Posted by Bill Gatten on July 01, 1999 at 20:29:02:
Olga,
A dozen people on this site can answer your question better than I can (understatement), but here’s my input, for whatever value it may have for you.
First of all, in my opinion, the key and underpinning of it all lies in finding properties, with sellers that are willing to do it your way. You are not shot gunning if you just stick to contacting everyone who has a property they are willing to dispose of, and finding out if they’ll do it your way. If you do nothing more than just take a survey (who’s willing to give me a house and just walk away?), you’ll eventually find some takers. If you refine your efforts and ask more pointed questions in your survey (who’s willing to stay on the loan and let me take over payments?) you then quintuple your success rate, given a sufficient amount of time and numbers of repetitions.
If you have some cash and good credit you can just start making offers and keep on buying till you money runs out (and it will go real quick). A couple years back a guy I know in Marina Del Rey, Ca. won $500,000 in a motorcycle race and used it to buy five dinky little rental properties for cash. He feels he is really a land baron now, what with all that equity and cash flow… I could’ve bought 500 houses for that money and still had $500,000 in my checking account (I’m a few dollars short of that at the moment).
When buying traditionally, be prepared to make payments and handle all costs until you find a tenant; and be prepared to wait a long while before you see any return on your money. If you’re planning to hold, then you only need to worry about getting the property at a good price (10% below FMV by Comparative Market Analysis). If you’re planning to flip soon, then you need to buy significantly below market (30-35%% at least): and the most frequently employed way to do that is to buy fixers and OTB’s that are devalued well below the real after-fix cost. My own forte is taking over payments on minimal or NO equity properties with a little fix-up to do. I then have someone else make all the payments and handle all upkeep and costs for me… for 5-6 years…until I can capitalize on the appreciation and equity build-up. Although in doing this I’ll usually create some extra equity for myself in the beginning, and a modest positive cash flow along the way.
If you are looking to boot up from nothing (i.e., no cash, no credit and in-grown toenails), then your options are, of course, a bit more limited, and would generally be restricted to AITD’s, Lease Options, land contracts, Lonnie Deals or PACTrusts (can I call them “Billy Deals”?). In these scenarios (to over-use an outworn word…scenario) you can get an owner to stay on the loan and carry virtually all the down, while letting let you in for little or nothing out of pocket… if you’re good at doing it. If you’re not already good at it, you need to learn to be… therefore, the courses.
It is with these latter options that the training courses by the “gurus” become mandatory in order to learn the techniques, tricks and talents required for effecting these kinds of things. Though the posts on CRE contain everything you can find in the courses… it will take you longer to look it up than it will take you to make $10,000 from a course by Bronchik, or Kaiser or Scruggs, or …(ugh… it’s hard not to say…).
I can’t tell you where to start Olga, but I can tell you that I deal with lots of folks who are quite wealthy today, who started in the business without a pith helmet to pith in (as it were…an Aussie term, you know).
Let us know where you stand money-wise, credit-wise, and Want-To wise, and I’ll try to be a little more specific.
Then… once you get the house (or condo, or town house or trailer home, trailer park, apartment building, etc.), then you need to market it (that’s the fun part because they call you and you get to screen them for a change, instead of it being the other way around).
Bill