Posted by ann on June 26, 2003 at 19:54:38:
you told HIM!!! HEHEHEH!!!
What a post…long but I liked it. All of it.
what part of Florida are you located?
ann
The Holy Grail - Posted by Larry G
Posted by Larry G on June 25, 2003 at 19:50:51:
Dear Real Estate Investor
This is a very informative site with some articles from authors who are quite knowledgeable. However, having been a real estate investor for over 15 years i am just astounded by the number of people who think they are going to make millions by going to seminars and boot camps for $3000.Look you don’t have to pay that kind of money to get good information.No offense but Robert Allen has declared bankruptcy and is now back selling a new cure-all potion.
There are courses you can take fromm CCIM that will teach you the present value of money calculations,loan constants,debt coverage ratios,cap rates, GRM,etc… And they will not cost you anywhere near that kind of money.Moreover,all this no money down junk is ridiculous. Can you buy with no money down? Yes i have and other investors i know have but it makes it very tough on achieving positive cash flows and more often than not will bury you.
Folks there is a reason banks don’t like no money down deals they have have a century of lending experience that tells them it puts deals in shaky territory.William Nickerson in his first book had you putting 25% down and borrowing the balance.In general he wasn’t far off although i would recommend an 80%LTV.
To all you aspiring investors, real estate is not a get rich quick scheme it’s a get rich slowly game.But as time goes on you proceed much more quickly then when you first start out and you must be persistent and you will reach the Holy Grail. The trip should be as much fun as the destination.
Sites like this are helpful but be careful of the charlatans. Good luck to all.
Re: The Holy Grail - Posted by Sean
Posted by Sean on June 26, 2003 at 11:57:17:
BODY OF MESSAGE: Well personally I am glad you aren’t the investor I learned what I know from, and I honestly don’t know a whole lot! I have not once come out of my pocket for anywhere NEAR 20%, in fact, I haven’t come out of pocket for $1000 for an investment property.
Not only that my friend, but whenver I do go down to see Mr. Banker and put a bank mortgage on my property at 75-80%, I get a nice 5 figure check from the bank at close.
There is definately a lot of crap out there, there are people selling courses who made their names in Alaska 20 years ago, and haven’t done anything since… but they still sell their courses. Of course there are a lot of REALTORS out there who have “been in the business 20 years” and haven’t learned a darn thing since their 1st or 2nd year… so what are you going to do?
Investors make money by solving problems CCIM grads just walk away from saying sorry can’t help you! Lets face it, what are the 2 extremes of REI?? Junkers, which most agents won’t list to save their lives, or pretty houses generally with not enough equity in them to ensure that Mr. Agent will get their commission check, so they won’t touch them either. And that’s where lots of REI’s are making lots and lots of money.
Realtoritis Is Not A Good Disease - Posted by phil fernandez
Posted by phil fernandez on June 26, 2003 at 06:19:26:
Larry,
Welcome to this great site. It’s the best out there. The 4 guys that just responded are all seasoned successful creative investors. Jim and Joe K I know personally.
What you have is a bad case of " Realtoritis ". It seems to strike, not all at once but after you have had your realtor license for awhile. You take your barebones simplistic realtor courses and you think you know everything. From what I’m hearing from those who have taken some of your realtor courses is that they are basic and do not teach you to think creatively to solve problems. The old put 20% down and get a bank mortgage for the other 80% is a very dull and unproductive way of looking at things. Tell me, how do you make money by putting 20% down. All you are doing is locking up that money when it could be spread out over 10 or so deals. By plunking down your 20% you limit yourself. By buying nothing down you can buy as many houses as you want because you are not restricted by downpayment requirements of 20% down.
Larry, welcome aboard. Stick around here and you will learn how to " think outside the box" and prosper.
Re: The Holy something Batman! - Posted by Jim FL
Posted by Jim FL on June 26, 2003 at 04:18:27:
Dear Larry,
I have to tell you, I’m only responding because I’m up early today and unable to sleep.
Otherwise, a rather offensive post like yours usually makes me just move on and forget about it.
Like I said, I have time.
So, let’s take a look at what you had to say here and I’ll interject comments throughout and perhaps shed some light for you…or not;
“Dear Real Estate Investor”
Cool, you got that right, this is an investor forum
“This is a very informative site with some articles from authors who are quite knowledgeable.”
AMEN! This is the BEST website out there for information about investing, whether creative or not.
“However, having been a real estate investor for over 15 years i am just astounded by the number of people who think they are going to make millions by going to seminars and boot camps for $3000.”
Uh oh, you stepped in it here, be careful, MANY people here, who are both VERY successful, all the way down to the part timer who is happy to do 5 deals per year started with “Seminars and Bootcamps”, myself included, except for the bootcamp part.*
“Look you don’t have to pay that kind of money to get good information.”
You are correct, there is a TON of info RIGHT HERE, for FREE!..however, sometimes a course, seminar, or even a bootcamp is exactly what the doctor ordered, and does in fact help to straighten the learning curve for some.
“No offense but Robert Allen has declared bankruptcy and is now back selling a new cure-all potion.”
GREAT NEWS! Thanks, that IS an inspiration, to be able to file a BK and STILL start over and create wealth! Now there is someone I’ll listen to, they know a thing or two, and I’ll just bet that good old Robert Allen learned a thing or two with the BK experience…if it indeed happened, but I’ll give you the benefit of the doubt.*
“There are courses you can take fromm CCIM that will teach you the present value of money calculations,loan constants,debt coverage ratios,cap rates, GRM,etc… And they will not cost you anywhere near that kind of money.”
*Great, this sounds wonderful, IF I want to be an agent or broker, especially commercial. HOWEVER (There is always a “However” it seems)
I prefer to invest, and when I need someone to figure out things such as above that I might not want to, be able to, or have time to, I’ll PAY a pro, and use my time doing what I know how…buying houses, and yes, for no money down…WOW! It works!
“Moreover,all this no money down junk is ridiculous.”
*Gee, you sure picked a good place to come and make that declaration! Sheesh. Perhaps you should stick around a while and do some HEAVY reading, starting with the success stories. MANY of us here buy houses and other properties ALL THE TIME with no money down. But perhaps I’ll start to plunk down LARGE amounts of money to buy, and park it, rather than having it work for me elsewhere. Nah, too much hassle.
“Can you buy with no money down? Yes i have and other investors i know have but it makes it very tough on achieving positive cash flows and more often than not will bury you.”
*Whew, you sure saved me there. I guess I should just quickly run out and sell all the DOZENS of properties that I have aquired “No money down” that have KILLER postive cash flows. Gimme a break here, this comment shows a certain part of your anatomy, and it ain’t your brain. Like I said before, stick around here, you might learn a thing or million…and if you are really nice, maybe someone here will help you straighten out that investing handicap you have.
“Folks there is a reason banks don’t like no money down deals they have have a century of lending experience that tells them it puts deals in shaky territory.William Nickerson in his first book had you putting 25% down and borrowing the balance.In general he wasn’t far off although i would recommend an 80%LTV.”
***Good thing I’m not a bank and stuck thinking in antiquated ways about making money. But hey, I’ll still use their money to make some for myself…and yes, that does work. In fact, while I’m at it, let me give you an example, and you tell me how this deal is “Shaky”…this I gotta hear.
I recently purchased a house subject to the existing mortgage, for, ready for this, NO MONEY DOWN!
In fact, the sellers are paying me to take it, by sending the next THREE months worth of payments to me.
The interest rate on the loan I took over is a little high by todays standard, but I’ll take it…it sits at 6.7%.
The house WILL cashflow, because the payments are WAY less than market rent for the area.
I’m in this house for about 57 cents on the dollar.
So, where is this deal “Shaky”.
I’m in for zilch, actually, getting paid to buy it, and have PLENTY of equity. This is not a typical deal, I’ll admit, my average LTV stands in the lower 70% range…ALL with no money down. Should I rethink how I buy? I don’t think so. By the way, I would NEVER put 25% down, or even 20%, UNLESS it was equity from another property, and kicked back KILLER cash flow for the use of it. I don’t PARK money lightly.***
“To all you aspiring investors, real estate is not a get rich quick scheme it’s a get rich slowly game.”
*WOW! A point I agree with, you are right, you can build wealth slowly in this business. I do think there are ways to accelerate it, by using creativity though, and I’m sure you’d disagree with most of them, because they are no money down techniques.
“But as time goes on you proceed much more quickly then when you first start out and you must be persistent and you will reach the Holy Grail. The trip should be as much fun as the destination.”
I could not agree more, being persistent is the key, and the trip sure is one h e double hockey sticks of a ride, I know, I’m on it now, and having a BLAST along the way!
“Sites like this are helpful but be careful of the charlatans.”
And WHO might that be? This just plain did not make sense to me…then again, your observation appears to be from someone who has not been around here for long. Again, I’m not affiliated with this website in any way, other than being a devoted fan and particant, but I’m sure the owners would not mind it one bit if you stick around and read some things. You very well might learn a thing or two, IF you can be open minded…which your post really is not.
I’m not trying to be harsh with you here, I just felt that your post was somewhat disrespectful to the folks here, and really showed how much you really don’t know about what most of us here do.
“Good luck to all.”
***I do appreciate your wishes of good luck, and will take them with me as I go and buy yet another house, “No money down”, with plenty of equity and a nice positive cash flow, tomorrow.
No hard feelings, just read a little more of the content here before you make a sweeping post such as this.
Take care and have a GREAT week!
Jim FL
Re: The Holy Grail - Posted by Houserookie
Posted by Houserookie on June 26, 2003 at 02:05:16:
Larry,
When did R Allen file BK? Was this personal bankruptcy or just one of his many companies?
Also, you compare creative no money down techniques to bank’s no money down deals. One is chocolate the other is vanilla.
The difference between the two is banks loan money out of their own pockets. Creative investors loan money out of someone else’s pockets.
CCMI, GRM, CRS, GBR, TVM, FV, …they all sound like BS ( bachelor of Science ) terms to me.
My favorite has always been OPM. 75 LTV sure don’t sound like OPM.
Cheerz,
So how long have you been a realtor? - Posted by GL - ON
Posted by GL - ON on June 26, 2003 at 24:56:45:
When I see someone who thinks you can turn a bad deal into a good one by putting down a bigger down payment (and getting no return on it) I know I am looking at a real estate agent.
By the way we all read John Reed’s site too.
Re: The Holy Grail - Posted by Joe Kaiser
Posted by Joe Kaiser on June 25, 2003 at 21:55:03:
You insult us when you presume you know what’s best for us
without ever really being around here long enough to know us.
Stick around . . . I think you’ll be impressed with the caliber of the
average discussion group poster, and I suspect you’ll learn a thing
or two. Your comments about “all this no money down junk” tell
us you’ve got some things to learn yourself.
Joe
Re: Realtoritis Is Not A Good Disease - Posted by GL - ON
Posted by GL - ON on June 26, 2003 at 09:15:20:
“Tell me, how do you make money by putting 20% down.”
He doesn’t recommend you make money. He recommends you put 25% down on deals that SUCK and have NEGATIVE CASH FLOW.
Then you pretend that the deal makes sense because you now have break even cash flow, forgetting that you are making NOTHING on your 25% cash investment.
All this does, is make it possible for lazy real estate agents to sell overpriced properties.
Overlooking the fact that this method effectively kills investors, from the agent’s standpoint. Taking their advice immediately writes off anyone who hasn’t got a barrel of cash. And then kills the one with cash by putting all their money into one mediocre deal, effectively removing them from the market forever, or until they save up another 25% down payment.
Instead of being a little creative, and having ten times as many clients lined up to buy their listings.