most effective way to create CASH FLOW? - Posted by Daas

Posted by Ronald * Starr on April 16, 2001 at 23:21:16:


I am impressed with your energy and preparation. It looks to me like you will do great.

I posted a response to “Mary” who asked about a “lender who will finance repairs” on April 10. This is on the “Finance Forum” Bulletin Board part of CREONLINE.COM. I feel that my general advice may help you too.

I wish you well–Good Investing===========Ron * Starr

most effective way to create CASH FLOW? - Posted by Daas

Posted by Daas on April 16, 2001 at 21:31:28:

I have been reading a lot of posts and I am having a hard time finding an answer to my question. What is the most effective way to receive cash flow in real estate? Residentially or commercially, I don’t care. I have a substantial amount of money I can invest in so therefore all these things I hear about no money down don’t seem to have the best deals. I would like to have alternate methods of receiving a check in the mail at the end of the month. So flipping doesn’t interest me that much. I don’t want to keep looking for houses and fixing them up day in and day out. Contractors or no contractors, I really don’t want to work that much. I hate my job and I think this could be a great alternative. I came across wrapping which sounds likes fun, but don’t really know where to start. I was even thinking about being a small bank for other people who want to start investing but don’t have the funds to do it, or they have crappy credit. I know there are a lot of people living in apartments that want a house but can’t qualify. The collateral would have to be of some interest though. Like the house. I went to one of the 3 day seminars of Robert Kyiosaki (spelling?) and I am going to another Real estate seminar next month with a guy named Dolf Roose (spelling? some guy from Australia) where we will actually go and look at property and go through the process of real estate. There are only 50 people aloud in this seminar and sold out in 10 minutes. It will be very personable. I am also going to John Burley’s 5-day bootcamp also later this year. I have educated my self as much as possible but I want to take action and don’t know where to start. I was told to protect my assets through a corporation. Done. I started an LLC and the paperwork should be completed by the end of the month. Now what. Need an attorney. I got one. Need a CPA. I got one. I don’t even know if a building is a good buy or not. How do I compare houses in a certain neighborhood. Knock on a door “Excuse me, but how much is your house worth” “And how many square feet do you got in there” “Bedrooms?, Bathrooms?” “How’s the plumbing?” The owner is going to think I am going to rob him when he goes to work the next day. There has to be a better way. I would ideally like to find someone locally that I could learn the ropes with. I can only learn so much by reading. Could by chance I look in the yellow pages? I have called some real estate people and none of them know what the hell I am talking about.

Thank You

Do you want “passive” income? - Posted by Michael Morrongiello

Posted by Michael Morrongiello on April 18, 2001 at 22:17:03:

Investing excesss cash into Real Estate secured debt instruments can produce above average rates of return with little headache or heartache. You have a secured lien on a peice of Real Estate as collateral. A check comes in monthly (cash flow) providing you a return on your investment (like clipping coupons on a bond). You are not dealing with the dreaded " T & T" tennants & toilets. If you continually reinvest these funds then you start to realize compound rates of return. Also if you have the right IRA Custodian then you can also deffer taxes on these returns within your retirment plan.

Is this the “best” way? Thats a question you have to ask yourself.

To your success,
Michael Morrongiello

Small Piece of Advice - Posted by NCPaul

Posted by NCPaul on April 17, 2001 at 14:32:50:

Your question about valuation of real estate and knocking on doors should be more of a question than you may realize. Lot’s of people getting into this business fail to learn even the most basic valuation techniques. This can be the difference between getting a good deal or being stuck with a pig in a poke. If you have no clue what something is worth on the open market how can you possibly make an educated decision about buying that property? My advice would be to find an appraiser you can get along with, possibly one you already know, and set a deal up where you will send him all your business if he will give you “pre-comps” on various deals. Pre-comping a property is a courtesy appraisers will often give to their regular customers. Basically they pull comparable sales from the subject area and tell you what these homes sold for. This will give you a rough idea if you are on the right track or way out of line. Another way to get the same information is to talk with a Realtor and get a Broker Price Opinion, BPO. Banks usually order these but anybody can get one. They usually charge $50-$75 per but this includes comparable sales and a basic neighborhood analysis. I hope this helps in at least a small way. Good luck and happy hunting.

Re: most effective way to create CASH FLOW? - Posted by David Butler

Posted by David Butler on April 17, 2001 at 11:32:32:

Hello Daas,

Very difficult question to answer specifically for any one individual, but you make mention of potentially being what I call a “vest-pocket angel” for others in the various sectors of CREI, which may or may not be a very sound approach… particularly if you are more interested in having others do as much of the work as possible…

Although you have indicated too that you are tired of reading :wink: - I am going to suggest that you consider reading at least one more piece… that being Jon Richards’ report at:

as it goes to the heart of a tremendous sector that is followed heavily by many of the participants throughout this website.

Hope this helps you in exploring what direction you might want to take… and many happy Returns :wink:

David P. Butler