I always looked up to Robert, but he gets a lot of bad publicity I notice on the internet.
Some even say he never invested in Real Estate before his books released.
In any case, when he mentions about homes he buys with no money down, is this something that is possible or is he just making this up?
Kiyosaki is a great source of basic financial information.
He licenses his name for the real estate courses being offered. He gets paid a boatload of money for it. At the same time, he doesn’t control the content, curriculum or delivery of the information.
I’ve heard him complain about a licensee. However, I’m sure it’s hard to give back $10M, just because the third-party operators use gimmicks, tricks, and sophisticated up-sells on those course offers.
If we review the psychology surrounding the marketing of these serial seminar outfits, we’ll discover that they sift out out as many skeptics and ‘questioners’ as possible, and focus on the most rabid information junkies.
It’s easy to sell to a rabid fan of a topic. It doesn’t take much more than a nudge to compel them to pull out a credit card …and spend big bucks.
Of course, the lure is, access to ‘transformational’ information.
However, it’s more than that, and not just an information dump.
The presentations are inspiring, compelling and confidence building. The ‘students’ walk out of these seminars all primed, pumped and ready for the kill.
Not to mention we’ve got a ‘club’ and class of people that ‘can’ fork over $15,000 for a seminar. That puts the entire group into an exclusive class of people. And don’t think that isn’t also part of the allure.
Of course the smart students turn these events into networking opportunities, that promise a value-added return on the cost of the event itself.
Where else would we find someone, like minded, with enough cash to blow on a weekend like this, without the weekend like this?
It’s like shooting rich fish in a barrel of rich fish.
I spent about $5k on 3-day event in Las Vegas several years ago now. It wasn’t the most expensive training I’ve taken, but I’ve profited a hundred times more than I spent.
I mention this, because I have a Rolodex of names and contacts that I relied on many years after the event occurred. Even better, I sifted for the ‘high-finance’ fans of the event, and used them to make further, profitable connections. It’s like dropping a pebble in a pond of high rollers.
The question might be, “Could you have learned the same thing without spending $5,000?” Yes, but again the contacts and networking, if not the ideas and experience-sharing, wasn’t something I could buy otherwise.
The ones that might call this a waste of money and time (not the posters here, thank you), are the same ones that don’t understand and appreciate rubbing shoulders and networking with like-minded people with similar aspirations and goals, AND the resources to help them make their dreams and goals come true.
And BTW, just for fun, whom else are you gonna brag to, that won’t think you’re douche-bag for doing so, when you bring home the biggest prize ever? The network connection that helped make it possible, that’s whom.
You know who really resents your big pay offs? Those that don’t understand what you’re doing, and how you did it. And those not trying to.
For me, it’s not the cost, it’s the benefit.
Just saying.
Robert does get some bad publicity - as does most people who are successful. Criticism comes with success unfortunately.
But I know for a fact his teachings work - as I have become a self made millionaire and I owe his teachings a lot of credit! And my career is only getting started…I should be worth $100mm+ by the time I am old and gray. And I know a lot of people who have also used his information to become successful. So I know it works. Anyone who says otherwise is either using the information wrong, is not smart enough to become rich (Robert only provides guideposts - its up to the individual to find a path to get there) OR is just a failure and has given up.
No money down real estate investing is possible, sure, but it is harder than normal right now with the credit markets being tighter than they were years ago. It all comes down to the numbers…if you can get a house at a good interest rate, with nothing down and it gives you a great ROI, then go for it. But you will find most no money down deals don’t cashflow too well.
Personally I pay cash for virtually all my rentals. I won’t do that forever - but I have enjoyed doing that for 25+ bargain properties, and even a house I rehabbed & sold last fall, while the market is so cheap now. These low prices are a once in a lifetime deal for most of us.
He’s not making this up.
Just because we ‘can’ buy with nothing down, doesn’t mean we should.
I’ve had numerous opportunities to buy with nothing down. I’m talking about just paying the closing costs.
The issue is, are we still buying enough below market, or are the terms good enough, to allow for operating expenses, or not.
Typically, ‘no down’ deals are also low/no equity deals.
Robert Allen got in trouble leveraging himself into a boatload of ‘no down’ deals that reflected his actual seminar teaching(s).
However, the market went south, and all the leverage became an anchor around his neck. That contributed, partly, to him filing BK. Had he better timed the market, he would have saved himself a ‘boatload’ of grief. But we all have 20/20 hindsight.
However, if the market is going up (at all), a higher leverage, no down deal, with minor negative cash flow can be an overall winner in the end. Meanwhile, time solves about 99.5% of our real estate mistakes …when/if we can hang on.
Otherwise, a no down deal should represent meaningful cash flow at the start, so that if the market doesn’t go up, we don’t find ourselves sucking drain water.
Speaking of “no down payments,” I’ve got Robert Allen’s favorite no down techniques if you want a copy.
Of course, my favorite way to buy no down, is to take over loan(s) Sub2. It’s still a matter of buying quality deals, not just getting in for no down, because we can.
FWIW
I have read most of Kiyosaki’s books and he has great information especially for beginners.For me i would agree that the seminars wouldn’t add much value but the networks from such seminars are worth it.
I was about to board a plane to Paris and was looking for something to read in the kiosk at the airport gate. I picked up a couple and then I noticed the book Rich Dad Poor Dad by Robert Kiyosaki. I had a couple of rent houses and had always had businesses (vending machines, maid service, video stores etc). I read all 4 books but the one from Kiyosaki really stuck in my mind. He was talking about what I had talked about for years but didn’t have a cohesive term for it. I used to say that I need to live my life like Me incorporated (if my name was Smith I should be Smith, Inc.). I should do the things that my company did as far as money is concerned. I should only spend money as an approval process between my wife and me and need to pay attention to my balance sheet (net worth). I should pay attention to if expenditures are expense or capital etc. But a lot of the things that he said gave me heartburn, like assets versus liabilities. I, knowing the definition of accounting terms, rejected it. But once I re-termed these in my mind I could see his point. You home is an asset, but so is a car, washing machine, TV and even rolls of toilet paper. They are just not income producing assets.
Kiyosaki’s philosophy is good although he got rich on the book and not real estate does not make what he says no less true. Just like a priest can tell you how to be pious although he may not be or professors that teach economics that don’t have 2 nickels to rub together they still are telling you true concepts that you can use to get rich.
I have also read a couple of his books and what I like about them is they make you think.
The part about zero down real estate is a bit outdated as far as most of what is still out there for investors. I believe that there are zero down loans out there but not for first time investors on a hand shake. You have to get a couple deals under your belt with the same HML or local bank (forget conventional lending unless you have at least 15% to put down) and then after you build some trust things can start to happen like credit lines on a signature and loans based on ARV.
Zero down payment is not only possible but done everyday in real estate. But let me clarify, zero down payment does not mean no money comes to the table. It means “No money comes out of your pocket”.
Here is an example deal I am looking at in Bayonne, NJ. 5 unit building with an asking price of $475k. It has a net operating income of $38k so the offer I will be submitting is $380k. If it gets accepted, I have a private investor that will lend me 30% down payment ($114k). I will be paying 10% interest on this money; interest only payments which will be $11,400/yr. Combined with my projected mortgage of $17,138 a year that gives me a total debt service of $28,538.
Subtract $28,538 out of the NOI of $38k, leaves me with $9,462 net profit.
Other than my closing costs which I can include in my loans, this is a No Money down deal. No money out of my pocket and creating a yearly income of $9,462.
This is not an endorsement for Kiyosaki but you have to go beyond Kiyosaki and learn from real players in this business.
I would love a copy of it!
TG,
I sent you a link to the pdf.
Very true I do it all the time. The key is creativity you must figure out what the seller wants and think of ways to provide that without using money. I do a mental exercise everyday where I say I need 500,000 to make 100K a month how will I get the money ans spend time thinking of ways to finance the deal. Try it!
Thanks I look forward to reading it
No money down conventional loans still exist but are almost impossible to obtain. As mentioned before, you would need a good stable lending history, excellent debt to income ratios and top-of-the-line credit ratings.
FHA offers loans with only 3.5% down, but they are changing some of their loan policies and the fine print is less appealing.
Buying property on land contract is a viable option for very low down payments, less risk and good cash flow potential.
Robert keeps claiming he built his fortune before he wrote those books. Is there any reason why people make these claims that he never invested in Real Estate before making the Rich Dad company?
I don’t know if he said in the book that he bought any real estate. He tells a story of a fictional rich dad and how that dad thought about money versus his fictional poor dad.
His books are not supposed to be instructional but motivational if you get what I am saying. It is like a priest can teach you how to live a pious life but may not be able to conquer his problem with say gluttony or sloth. His advice is nevertheless correct.
In his interview with Alex Jones, Robert claims that he makes over a million a month (or 2? I don’t remember) tax free from commercial real estate and owns a gold mine. If you search for “Robert Kiyosaki Alex Jones” on Youtube you can listen to the interview.