Re: Sorry, Difference of Opinion… - Posted by Frank Chin
Posted by Frank Chin on February 14, 2006 at 08:25:48:
Ed:
You made some good points here. BUT
Having met you, and hear you speak at two CREOnline conventions, I find you thoroughly entertaining. Add that to good business sense, and we got someone who can do well, anywhere, in good markets or bad. The point being, not anyone can be a “Ed Garcia”.
In the last convention, I was at a session where you spoke, and you had students discuss your course, particularly about the use of the “working line of credit”. I recall one fella, short and fat, speaking with an accent, commenting afterwards that he’ll have a hard time doing deals as he even has trouble getting himself hired at a “seven 11”.
Having said that though, he said he had no choice but to do RE a he can’t get himself employed.
Having tried hands getting to the “real” deals, at least around here, in NYC, where it exists, but hard to find, it’s usually snapped up by investors, ALL CASH. These deals are exactly the type of deal that your “working line of credit” is aimed at, isnt’t it??
But, it seems that even you, and banks for that matter, would only consider “experienced” investors for these lines, a novice starting out would have a hard time competing against the experienced, for the GOOD deals.
I did run across one fella, whom I partnered with, and actually gone thru one deal. He put a team together, where he’s got RE lawyers referring deals to him, and he’s got investors with CASH to tie up the deals. But, it took him TWO or more years to get it together.
When I met him, I already owned several rentals, and in the “high inflation” era of the early 80’s, I already earned 10K/year on each property in appreciation. In addition, rents went up 50% between 1981 to 1986, so a property that just broke even in 1981 cash flowed nicely by 1986. Add that to the reduction of interst rates on 18%, to 13% in the same period, we went from nothing to nearly $1,000 per month in cash flow in a few short years, on each property.
The point here being, I would’ve missed out the whole early 80’s had I insisted on good cash flow from day one, and poohed poohed appreciation.
While I made money with rentals, this guy putting his team together made very little putting his team together. One reason being, perhaps, I noticed he’s not as dynamic as an Ed Garcia.
I also understand Crassus’ point about doing deals and being “employed”. Had a friend who inherited a little over $1,000,000 from an uncle who passed away. As he had the cash, he looked for deals where he can tie something up ALL CASH and flip.
He called me one day ranting. Had a deal where he could’ve picked up a property for a little over 50% FMV. Seller want to wrap the deal up on a Thursday. He asked for a day off, but the boss said there’s a meeting on that Thursday.
So he rescheduled for Saturday, and by then, it was sold to someone for even LESS. A little upset, he asked the seller “why”?? Seller explained he needed the money BAD on Thursday, not Saturday.
In fact, I did a deal with a seller where I was able to advance him a few thousand cash quickly, at least quicker than the next guy. Long story, but he owed the local “loan sharks” some money. He’s looking at a few deals, but if he didn’t pay by a certain date, they promise him his legs would be broken. I was able to work things out to keep him in one piece.
I got myself a good deal, and he was able to WALK to the closing.
Frank Chin