Questions after 19 years....

General Real Estate Investing
1

I am new here and know this site has been around for years. I was noticing that the pages go back for years… Here are my questions??

What do you think happened to the New Investors from 5 years ago??

Option 1. They bought all the Books and Hired Mentors and became such a success in the Real Estate Industry that they no longer have time to post on this site.

Option 2. They gave up after paying to buy all the information and how to books and went back to their full time job that offers them security.

FACT 1: When I started in the industry it was nothing like it is now.

FACT 2: Everyone that I started in the business with is no longer in the industry.

FACT 3: This is a full time job anyone that says you can make 30k a month part time should also inform you that your chances will increase if you work the system full time.

I am not writing this to discourage anyone that wants to get into the industry at all. Just know that this is work, and it takes time to do things right. Personally I say instead of buying books and courses and hiring a High Dollar Mentor save your money for the deal.

Here is what I SAY you really need to focus your time on.

Finding deals in your market.

Beating your competition to the deals. How are you going to find a way to beat your competition and always get to the deal 2 Months ahead of everyone else.

Offer options!! Don’t only wholesale, Short Sale, Bird dog, Sub2 etc… Have an open Mind to everything.

Remember that no 2 deals will ever be 100% the same. This is not a factory you can’t crank out deals. If it were that simple everyone would be doing it.

Work on 2 things the most… #1 your Confidence! People really enjoy doing business with people with confidence! #2 Your Attitude People only do business with people they like and that is a FACT.

ASK QUESTIONS… As you notice even on Forums you can get 10 different answers from 10 different seasoned Investors. And who is right and who is wrong?? Most answers are correct and if not the others will tell you that its wrong. Simply put there is always more then one way to handle any situation. AND AGAIN NO 2 DEALS ARE THE SAME!

Motivation is KEY get off the computer and do something. Which brings me to the end for now… We have just over 900 leads to call and only 5 people in the office… What a wonderful world

2

I love it!

3

I was hoping you would reply I know you can add to this…

4

Where are all the investors from 5 years ago?

The housing bubble was going up up up. HGTV was all about “flip this” and “mega-millions” in real estate. Credit was easy and barriers to entry were few. All you needed was… well… nothing down.

Some bought rentals, some bought flips. Everyone found out that owning real estate is REAL WORK and not the fantasy that they see on tv. It takes CASH, ENERGY, KNOWLEDGE and CASH to do a deal, make it cashflow and stick with it through the down times.

Then the market turned. Home values plummeted. Foreclosed houses were cheap, but credit dried up. No longer could you get a nothing down with renovation cash out easy payment plan mortgage. Many were left holding unfinished properties they had no cash to complete, no market to sell if they could complete it, no cash to make payments and no options. Landlords in variable rate mortgages (or worse, interest only or even worse, those horrible “variable payment” plans) suddenly couldn’t make the mortgage payments. Some short sold. Many foreclosed. Some even just walked away.

And those were the lucky ones. One of my clients turned to crime to pay his bills, and is now a guest of the Texas Penal system. I feel sorry for his wife and disabled adult son, and so I do their taxes for free.

One of my clients put a bullet in his brain, I guess hoping the life insurance would bail out what was left of his shattered, fatherless family.

Few… very few… weathered the storm.

But smart investors were able to buy at the bottom, and maybe one of these days (if Europe gets its act together, and we get our own fiscal house in order) they’ll come out great.

So where are the investors from 5 years ago? Most of them had their a$$es handed to them in the real estate market, lost money (sometimes everything) and have left broken never to return.

5

mcwagner, I’ll bet you’re the life at parties, huh? :biggrin :biggrin :biggrin

6

you betcha. especially after some crown & cokes.

7

It seems like there are a few of us regulars on here who have been around for awhile. There are some experienced people who aren’t on here anymore. Propertymanager was a moderator and very regular poster on here for a long time. There was some discourse about politics on here awhile ago and he took his ball and went home. Furnishedowner was also on here a lot before and she just quit posting. I just checked and her website is still up and active so I think both of them are still active in REI, just not on here.
There were a few newbies who had lots of posts, but no deals or very few deals. I agree with Mark and think that most people realize this is more work than they want and/or takes up more time than what they want to dedicate to it. So I think very rarely does anyone stick with it and have success with REI. I think the learning curve is steep in the beginning, but I’ve just replicated the same type of deals over and over growing into a nice portfolio.

8

You’re on a roll!

I’m not confident that a newbie can take advantage of everything he comes across, even though there’s a potential profit. What is easy and obvious to us, can represent a mountain to a newbie. That’s why I suggest that one become an expert in one niche, and then expand when that niche has been mastered. Otherwise, it’s like trying to be a jack of all trades and master of none.

Confidence and likability really do pave the way to creating trust and credibility with sellers. It took me a looooong time to get that figured out. When I first started, I was as nervous as a pregnant nun, and at the same time, behaved as if I was owed a deal. Well, that’s the combination for negotiation hell. I got better.

I like the option ‘option.’ It’s a very powerful tool to temporarily tie up property, in order to find buyers, sellers, or financing, etc.

Good post.

9

I completely agree. I’ve looked a little into doing some different things recently. I’ve checked a little into timber production. There’s also a hotel for sale here, but I’m not quite positioned for that at this moment and I’m not sure that’s something my wife and I would really want to get into. Anyone on here own hotels?
Anyhow…sometimes I feel like a real plain vanilla investor, but it’s been so easy to find cheap houses to fix up and put someone in for about $600/mo. I do enjoy reading about all of these different strategies though.

10

I agree to become an expert in one field… Just keep in mind that will limit your options to assist everyone. About a year ago I was working as a contractor for a major Lender. Doing training when suddenly it dawned on me that people really like options. And you need to supply them with those options. Sometimes just because you want to take over the payments on the property (SUB2) doesn’t mean the homeowner wants someone that they just met to do that. Or maybe because you only want to Short Sale their house doesn’t mean they want to move. The number one rule to remember in the Industry is Sellers are Strange and Buyers are LIARS!! If you can always remember that and learn how to get around it TEACH ME HOW!! Anyway when I was doing Training and working directly in the Loss Mitigation department I learned that 31% of Short Sales actually close. I know I am going to get some negative feed back of people saying I close 100% of my deals. And to those people I will say “Good for you!” statistics show that only 31% close. What do I SEE as the main issue? Simple comes down to 2 things.

Number 1 Investors writing low ball offers that the lender will never accept because that is what the book told them to do.

Number 2 Realtors listing the house to far below what the BPO value is just to get an offer.

Now lets focus on number 1 for a minute. I am not saying that you can’t get a house for a low price during a Short Sale. What I am saying is that if you can get every house at 50-60% without buying the note please call me I have a job for you. Learning the art of Negotiations is key to success in the Short Sale Industry. You can learn everything about Short Sales yet if you Negotiate like crap you are going to get crap deals.

Now number 2… To many times we see Realtors list a house where the BPO value is $200,000 lets say for $165,000 which brings an offer of $135,000 minus 3% to allow for buyers closing costs and 6% to the Realtor’s involved. While this deal might close it is going to take a Strong Negotiator that knows someone at the Lender to get this to close. Probably the same Negotiator that convinced you to pay $3,000 for his course. And truth be told I highly doubt that they close more then 31% of these deals anyway.

Lets cover SUB2… Put yourself in the homeowners position. You just met a guy/gal and they want to take over your payments. Now I don’t know what their credit looks like or how long they have been in the industry, or for that matter how long they plan to stay in the Industry before they walk away and let my house go with them… SIMPLE FACT thats what they are thinking…

How do you get around the objection no matter what you wanting to do with the house??

Step 1

Go to the house make a friend first. By the time I even sit down to talk shop I know how many kids they have, Where they went to school, Where they met, Where they went on their last vacation, Everyone’s Name (Including Kids and Grandkids) ETC… I am not doing this to be nosey I just made a friend. People like doing business with friends right??

Step 2

Make you spiel short simple and to the point. Don’t try and make anything harder or sound more complicated then what it really is!! My approach is 2 pieces of paper. Page 1 I call This is “What the Lender is going to do for you”, And show them exactly how the numbers work in a foreclosure. Holding Costs, Attorney Costs, Realtor Fee’s etc… (I can show you the paper I use if anyone in interested) Then I show them what I can do (Sub 2, Short Sale, Write a contract whatever) and say "Now which one looks like it will work better for you situation " 100% of the time they tell me your deal!! “Great sign here and here and here and I will finish the rest of the paperwork and have it to you tomorrow…”

REMEMBER KISS YOUR CLIENT… Huh??? (K.I.S.S. Keep it Simple St*pid) More people ruin the deal by talking way to much about the transaction. And I have noticed over the years is 90% of people going into foreclosure really don’t know what they want to do and you need to tell them and they are looking for a friend to assist them. Make a friend let them talk about what people like to talk about most THEM and Their Family… They don’t want to talk about Real Estate or how they are losing their A$$… KISS them and move on… Oh and I know what you are wondering what about the other 10% well they are mostly A holes that are in denial and don’t care if the house is going under they are getting free Rent :biggrin

What else should we talk about… How about why you are still reading this… I am still writing this and nobody found a deal in the past 5 minutes did they??? Time is the most valuable asset you have stop reading this and find a deal!!

11

Furnishedowner here, checking in after a whole year…! Nice post, Figureditout.

I am still renting out fully-furnished homes, all bills paid. Still renovating and improving the existing stock of units. Today we put in 2 window air conditioners, moved a woodpile, handled a flood from a broken outdoor spigot, and rented out 2 homes at $1395/month for the 1-bedroom and $2300 for a 2-bedroom. In May we had only 70% occupancy but June so far is looking good.

I haven’t been reading or posting for so long because I followed my own mantra–IF NOT NOW, WHEN? I had always wanted to become a foster parent or adopt a kid, just because I like kids. So last June I passed the background check, took a couple of classes and got my first kids…16-year-old twins.

Now I have probably had 20 kids in the last year. This state has around 300-400 children who are cleared for adoption, but have no prospective parents. It is so sad to see a child age out of foster care with no one.

I just had a 10-year old boy for a weekend respite stay. “What kind of family do you want?” I asked him.

“Just nice people, but people with animals!” he replied. That was a sweet, smart and good-looking brown-eyed kid. He was helpful. He was kind to my dogs. He is available for adoption. Dad incarcerated, Mom gone many years.

I have learned that when you pick up a 3-year-old at the Police Station at midnight (parents driving drunk) that child will cry for 40 minutes. That happened with each and every 3-year old. She might be really angry: “I don’t like you! I want my Mommy!” That is a good sign.

What’s worse is the small child who is overly sweet: “You are so nice. I like you. I like your house.” Red flag, that child was probably abused and she is now doing verbal grooming.

Way off the subject here of what people are doing in real estate. But I taught a 6-year old to read. Her face lit up, she was already half-way through a traumatic first grade year. I introduced a 10-year-old to soap and toilet paper. I have had 20 different refusals of vegetables in any form. I have served more chicken nuggets than you can believe. I have sent clean, well-fed, well-slept kids to 8 different schools. Currently a 17-year-old is lounging on my couch watching Disney. It has been a busy year.

I have lost weight. I have lost sleep. I have become way more flexible. I have even learned to tolerate religious music played day and night, my current little guest’s passion.

I didn’t just think about “someday”. I went out and did it. And did my real estate day job too. So, okay, I am a little proud of that.

If any of you have a hole in your home, in your heart, there are 400 kids here wondering–“Will a family ever want or love me?” There is a whole photo gallery of faces online. The little brown-eyed boy is there too. I can vouch for him. Now if you just have some animals…

Furnishedowner

12

You are correct. I started 6 years ago after learning about all types of investing. The market tanked and I was like a fish in water. I developed a short sale system that gets me paid without any middlemen. So I am a happy camper. You are also correct, you need to be able to analyze every deal to maximize profit.

13

Furnishedowner,

       Now that is what I find totally amazing, People reaching out to other people to assist them during the hard times. I admit that I get so tied up in what I am doing that sometimes I personally don't take the time to see the real important things in life. You post motivated me to find a way that I personally can give back more then what I really do as well. And that was the most valuable lesson anyone can learn in Real Estate. Its not how much you make it's what you do with the money after you make it. Personally I don't like sharing what my plan is on how to give back yet I will promise you that it will be totally amazing as well. Here I was trying to tell others how to really get started and this turned out for me to be lesson on what I am not doing enough of as well. My hat is off to you and I hope that find happiness in what you are doing, Personally I would like to know if you do this thru a charity as I would like to make a donation to your cause I sent you a personal message and I hope that you will get back to me. And you hit the nail on the Head "IF NOT NOW WHEN?"

Reguards,

Figureditout

14

Figureditout,
I sent you a personal message so I hope it went through.
Thanks for the kind words and good luck with your endeavors in real estate.

Furnishedowner

15

figureditout,

I am also one of those that posted frequently awhile back, but don’t visit much any more.

I am guessing that most of the investors who were “new” five years ago never put their first deal together. The market downturn made it too difficult for them to become investors in face of their credit issues, lack of working capital, and perhaps even loss of income when one member of the two income family was laid off. The dream of being a full time investor was too difficult to turn into reality, and most just gave up because they were unwilling to do the hard work that became even more difficult in a tight lending environment.

16

I totally agree with Dave T yet I think we are missing one thing that nobody has hit on yet, and that is that 90% of the people that buy a course or program never do anything with it. They might get it out of the box and read it from time to time yet it becomes what I call a “What if” object… Meaning what if I would have been able to make that work?? Or What if I would have done that?? Then when you hit your retirement age you really start to think about everything and realize your retirement may have come earlier and better if you would have done something with it. I suggest to everyone that is reading this to TAKE ACTION… Even if you only can find one hour a day that you can dedicate to Real Estate. Maybe you will make a Million in a year maybe you will only find one homeowner that is going under and it will be a family member or a good friend that you won’t make money on??? Its hard telling I will tell you that the education process in Real Estate is a long one. I know I am going to get negative comments on that so let me explain. Just because you buy a course doesn’t mean that course will work for every deal out there. Just because you learned one way of doing something that doesn’t mean that it will fit into your morals and ethics of how you want to do business. You need to find your niche your way of doing things. I just recommend that you get off the Couch and away from that TV… (For those of you reading this thinking “I feel a Zig Ziglar quote coming” your right)

“Lack of direction, not lack of time, is the problem. We all have twenty-four hour days.”
― Zig Ziglar

ASK QUESTIONS- Questions are the best way of figuring things out.

Over the past 19 years I have had people come to me asking what I thought about a deal… After I told them how bad it was guess what they were so excited to do the deal they did it anyway… And those same people then asked how to get out of the deal. Loss Mitigation Departments everywhere are full of Short Sales from new and bold Investors that “THOUGHT” it was a great deal.

Your going to make mistakes!! Make sure when the mistakes are made that you make them easy to fix and that it didn’t hurt anyones family or lifestyle. Karma will kill your business.

Well thats my 2 cents for the day… Get to work and find a deal!

17

“You don’t have to be great to start, but you have to start to be great”

― Zig Ziglar

Sorry had to add this…

Read all of his quotes they are more motivational then any book you will find

http://www.goodreads.com/author/quotes/50316.Zig_Ziglar

18

Furnishedowner,

I just want you to know that your post was inspiring! I have been in education for 30 years and my job now is to work with at-risk 7-12th grade students (students at risk of graduating). There are many foster kids in our school district and it’s people like you that provide the love and structure that is missing in so many of our homes. My hat is off to you.

I am not a regular poster, more of a lurker I guess, but have a passion for real estate. Back when anyone could get a loan I purchased 6 homes, 4 with conventional financing, one on contract and one subject 2. I sold 2 of the homes and still have 4.

My wife and I bought a restaurant 5 years ago and I haven’t been active in rei since the purchase of that restaurant. However, that changed in Feb of this year. I am now back to pursuing my passion. Since I am property rich and cash poor at this time, I am learning how to be a wholesaler.

I do know the challenges that come with being a successful rei. I have 2 offers pending…one on a REO property and one on a property privately owned. I have put in a good amount of time learning the wholesaling business and working on these properties. I have just contacted another realtor today who has just sent me more properties to review. I have realized the roadblocks and the setbacks that I think cause people to quit.

I think it boils down to the dream that we all start with. We have this dream of being a successful investor, all of these challenges come up and because their dream wasn’t strong enough they quit.

Maybe that’s too simple but simple really works for me.

Figureditout…I’ve sent you a PM

Thanks!

Brian

19

I’m in Dave T’s thought train and that is how do you classify an investor in your question. The real investors are still here, they knew this was just a new game with new rules and adjusted to it. People like speculators that I don’t classify as a real investors took big hits and withered on the vine but one I knew asked me what I was doing and since he lived 400 miles away I told him. Now he is an investor.

20

Great point Bay Area Brian! I was just saying that 90% of the people that bought a course never do anything with it. I believe its not the course you buy its the motivation you have. A person can buy book and course out there and if they don’t imply it they are not an investor… If they do they might make something out of it. Yet I feel that most people probably get discouraged and walk away after they figure out that this is a job! Sure you can extend your Credit and buy a rental does that make you a Investor???

Hmmmm I am going to the lake, maybe that will make me a BOAT???