Posted by steph on July 23, 1999 at 23:50:36:
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To: all the R.E. experts, some questions - Posted by Bob Brill
Posted by Bob Brill on July 23, 1999 at 10:09:52:
To all the R.E. investment experts,
I have some hardball questions adressed to everyone. I
am a real estate investor, however, I am more of a conventional type of R.E. investor. I am brand new to the
no money down concept. It looks like a world of opportunity,
however, I have a lot of questions and concerns.
Why did the number one advocate of no money down real estate
go belly up? (I am talking about Robert Allen). Why won’t
Carleton Sheets list the properties where he did a no money
down deal? In order to do a no money down deal, why does a
“creative investor” need to find someone in a desperate
situation and than try to convince them to terms that are
very favorable to you but not to them? Why does a “creative
real estate investor” have to play games with lenders as to
the source of down payment, and all sorts of other games
such as doing a land trust, lease options, etc…??? Why
does a “creative real estate investor” spend a lot of time
going around the due on sale clause? Is’nt it illegal to
try to get around the due on sale clause? What happens if
the due on sale clause is triggered? (if the lender says
that I have to pay up the balance of the loan)?
That is it. All of this stuff has been on my mind for a long
long long time. I hope you will take the time to answer my
questions. Thanks for your time.
Re: To: all the R.E. experts, some questions - Posted by David S
Posted by David S on July 24, 1999 at 10:14:23:
You have some valid questions.
One area you forgot to mention is that many of us “creative RE investors” work both sides of the business; conventional and creative.
The creative investor doesn’t always have to find a motivated seller or distress situation. This just puts the creative investor in the drivers seat when trying to make the deal work and totally depends on the deal you are working.
Just think of all the “creative” deals you have missed along your path. Not all are NMD. Many of the topics you mention; land trusts, seller financing, lease options, etc are decisions we make in order to do more business and to keep our credit lines somewhat free with our lenders; control without ownership. How many sfr’s will your lender allow you to carry, 6,8,50?
Many of the concepts and systems discussed here are to allow the truly creative investor to operate without the “strings” that most lenders require. Try putting a deal together in just 2 or 3 days using the “conventional” lender.
Knowledge of creative finance is another “tool” in the truly “creative investors” toolkit.
David S
Re: To: all the R.E. experts, some questions - Posted by SCook85
Posted by SCook85 on July 23, 1999 at 22:40:25:
I’d like to start out with saying this, if you are already a successful investor who has been investing conventionally it is more difficult for you to open up to the ideas that are discussed time and time again on this site. For many of the people who visit this site doing a “no Money Down Deal” is there only option. They do not have money to work with. I can assure you that there are many people on this site pulling off “no money down deals”. I for one have done dozens of them over the last year.
I do not do deals in any of the ways that you mentioned in your post. I do seek motivated sellers who will sell real cheap then I borrow 100% of the purchase price from private lenders.
Without going into a whole lot on the due on sale clause. Read the clause. You will see that it is not illegal to go around it. The lender has the OPTION to excercise the clause, nothing illegal about it.
I hope this helps!
Steve
Re: To: all the R.E. experts, some questions - Posted by mark
Posted by mark on July 23, 1999 at 21:33:37:
Fake,Phony ,Fraud
Why even entertain this moron?
His e-mail is even fake.
Re: To: all the R.E. experts, some questions - Posted by Eduardo (OR)
Posted by Eduardo (OR) on July 23, 1999 at 20:57:39:
Bob–
The first year I was in real estate I didn’t know anything. The second year I was in real estate I set out to learn all the tips, tricks and gimmicks (I bought lots of courses, books, tapes and went to dozens of seminars and workshops). The third year I was in real estate I began to learn why not to use the tricks and gimmicks.
Buying all the courses and books was the best thing I ever did. Now nobody can pull the wool over my eyes. I can spot a real estate crook a mile away. But I rarely use these techniques myself because I have developed a way to make money in this business that is simple, easy and honest. I just “steal” little houses. That is, I pay less for them than what they are worth. KISS–Keep it simple! The two best things I ever did were to master the financial calculator (discounted paper is where half the money is) and became an good negotiator. My houses are little cash cows–pumping out money for the rest of my life.
When someone wants to sell me a property and starts to explain how we are going to get around the due-on-sale clause, I usually go the opposite direction. Not because it can’t be done, but because the odds are the guy is going to cause me problems.
There is so much money to be made in this business that I find I just don’t need to use complicated techniques. You find a method that works for you and then do the same thing over and over. Don’t feel bad, Bob, if you are successful with what you are doing. But, learn all the tricks so you can spot it when someone tries to pull them on you. --Eduardo
Sounds like… - Posted by Glenn Crocker
Posted by Glenn Crocker on July 23, 1999 at 19:27:11:
Sounds like you have been on JTReeds site and found all the negative comments you could find about them. As they say, open your mind and learn.
Regarding Investors vrs. Business People - Posted by Dirk Roach
Posted by Dirk Roach on July 23, 1999 at 19:26:29:
Hi Bob,
everyone else pretty much summed everything up below.
I will add though that often times great investors make poor business people and vice versa. They almost never go hand in hand and I personally only know a socre who can handle both succesfully.
I think that this can often times be contributed to such things as focus. It’s hard to adiquetly focus on too many things. For example a Business Owner may exhert a lot of energy on overhead etc. Which an investor does not have to worry about.
Also you are comparing apples and oranges. Robert Allen was at the top of his game several years back.
The market is constantly moving. What applies yesterday doesn’t always apply today and vice versa.
Thus we as investors spend a tremedous ammount of time keeping our knowledge level up and also keeping abreast of the market.
Just some thoughts
Dirk
Re: To: all the R.E. experts, some questions - Posted by phil fernandez
Posted by phil fernandez on July 23, 1999 at 15:03:54:
Hi Bob,
Just a reply on a couple of your concerns.
1./ Robert Allen of Nothing Down. Read his book. Great ideas. Don’t really care about his BK. What makes you think his BK has anything to do with creative real estate investing. Unless you know something that I don’t.
2./ Carleton Sheets. Again who cares. It’s not my concern. I’m too busy making money with creative real estate.
Hope this helps ya.
To Bill Gatten - Posted by TC
Posted by TC on July 23, 1999 at 14:06:55:
Like your humor,attitude,outlook on success and enjoy reading your post.Keep up the good work,you are one of the great people that make this board what it is!
Re: To: all the R.E. experts, some questions - Posted by Bill Gatten
Posted by Bill Gatten on July 23, 1999 at 13:44:46:
Hi Bob,
'Don’t know why, but your “question” sounds more like a rhetorical statement than a question to me.
Remember Henny Youngman? 'A guy goes to the doctor and says, “Hey Doc. my arm hurts when I go like this,” whereupon the doctor replies, “So don’t go like that!”
Advice: Until your concerns are truly questions, rather than assumptios (or rhetorical challenges); and, until you’re comfortable with what we all do, don’t worry… simply “Don’t go like that.”
The BK of Robert Allen (assuming that happened…and it probably did…'couldn’t care less personally, as I don’t know him) is his undeniable Legal Right, under the laws of this country. My guess is that he simply over-extended himself as many extraordinarily successful people have a wont to do at times. Willie Nelson filed a BK too; but I think most of us would consider him reasonably successful in his field. Robert Allen’s BK relative to Creative RE Financing is as much a non-sequitur (i.e., has nothing to do with anything) as is Willie Nelson’s. Most truly wealthy people, whom I have known personally, have filed Bankruptcy at some point in their careers.
Why Carlton Sheets doesn’t report his properties…? 'Couldn’t care less (too jealous of him to worry about it). I probably wouldn’t believe him anyway if he did, and if I did believe him, I’d just be even more envious. 'Gald he doesn’t (assuming he doesn’t… haven’t read his book).
Re. a DOS violation being “illegal”…it’s not: violating the DOS is simply “against the rules” re. a bank’s lending policy. They don’t want me opening another bank with better loans and higher passbook rates across the street from them either: but it’s not illegal for me to do so(though they could make life miserable for me, if I did…and maybe even petition the government for sanctions… 'tried that once).
And re. looking for “Don’t Wanters,” think about it Bob… if you’re duck hunting because you’re hungry, aren’t the rules different than when you just want to get away from the little lady and drink beer and burp with the boys for a weekend? In the latter scenario I go “Boo!” to get 'em in air and wing 'em on the fly (the “manly way”): but when I’m really-really hungry I swim under 'em and grab by the legs.
And. besides…if the bank ‘does’ call a loan because of discoveray of a DOS violation… well then, you should have used a PACTrust.
Hope this helps (sigh…).
Bill
Re: To: all the R.E. experts, some questions - Posted by Ed Garcia
Posted by Ed Garcia on July 23, 1999 at 13:14:46:
Bob,
I?d like to give my opinions to some of your questions.
OUESTION…
Why did the number one advocate of no money down real estate
go belly up? (I am talking about Robert Allen) ?
ANSWER…
Bob, I can?t speak for Mr. Allen. I can tell you that many times when
someone doesn?t receive the results of the teachings, it is considered
a scam. But if you go back and evaluate the material, it should work.
I think that many times when an individual goes to a seminar or workshop,
they?ll get a lot of hype. I also do workshops, I divorce the hype from
reality, with my mentoring. But the answer I think your looking for is,
it don?t work or it?s a bunch of bull. That?s not necessarily true.
It?s the old cloche, ( you get out of it, what you put into it.)
QUESTION…
Why won’t Carleton Sheets list the properties where he did a no money
down deal?
ANSWER…
For this one, you?ll have to ask Carleton Sheets. But again, I can FEEL
your innuendo.
QUESTION…
In order to do a no money down deal, why does a “creative investor”
need to find someone in a desperate situation and than try to convince
them to terms that are very favorable to you but not to them?
ANSWER…
Once again Bob, your conventional, conforming ways show again.
Remember you were taught by the book. Get rid of your previous
teachings, free your mind, open your eyes.
First of all desperate is not a good choice of words( Motivated) is a
more appropriate word.
Being desperate is no doubt a source of motivation, however I think
weather you do a no money deal, or pay all cash, The motivation of the
seller is going to attribute to the deal being made.
Good deal making, is good deal making.
Nobody holds a gun to the head of the seller. When we get into the arena
of negotiations, the seller is no different than the buyer. They are both out
for their best deal. It?s just if your a smart buyer, you?ll look for
circumstances that are more favorable to you.
Nobody should be held at fault for trying to cut their best deal.
QUESTION…
Why does a “creative real estate investor” have to play games with
lenders as to the source of down payment, and all sorts of other games
such as doing a land trust, lease options, etc…???
ANSWER…
Why do you call it playing games ?
Financing is usually a part of most deals. I?m sure when you go out to
get a loan on your property, and the lender quotes you a rate.
You don?t tell them that to low. You negotiate your best deal.
You try to get them to cut their points, and garbage fees. And by the way
if you don?t, come to me, have I got a deal for you. ( just joking Bob)
When doing a no money down deal. The borrower is just trying to
structure the financing that will allow the deal to happen.
The techniques that you just mentioned are just a few. Today lenders
are offering such great financing, such as , stated income, NIQ?s
(none income qualifier) , lite docs, easy docs, 90% on none owner
occupied etc.
Good news Bob, the seller can say no.
QUESTION…
Why does a “creative real estate investor” spend a lot of time going
around the due on sale clause? Isn?t it illegal to try to get around the due
on sale clause?
ANSWER…
For me, there has been to much conversation on this forum about the
due on sale clause. I have been in this business for 30 years.
Have done hundreds of millions of dollars in real-estate loans. Have
worked thousands of real-estate transactions. And yet, I got to tell you I
have never heard as much talk about due on sale clause, as I have here
on this forum. It?s a complete over reaction of which very little if any
action has been taken upon.
As you can see, I have my own personal opinion on this matter.
Let me just say this, when doing a deal, for me it is not a consideration.
QUESTION…
What happens if the due on sale clause is triggered? (if the lender says
that I have to pay up the balance of the loan)?
ANSWER…
You tell me. each lender is different. I have dealt with a lender who told
me, I could not assume the loan. We talked about it for 9 month.
They kept accepting my payment. It went to their legal department.
And then I heard nothing. I sold the property it 18 months and paid them
off.
But do you think that maybe the reason I never heard from them, was
because it wasn?t in their best interest to take legal action against an account
that was current. You tell me ?
Bob, you must climb out from under your restricting real-estate mentality.
If you should ever want to make it in this business. You?ll have to develop
what I call a deal makers mentality. That mentality does not have to make
you become sleazy or dishonest , just because you have the ability to
understand how to structure a deal.
If you are satisfied going the conventional way, Pay asking price.
That?s your prerogative. But I don?t think it?s fair for you to be judgmental
against techniques that you either don?t understand, or know how to do.
I?m sure that there are others here that may disagree with me on some of
my answers, and that fine too.
I just wanted to express my opinion, so that it may give you another view
of this business.
Ed Garcia
Re: To: all the R.E. experts, some questions - Posted by JohnBoy
Posted by JohnBoy on July 23, 1999 at 10:57:55:
“Why did the number one advocate of no money down real estate
go belly up? (I am talking about Robert Allen).”
Don’t really know or really care. Does it really matter? Does it make him any less of a person or mean his ideas on how to buy properties worthless if they really do in fact work? Why did Donald Trump file a BK? Does that make him any less of a successful investor? Who cares?
“Why won’t Carleton Sheets list the properties where he did a no money down deal?”
Don’t know, and again, who really cares? What difference would it make anyway if he did?
“In order to do a no money down deal, why does a “creative investor” need to find someone in a desperate situation and than try to convince them to terms that are very favorable to you but not to them?”
You try to find “Motivated” sellers that would be willing to sell on more favorable terms for “BOTH”, you and them. It’s not one sided. Sometimes it may not be what the seller would “like” or “want” in the way of terms, but it would be what they “need” to do in the way of terms to solve their “problem”. Your job is to “solve” a problem for someone, not just take advantage of people by screwing them over because of a problem they may have. Motivated sellers usually mean they have some sort of a problem where they “need” to sell fast. If you can figure a way to “solve” that problem that works for you so you can make a fair profit…does that mean the terms were favorable to you but not them? They needed to sell fast, that’s a favorable term for them in itself if I can solve their problem by buying on some sort of favorable terms.
“Why does a “creative real estate investor” have to play games with lenders as to the source of down payment, and all sorts of other games such as doing a land trust, lease options, etc…???”
Why would you need to play any games? Being creative doesn’t mean your playing games. It means your finding a solution to a problem as long as everything is done legally.
“Why does a “creative real estate investor” spend a lot of time going around the due on sale clause?”
I didn’t know it took a lot of time to go around a DOS clause.
“Isn’t it illegal to try to get around the due on sale clause? What happens if the due on sale clause is triggered? (if the lender says that I have to pay up the balance of the loan)?”
No, it’s not illegal. If the DOS clause was to be triggered by the lender then you either pay it off by using your own money, refinancing the property, or selling it before they foreclose so you can pay it off if you don’t have the means to do it yourself. You could call the lender on it and see if they push foreclosing on the property. If the payments have been made on time and are current, chances are very slim they wouldn’t enforce the issue since a foreclosure would cost them time and money. Of course you should have a way of being able to come up with the funding to take care of the problem if you ever HAD to pay it off because of that. Whether it be using your own money, refinancing, or borrowing from someone.
I Second That !! 
- Posted by steph in texas
Posted by steph in texas on July 23, 1999 at 19:49:28:
.