A retirement plan (J Piper) - Posted by tampasteph

import · September 23, 2003, 9:31am

Posted by eric-fl on September 24, 2003 at 09:59:14:

Most people don’t think the Real Estate market is going to drop 20%. The worst-case scenario, in most markets, is a “soft landing”. Sure, maybe it will happen in the markedly higher-price markets (probably will), but that’s because those markets are overpriced. Sub-2 is already not a good idea in those markets, unless the seller is heavily subsidizing the payment. They won’t cash flow from day one, so they shouldn’t be acquired in the first place, regardless of acquisition method.

import · September 23, 2003, 9:31am

Posted by tampasteph on September 23, 2003 at 09:31:13:

I’ve had this plan posted on my wall by my desk for a year or so. Just thought I would share it with everyone out there. So far, I’m one down, 49 to go!

Posted by JPiper on August 27, 1999 at 10:39:49:

In Reply to: Retirement Savings for FULL-TIME Investors! posted by Carey_PA on August 26, 1999 at 18:58:56:

Here’s an imaginary retirement plan?.adjust the numbers or years according to your preference.

Go buy 10 houses per year. You resell the houses on a lease/option creating $3K upfront cash?.this representing the difference between what you put up?and what you receive from the new buyer. Create a cash flow of $150 per month.
At the end of year one you will have made $30,000?.not counting any cash flow.
In year 2 buy 10 more houses. You will make $30,000 in upfront cash?.plus another $150 per month for the 10 houses you bought the first year. That’s $18,000 cash flow. Therefore total income (not counting the cash flow from the 10 houses bought in year 2) is $48,000.
After you have done this for 5 years?.your cash flow is now $90,000 per year. Hopefully this will at least cover your overhead.

After five years of ALL this work?you have created an income stream of $90,000 by buying essentially a house every month with a couple of months off for good behavior.

Now here’s the real power of this. Someday these houses will be free and clear. Let’s assume for a moment that the rent per house is $1000 per month. Therefore, someday when all these houses are paid for, your income will rise to $50,000 per month?.less your expenses.

If during the course of buying these houses, someone exercises their option to acquire your house?..just do a 1031 exchange into another house for less dollars than the house you sell.

If you owned 50 houses on a lease/option would that represent “retirement” for you? Only you can answer that. You could probably HIRE an employee to collect your money and deposit it for you?..that might cost you $3K per month.

Is this plan realistic? I’ll leave that for you to decide. But if this plan is realistic?.you’re only 5 years away from the end of it right now.

Oh yeah?.and by the way, I guess you could also set up IRA’s, pension plans, etc. But me? I’d concentrate on getting those houses.

JPiper

import · September 23, 2003, 4:02pm

My apologies to Piper - Posted by Hank FL

Posted by Hank FL on September 23, 2003 at 16:02:27:

Several hours ago I posted a humorous post that made a serious point. Perhaps the subject line “Piper is a Piker” was a bit strong, so sorry JPiper. I remember the Gatten joke that went down in flames w/some.

My post went something like this:

10 deals a year ? 30k ? You’ve got to be kidding me.

You need to broaden your horizons Tampasteph.

By my desk I have some inpirational material in my bookcase you might want to study …

“It’s Yours If You Say It Is”
Short Cut Your Way To Financial Freedom by Lou Pole

“Instant Millionare”
Multi-Task Your Way To Riches W/Real Estate, E-Commerce, Book Writing and Day Trading - All In Your Spare Time! by Phil McKraken & Robyn Yu

“300 Offers A Day”
Shotgunning Your Way To Wealth by Hugh Jass

“The Contrarians Guide To Financial Success”
How To Make Millions By Doing Exactly The Opposite Of What I Teach. By Wade Schnook.

“Highest And Best Ruse”
Big Buck Bonanzaa In Boarding Houses By R. Whitless

So I get back home and check my e-mail to find that once again, some folks just have no sense of humor.

stupiditycop (iarreststupidpeople@UR1.com), if you can’t use a real handle/e-mail address, don’t bother posting.

Some other guy wanted to know where to buy one of the goof-courses.

Then the moderator deleted my post.

So let me make my point w/out anything that might distract or detract from it.

I think that Piper plan is a very sound and attainable way to go. Many people buy some courses and jump in this CRE thing expecting to do 500,000 gross the first year. Several years ago I thought shotgunning REO offers would bring in the big bucks that the course said it would. Little did I know, but later came to figure out, was that the REO market in my area isn’t the place for deals at this time (unless you get pocket listings).

So my point is that the “Get Rich Slow” plan will usually work better than the “Get Rich Quick” idea. John Schaub (amoung others) speaks well on this point.

IMHO,forget about flipping 150 deals a year or day-trading or any faddy B.S. and do the sensible thing similar to what Piper described above.

That is my plan.

Sorry if I confused anybody out there.

import · September 23, 2003, 3:55pm

Is this a practical plan? - Posted by Sammy

Posted by Sammy on September 23, 2003 at 15:55:26:

To cashflow $150 per month you are talking about a house worth approximately $100,000 to use a nice round number. To net 3k “upfront cash” on this 100k house you pretty much need to buy it for “nothing down” i.e. take it subject 2. In my humble opinion, starting today and taking 50 houses sub2 over the 5 years is suicide unless you average at least 20% equity in each property AND have significant cash reserves. If you ask me, this “retirement plan” is not doable for 99.9% of the readers of this board …

import · September 23, 2003, 10:43am

Re: A retirement plan (J Piper) - Posted by Clyde

Posted by Clyde on September 23, 2003 at 10:43:24:

Interesting …do not know who JPiper is or was but that investment theory/program has been around for at least 30 years that I know of.

Clyde

import · September 23, 2003, 10:07am

Those JPiper posts are sorely missed - Posted by JT-IN

Posted by JT-IN on September 23, 2003 at 10:07:56:

The wisdom that he used to bestow upon us, the likes of this one and so many others…

import · September 23, 2003, 4:24pm

adverse possession - Posted by Hank FL

Posted by Hank FL on September 23, 2003 at 16:24:01:

“It’s Yours If You Say It Is”
Short Cut Your Way To Financial Freedom through ADVERSE POSSESSION by Lou Pole (That’s Loop Hole for stupiditycop)

I left out the adverse possession part in my above post.

Wouldn’t want to confuse anybody out there.

This (different title & author) actually is a new course by the way. The idea is as old as dirt but someone claims it’s “The Last Real Estate Secret”.

import · September 23, 2003, 4:22pm

Re: My apologies to Piper - Posted by JP

Posted by JP on September 23, 2003 at 16:22:58:

I say forget about flipping 150 deals a year too. BUT, anyone CAN do 10 deals a year averaging 20k profit on each. This is relatively easily attainable once you know what you are doing. So that is a nice 200k a year profit. Live on 50k and save 150k per year (invested in relatively low-yielding but liquid investments). Do this for 5 years and you have a nice sum of 750k cash to move on to the next step which is to basically buy a big apartment building and retire. End of story. Simple. You’ll make exponentially more money doing this then buying and holding a few rental properties per year from day 1. I guess it depends on how much time and effort you can and/or are willing to put into it at the start…

import · September 23, 2003, 4:17pm

Re: Is this a practical plan? - Posted by tampasteph

Posted by tampasteph on September 23, 2003 at 16:17:31:

I think it’s a very practical plan - that is ,if you use your head, buy right, and keep adequate money in reserve for holding costs, repairs, etc.
I don’t think the post said anything about taking properties sub2 with no equity, then pi$$ing away the money you get for option consideration.
If you think this retirement plan is not doable, then you’re right, it probablly isn’t. I will keep working my a$$ off though, so when I’m 33 or 34 I can tell all the people who told me “You can’t do that” to go tell someone who cares.
What’s your plan?

import · September 23, 2003, 10:13am

The last JPiper post I read… - Posted by Ben (NJ)

Posted by Ben (NJ) on September 23, 2003 at 10:13:52:

was September 11, 2001. It was moments before the World
Trade Center got hit. I remember it like it was yesterday. Piper and I were mutually ripping apart insurance companies (like any other ordinary day,LOL)
when the phone rang and a friend of mine told me to turn on the TV. You never forget where you were at those moments.

import · September 23, 2003, 9:13pm

100 Bucks… - Posted by JT-IN

Posted by JT-IN on September 23, 2003 at 21:13:19:

Says your path will be different than you think… if and when you reach the point of having the 750K liquid, from saving the 150K per year, for 5 years…

So many of your attitudes will change as you go through life, and what you think is important to you today, may not even turn your head… some years (and some dollars) down the road. Been there, done that… and have seen countless other folks experience just the same thing…

It is nice to dream what you will want to do with it, and how, but it never fails that when you get there, the thought of retiring as you thought you would, seems so silly when you can. The definition of financial independence is when you can do what you want to do… but choose to keep on doing what you love to do… which may be the same old thing you have been doing for quite a while now… working, making money, and loving every minute of it…

JT-IN

import · September 23, 2003, 6:07pm

Re: My apologies to Piper - Posted by Houserookie

Posted by Houserookie on September 23, 2003 at 18:07:50:

I am bias towards flipping in the sense that I flip about 20+ houses a year. It depends on one’s personalities and teachers.

I don’t plan to retire in 20 years since I might not be alive in five. Flipping satisifies my appetite for cash now and more cash later.

Cheerz,

import · September 23, 2003, 4:36pm

I see what you mean - Posted by Hank FL

Posted by Hank FL on September 23, 2003 at 16:36:41:

And your plan ain’t bad either.

Of course, the Fortunato/Schaub type purists would say that you’d be crazy to sell a perfectly good house.

import · September 23, 2003, 4:28pm

Re: Is this a practical plan? - Posted by Sammy

Posted by Sammy on September 23, 2003 at 16:28:15:

If not subject 2, how do you plan to net 3k “upfront cash” when buying a 100k house?

I’m already “financially free” after developing and selling 2 Internet businesses in the past 7 years. My plan is to simply keep making as much money as I can while I wait for my notes to finish paying off, and then buy a 40mm apartment building in the next 5 years. Then retire.

import · September 23, 2003, 10:31pm

Re: The last JPiper post I read… - Posted by Redline

Posted by Redline on September 23, 2003 at 22:31:03:

Yep and I was in NY watching the towers burn. They’ll be missed.

Piper is also missed but I suspect he’s having fun somewhere right now …

RL

import · September 23, 2003, 10:48am

Re: The last JPiper post I read… - Posted by Teresa

Posted by Teresa on September 23, 2003 at 10:48:51:

what happened to Jpiper?

import · September 23, 2003, 10:21am

Interesting… and touching, at the same time - Posted by JT-IN

Posted by JT-IN on September 23, 2003 at 10:21:02:

And yes, the Ins Co’s are still a bunch of dirt bags, but they certainly got a haircut on the 9/11 tragedy…

JT-IN

import · September 23, 2003, 4:41pm

Re: Is this a practical plan? - Posted by tampasteph

Posted by tampasteph on September 23, 2003 at 16:41:59:

The upfront cash comes in the form of a non-refundable option consideration taken when selling on a lease option.
I do plan on buying subject to, and don’t see anything wrong with that as long as the deal is good.
I wasn’t trying to start an argument here, I was just trying to pass on a plan that has helped me set some goals for myself.
Sheesh.

import · September 23, 2003, 7:53pm

Insurance Companies now cutting back! - Posted by Bill Taylor

Posted by Bill Taylor on September 23, 2003 at 19:53:49:

Yea those insurance companies got clipped a bit on 9/11 but now they are retaliating in a big way. We are getting lists of things they want us to do on our properties and cancellation notices. Fewer and fewer will even look twice at investment property. We are now looking at the option of self insuring except for the liability portion. They say it is to much risk and if you have enough properties it is worth looking at this option.

import · September 23, 2003, 11:14am

Re: Interesting… and touching, at the same time - Posted by Walt_FL

Posted by Walt_FL on September 23, 2003 at 11:14:29:

A Haircut we are ALL Paying for Now, at a very expensive Salon…

Walt_FL