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Freedom Mentor December 10, 2015 Leave a Comment

Keys to Insurance for Real Estate Investments

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Key # 1 –More Than One Insurance Broker

An insurance broker represents many carriers but the usual Geico or State Farm agent represents only one. Additionally, not every insurance broker write policies with every carrier so each one might have their own strengths and weaknesses.

Key # 2 – Accurate Kind of Policy

◾Landlord ($): When your property will be rented out to residents
◾Vacant ($$): For unoccupied properties that you are repairing cosmetically for resale.
◾Builder’s Risk ($$$): For unoccupied properties that you will be majorly renovating

Key # 3 – Name of Insured Must Match How the Property is Titled on the Deed

By far the largest mistake investors make. Whomever the Deed proclaims as the title holder MUST be the precise name of the insured on the insurance policy.

Key # 4 – Adequate Coverage

◾Damage: Centered on replacement expenses and contingent on your precise circumstances, you might choose a diverse amount then what the replacement cost estimator concludes.
◾Lost Rent (for Landlord Procedures): Set at the gross rent you presume to accumulate.
◾Liability: Ask your insurance broker for the suitable amount and don’t forget to own your real estate in a limited legal responsibility entity.
◾Pets: If your tenants have any animals, be sure you also have pet coverage in your policy (and the pet is not on the uninsurable list) or the renter has paid for renter’s insurance and that policy includes pets.
◾Flood: Even if you are not in a flood zone, if you are near water of any kind, you might want to get flood insurance. Just ask people from Nashville, TN what occurred in May 2010. Or people on the East Coast during Hurricane Sandy. Flooding happens more than you might guess.
◾High Deductible: Ponder a higher deductible since you almost certainly won’t file a claim below $5,000 anyhow.

Key # 5 – Don’t Cheat

Insurance companies make cash two ways; (a) Collecting dividends and; (b) NOT paying claims. Don’t give insurance companies a reason to get out of paying out your claim.

Tagged With: insurance, investor insurance, real estate investmentsFiled Under: Blog

Freedom Mentor December 10, 2015 Leave a Comment

Owning and Renting out a Vacation Home

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Rules to Follow:

 

  • You must learn the laws on short-term rentals. The locations that are perfect for vacation rentals usually have a lot of hotels and tourism. These areas typically have definite laws relating to short-term rentals.
  • Short term renting is considered less than one month. (nightly, weekly)
  • Be sure to talk to a property manager or the city, to find out the legality of short-term renting in that specific region.
  • You must find a rental that either has a long peak season or more than one peak season.
  • Having only one short peak season can cause financial woes during the downtime
  • Learn what areas have a lot of success when choosing location
  • VRBO/homeaway and Airbnb have many vacation homes that have already been reserved and reviewed.
  • Purchase a home in an area people love. This will make it easier to book up
  • Find a Nice Property at Reasonable Price. I usually look for cheap finds when looking for real estate, but to find your dream vacation home in the best location, you need a nice property in a great area, at a decent price.

 

Advantages:

  • You can own a vacation home without it being a financial burden
  • Owning a vacation rental is an investment that will make you money
  • Free Vacations

 

Disadvantages:

  • Traditional Mortgage
  • Down payment
  • Furniture/upgrades may be needed
  • During peak holidays you may want to rent the home out instead of using it for yourself
  • There’s always the worry tenants will wreck the place. This is why you ask for a security deposit

 

Tips:

  • Hire a property manager to take care of all day to day operations
  • Put the home on Airbnb or Homeaway
  • Choose a great home and an ideal area
  • There will be added expenses so be prepared
  • Up your marketing
  • Have a professional take photos/videos
  • Learn what added accommodations are suitable for your area (hottub, sled, surfboard)

 

 

 

Tagged With: short term rental, vacation home, vacation rentalFiled Under: Blog

Freedom Mentor December 9, 2015 Leave a Comment

The Anxiety over Obtaining Wealth

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If you have been attempting to increase your monetary state, but you just aren’t able to make any headway. It is almost certain that have this dread of wealth, and might not even realize it.

The destitute/poverty attitude is also known as the fear of more money. It can often become quite a big problem when you are attempting to better your currents funds.

If you set a thermostat on your air conditioner to 69 degrees, if the temperature in the air is below 69 it does not click on. The moment the air temperature goes above 69, the ac turns on and works to bring it back down to 69 degrees. When pertaining towards anxieties of obtaining wealth, people have a habit of having this backwards. The majority of people have an amount in their mind on how much money it will take them and their family to survive comfortably each year. This is not the ideal amount in their heads but it is the amount needed so It sticks out. Often times, once someone has successfully achieved that goal amount, they stop trying to advance or slow down on their efforts. This is the poor man’s mentality.

Researchers at IBM took men and women that were earning $40,000 a year that felt overworked and poorly paid. So they decided to give each of these people a $10,000 raise. The researchers anticipated that the people would work more efficiently because they were earning more. Unfortunately most of these people had the $40,000 mentality so when they were given a raise but the same job title, they worked 15% less.

Why is This Happening?

If you reviewed at your IRS tax records for the past couple of years and the number has stayed the same, even though you have been attempting to increase your wealth status, then you are most likely suffering from the fear of more money. You have a connotation with the word money. A connotation is when something in your brain is associating a deeper meaning or secondary meaning to a word. That connotation is deciding what your relationship and feelings towards money is. So your implication is most likely, “Some cash is ok, but too much cash is problematic.” Deep down you have linked something negative with obtaining wealth. Perhaps you associate money with extra complications, more obligation, jealousy from others, being considered stuck up, etc. Your brain has been taught that a certain amount of money is ok, but too much isn’t.

There should definitely not be that much bad relations with “obtaining wealth”. In fact, there should be a lot more positive associations instead. Becoming wealthier could mean more flexibility in your life, or being able to help others. Obtaining more wealth can open up a lot of doors and have a lot of positive outcomes.

We must pair more positive thoughts with the idea of more money in order to redraft the script of what it means to obtain more wealth. Only this will prevent you from self-sabotaging yourself when it comes to earning more. Think of a few optimistic things that could happen if you were to obtain more wealth. I myself, want to become a better husband, a better dad, a better human being all together. So if I am working at improving the other areas of my life, why shouldn’t I be trying to enhance my financial situation? Life can be far more efficient, more open, by obtaining more wealth.

Tagged With: fear money, financial fears, wealth anxietyFiled Under: Blog

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