For the last year or so real estate has been getting a bad rap. Prices have been declining in many markets (although not all), and the lending industry has been adopting some tougher standards. All of these things coupled with the constant negative media attention are telling people that real estate is a bad investment and too risky. I don’t really agree with all of this and still have many reasons to like real estate, which I’ll review here over a series of posts.

First of all, let me be clear up front that I’m not talking about flipping houses here. That is a valid form of real estate investing, but not the sort that I’m interested in. I’m more concerned with netting a positive cash flow than worrying about price fluctuations and capital gains. If a property is “self-sustaining”, you won’t have to worry about a drop in value or many other concerns I hear a lot.

I want to be in control.

Many people who want to avoid risk (and therefore real estate) are perfectly content to put their money into mutual funds for various reasons such as diversification and the like. When you do this though, you’re not only at the mercy of the fund manager (who is paid no matter what by the way), but you’re also at the mercy of the board of directors and the senior leadership of every company that the fund is invested in. Said more simply… you have no control over your investment except to be in or out.

With real estate, on the other hand, you’re in complete control. You determine how much you’re going to buy a piece of property for and what the terms of the sale will be. This usually happens through negotiations with the seller, but you’re in control of your negotiations. You also make the decisions about what to do with the property once you own it to suit your purposes. You decide to whom you’re going to rent/lease the place and for what price.

The point here is that everything is up to you. Even though you will most likely take out a mortgage you still own and control the whole thing. Where else can you only put down say 10% yet control all 100%? Having this sort of control over your investments is a huge advantage for me and something that I consider when investing in anything.

This last weekend has been really hectic. So busy that I didn’t even have time to put together a Weekend Edition. It was so busy because I had decided a week ago to take on a Do It Yourself project here at my house.

It started on Friday after work at about 5 o’clock. My wife and I pulled up all the carpet in the front room, which didn’t take too long until we got to the carpet pad underneath. Whoever put pad in went to town with the staple gun. We didn’t finish ripping everything out until about 10 o’clock the same evening, but at least it was all out for the next morning.

I started Saturday at about 7:30 a.m. pulling up a small section of linoleum. At this point everything was ready to start laying the new laminate flooring. Two of my friends from work came over to help which was fantastic because things went so much faster. We ended up getting almost the whole floor layed except for two very small hallways which shouldn’t take too much longer to finish. I’ll have a few pictures later once the project is finished, but the new floor looks really slick.

I will say that it was so nice to have people willing to come and help out. It makes such a huge difference to have multiple people able to work on multiple things at a time. I also had other people lend me some of their saws and other tools. I was very impressed again with the willingness of those people.

I’m also excited that it didn’t take as much flooring as I had originally anticipated. I ended up buying quite a bit more than what was needed so I will be able to take it back and get reimbursed. As you know, it’s always nice to get money coming back to you than going away. Hopefully the new floor will help with the sale of the house, since that’s more or less the intention of the whole project.

Since I’m going to be looking to sell our house when I go back to school, it’s more or less constantly on my mind. I’m always thinking of what could be done to make the sale go smoother and what potential buyers might have an issue with that I can fix now.

I’ve known for a long time that I need to do something about the carpet in the front room, but I didn’t know what exactly. I wasn’t sure whether I should put down new carpet or try to clean it and see what it would look like. Well, I’ve actually decided to go with something completely different. I had heard from some people at work that they were selling some laminate flooring for 69 cents per square foot over at Lowe’s. So while I was out the other day I stopped by to see if it was still that price. This is what I found:

I ended up buying 42 cases of the oak style laminate flooring and 10 rolls of the underlayment. I’ve never done anything like this before, but I figure I’ll learn how. I’m going to have to rip up all the carpet and a small area of linoleum and then put this down. Hopefully it’ll not only turn out well but also help sell the house easier. What do you think?

Last night I had a meeting up at my church and the youth were going ice skating that same night. I was invited to come along, and I went since I love to ice skate and have my own ice hockey skates. At first I wasn’t sure that I wanted to go and had all sorts of reasons why not like I would be tired from work and would rather just relax at home doing nothing.

I reminded myself though of all the times that I didn’t really feel like getting out and doing something yet went anyway. And I’ve always been glad afterwards that I went and actually did something rather than staying home and doing nothing. So I decided that I would go, and naturally I had a good time and was able to socialize with everyone else who was there.

I was thinking about this because it’s a lot like our financial and investing lives. A lot of times we don’t really feel like putting in the effort that is required to find or choose good investments. Putting our financial house in order would just take too much time that we’d rather spend sitting in front of the television. However, once you do take the time to, let’s say, list out all of your debts and formulate a plan to eliminate them, you’re always glad that you did. This is because it usually feels good to accomplish something.

I’ve also heard a lot of people complain about how complicated it is to invest or that they can never find a good investment. I also know that most of these people have never taken the time to read a book about investing or have never spent any time in search of a good investment. And some things in life require some doing.

For example, I’ve had a rental property for about a year and a half now, and I’ve been asked numerous times how I went about the whole thing. I’ve also listened to many people tell me how they would like to do the same thing but they haven’t found anything or haven’t gotten around to it. So let me dispel the myth for you… an investment property didn’t just fall into my lap, and it won’t fall into yours either.

I could tell you of the many hours spent looking at properties with different agents and without agents. I could mention the time spent with a mortgage broker discussing how I could make it happen and what I would need to do. There was also the time I spent with an accountant learning all about the tax implications and benefits. It was a great learning experience, but it took a lot of time. And this doesn’t even include all the books I read about real estate investing and the seminar I went to.

So what does all of this have to do with my initial thoughts about going ice skating? The point is to get out do things and make things happen. There will always be time to sit and watch TV, but if there’s something that you want to do or accomplish, you just need to get out there and do it. I know you’ll be glad you did, and you definitely won’t regret it.

When you start to invest or begin looking at your different options of what to invest in, it is paramount that you understand what you’re investing in. This concept applies to many aspects of our lives, but here I’m focusing on investing. You’ve got to understand what you’re doing.

There are so many options available to us these days that it can be extremely tough to choose where to put your money. There are full service brokerages, self service brokerages, retirement accounts (both employer sponsored and not), mutual funds, individual stocks, real estate (residential, commercial, etc.) and so much more. If you understand how money is made in each of these investments you can do quite well for yourself. If, however, you’re not sure how they work, you can also lose a lot of money.

I’m sure most all of you have seen those late night infomercials telling you how easy it is to make money in something like real estate. And I’m sure there are all sorts of opinions on this subject as well. Well, the truth is that there is both money to be made in real estate and money to be lost. Donald Trump is a typical example of someone who knows how to make money in real estate and you probably know someone who has lost money in real estate. The difference, I submit, is that some understand the game and others don’t.

The stock market is another place where some people make money and others lose money. There are people like Warren Buffett and (once again) there are plenty of others who have lost a ton of money in the market. I don’t think anyone will dispute that Warren Buffett understands how the market works and how to profit from it. Those who continually lose money in the market probably don’t understand it like they should.

So what does all of this mean for us? What should we invest in and how? It may behoove us to step back and instead of wondering what to invest in, decide what we understand or what we want to understand better. If you’re interested in the stock market, begin by researching how one makes money in it. Just because you’ve heard that you can make a lot of money through options trading doesn’t mean that you know how to. Someone you know may have made some money by shorting a stock. Does this mean that you should all of a sudden start shorting stocks?

Now, instead of realizing all of the things that you don’t understand, take the time time to educate yourself in areas of investing that interest you. Perhaps you can find a mentor of sorts that knows how to do what you want to do. There are also a ton of books at the local library with a wealth of information on various investing topics. It may be time to invest a little time in yourself before you start investing your money.

In your search for a new home, you’ll most likely need to get a mortgage in order to finance the purchase. MyHomeLoanMortgages.com is a comprehensive online mortage and real estate financial resource that can provide you with news, calculators, and information on professionals in your area. You can look for a California mortgage and find many different lenders to compare. You can also search at the local level to find brokers and agents. If you’re in my area you could find a Florissant mortgage.

In addition to getting out of debt, being frugal, and saving for retirement, you would be wise to look into various forms of alternative income. If you think about it, looking ahead towards retirement you’re going to need another form of income other than your job. Most people hope to have enough money saved in their retirement accounts that they can live comfortably off of the interest or other investment income. So the question then becomes… Why wait until retirement to develop these income streams?

In fact, the sooner you create this alternative income, the sooner you will have reached financial freedom. Once your alternative income streams are greater than your expenses, you have the freedom to do whatever you’d like. You can continue to work, quit altogether, or find some happy medium in between. The point of all this is that you don’t have to wait until age 65 to make this happen.

There are many different forms of alternative income, and you’ll need to find what you’re most comfortable with. If you put your money into a money market account, you can view the interest earned as passive income. You might decide to purchase stocks that pay nice dividends. These dividends may serve to replace some of your current job income. One of my personal favorites would be real estate investment income. Here you may have an income producing rental property that gives you a hundred or so dollars a month or even more.

You may not want to put all of your money into income producing investments, but you’d be wise not to ignore them. It’s not bad to play the asset appreciation game, but there’s a whole other playing field with cash flow. Also, the more you look into this type of investing, the more opportunities you’ll find to increase your financial position.