I have my first Real Estate Investors meeting tomorrow night and I am not quite sure what to expect. I wake up early in the morning; early enough to see the “infomercials” for the night owls discussing how I can make it rich in real estate if I just buy so and so’s package. All of this seems like a royal rip off.
I know there are ways. I am a victim of a chapter 13 Bankruptcy. A long story of course, but I was days away from loosing my house. My intuition told me to hold on to my house until they came to take me away. I knew I needed an escape plan, a “Plan B” if you will, so I answered one of those “We Buy Houses” post cards I have been getting. I recognized the scheme from some of the books I had read about investing. I was expecting to get hounded by an aggressive sales person and was ready with a solid defense.
The guy that came over was actually very nice. Looked nothing like the “Sales Guy” I was expecting and he was very down to earth . He didn’t drive a fancy car and was very up front with me. I talked truthfully about my situation and told him that he was plan “B.” In the mean time, he explained to me everything that would happen, but time was needed to get the job done. I started to feel like I could do this!
To make an already long story shorter, He left. I found a way to make my ends meet and saved the house. Last week, I just made my final payment on my Chapter 13 (1 year early!) and it is in process to be closed.
I also answered a local add that I found on a telephone pole written on poster board with a sharpie that read “Real estate investor seeks apprentice. XXXXk to XXXXXXk per month. Full or pat time.” I held on to that number for weeks, then I called and was greeted by a long VM prompt explaining all the money I can make. I left a message, the guy called me back, and we talked fr some time.
I am coming to this meeting with a positive attitude, but at the same time, I cant shake the notion that this is probably some kind of a scam. That no one will be willing to “Show me the ropes” unless I buy books, CD’s and seminars from the guy. After all, why would someone go through that much trouble to make me rich unless they were going to benefit from it. He’s not going to get rich from me!
Congratulations on getting the Chapter 13 paid off. That is a good step in the right direction. Also, lose the idea that you are a “victim.” Accept the fact that whatever decisions you made put you in that position. Now you have learned from it, turned it around and are looking for success in real estate investing!
If this guy turns out to be a waste of time don’t worry about it. You can invest successsfully without a mentor. Most of those on this board didn’t have a mentor holding their hand through it. Read, study, learn the business and get out there and make a deal. Easier said than done? Of course! If it was easy, everyone would be doing it. You are at the right place and taking the right steps to make it.
What do you want to do in real estate? Have you decided on what you enjoy the most? Rehabbing, being a landlord, etc? Keep us posted on your progress.
One last thing, there are people out there that will help without expecting anything in return. Just takes time to find them, just like finding the right deal on a property.
I'm pretty sure that the posting on the pole was an organization called Nuevo riche. This is a pyramid scheme, and they do require lots of money to join or get their products. You probably could find a better real estate investing club simply by googling the topic. You can also find equivalent if not better information by going to your local bookstore or scheduling a meeting with an agent or mortgage broker, but remember they have their own agenda to make money, also. I would not get started buying property outside your local area.
Flipping and rehabbing can be something that I enjoy. I am very handy, I used to be a journeyman plumber, and I have a degree in electrical engineering. I could handle more technical work that most flippers and rehabers outsource. Although, from little of what I know already, it seems like I will need a substantial amount of money up front to get started. A resource I don’t have or will be easy to get.
I am not adverse to land lording either. My former in-laws are basically retired and living off of a few buildings.
Maybe a few lease options to round it all out.
Basically, I would definitely want a few rental properties while I do a few quick flips and lease options and eventually work up to managing one or two rehabs a year.
Your tool box may be a little upside down. The plumbing work will start getting in your way of doing deals. You become the bottle neck to getting a project ready for the market. The main tool that you need in real estate is leverage…the ability to borrow. Without leverage real estate is no better than any other investment. For example if you buy a house for $100,000 cash and it goes up 10% in value to $110,000 then you have made $10,000 which is 10% on your money. If you buy that same house and put down 10% or $10,000 on that $100,000 house and it goes up that same 10% the house is now worth that same $110,000 and you still made $10,000 but you only have $10,000 in the house so you made 100% on your money. You see how real estate makes a lot of money when you use leverage. And that means you want to do as many of these as you can so you can but turning wrenches, will slow you down. Just like the main tool of a mechanic is his wrench, the main tool of a real estate investor is his credit. You need to establish it and guard it just like a carpenter would his hammer and saw. If you loose it you will not be successful.
I’m not saying that I want to spin wrenches all day. some of you are pretty arrogant and make allot of assumtions.
All I am saying is that I have the skills to save some money where others will out source and I have a better “eye” for those details than the average joe.
Jeez, all I am trying to do right now is figure out how REI works. I can’t get any straight answers, everything looks like a scam, and I have to deal with a bunch of know it alls. This might not be something I want to do after all.
Being able to do most or all of the work yourself is a huge advantage, especially if you will have some trouble with your credit. I have a bunch of rentals and do all the management and all the maintenance and rehab myself (except HVAC). Doing these things will DOUBLE your income from rentals with very little additional work (after your properties are stabilized).
The answers to your questions are on this site. However, as you said there are a million scams aimed directly at newbies. That is not only true of real estate buy many other home based businesses perceived to be a get rich system. They prey on newbies with the promise of instant riches with no money, no credit, and no work. Of course, the no money does not include the thousands (or tens of thousands) they charge to give you the “secret” of real estate investing. Unfortunately, their is no secret and therefore they never reveal it.
Bluemoon was 100% correct about the credit issue. Credit is VERY important if you are going to run a successful REI business. Many of the “gurus” prey on the fact that many people have bad credit and therefore they promise instant riches with no credit. The fact that this is a big lie doesn’t seem to matter.
Finally, if you can’t deal with a few “know it alls” on this board, you are definitely not cut out to run a REI business. There are a million headaches to running your own business and every one of them is worse than the “know it alls” that have given you their honest opinions on this forum. Believe me, dealing with a drug dealer in one of your rentals is infinitely worse!
Thank Mike and thanks all for the constructive criticism. I will admit that I am the controversial type and I can deal with the know it all! Heck, I’m even married to one
I have attempted wanting to do this before, but have always been led down the evil path. fortunately, I knew to turn back before signing a check or giving away my credit card. This in turn has just led me to believe that all of this is a scam. Some of you folks really boast about this site and that is great, but already, I have found things here that are just advertisements for the authors scams.
However, at the same time, I have found some viable honest resources here as well.
I have always known or at least had the feeling that credit was very important. My credit is practically shattered, but I am starting to see the light at the end of the tunnel. My personal cash flow is more comfortable and manageable. I have ZERO ZILCH NADA dept (except for my home of course). Everyone has been paid through the chapter 13, I have two cars with no payments, I have at LEAST $30,000 in equity in my home (maybe closer to $50,000), I have a wife with very little but excellent credit and I will soon have a few thousand dollars in cash. Learning is a lifetime event, but while I am studying REI I understand that it will be many months before I make my first deal, in that time I will be repairing my credit. In the mean time, I hope that there are some of you here who are, or have been in my shoes that are willing to lend a helping hand. I may not be able to offer you anything up front, but perhaps I can offer the same to another new guy years from now.
I haven’t ventured out into REI yet, so everything I mention should be taken with a grain of salt, but as has been pointed out, the world, and the internet in particular, is a cauldron of schemers and scammers. It’s always best to approach everything skeptically and always do due diligence and take your time, especially in the beginning. We’ll make mistakes; no reason to make them more costly than they need to be because of something we could have prevented. Even this board, with the huge amount of valuable information offered, sometimes lends itself to poor or questionable advice, what sometimes amounts to nothing more than ads or self-promotion, and a place some people come to vent, start food fights, crap on other people’s dreams, or just waste everyone’s time.
But hang around long enough and you’ll start seeing who knows their stuff and who should be ignored. Don’t be discouraged. I personally know people that have done it, but it takes perseverance, smarts, and an ability to weed out and ignore the BS. Otherwise you’ll get frustrated, distracted and drown. I have owned and been successful with my own business and you’ll find that the more successful you are, the more people you’ll have knocking at your door with their hand out. Your BS detector will have to get stronger as you grow or you’ll get wiped out. One of the things I always remember my grandfather telling me was that it’s easy to make a million dollars; the hard part is hanging onto it. I look forward to finding out.
As far as rebuilding your credit, which is paramount, I’d recommend visiting creditboards.com. Lots of valuable info there.
