John Beck vs Carlton and others - Posted by new2this

Posted by Jack E on November 30, 2006 at 16:12:32:

Beck’s basic course is all you need. Don’t get caught up in the big Guru hype. Use that money to buy properties.

John Beck vs Carlton and others - Posted by new2this

Posted by new2this on September 26, 2006 at 23:39:11:

I am new 2 this.

I saw an informercial and I purchased John Beck’s system. What a load of crap. No real info there. It’s all out dated info.

Can someone tell me if it is worthwhile to purchase Carlton Sheets to learn?

I am not necessarily trying to do the no money down deals. I have about $100K in cash. Just want to know what is the best way to get into real estate investing without taking on too much risk.

Thanks

Re: John Beck vs Carlton and others - Posted by rich

Posted by rich on October 31, 2006 at 07:00:09:

Hey – Carleton Sheets course is crap too. I reccomend Ron Legrand as core curriculum. Then read Joe Kaiser after that!

Rich

Re: John Beck vs Carlton and others - Posted by Pit Bull

Posted by Pit Bull on October 28, 2006 at 18:32:31:

Unfortunately it seems to me you may think all efforts to help you invest may be a load of crap. There is something to be gained from both of these so called Gurus. But understand tha- they are out to get your money and are necessarily your great friend. Be realistic, get what you can and if you have any sence, read this site like it was your lover. Just do it!

Re: John Beck vs Carlton and others - Posted by Robert

Posted by Robert on September 27, 2006 at 04:52:11:

With that much cash in hand, you’re in a good position to make things happen.
However, you still aren’t going to want to dip into your own funds unless required to do so. Creative real estate is all about using OPM: other people’s money.
As for taking the less risky path, I would strongly recommend utilizing options and lease options for starting out. Clearly, the risk to reward ratio can’t be beat. I’d be happy to discuss this a bit with you, and recommend a few folks and materials who I think are worth your time. Good luck.

Re: John Beck vs Carlton and others - Posted by new2this

Posted by new2this on September 28, 2006 at 24:17:02:

Thanks Robert. I am very interested, but never really understand how it works when people say using OPM. Wouldn’t you be stuck if you are unable to sell the house you are purchasing ? Especially now we are in a down market…

Would definitely love to hear more from you…thanks

Re: John Beck vs Carlton and others-Why Invest? - Posted by Jack

Posted by Jack on September 28, 2006 at 19:16:52:

In the R.E. business, comparing Beck to Sheets is like comparing apples to oranges. Carltons course, if nothing else is a basic primer in R.E. Investing. Beck is mainly for tax certificate and tax deed investing. I know him well having been on a traveling boot camp with him.

If you have no experience in this business, then to my way of thinking you have no business just going out and buying willy nilly any course on any subject. That is idiotic! You need to gain a basic knowledge first, which you can get best by reading everything and I mean everything on this site once if not two or three times and joining your local non profit Real Estate Investor Association (REIA). If you want to find one in your area, just look at the sidebars on this site.

All I have said so far is practically free. Once you have gained a basis knowledge you need to get out and do it. That may be the time to get any specialized courses, if necessary. Some seem to prefer personal coaching, which I personally think is a waste of time and money, but some may not be able to do it any other way. But nothing beats just getting our and doing it. It has been estimated by several Gurus and many of us long time investors that 90% of better of the people who take courses and buy boot camps and go to conferences, never buy their first property, even though had they used the money they spent on going, to invest in property, they would have had a much better chance of being successful. Evidently the fear factor overrides all that they learn. Yet many of these are also investors in the Stock Market, which is a real crap shoot gamble. And I would think some, if not many are casino gamblers and go to “Lost Wages”, Las Vegas and loose a lot more than it would have cost them to make a smart investment in R.E. I have personally talked to wantabe investors at conferences that have been gathering knowledge for years, one for six years and going to conferences and have never invested. Now don’t get me wrong, going to conferences can be fun and very educational. The best of the bunch by far is the one offered by this site, usually in February.

If you have any questions on all of this, please post them and let everyone know. Also any of you experienced investors please chime in. I would gladly answer. What is my motive in this long disertation? I just do not like to see people, any people loose their shirt financially, do to lack of knowledge, when it is so abundent, especially on this site.

Re: John Beck vs Carlton and others - Posted by Robert

Posted by Robert on September 28, 2006 at 09:41:56:

It all depends on the paperwork you are using and what sort of clauses it contains. We always try to operate with a “weasel clause” so that, if necessary, we have an out. Not that we enter a deal with this intention, but if things go awry, an out is available.
Also, when using options and lease options, they are just that: an option to buy, not a requirement to do so. So there is no way to be “stuck” when using this approach. Done correctly, the risk to reward ration they offer can’t be beat, which is why I touted them as the best way to begin in this business.

Re: John Beck vs Carlton and others-Why Invest? - Posted by new2this

Posted by new2this on September 29, 2006 at 21:49:09:

Thanks Jack. I appreciate that.

I bought my first property not that long ago. But it was the traditional buy-lease-hold strategy. And I spent a lot of money for the property.

I have saved up another lump sum now for my 2nd property. But I want to know if there are other ways to make money in R.E without doing the traditional buy-lease-hold strategy. That’s why I am intrigued by this site.

I wonder if someone can post a concise list of all the creative strategies that one can use to invest in R.E ? Something in bullet points ?

Thanks

Re: John Beck vs Carlton and others-Why Invest? - Posted by vladimir Joseph

Posted by vladimir Joseph on September 29, 2006 at 12:27:04:

Hi guys, I was wondering as a first investement what would be the first and secure property you would suggest to buy…Thanks!

Re: John Beck vs Carlton and others - Posted by new2this

Posted by new2this on September 29, 2006 at 21:29:53:

Thanks guys.

Can someone give me a simple but concrete example ? How can one invest with OPM or very little of his own money ?

For example, how do you entice the seller to give you an option to buy ? Do you have to give him some money in order to have the option ?

So once you have the option, you then look for buyers who are interested in the property, am I correct ? And you just pocket the difference between what the buyer is willing to pay and what the seller is asking ?

So that would mean profit in your pocket with little or no money down, and no risks ?

Do I understand this right ?

I know there must be many creative ways to structure these creative deals…but I just want to get an idea of the different strategies.

Thanks, I am glad I found this site.

Re: John Beck vs Carlton and others-Why Invest? - Posted by Bob Davis

Posted by Bob Davis on October 04, 2006 at 12:51:10:

I’m a very small time investor but here’s one of my deals. I purchased a house for $7,500.00. I spent another $1,100.00 on paint and facelift. I had house appraised for $20,000.00. I took out and equity loan for $16,000.00, 80% of appraised value, paid myself back the $8,600.00 I had invested and have rented the property for the last six years for $350.00 per month with $196.00 mortgage payment. About as easy as it gets. This was a very low end property, but has a positive cash flow and I could sell it today for a good profit after all the years of a steady monthly income. High priced properties can work the same way with even more profit and income. Depends on how much nerve you have and if stress is a factor?? Best of Luck. Bob

Re: John Beck vs Carlton and others-Why Invest? - Posted by Jack

Posted by Jack on September 29, 2006 at 16:57:42:

What do you mean by a “secure” property? What you invest in should be dependent upon what you plan to do with it after you purchase it. Do you plan to flip it as is, fix it up and sell it, or lease option it or keep it as a rental? The type of investment and what may be a secure property can vary depending on what you do with it. Always have an exit plan before you buy. That is not to say you may change your mind once you have it, but be sure you have thought it out before hand. You may want to buy a SFH, a multiple family place or a commercial property or maybe even a mobile home. They all can be secure in a sense that you may be able to make a profit. Get the basic knowledge before you buy anything and then decide what type of property you want.

Re: John Beck – CONCRETE EXAMPLE - Posted by ejg

Posted by ejg on November 03, 2006 at 16:44:21:

Here’s a concrete example we are closing right now. First, some basic concepts. Assuming you are going to keep the property for a year or move (whether you fix it up, or rent it as is), unless someone GIVES you the money, there is really no such thing as ‘nothing down’. If you create a long-term comprehensive scenario on a spread sheet, you will find that your NET WORTH is either going up over time (good), or going down (bad). (For a short-term flip, 'nothing down, or a high interest rate, may be OK, IF you upgrade wisely and sell at a profit.)

We have a lot of equity in another property. Therefore we established a line of credit (LOC) for about $120K, 80% loan-to-value, @ 8.25%. It cost 1%, or $1,200 (+ about $100), to set this up. We only owe the 8.25% (interest only) on the (revolving) outstanding balance.

Next, we identified a 1976 1400 sq ft ranch style rental. As best we can tell it is worth $240K TODAY, in ‘as-is’ condition. Good roof, ext paint, recent furnace and hot water heater, original kitchen and bath, original aluminum windows. Could use interior paint, carpets, upgrade landscaping, cosmetic TLC, but the current renters appear to be happy.

Asking (and purchase price) = $219K. As-is comps = $240K. Nicer comps = $250K to $255K. Primo comps = $259K to $265K. ($12K-$14K would refurb kitchen and 2 baths, add vinyl windows, carpets, inter paint, improve landscaping.)

Apprec last year (suburban Portland) approx 17%-21%. Very nice, BUT deal does NOT require this for the future!!!

Invest 35% down ($76K + $5K closing = $81K), get a low-cost, easy, quick, no-doc loan for 65% LTV ($142K). Is this ‘nothing down’? I don’t know; you tell me. It’s my money, but I’m borrowing it ‘from myself’ at 8.25%. (Variable, BTW, so I need to pay attention to future rates.)

Immediately after closing, my lender will give me a new LOC on this house. Since their on-line appraised value is $250K, they will give me an 80% ($250K x .8 = $200K) LOC. $200K - $142K = $58K LOC (1% to set-up = $580 + $100). NO COST unless and until I DRAW on this LOC, but it’s available if and when I need it. Regardless of where my LOC lives, my TOTAL LOC has dropped by only $23K ($81K spent; $58K new).

It ‘feels to me’ like I just bought a property worth $240K for $219K. I paid $23K down (sort of), 10.5% down on $219K, or 9.6% down on $240K. I have acquired $21K ‘instant equity’.

Expected rents are about $1100-$1150/mo. After taxes and insurance, AND the interest-only payment on the LOC, we will have a negative cash flow of about $450-$500. DO NOT DO THIS IF YOUR AREA IS AT THE PEAK OF A BUBBLE!

I ‘expect’ apprec to slow down, but not go negative. Let’s say it slows to 5% instead of 15-20%. Apprec will be about $1,000/mo, so our net worth is going up, even though the individual cash flow is negative each month. (I have not mentioned the moderate accumulation of loan equity, or any depreciation or other tax benefits; YMMV).

(Boy, would I like to see 15% apprec again! Gravy!)

I spent all this time just to think through (yet again) all the details. COMMENTS APPRECIATED.

Is this a good deal? A great deal? Well-known? Helpful to others? Am I a genius? A moron? Something in between?

Keep in mind: ‘Nothing down’ means a ‘large loan’. ‘Large loan’ –> ‘large payments’–> negative cash flows. FLAT appreciation may mean your net worth is going DOWN!! Running out of cash may lead to DEFAULT!!

No ‘guru’ can make these real-world facts disappear.

OK, Let’s hear it!

Re: John Beck vs Carlton and others - Posted by Robert

Posted by Robert on September 30, 2006 at 05:36:08:

new2this,
Email me off board. You have a lot of questions, rightly, but it’s difficult to answer them with one sentence replies here. If I can help, I will. If I can’t, I’ll point you in the direction of someone who can.

Re: John Beck vs Carlton and others-Why Invest? - Posted by Amber

Posted by Amber on October 07, 2006 at 17:45:54:

As for a bulleted list, that would be a long long list. Although I am new to this (mostly), what it boils down to is how bad do you want it. There are a lot of resources available for little or no money to begin learning (like this site). I have purchased John Becks program, Carelton Sheets program, Rich Dad’s program and also Property Pro, spending around 5000 for them all. The only thing that is a waste of money is something you do not use. Becks program was great I thought, a fresh view. It is all up to you. Good luck!!

Re: John Beck – CONCRETE EXAMPLE - Posted by Kurt Schultz

Posted by Kurt Schultz on November 04, 2006 at 18:01:34:

Yup, there ya go!

My only complaint? You should have posted this over on the Creative Financing forum!

General observation about “No Money Down” approaches: in order to make these deals work out well, you must master debt management. The way to get property for no money down is usually to assume lots of debt obligations. If you are not able to manage that debt well, you will get overwhelmed by it.

This is an issue that I wish Carleton Sheets’ courseware would address.

Re: John Beck vs Carlton and others-Why Invest? - Posted by ruthblue

Posted by ruthblue on November 29, 2006 at 23:17:37:

I too purchased John Becks program & some things were useful points of interest, others just hype. I took a college course on investing but the only thing I invested in so far was a foreclosure property. John Becks people have contacted me to invest more money in their course from $3,500.00 to $10,000.00 saying I will make lots of money but you are the first person to say his course was useful to you, but you do not say it you made any money from his course or not?Advise.ruthblue 11-29-06

Re: John Beck – CONCRETE EXAMPLE - Posted by Bob Davis

Posted by Bob Davis on November 06, 2006 at 12:50:45:

Kurt, This is a very good point that I also wish Mr Sheets would make clear. Money back at closing sounds very attractive, but it has it’s costs. Someone has to pay back the cash, hopefully your renters, but if not, it’s your responsibility. Money is not free. People need to look at all angles.