I think you should name names.
I know many investors that lost all, or part, of their fortunes through ignorance, stupidity, or no fault of their own.
I know many investors that came back stronger, wiser and richer as a result of not quitting after suffering those losses.
In fact, one of my subscriber friends lost everything in the McMansion Bubble collapse of 2008. He said his credit was still shot with all those foreclosures on his record. In 2013 he had about $15k in savings and wanted to start investing again.
Well, $15k isn’t much to start with, but I shared a low-cost, low-risk ‘sub2’ solution I was taught, that had been working for me ever since my bank refused to finance my two board and care facilities back in the early 1990’s.
After showing him what to do, he found two sellers that wanted out of their houses. One seller was an investor that bit off more than he could chew, and the other seller was out of state, and not managing the house profitably. Both properties were in the half-million dollar range (in Southern California where I live) with LTV’s (loan to value) of about 90%. These were not steal deals, per sé, but they were newer, vacant and ready to rent.
To make a long story short, he offered to make the seller’s payments if they would give him their deeds. Both sellers agreed, but both seller’s wanted about $5K to make the deal work. One seller needed to bring the payments current, and the other seller just wanted some money.
Here’s the rub. The rents from these houses would not cover the expenses in this price range. That’s one reason the sellers were motivated to do something quick. So, the play was not to rent them out, but to flip them on seller financing contracts. He offered to finance any buyer whom had 10% for a down payment.
Short story, he raised the price about 8% over retail, offered no-qualifying financing, and resold both houses using installment loans. This was all done within three weeks of closing with the original sellers.
This exit strategy put almost $90k in his pocket up front, with another $70k coming when his buyers cashed him out (refinanced).
***He has since been cashed out, and grossed $160k in profits, off just those two deals.
His combined investment was about $15k, but that included advertising, making up back payments for the first seller, and giving the second seller spending money. However, within a month he netted $75k in down payments.
***My friend never actually gave the first seller money to bring up the back payments. He made up the back payments himself, from the down payment he got from his first buyer. So, really he got into both these deals for the cost of marketing; five thousand dollars paid to the second seller; and the cost of transferring both deeds. Not too shabby.
BTW, his first buyer cashed him out in just a few months time, and the second one refinanced within two years.
This can be done with houses in any price range, or type of home, but the ‘trick’ to doing all this fast, is sticking with vacant houses that are ‘rent ready.’ And houses in areas that everyone wants to live. This doesn’t work efficiently with frumpy and dumpy houses.
BTW, neither seller asked about my friend’s credit history or his income, and they still gave him their deeds, and let him take over their payments.
Hopefully, that story will provide some encouragement and inspiration about what’s possible in overcoming bad credit, lack of down payments, and a ‘hiccuppy’ past.