Posted by Mike (WA) on September 23, 2004 at 17:38:40:
I’ll bite.
Lease Option. I buy a house for 120K (market price). I L/O to someone who has no chance at financing it himself. He buys it from me 1 year later with the built up credits from paying me rent. I make money and tax breaks on a house bought at value. He gets into a house and stops renting with a little equity. I guess you’d call it a tie, but I call it win/win.
Are Sheets’ Courses Updated for 2004? - Posted by calreal
Posted by calreal on September 13, 2004 at 03:46:52:
Over the past 5 years, I have ordered the real estate investing packages from Carleton Sheets and John/Greg Rice (the midget realtors). While I did not get taken in to pay more for the ?one-on-one? training or the ?exclusive seminars,? I know I wasted over $250 on the introductory packages. It took me several years of trying to use the offered concepts and strategies to realize it was nonsense. I was confused and frustrated that the folks on the infomercials made the system work and I could not. I thought that if real estate investing worked anywhere, it would certainly work in Las Vegas where I live? By the time I realized the stuff was crap it was too late to get my money back!
The ?light of day? finally broke through after I got married to an experienced mortgage broker. My new wife found my Carleton Sheets stuff hidden in a garage sale box and laughed. I told her that I didn’t see what was funny. I had spent nearly 3 years before we met trying this stuff to no luck! She sat me down and explained exactly why Carleton Sheets’ system as well as a dozen other similar systems may have worked 5 years ago, but none of them will ever work today. In about 1 hour I got a lesson in the reality of investment real estate mortgage financing. Here is what I learned from my new wife, a mortgage broker for over 12 years in Nevada, Arizona and Colorado. I talked with 4 other mortgage brokers in her office and got the same information.
Prior to 1998, it was possible to buy a property, fix it up quickly and cheaply, and then resell it for $10,000s in profit. Now known as ?flipping,? many mortgage lenders did not care as long as the property appraised out at the higher value. What turned the tides on this ?money making? industry was the incredible increase in foreclosures that began in 1999 and has blossomed over the last 4 years. Mortgage lenders that had refinanced properties valued at $100,000 were finding them to be worth lots less when they went to foreclosure. As more properties went into foreclosure, property values dropped. (Property value is based partly on the previous sale of comparable properties.) It doesn’t take banks long losing money to change.
Since 2001, states have begun to implement ?anti-flipping? laws that go after real estate investors and appraisers who artificially inflate property values. Appraisers must now look for comparable properties within a 1 or 2 mile radius of the subject property to get fair market values. Many states now require anyone selling more than a few properties a year to obtain a real estate broker’s license. As of 2003, my wife could not think of any mortgage lender that would refinance a property for cash out if the property was owned for less than 6 months and most require 12 months. Even then, the owner had to show real receipts for improvements!
If someone had to sell their home after less than 12 months residency in it, the original purchase price would be used as the appraised value. Also, people hoping to buy homes below their appraised value and then get the difference as cash at closing will be sad to know it can’t be done! Mortgage lenders will lend money based on a property’s purchase price or appraised value at time of sale ? whichever is LOWER.
Flipping real estate became such a money loser for mortgage lenders that they have refused to do the loans! Anyone wanting to engage in flipping real estate for big money will have to find a source of funding other than banks and credit unions! Good luck - those are few and far between and charge too much in interest! My wife explained that nearly all of the Carleton Sheets-type real estate investment schemes rely on long gone mortgage financing before the anti-flipping laws.
Also, many ?real estate investment gurus? recommend making deals with property owners and have the owner do the financing while you make payments to the owner over several years and then sell the property and pay the owner a lump sum out of the proceeds. My wife says that she has never known a property owner who wanted to engage in that type of deal. If the investment property is making money without the new buyer, then why should the owner enter into a deal that will require higher rents to make 2 people money instead of one?
Finally, my wife and her colleagues in her office made a very common, but sound observation. If someone has a truly profitable unique real estate investment program ? why aren’t those folks still doing it full time instead of ?teaching? others. The money Carleton Sheets and all others like him make is out of selling information to fools who believe it will work. The successful students often made their money before the anti-flipping laws and now have either gone to work for their teachers selling outdated information OR have gone into the ?real estate investment teaching? business themselves.
One of my wife’s fellow brokers did come across a company that puts out a guide to real estate investment using current mortgage financing rules. I read the guide and found it interesting. It was meant for people who want to buy investment property and hold it for rental income or sell off a property or 2 ever couple of years. It was definitely not for those who still believe they can flip homes for big profits in 60 days. Banks and credit unions won’t lend the money!
If they did, my wife and her colleagues would be making money by handling the purchases!! The flyer I read was from a company called The Corner Source ? here is old email thecornersource@msn.com I don’t do any real estate investment now, but this guide made sense and my wife says it is good and they don’t ask for $1000s for seminars!! Take it for what it is worth. Real Estate Flipping is Illegal and people are in jail for it!!
David
Las Vegas, Nevada
U.S.A.
Re: Are Sheets’ Courses Updated for 2004? - Posted by Ron
Posted by Ron on September 26, 2004 at 13:27:28:
Dave, the comments in your OP, though not yours, do raise some good points.
I don’t know much about flipping as a business model but I know the CA and AZ RE markets around San Diego, Yuma, and Phoenix.
I bought a SF one year ago in Yuma and it has appreciated about 40% which is a 100% ROI on my down and closing costs. San Diego is doing the same thing.
So, I can see where, in certain markets, flipping could work. So could buy and hold. RE in these markets is like the stock market before the dot com crash: everyone was a genius. I don’t believe that RE will crash in the same way, I do think appreciation in these super hot markets has to slow down because no one can afford to buy.
Re: Are Sheets’ Courses Updated for 2004? - Posted by FrankIL
Posted by FrankIL on September 17, 2004 at 17:00:48:
David, I’ve been flipping properties for over 7 years now and there is nothing illegal to it. There is no such thing as an ‘anti-flipping’ law. What you are talking about is blatant fraud cases which we’ve all heard about in which appraisals are phony and properties are sold to unsavy buyers at ridiculous terms, they lose the house and bank gets a property back worth much less than what they loaned on.
Your letter is difficult to read - there are so many inaccuracies. I suggest this - save the letter you wrote and for the next 6 months don’t invest in real estate but instead read this board, the how-to articles, etc. Learn about the business. Then go back and read your letter and I guarantee you’ll see how ridiculous some of your comments were.
Keep this in mind - your reality is framed by what you believe. Since you believe your wife when she tells you this stuff doesn’t work and think flipping is illegal, then you’re right - it doesn’t work and you’ll never succeed in this. For me, I’m off to the post office to pick up my rent checks tomorrow - should have 17 of them - all from a business that you say doesn’t work.
Misunderstanding re: Updated for 2004? - Posted by calreal
Posted by calreal on September 13, 2004 at 14:02:22:
Umm, Hi, I am not the ‘David’in that posting, I am the one who wrote this (posted just below) just asking a simple question. I have all of Sheet’s 1998 stuff, alot of it does work since I and some business partners have used a handful of the plethora of ideas in there and applied them within the regulations of California ‘Real Estating.’ I just wanted to know if the 2004 Sheets courses have been completely updated or are just a repackaging of what I have already? I have a nice library of real estate Guru stuff bought throughout a 20 year period in addition to the professional materials used ‘in the biz’ by me and a broker friend when we were together and actually put together a syndicated partnership LLC that blew up in our faces in the 1980’s due to sudden economically effected changes in the marketplace. Take out financing appraisals weren’t where we wanted them and our main construction contractor overestimated-big mess, big risk, but I’m not afraid to pick and choose from ideas from wherever the source and put to good use what applies to the situations as they present themselves. If you own an early edition of Carleton Sheets’ courses in addition to the 2004, have you noticed any changes to them outside of the formatting and outer packaging of them?
Posted by calreal on September 13, 2004 at 03:46:52:
Re: Are Sheets’ Courses Updated for 2004? - Posted by Hunter
Posted by Hunter on September 13, 2004 at 13:24:04:
David,
Unburdened with your knowledge and “expert testimonials” about how flipping can’t possibly work I’ve gone out and generated $90K on my first 3 deals this year. Absolutely nothing illegal about buying low and selling high. I’m sorry to hear that it took you 3 years to figure out that your strategy wasn’t working. Adapt, innovate, overcome! Find motivated sellers, create solutions and make offers! IF you want to make good money at this you are often going to operate outside of the conventional retail real estate business. I have real estate agents and mortgage brokers all the time tell me that what I do just can’t be done. That is why they are working JOBS and I am making deals where all parties are happy with the outcome. Purge your brain of all the reasons it won’t work. Focus on solutions. If you didn’t like Carleton Sheets find somthing else. Ever go to a bad movie? Did you swear off all movies? Go to the mobile home forum, buy Deals on Wheels and try that. Go! Go! Go!
Re: Are Sheets’ Courses Updated for 2004? - Posted by JOE
Posted by JOE on September 13, 2004 at 06:54:27:
Only when investors, appraisers and contractors inflate prices could flipping be illegal. All brokers and salespeople seem to hate Sheets and everyone else because they have never tried it.!!!
Oops - Posted by Hunter
Posted by Hunter on September 13, 2004 at 15:58:02:
Ouch, I just picked myself up after falling off my high horse. It sure felt good to unload though. Sorry I don’t have an answer to your question. Good luck.
Re: Are Sheets’ Courses Updated for 2004? - Posted by Craig
Posted by Craig on September 13, 2004 at 16:43:32:
Hunter
Most of the REIs that make it in the industry would have made it no matter what course, or book they read.
There are a few points I’d like to make
There are thousands of people that are making money in Real Estate with taking a single course. So what does that tell you.
Are Carlton or Legrand students better, NO not at all. In fact you would probably find that the percentages of success are the same as the general population.
The people that make it are the ones that have the balls to take risks, it has nothing to do with some course you take.
It is the ones that can be rejected and keep going back until they finally found someone that will go along with their scheme.
It is also the ones that can look a guy straight in the eye and take his last dollars of equity.
Guys like Kiyosaki talk about Win win situation. There is no such thing, if you are winning someone is losing.
I am not trying to condemn or judge people but the reality is the successfully ones got there for other reasons, not because of the seminar they took.
Re: Are Sheets’ Courses Updated for 2004? - Posted by JOE
Posted by JOE on September 13, 2004 at 13:38:10:
WELL SAID!!!
Re: Are Sheets’ Courses Updated for 2004? - Posted by calreal
Posted by calreal on September 15, 2004 at 02:34:02:
Craig, I have to agree with you in light of the variables involved with real estating and Hunter, S’Alright, you’ll find I usually let problems, conflicts and misunderstandings roll off my back like water on a duck. Whether it’s residential or commercial any number of situations and opportunities are possible. One does not ‘try real estate’ it ‘tries you,’ I should know since I am currently examining different ways to maximize opportunity following a major financial upheaval due to circumstances beyond our reasonable anticipation and control in addition to the huge risk we took as a way to ‘buck up’ our way from an extremely tight real estate market.
I began in real estate in the early part of the 1980’s, was involved with first one broker partner and mainly assisted in the process of the syndication offering he was promoting and was there for the ‘ground breaking’(at the age of 19 no less!) on the first part of the authorized ‘take out financing’ for the first part of the development. We thought for sure we would be able to complete the proposed apartment complex development and then the 1984 tax rules changed, the market changed and the lender refused to continue on with the project after finding that our main contractor over inflated the true costs to do the build out among other things. I learned from watching the broker and the syndicated partners that it probably would have been better had the broker used a few different methods in assessing the project and the potential availability of financing for it. That project set him and the rest of us associated with him back quite a bit. I went on to sell new homes(I was told I was gutsy for taking the risks for being ‘so young’) and then did a bit of mortgage brokerage thinking I might learn from working with a broad base of clientele covering from A to D credit for conforming and jumbo residential and commercial loan product. What I learned from touching folks’ financials can only be taught partly by books; there’s nothing like real world learning. I sold luxury new homes too and watched and learned how the top 10 to 5% affluent manage their money whether they are nouveaux riche or old rich-it is an education to say the least that would be the envy of anyone at Claritas one of the major geodemographers.
After a few years of doing this and serious financial problems due to the illness of a significant other and my attempts at helping(why am I this way? I give everything and everyone ‘my all’ and sometimes as in these examples it has a 'negative effect.'Guess the key is in that word, ‘sometimes.’) I went back to my broker friend since a long term client was in his early 80’s and looking to unload his snf’s,alfs and alz’s (parlance for skilled nursing facilities, assisted living facilities and alzheimers assisted living facilities) there was also one gp (general practice) medical center the client was part owner in. He trusted my broker friend like family and entrusted him with the marketing and sale of the properties and my broker friend wanted me to help out and split the deals as they came through. I learned from that the minutiae involved in these ‘involved’ properties, he trusted me to handle the details since he was the farthest from a ‘detail person’ and I have lots of stubborn patience and am nearly always calm and collected in dealings with the MBA types that are frequently on the other end of the phone representing themselves or their clients as we go over the details of the APOD (annual property operating data), rent rolls, inspections, licensure, occupancy, cash on cash, etc.
To make a long story shorter, we managed to sell a few of the properties shortly before 9-11 and a few months after that my broker friend had a bout of cancer that was fortunately completely removed from his eye but psychologically the illness and the length of time to sell the properties and the difficulties we were experiencing with the market compelled us to consider closing up shop 'for now’since we had a ‘negative balance sheet’(boy were we upside down then and still are to an extent) and as a result the stress I as well as other friends feel that psychologically everything was severely affecting my broker friend that we were urging him to see a psychiatrist. The behavior was that of someone who was depressed and somewhat manic and possibly delusional with pronounced expressions of peculiar behaviors ( I would know too, a former significant other had a severe form of manic depression and many hospitalizations before we decided to separate-but that’s another story and part of why my real estate stuff is in a bit of a holding pattern.)
Even after all of this, real estate still appeals since I have experienced a taste of the success it brings (heck, just from one closing on a 15m snf = 1% of the sale price split between me and the broker so do the math!) and I was only a short way to the beginnings of a regular 6 figure income and the chance to invest myself since quite a few of the commercial brokers enjoyed transacting with us!
Anyway, in life ‘almost’ doesn’t count since at the moment I am not making the 6 figure income and buying any properties just yet, but I have learned alot from my experiences and will continue to look for yet other opportunities to continue forward towards real estate success and that includes not only reading and studying trade publications but ‘rounding’ my creativity base and picking up the latest real estate guru’s materials once in awhile to find out what new nuggets of information or ‘twist’ to a concept they might come up with since one can never have too much knowledge.
I honestly cannot think of any really unique ways to expedite the process of rebuilding my financial position but at least I can keep on plugging away and pursuing certain creative ideas I have that are variations of tried and true methods picked up from whatever sources they originate, such as creonline which encompasses most property types. In that I am like a pioneer since I will be the one doing and experimenting with them.
In closing, yes, I feel that I will be one of those who ‘made it’ in real estate without a real estate course since experience is truly the teacher whether or not we have taken a course. Risking is also a pretty large part of the equation in addition to sound judgement and knowledge so take these into consideration. Here’s a quote to add to your collection if you’re looking for more motivation and best of luck to us all as we succeed with real estate! … “And the trouble is, if you don’t risk anything, you risk even more.”
~Erica Jong~
Posted by Craig on September 13, 2004 at 16:43:32:
In Reply to: Re: Are Sheets’ Courses Updated for 2004? posted by Hunter on September 13, 2004 at 13:24:04:
Hunter
Most of the REIs that make it in the industry would have made it no matter what course, or book they read.
There are a few points I’d like to make
There are thousands of people that are making money in Real Estate with taking a single course. So what does that tell you.
Are Carlton or Legrand students better, NO not at all. In fact you would probably find that the percentages of success are the same as the general population.
The people that make it are the ones that have the balls to take risks, it has nothing to do with some course you take.
It is the ones that can be rejected and keep going back until they finally found someone that will go along with their scheme.
It is also the ones that can look a guy straight in the eye and take his last dollars of equity.
Guys like Kiyosaki talk about Win win situation. There is no such thing, if you are winning someone is losing.
I am not trying to condemn or judge people but the reality is the successfully ones got there for other reasons, not because of the seminar they took.
courses & win/win - Posted by Hunter
Posted by Hunter on September 13, 2004 at 17:08:42:
Craig,
I agree that many people succeed without taking a course. I didn’t suggest that you have to take a course. I did suggest that someone who has been trying unsuccesfully for three years may want to try some other method (ideas) and they can be found in other courses if one lacks the ability to dream up their own method.
I completely disagree that there can not be a win win situation. If I buy a car and the dealer makes money and I am happy with the car and the money I chose to spend on it, who loses? Same in real estate, if both parties agree that the deal is in their best interest and nothing deceitful has taken place, who loses? We both got what we wanted. Best wishes.
Re: courses & win/win - Posted by Craig
Posted by Craig on September 14, 2004 at 12:54:33:
Hunter
I don’t agree with the win win, if you are winning someone is losing. Just ask the losers of the superbowl from last year.
As in the car comparison, I would consider that to be a tie. Now if you bought the car for half its value you would be in a win situation but the dealer would be at a loss.
The phrase win win was invented to make people feel better when they are being fleeced. The reality is they are losing.
It is also designed to make the person that is winning feel better about what he has done.
Tell any sports team there is such a thing as a win win and they will tell you, that you are crazy. Its win or lose.
Just the very meaning of winning means someone is losing. Cant have it both ways.