Re: Zack, you misunderstood - Posted by James Strange
Posted by James Strange on December 19, 2002 at 20:31:46:
This shows just how bad the advice found at johntreed.com is.
How does the cash flow in determine how much you will spend on operating expenses? Does a hot water heater cost a % of your rent or does it have a set price no matter what your rent is?
If operating expenses were 45% before payments on all rental property no one buying rentals would be making any money.
Re: SFHs–Costs, Income, and an oxymoron? - Posted by Ronald * Starr(in No CA)
Posted by Ronald * Starr(in No CA) on December 20, 2002 at 15:38:29:
Nate–(DC)--------------
There are a lot of towns that fit the description of Eric. I was going to ask the same question. Thanks for saving me the trouble.
Look in the Midwest and the Southeast. I know that you are in a high-priced area, as am I, and it is hard to believe that there are towns with price to rent ratios that good. But there are. You can look up a lot of towns on realtor.com to see what houses sell for. A couple of weeks ago I looked up Wichita, KS. Lots of houses for less than $70K there. And there were rentals for over $800/mo. Maybe the more expensive properties, but still promising.
Good InvestingRon Starr***
We all have to have some secrets. (nt) - Posted by Eric - GA
Posted by Eric - GA on December 20, 2002 at 10:16:52:
nt
Re: SFHs–Costs, Income, and an oxymoron? - Posted by James Strange
Posted by James Strange on December 20, 2002 at 01:20:05:
On one hand he seams like a smart guy. A lot of his reviews are right on. If it was a guru review site from someone not selling his own material I could take it a lot more serious.
I also don’t vote for political candidates that sling mud.
As for search engines that is easy stuff. If he would design a site with good content he could have better ranking.
Re: Zack, you misunderstood - Posted by Dave T
Posted by Dave T on December 19, 2002 at 21:48:54:
Using your numbers, your Net Operating Income is at 58%. If you do your own property management, net operating income increases by $100 per month giving you a 68% operating income ratio. This should be plenty to cover debt service if the mortgage loan is no more than $80K at 7% interest rate.
Re: Zack, you misunderstood - Posted by James Buster
Posted by James Buster on December 21, 2002 at 04:33:24:
I’ve seen numbers regarding multi-family properties very similar to 45% before debt service (including management).
Re: Zack, you misunderstood - Posted by Eric - GA
Posted by Eric - GA on December 20, 2002 at 06:42:38:
And that’s what Reed is trying to say…basically all rental property is cash flow negative, and the owners just don’t admit it. You’ve convinced me otherwise though. Thanks.
Re: SFHs–Costs, Income, and an oxymoron? - Posted by Ronald * Starr(in No CA)
Posted by Ronald * Starr(in No CA) on December 20, 2002 at 13:19:08:
James Strange------
I agree with you that many of, although not all, of his guru ratings agree with my feelings about the gurus.
However, I do also feel that there is a lot of very good information there: his reflection about running the guru ratings site, his advise for beginners, and well at the bottome of this post is his a list of free articles on his website. Now some of them may contain opinions with which you disagree, especially probably his ethics and suitability and lease-option views, I would guess. But much of the rest is interesting, and probably is useful. The Guru Rating Checklist seems to me to be a brilliant idea and useful for beginners.
So, what other content would you rather see him have. Or what would you suggest he remove?
Good Investing***********Ron Starr*******
Listing of free articles on www.johntreed.com
Are you seeking real estate investment advice for the right reasons?
Nothing down
“The real estate B.S. artist detection checklist.”
Why you should not buy expensive seminars or mentoring services.
What you need to know about lease options.
Reflections on three years experience with my guru-rating page.
The ethical standard of suitability in real estate
How can you tell who?s telling the truth: John T. Reed or the gurus he criticizes?
If these guys are not telling the truth, why haven?t the authorities shut them down?
Positive cash flow
Should you only read books by active investors?
Suggestions for beginning real estate investors.
Review of Carleton Sheets’ material.
The truth about getting around due-on-sale clauses.
Common real-estate-investment misconceptions.
Why John T. Reed created and maintains his real-estate-investment guru-rating page.
What about those amazing guru testimonials on TV?
Who my guru-rating Web page is for.
Some real estate investment basics.
What the bad gurus say behind your back.
How to get a refund of the money you paid to a bad guru.
Review of Robert Kiyoaski?s book Rich Dad Poor Dad
Best-selling real-estate authors: Where are they now?
Flipping real estate
Don’t Forget Vacancy - Posted by Sean
Posted by Sean on December 20, 2002 at 09:39:09:
Zack’s numbers may be conservative, as he says, but he didn’t include a vacancy allowance.
Re: Zack, you misunderstood - Posted by James Strange
Posted by James Strange on December 20, 2002 at 17:14:53:
You have to look at the numbers.
Build a big cash reserve. Don’t expect to cash flow from day one. If you are spending your cash flow how can you build a reserve. Things like roofs are very expensive. Someone who does not pay the rent can hurt you.
Usderstand I am not a formula guy. But look at it from all angles.
Re: SFHs–Costs, Income, and an oxymoron? - Posted by James Strange
Posted by James Strange on December 20, 2002 at 22:03:42:
****Ron Starr
Since you recomended that I look at more of the information on the site I went and took a look. His Guru ratings page was my first impression. You know what how it is. It may not be right but a first impression goes a long way.
So anyway since I respect your opinion I went and took a look. As for ?his ethics and suitability and lease-option views? I basically agree with him. I just don?t like his selling methods.
I do have one question for you. I am just a rehabber my situation does not allow me to be a long term investor. The 45% that he mentioned as operating expenses. What number are you coming up with?
Below I have added my comments about the sections. They are just my opinion.
Are you seeking real estate investment advice for the right reasons?
I recommend.
Nothing down
I do not recommend. It is nothing more than a way to suck you into buying his special report ?How to Buy Real Estate for Little or No Money Down.?
“The real estate B.S. artist detection checklist.”
I am surprised to say that this is must a read before anyone spends hard earned money.
Why you should not buy expensive seminars or mentoring services.
Neutral. Not a bad article but he would have a cow if he seen my billing rate.
What you need to know about lease options.
Neutral. He does a good of discussing the moral side of them, which is often left out. But he takes pot shots at other but to do it right buy his report ?Single-Family Lease Options?.
Reflections on three years experience with my guru-rating page.
Waste of bandwith.
The ethical standard of suitability in real estate
Neutral
How can you tell who?s telling the truth: John T. Reed or the gurus he
criticizes?
Not Bad, but is self serving.
If these guys are not telling the truth, why haven?t the authorities shut them down?
Not Bad.
Positive cash flow
It is a well written article but the 45% expense ratio has me baffled. If it really is 45% then is anyone making $ with rentals?
Should you only read books by active investors?
Not bad.
Suggestions for beginning real estate investors.
Part one and two are very good reading.
Review of Carleton Sheets’ material.
It is a well written article.
The truth about getting around due-on-sale clauses.
Good reading.
Common real-estate-investment misconceptions.
Good stuff.
Why John T. Reed created and maintains his real-estate-investment guru-rating page.
At least he admits ?I do it to sell books!?.
What about those amazing guru testimonials on TV?
Not bad
Who my guru-rating Web page is for.
I mostly fall into the ?You probably WILL appreciate my material if you…? category. Which is surprising since I don?t appreciate the material.
Some real estate investment basics.
Must read.
What the bad gurus say behind your back.
Gossip, I don?t do gossip.
How to get a refund of the money you paid to a bad guru.
Read before you order a course.
Review of Robert Kiyoaski?s book Rich Dad Poor Dad
I have never read Kiyoaski?s books, so I have no comment.
Best-selling real-estate authors: Where are they now?
Good reading.
Flipping real estate
Good reading.
Re: Don’t Forget Vacancy - Posted by Zack
Posted by Zack on December 20, 2002 at 21:34:37:
I knew I was forgetting something.
Re: Zack, you misunderstood - Posted by Eric - GA
Posted by Eric - GA on December 20, 2002 at 18:51:17:
I agree whole-heartedly, and I don’t think I’d do a deal the way Zack is describing, because it doesn’t give me that reserve that I want, and I feel that I owe to my investment and tenants. Besides, how much sense does it make to risk losing a $100K property because you couldn’t resist spending the cash flow you got on a new pickup truck, instead of setting it aside for the new roof, new carpet, new paint, new stove, new water heater, new garage door, sewer line repair, fence repair, busted pipes, termite treatment, or the 3 months of rent you missed because you picked bad tenants.
Thanks James.
Eric - GA