The majority of people who want to invest in real estate fail in their attempts. Of the ones who don’t fail, few make any significant money.

The question is, why?

If you talk to successful investors you will hear things like, they weren’t serious enough about it, they didn’t work hard enough, they didn’t learn what they needed, etc.

If you talk to mentors they will say the students who didn’t do well failed themselves by not being serious enough, not working hard enough, not following the instructions and directions given them, etc.

See the pattern?

Investing in anything takes effort and knowledge. But, not all effort or knowledge is equal. Knowing how someone bought millions of dollars worth of property in the 1950’s is fine, but even if you faithfully applied the same knowledge today, you would probably fail.

So, it is not just knowledge, but the right knowledge at the right time.

The same is true for action. Yes, an investor must take action but again, it has to be the right action at the right time. Sure, sometimes a kick in the pants would be helpful to newbies and long time investors alike, but action for action sake is not all that helpful.

This is the problem faced by investors, especially new investors. They have difficulty identifying what they need to know and what they need to do, right now. They get caught up in the frenzy of learning for learning sake and doing “something” so they can say they work on their investing however many hours each week. But, over time, they don’t really gain any traction. They get frustrated. They might even give up.

For many the use of a mentor sometimes helps, at least for some period of time.

But, I think there is a better way. In fact, I know there is a better way because it has been in use for several years and has proven its value to me.

There is a definable process to every step on the real estate investing path. When someone says they want to wholesale properties for profit, they may not realize it but those words imply a process that can be broken down into definable steps.

For example, to wholesale you need buyers. To have buyers you have to compile a pool of qualified people who have the ability to close the transaction. To get that pool, you have to qualify potential candidates. To get those candidates you have to find them or get them to find you. To do that you have to market for them. To market for them you have to identify your target audience, construct your marketing message, and get it in front of them.

So, if someone says to you they want to get started wholesaling properties and asks you what they need to do, you would probably say, you need a buyer’s list. You may or may not think about all the things they have to do to get that list but rest assured they don’t have any idea.

Historically, the Field Guide has addressed that for its members. However, we are extending the tools proven in the field to solve this problem to help new and experienced investors concentrate on their investing as a business instead of a disjointed series of actions and endless searches for knowledge and strategy.

Of course it will take months to productize and make these tools ready for widespread and less supervised use but in the end it will be worth it both to us internally and to the investors who use these tools.

I will be recruiting early adopters to help with this process. Initially, they will come from the Field Guide membership but later I will be seeking some non FG members as well. If you think you have any interest in using a set of tools that apply a systematic process to real estate investing, watch this blog for an opportunity to be an early adopter and the benefits for participation.

Over the last year I have been much more involved in the day to day minutia of real estate investing than ever before. Sure, I have been investing since 1984 but never really looked at the systematic process.

There are lots of inefficiencies in real estate investing. I came to that realization while trying to get groups actual people involved in the process to work just a little more closely.

Buying an investment property is an expensive process. Few small investors understand this and as a result they will spend an inordinate amount of time and effort chasing a minimally profitable deal. They don’t understand the concept of missed opportunity costs and often under estimate their actual sunk costs.

Holding an investment property is an even more expensive process regardless of whether the investor self manages or using a property manager. Marketing and finding tenants, servicing those tenants, collecting rents, processing evictions and other tenant issues. All of these eat up time and money and are often time dependant. Then there are the documents and notices.

The problem anyone faces trying to address these inefficiencies in those incurring the costs don’t understand what their costs really are. They usually focus only on the actual physical dollars without understanding the bigger picture.

This is not a new situation. This is exactly what sales organizations have faced for many years and it is time the same tools in that area are brought to bear in the real estate investing world.

This month, I accepted a new position with a start-up to identify and address a niche in this area. I am heading up the product development and technology areas to bring some efficiency and sanity to real estate investing.

Obviously, these processes and tools aren’t going to be all that helpful to the lone ranger type investor. But, they are a dying breed. The individual investor has a very tough time surviving and thriving in today’s market realities. No matter how much success an individual achieves they will never be able to compete head to head with a well organized team of specialists.

The first series of modules to be released are for property managers. There is an ingrained distrust between investors and fee based property managers. Much of that distrust is valid and comes about due to a lack of visibility and control in the “normal” property management relationship. An investor buys a property, signs and agreement with a management company and hopes they don’t get screwed. Technology can solve this problem for all parties involved. The manager can do their job efficiently and profitably and the investor can retain control where it belongs.

Why would property managers adopt our system? Because it gives them advantage in recruiting and retaining clients. Using this system a property manager is not only able to tell an investor the benefits of dealing with them, they can show those benefits in a very concrete manner.

I am excited to be a part of this new and innovative approach and it couldn’t come at a better time. At every step in the investing process it is critical to control rising costs, falling revenue and increasing financial risk. You can’t do that by sticking your head in the sand or relying on thumbnail guesstimates as to how your properties are performing.

When someone starts off with that I have a hard time following the rest of their thought.

This phrase is particularly popular with someone who posts regularly on a discussion board I frequent.

His latest comment to someone trying to get started in real estate was …

“There are 168 hours in a week, which is more than enough time to work two full time jobs and still have more than half the week left over for sleep and studying real estate.”

Now, I don’t know if he really believes this or not. From his other comments I am dubious of his time estimation and tracking skills. But, let’s look at this and talk about what he is omitting.

Okay, working two full time jobs consumes at least 80 hours each week while working for the employer. But, that is not all there is. During those 8 hours of work, there is at least a lunch break. Let’s suppose you only take half an hour. Well, now those full time jobs are consuming 85 hours instead of 80. Then there is the time to get to and from each of those jobs. Then the time needed to get ready for those jobs, showers, personal hygene, etc. Then if you have a family, you are an idiot if you are not spending time with them. What about the necessary errands like grocery shopping, and such? The more you think about it, the sillier his comment becomes.

So, his bit about you having half the week left to sleep and study real estate is much less than accurate.

The reality is part of the advice he gave to the person was correct. They need to get a job because they have bills to pay now. Maybe they even need to get two jobs. But, beyond that his “advice” collapses under its own weight.

Time management is one of the most critical skills you need to develop. Your use or abuse of the time you have directly determines your odds of success. You need to identify the time wasters and evaluate them. Notice I did not say you need to eliminate them. You might, but some time wasters are necessary.

We are not machines. It is impossible for us to stop one task and in an instant start another. The examples of 168 hours in a week guy gives are silly just based on that one undeniable fact.

It is imperative anyone doing time estimation understand the difference between “project hours” and “elapsed hours”. Confusing them is a rookie project management mistake.

Yesterday on Meet The Press, Valerie Jarret said, “given the daunting challenges that we face, it’s important that president elect Obama is prepared to really take power and begin to rule day one.”

This is the attitude within the transition team? They are going to “really take power and begin to rule“?

Amazing in its arrogance and telling in its delivery.

I have mentored many over my career and been mentored by many. Personally, I have never paid for any mentoring I have received and have never directly charged for any mentoring I have given. In fact, I have mentored many without any strings or expectations of any gain.

However, there is a disparity in the success those being mentored see. I have talked to many who also mentor and many say they no longer do “free” mentoring because when they pay for it the odds of success go up. I think they rightfully correlate the willingness of the “student” to pay to their willingness to work. In other words, they have skin in the game.

I too see this disparity in those I work with by mentoring. Members of the Field Guide for Investors are much more likely to see success than those I mentor ad hoc with no other factors involved.

The interesting thing is I have been threatened with a law suit by a “student” exactly ONE time and it was from someone I took on and mentored for “free”. If they go forward with their threatened action, I will post everything about it on this blog including any filings and discovery items and discovery goes both ways. FWIW, I don’t think they will pursue this for the same reason they were not successful in real estate investing. But, it has made me rethink the way I help people.

The Field Guide for Investors is a proven vehicle to help others and all members have full access to me in a number of ways. Going forward this blog, my free email newsletter and the Field Guide are the vehicles I will be using to help others. If they are serious enough to join the Field Guide then they are more likely to be serious about working as hard as it takes to reach their goals and I will happily go the extra mile to help them. If they are serious enough to ask questions here or respond to items in the emailed newsletter, I will be happy to answer their questions and help if I can.

I will still participate in a few open forums but for the most part I will refrain from detailed discussions. Things like the credit repair scams, private lending scams, multilevel marketing junk and all the other noise on free sites makes it very difficult to really help others. Couple that with the conflicting data with absolutely no research or substantiation behind it and you can easily find yourself in a debate based on opinion backed by nothing more than guesswork and personal anecdotal experience.

I didn’t intend this to be an advertizement for the Field Guide but the reality is if you want real research and opinion based on fact, the Field Guide for Investors is the place to be. If you want access to methods and techniques on many aspects of investing, the Field Guide is your place. If you want the equivalent of a continual running boot camp …  Well, you get the idea.

Back on topic. The success someone sees in working with a mentor is much more dependant on the efforts and motivation of the “student” than the mentor.

Given that, I think it prudent for any mentor to be very careful in who they choose to give the greatest gift they can give - their time.

In a previous post I talked about the hearing held on October 7, of this year about seizing retirement accounts, 401(k), IRA and other pension plans.

The details of the plan be contemplated are from a position paper written by Teresa Ghilarducci, a professor of economic policy analysis at the New School for Social Research in New York. Some of the most interesting parts of her testimony was this needed to be done in the interest of fairness.

Sound familiar?

Ghilarducci’s plan first appeared in a paper for the Economic Policy Institute: Agenda for Shared Prosperity on Nov. 20, 2007, in which she said GRAs will rescue the flawed American retirement income system. You can read the position paper by clicking here.

According to Ghilarducci the current voluntary retirement system, “exacerbates income and wealth inequalities” and the tax breaks for voluntary contributions are “skewed to the wealthy because it is easier for them to save, and because they receive bigger tax breaks when they do.”

Sound familiar?

Under her plan which the democrats favor, all existing 401(k), IRA and pension plans would be seized and rolled into a government controlled redistribution system euphemistically called a Guaranteed Retirement Account. The return on this guaranteed account would be a fixed 3%, it would not even keep pace with inflation. In addition to the seizure, all workers would have 5% of their wages seized and deposited into this account. This is in addition to the current 13% being seized for social security.

In a radio interview in Seattle on October 27, she was very clear in the purpose of this plan, “I’m just rearranging the tax breaks that are available now for 401(k)s and spreading — spreading the wealth.“

Sound familiar?

These are the people the voters have given the reins of power to and they are not wasting any time in their efforts to promote and realize their agenda. We can’t claim we didn’t see this coming. We did and with President Obama in the White House continual redistribution of wealth is what we have to look forward to for as long as we allow it to continue.

So, when you receive your government mandated 5% reduction in pay, will you be happy?

Oh yeah, and when you die? You can only bequeath one half of the balance of your GRA to your heirs. The rest gets redistributed for you.

There is a great deal to do before the end of the year now that we know who the next President will be. I am still seeing lots of hits from people searching for answers on how to deal with an Obama administration. As I mentioned in some other posts here, many seem to be a little worried about what this will all mean to them, their families and their financial situation.

Now, what steps should you be taking right now, today?

First, talk to your tax advisor because it might make a lot of sense to pull as much income into this year as you can at the current tax rates and then defer as much income as you can for as long as you can starting January 1, 2009.

Second, talk to your tax advisor about doing a step up in basis strategy for investment assets you have held for a long period of time and have pending capital gains.

Third, stay vigilant. Pay attention to what Congress is doing and adapt accordingly.

This is going to be a very wild ride and the well prepared and well informed investor is going to come out on top. That being informed part, is where we come in.

Since late yesterday afternoon I have seen a large spike in people wanting to join the Field Guide for Investors. The trend curve took a big jump upward around 9:30 last night and then when the race was called for Obama it took another big jump. To be honest, this spike in interest was an unexpected event and we were not prepared for it. Today has been a catch-up day.

People are worried and they should be.

At the Field Guide, now more than ever, we are targeting information for the transition. What we think is coming, why we think that, what the impacts are likely to be and how to mitigate any adverse situations.

If you think it is your patriotic duty to pay as much tax as Obama-Pelosi-Reid think you should, you want to do two things. First, leave this site forever. You are not going to like how I talk about how to reduce or eliminate the wealth you have exposed to their upcoming redistribution. Second, get a mental checkup.

If you have investments, stocks, bonds, real estate, retirement plans or any other kind of investment, bookmark this site. Do it now, before you forget. Join the newsletter and if you are really serious about your investing business, consider joining the Field Guide for Investors like so many others are doing. In the past we have had to limit our membership for a number of reasons. That is not the case right now but, may happen again.

Yes, I am very serious.

For the last eight years there has been a shrillness from the left that had no basis in fact or even a healthy mental state.

It started with claims of the election being stolen. It wasn’t and anyone who wants to can read the decision from SCOTUS that led to Florida stopping the chaos going on at that time.

Then it was about the Iraq war and tax policy and housing policy and on and on.

There is no point in discussing each of these in detail. There is no point in providing the evidence the democrats were 100% responsible for the housing bubble and the mortgage meltdown. Reason and reality are severly separated from spin and perception at this point.

Okay, fine. If your guy wins and we have the Pelosi-Reid-Obama triumvirate then it will be time for those of us on the right to step aside. Go ahead, make your proposals, enact your policies and let’s see what happens. If it works, great, wonderful, good for you. But, when it fails, those of us on the right will have had NOTHING to do with it.

When you up the taxes on the rich and the rich change their behavior and the tax revenues go down, guess what? Those on the left will have to accept the responsibility.

When you double the capital gains tax rate and people with assets start just sitting on them? Same thing, our hands will be clean.

I could go on, but it is pointless, you get the idea.

Then in two years we can have a referendum on where the country is headed.

Don’t hand me the argument about how much damage they can do. They are going to do it. Those of us on the right can’t stop it because class warfare works.

No matter how they change the rules, I can adapt and I can certainly survive even 8 years of an Obama Presidency. I won’t lose any sleep over it. I won’t gnash my teeth or foam at the mouth about the situation.

This isn’t over unless those on the right continue to “try to do the right thing” and drag this out to the point we can’t recover from it. We have to love this country and our economy enough to let the left have their chance.