The End is Near ...Sell everything and build a cave

[Hoosier4life2005]

Actually, I find what Mike says to be encouraging to me.

Find out how much money you need per month to be happy.  Work hard to get the properties needed to sustain that, and then just be happy not working so much and enjoy life.

Its much better than constantly working, never being happy with anything you have because you always want more.

Ive actually seen this in my personal life before... My dads friends networth is over 10,000,000 (hes actually the guy who told me about this site when I was like 15), but he works 10 hours a day trading (stocks) and working on his rental properties.  Guess what???  Hes STILL not content with his money, and hes now 45, and still working his life away.

To each his own though..

[rookieNYC]

You say that you are doing owner financing to these buyers, so I was wandering how you are structuring your contracts? Are you doing a straight out note? Or are you doing a lease with an option to buy? If you are doing a note, how do you get around the  foreclosure process? In many states it's close to a year

Sorry I hope you dont mind if I answer this...I dont own properties like fdjake..I lend Hard Money..But how I avoid the foreclosure courts is to have the borrower sign a deed in lieu of foreclosure..Essentially they are signing the deed over to me and its kept in escrow at my attorneys office in the event the borrower defaults I simply record the deed and choose how I would like to proceed with my new property that I just bought for 30 cents on the dollar..


Hoosier...Its not about just making the money...Its being part of the action and making good smart decisions..I often use the line from my favorite movie Heat with Deniro and Sizemore..."Well ya know, for me, the action is the juice"...I'm in ....

[propertymanager]

Actually, I find what Mike says to be encouraging to me.

Find out how much money you need per month to be happy.  Work hard to get the properties needed to sustain that, and then just be happy not working so much and enjoy life.

I'm glad that someone understands this issue!  I have posted my business plan and goals from the very beginning on this forum, laying out the exact number of rentals I planned to buy.  I got a little caught up in the buying and exceeded that goal, but finally got back to reality and stopped buying.  My business is now stabilized and I am semi-retired.  Contrary to Rookie's assertions, I have absolutely no desire to buy any more.  While more rentals would mean more money, it would also mean more work and less free time.  What would I do with more money?  Would I buy a bigger house?  My wife and I already have 4 rooms that no-one ever goes into.  Would I buy a bigger motorhome?  I guess we could, but I like the one we have.  Would I buy another motorcycle?  I can only ride one at a time and I really don't want to clean and maintain two of them.  Would we hire another cleaning lady?  I guess we could, but the house is already spotless.  Would I buy another sports car?  I've already got the nicest one in town.  How about putting in a second swimming pool?  I guess we could - my wife could swim in one pool and I could swim in the other - (but what fun would that be).  I think you have the idea.  It's really quite simple.  There simply isn't anything else I want to buy.  I'm satisfied.   

If Rookie or FDJake want to work hard all their lives, that's fine with me.  I do not.  I am very happy working 3-4 hours per day, 3-4 days a week and spending the rest of my time doing other things. 

Its not about just making the money...Its being part of the action and making good smart decisions..I often use the line from my favorite movie Heat with Deniro and Sizemore..."Well ya know, for me, the action is the juice"...I'm in

I believe that Rookie was telling us the truth when he said this.  Some successful people, like your dad's friend, always need more.  I do not.  I have basically everything I need and want.  I was never in real estate for the thrill of doing real estate.  The "action" (doing deals in real estate) is not my passion.  For me, real estate investing IS ALL ABOUT THE MONEY!  I would be just as happy doing something else if it provided me with the same amount of money and allowed me to work fewer hours.  For me, there are a million other things that I'm interested in.  I enjoy snowboarding, camping, riding my motorcycle, shooting sports, and many other things.  There is always a new challenge.  My latest challenge is getting VERY POLITICALLY ACTIVE and trying to preserve our democracy by defeating the socialists - and that's no small challenge!

You are setting a poor example to up and coming real estate investors by being paralyzed by fear in the face of oppurtunity..And you are setting a poor example because you more than anyone own "millions of dollars in real estate" during what is surely the most vicious pullback in our history in those assets...So you more than anyone have lost the most here...

More RIDICULOUS NONSENSE.  I clearly articulated my business plan years ago on this forum.  I posted the deals as I did them.  I reached and exceeded my goals.  Now, I'm running a stabilized business and am semi-retired.  Yeah, that's a very poor example.  As to your assertion that I have "lost the most here" - RIDICULOUS!  I haven't lost ANYTHING!  Nothing.  Central Ohio never had the big bubble that many areas had and we haven't had a big bust either.  Real estate prices are certainly down to some degree, but I bought at an average of 50 cents on the dollar (70 cents on the high end and 13 cents on the low end).  I am not upside down on a single rental.  Rental demand is still quite good here and rents are up slightly (although they may be starting to weaken slightly).  I have not sold a single rental and continue to have strong cash flow every month.  As a bonus, I continue to gain equity through the paydown of principal each year (most on 20 year loans).  As the rentals begin to be paid off, the cash flow will dramatically increase.  So, while you claim that is setting a poor example, I would consider that to be a good example of making a plan; executing that plan; and then enjoying the fruits of my labor.

I firmly believe now is a great time to get started in the real estate business.

The first thing you've said that I agree with.  I would go a little farther and say that ANYTIME is a great time to start in the real estate business.

[REIER]

Rookie,

Thanks for jumping in and answering my question. I used to hear investors escrowing the deed for properties all the time, but it seems many “investors” are out of business, so I forgot all about this great move. I used to have rentals and I don't ever want to deal with tenants again if I can help it. All I want to do is flip.

Thanks

[REIER]

Mike,

As I already said, I have a lot of respect for you and am not trying to stir the pot here. You've given some great and smart advice over the years about real estate investing and buying at deep discounts when everyone was out there buying like crazy. I don't think I or anyone on this board will convince you that there just may never be a total financial meltdown of the US as we know it. I'm just disappointed that a smart guy like you isn't willing to at least entertain the fact that things may not turn out as bad as you've outlined. I also, just like others, am surprised you've done no REI deals over that past year. I am willing to bet that if you got back into this, you could probably flip some nice properties for some great money, rather than holding them.

Mike, I know a few investors in my area that have been picking up some fantastic deals in this recession. They've told me they have found deals they could have only wished for a few years ago, and they just had the best year in all the years investing. Some guys have been at this for a long time.

Again, I appreciate all the advice you have given in the past about REI on here.

[propertymanager]

I also, just like others, am surprised you've done no REI deals over that past year. I am willing to bet that if you got back into this, you could probably flip some nice properties for some great money, rather than holding them.

There is no "getting back into it"  -  I'm fully in it now.  However, I'm no longer in the acquisition phase of my business.  I'm simply past that part of the business.  I am very happy with the rental business and have no desire to be in the flipping business.  As I've already said, I had (and have posted) very specific goals when I started this business.  I have exceeded those goals and my plans are to simply operate the business I have as the loans are paid off and the equity and cash flow builds.

[rookieNYC]

There is no doubt how valuable a guy like Mike is to the cashflow/real estate up and coming investors here..My argument is that I feel we as investors/businessmen/entrepreneurs can do so much more during these kind of times than  the bubble decade..Maybe I'm forcing my opinion on others ,maybe Mike is as well..The point of the whole thing is to not be paralyzed by fear..After the banking debacle I saw a loophole in the banking/funding side of things during the worst time in history and put ALOT of capital to work..It turned out to be a great move and a business that I have come to really enjoy..I wouldve never had this opp had we not been in these tragic times..A guy I have done some HML's for in the past and some RE deals put it correctly when we were having dinner the other night..He said I'm needed now and during the RE bubble times he wasnt needed..He is making more ROI now,more money now,building a real portfolio of properties,buying from sheriff sales etc..You think he is worried what kind of debt the US has,or what BO is doing within our govt..He could care less..All he wants to know if my funding is ready for the next deal...All because of the times we are in..All of this and my HML business would not be nearly as successful if we were not in such bad times..Like I said before these times are when  people with money put it to work..I admire the fact that Mike feels he has reached the top of the mountain and is content..Me personally its not a # its I couldnt possibly sit back and see all this oppurtunity pass me buy and not take a shot..But all the same I respect his decision to step back..What I dont agree with is how he is using a real estate forum to spew opinions in how dire the US financial situation is..There are plenty of people making size money out there right now...As we speak..To all the newbies out there I say this..Dont be afraid to get started..If you are young and have time on your side take a shot..The people who make moves in times like this are the ones who sell into the masses when the good times return whenever that may be..Dont be paralyzed by fear...And Mike I say this directly to you,think about how your words influence a young investor..

[fdjake]

Same here.....

DEED IN LIEU....

You want the HOUSE???????

You take the deal on MY TERMS.....Otherwise.....SEE YA!!

I have YET to find a single buyer that passed on a purchase due to this arrangement....They have NO ALTERNATIVES.

NEAT, CLEAN, VERY SAFE for me, and as long as they PAY....They end up with the deed!   

My Attorney handles the entire transaction.....I even went one step further an set up an LLC as a holding company just for these deals.....The BUYERS have no idea I have anything to do with the financing....The payments get sent to the LLC's PO box just like a mortgage company or big bank, and no one knows any different.

The further you DISTANCE yourself from these transactions the better.....Not that you're doing anything wrong.....I just don't want  phone calls from the BUYER with EXCUSES for late payments.  DO NOT ATTACH A FACE TO YOUR LOANS....KEEP EVERYTHING SEPARATE!!! If they have a problem, they can deal with my attorney.....That's what I pay him for.

Everyone WINS!!!  AS long as they PAY......If they DON'T.....They "I" REALLY WIN!!!   AS it should be!!!

[allagash]

AS it should be!!!

Great model!

-Mike
http://www.youtube.com/watch?v=_BRv9wGf5pk

[John_in_NC]

I'm not going to be UPSIDE DOWN on ANY of these properties, UNLIKE the IDIOT  bankers that loaned people $300,000 on a home which I just paid $40,000 for...(Last WEEK!!)
That house will SELL for $200K....I'll be the BANK....They'll eventually pay ME between 2 to 3 times that $200K!!!!!

Pete, I am blown away you can find a 300K dollar property for 40K. I can safely say after watching public record transfers for years, that just doesn't happen in my county. Can you post links to public records for this transaction?

[allagash]

I'm not going to be UPSIDE DOWN on ANY of these properties, UNLIKE the IDIOT  bankers that loaned people $300,000 on a home which I just paid $40,000 for...(Last WEEK!!)

Nice price point!

I picked one up for $39k in October.  Not a flip....but fits in with my plans very nicely.

Heck, the lot, (88 x 220), is easily worth $35k. 

Buy 'em when they hate them.

-Mike
http://www.youtube.com/watch?v=SeFiXnEBvBg

[fdjake]

These are NOT $300,000 houses when I get them.....They're neglected houses that I buy from estates or heirs....NONE of them are ever LISTED on the MLS.......N O N E....

I'll buy a house like that and spend $20K or $30K on it and SELL it for ALL THE MONEY because I AM OFFERING THE FINANCING...

It's like BUY HERE, PAY HERE cars dealers.....They don't sell at Kelly Blue book....They sell OVER book value because THEY offer the private financing....You can't be ridiculus, but I can EASILY sell a home for $300K that comps out at $250K.  REMEMBER.....THERE ARE NO BANKS INVOLVED.....NO APPRAISALS....I lay out the terms and the price....They TAKE IT, or LEAVE IT.

Most buyers understand that even at a higher price point than neighborhood comps....They'll still be OK down the road because housing prices have just been slammed.  The house I SELL at $300K  NOW.....Was sold in 2005 for $500,000.

[John_in_NC]

I'm not doubting that you can sell that high that way, I just can't believe that you can buy a house for 40K up that way! The houses I buy for that price requires a concealed handgun every visit.

If my math is right that is 13 cents on the dollar! No WAY!

Can you post a link to public record transaction for that buy?

[fdjake]

NO WAY.....HUH?????

Take a little trip to the CITY OF PROVIDENCE....

Like this one...

www.providenceri.com

Go to the assessors data and look up 226 Vermont Ave....valued at  $226,000

Now take a peak at what it's PENDING for.......

http://www.zillow.com/homedetails/226-Vermont-Ave-Providence-RI-02905/65942065_zpid/

$60K!!!!!!!!!!!!!!!!!!!!!!!!

Oh...one more item....

There ain't a SNOWBALLS chance in HELL that I'm posting an INTERNET LINK to ANY of my properties, which would also link you to my LLC's, my name, address, ect.  Just to satisfy your desire to UNDERSTAND what's happening here....

This is SIMPLE........You buy a $300,000 house for $40,000 because......

ONE........I'm setting the PRICE based on what I WILL FINANCE someone for....

TWO.......It ISN'T a $300,000 house.....It's a $250,000 house (real market value)

Three......You BUY IT for $40K from an IDIOT that had it LEFT TO THEM, OWED NOTHING ON IT, and didn't want to even CLEAN IT OUT......And SOLD it so he could buy a NEW HARLEY!!!!!!!

I actively ADVERTISE for just such MORONS......They read certain papers, they hang in certain circles....I'm not buying a lot of houses from DOCTORS and LAWYERS.....I also pay BIG FINDERS FEE's to these IDIOTS FRIENDS.....THOUSAND$!!!!

Now how do you think you could CONTACT relatives of DEAD People with FULLY PAID OFF PROPERTIES?????

I just showed you a $226,000 house that is PENDING for $60K........You can't SEE how I could BEAT THAT????  ON a REGULAR basis???

Come on man????  R E A L L Y ?????

[John_in_NC]

Ok, just can't believe you can do that up there. Sure wish that was possible here in Raleigh.