I am a social studies teacher in San Antonio and have seriously contemplated changing careers and getting into Real Estate for the past 3 years. Being a teacher has its rewards, but unfortunately money is not one of them. i recently went to a Ron LeGrand seminar, and it caused my interest in Real Estate to rise 100 notches. I don’t have any experience in Real Estate. In fact, the closest I’ve ever come to doing anything of that nature is rent out a home that I currently own. Have any of you used Ron LeGrands method of flipping houses? Does it work? What is the best way to get started? I am extremely eager to get into real estate. Any info. and input is welcome and appreciated.
Stick with your day job. You will thank me later when everyone else is taking a bath.
But hey if your a teacher call H.U.D. housing and urban devlopment… Out here in Colorado teachers and police get 50% off a hud house its called the mentor next door program! Check in to that!!!
And hey sorry about the poor english grammer and spelling!! I went to Denver public schools Mr. or Mrs. Teacher LOL
Reo aren’t those programs for Teachers and Police officers who are buying to LIVE the homes themselves?
Not a big fan of Legrand I take it? Have you tried any of his systems?
Yeah it has to be purchsed as a owner occ.
The “Teacher-Next-Door” and the “Officer-Next-Door” Programs are for owner-occupied only and you have to agree to live there for three years. Additionally, you have to agree NOT to own any other residential property during that time…it does give a 50% discount off of the HUD list price.
My son is going into law enforcement and this may be a possibility for him once he gets sworn in after college.
I think you have Paralysis of Analysis. Did you know you can do it part time?
I don't have any experience... the closest I've ever come... is rent out a home that I currently own.
You have a lot of experience. Look into Lease Options, a better way than renting to someone (+ more money).
Have any of you used Ron LeGrands method of flipping houses? Does it work?
Yes. Ron is a multi-millionaire.
What is the best way to get started?
Didn’t Ron cover that at the seminar? If he didn’t, you should promptly ask for your money back.
I think you’d rather post on the message board than send 10 people a postcard about buying their house. I can relate - I was there once. The hardest part is printing the postcards, I promise.
i take it you have been Pretty successful flipping houses using LeGrand’s method. How successful have you been?
He actually did cover how to get started, but since I have very llittle background in RE, some of the terminoligy he used was foreign to me.
From what I remember, his steps were as follows (correct me if I’m wrong):
Buy a “pretty house” subject to and convince seller to pay the mortgage for the next three months. (I dont understand the subject to concept)
Form a land grant ( I dont understand why or how this can be done)
Post and ad in the paper thay says “Rent to own” and wait for buyers to call.
direct the potential buyers to a finance company so that they can finance the house for a higher price that what it is being sold to me for.
These are the general guidelines he coverd; however, i’m not convinced that this is all there is to it. Im sure there are other things involved. i would really like to get started, but i dont want to get into it without really knowing what needs to be done. any help would be greatly appreciated
I use a distilled LeGrand method. He teaches like a firehose opened to full. Some of his students have better material that skips the fluff.
I dont understand the subject to conceptPretend you were just transfered to Alaska, and have to pack and move in two weeks. And worse, you have no equity in your house because you just recently bought it.
It’s a good chance you’re not going to make any money when you sell. After paying closing costs, realtor commission, & several months of mortgage payments while the house is sits on the market, you may end up LOSING money on your house. You’ll be in Alaska & have to send a $5,000 check for the priveledge of selling your house.
Sounds like a bad deal.
Enter the investor. He says he can help & make your mortgage payments for you. You keep the mortgage loan in your name, but he takes care of the monthly payments. You won’t have to worry about selling - he will take care of that too.
Sound like a good deal to you? Would it free up a lot of your worries?
2. Form a land grantIt's easier if you just say, "you sign over the deed of your house to the investor, subject to your existing mortgage."
“Subject to” only means, that the investor is not going to go to the bank and get his own loan to buy the house. It doesn’t make sense for the deal to work that way.
So, the deal will only work “subject to” you holding onto your mortgage.
Steps 3 & 4 you have right.
i'm not convinced that this is all there is to it. Im sure there are other things involved.You have trapped yourself into making it more compicated than needs be. It's really only 4 steps, like you showed.
Yes, it’s “only 4 steps”, but there’s a lot of things you have to do at each step, lol. It’s like anything else, once you’ve done it a time or two, it’s simple. The 1st time or two you’ll need help.
I would suggest finding a mentor who would take a small part of your 1st deal or two to walk you through each step, answer your questions, tell you what to do, etc…
Now that you’re in Texas the business was just made a bit tougher by the new law signed in yesterday though. I don’t think you can lease-option the house to a buyer anymore, or after a certain date, or something. You might have to sell it conventionally. (again, I’d have to look into the law)
Heck, for that matter, they might have made sub2’s illegal. Look into the details before you move ahead.
Tried him, Russ Whitney, and some others I can not even remember, there was always a missing link… that they would tell you for an additonal $1,000 or $3,000.
I was a teacher too and then decided to go into real estate. Texas is a hot market right You are in the right place at the right time.
By the way… I love San Antonio.
But for your future I would find some like minded friends 1-2 with good to excellent credit scores and form an LLC and purchase houses through that. I found that buying duplexes, fourplexes provide the best bang for your dollar.
This little process changed my financial picture and I have never looked back.
Why would you get other people involved and give them 2/3 of your profits? To each his own I guess. Getting people together and forming a LLC is what you want your private lenders to do, before they give you $. Borrow $ from small groups like that and pay them a commission, but why give up most of your profits? I can’t see doing it if you’re a full-time REI.
Re-read what I said above too, as of yesterday the RE investment scene has just changed dramatically in Texas thanks to your Gov. >:(
Manga and znick,
thanks for all the info. I think I’m gonna get started. In fact, I went out and saw a few houses that were fsbo and got the phone numbers. However, I have a few more questions before I actually make the phone calls that way I feel a bit more confident.
znick mentioned that there are 4 steps just like manga mentioined, but that there is a lot to do in each step. That is one of things that I somewhat worry about. I guess I’ll go ahead and list the questions I have, and maybe you guys can help me out.
What is the best way to get leads?
Should I be cautious of the “due on sale clause” ?
When flipping a “pretty house” who ends up paying closing cost?
What steps need to be taken to attain the deed to the house? Does the investor automatically get the deed once he assumes the mortgage? (Are the deed and title the same thing?)
If I can somehow get the original owner to pay the mortgage for 2-3 months like LeGrand suggests so that it gives me time to sell the house, would any of that need any formal or legal documents, and would I need a lawyer to do that?
6.When I sell the house to the buyers and they get the money to pay off the existing mortgage, would their financing co. make the check to me so that I can pay off the existing mortgage or would they make the check to the existing mortgage company? I’m not sure how that works.
How can one find out what the existing market value on a house is?
Manga, I know you flip “ugly houses”. Do you ever find rehabbers who will buy old abandoned houses? How do you know what a good price to purchase it and then resell to rehabbers is? I’m assuming you also need the deed to an “ugly house” before you turn around and sell to a rehabber?
Znick you mentioned that lease option is no longer allowed in Texas and to read up on the new laws. How or where could I find that info.?
I know there are a lot of questions, but I would really appreciate any advice. you guys seem pretty experienced and confident about yourselves and the whole RE business. And as znick mentioned, I know it is probably best to find someone to help me with the first few deals, and I really wish I had someone to help me, but unfortunately I don’t know anyone who knows much less understand how to do this.
Again, thanks a bunch for your help.
Unfortunately, it would take me several hours to properly answer all of those questions… I can answer simple questions, but you’ve asked for what it takes entire training programs to understand.
You need to find a mentor in your area, join a local real estate investment club, start reading and reading and reading books and websights, order a couple of training programs, and maybe even take a class or “bootcamp” somewhere.
Real estate investing isn’t something that can be learnt in a few days and put into motion. Real estate investing is a business… one that requires as much expertise and knowledge as opening a restaurant, starting a manufacturing company, or starting any other “real” business. It takes training and support from others, and without the proper background, you are taking huge risks.
I paid a mentor $8000.00 to teach me the business, have spent thousands more in programs and seminars, and have dedicated hundreds of hours to train myself. I didn’t read a couple of books and start flipping houses. Maybe others did… but I wanted to do it right. (and believe me… it was WELL worth it)
Please don’t misunderstand me… I’m not trying to discourage you, this is a WONDERFUL business, whether it’s done full or part time… but it’s just that… a BUSINESS. You have to invest time and $ to learn it, and it takes work.
Many people selling programs tell you how “easy” it is, and how “anyone can do it”, and that it “doesn’t take any investment”. Hogwash. It’s not all that easy to a new person, not everyone can do it, and it does take an investment.
Maybe you can flip a house and assign a property without putting a load of $ into it, but you have to invest either enough $ to learn how 1st, or invest enough time to find a partner or mentor who will walk you through the deal. It’s not something you can just ask about on a forum and go out and do… not without help at least.
I would suggest finding a real estate investors group in your area and starting there. Here 17 in Texas:
I would also post a new thread here asking “what should a newbie do in this biz to get started?”. Ask about what books to read, and what programs to consider… and start learning.
Find an experienced investor at the local group and ask him if he’ll partner on a deal or two with you if you find the property, and work with him. He’ll tell you what to look for.
Again, I’m not trying to discourage you, I’m trying to help you. I’m giving you the best advice I can… maybe others disagree, but I feel what I’ve posted is the best course of action.
I have helped many new investors get through their 1st deals. I tell them what to look for, and when they find it, I tell them what to do each step of the way. I provide contract help and make sure they are doing everything safely. In exchange, they give me a part of the deal when it’s completed. You need to find someone in your area to do the same for you. I’ll do it if you’re totally stuck, but quite frankly, you’re better off working with someone you can sit down with and discuss things with.
Nice post ZNICK…
I am also a noob and have been reading and reading for about two months now…he is right, the investment needs to come from somewhere. Personally I would rather invest time and $ up front in the begining in a controlled manner rather than making a huge costly mistake later on…
thanks for your help. i’ve been trying to find someone to work with me. i think i might have found someone. i’m just waiting for their response, but if they don’t want to help me, I’ll definately take you up on your offer. I’m pretty eager to get started, so i’ll keep you posted as to what has happened. Any other info or advice you may have for me will also be appreciated. Again, thanks for your help.
Hope you are all having a nice day.
Yes I read a lot of books, took high powered seminars by all the top “gurus” on TV, Radio, and mail outs.
I learned a lot along the way, and then took action on some of my own deals.
Then I dreamed, would it not be great if someone could do all the work for me so I could just go to the beach or whatever. ;D
Someone to Find the deal, Fund them for me, do any fix up and Rehab for me, then if I wish either find tenants and manage it for me, then lease option it to them or heck just do a quick flip for the profit. Oh, and while I was dreaming, they would have to find the houses in the hottest markets around the country…
Then my …
opps wife wants to check e-mail
Good pitch Wallace. Take long to come up with that one?
LOL, just off the cuff. When you are sure of what you are doing and belive in it 100% no pitch is needed.
Again, you don’t know, what you don’t know.
My wife is off her e-mail now so here is the rest of my story . . . .
Well I found an investor concierge that does all that and I love it.
I found anytime you can get someone else to do a job for you and make money off of it thats the way to wealth.
J. Paul Getty once said " I would rather have 1% of the effort of 100 people than 100% of my own effort.
The point is Leverage.
Using OPM, OPB, OPE Money, Brains, Effort.
I strongly suggest to educate yourself everyday in your craft (REI) and to build a team to automate your investing or find one that is already in place.