Posted by SScotty on May 21, 2000 at 21:54:00:
Not offended in the least. Sometimes I get a little passionate about some of the advice bandied around here that I feel is reckless or not in most folks best interest. Probably one of the reasons I choose not to post here very often. Not everybody who reads here is a full time investor, and in fact I’d venture that most aren’t. Such deals may not meet your parameters, but that doesn’t mean the correct advice is not to do the deal. I don’t recommend you go out looking for skinny deals as a rule by any means, but why walk away if there is money to be made…especially if you are not doing this as your main source of income and you don’t have deals falling out your ears? The key is the deals are profitable, and that doesn’t mean the cash has to be up front. I don’t believe in feeding deals as a general rule, though.
Always remember you put dollars in the bank, not percentages. I learned that lesson the hard way. In my immediate market the median price of a home is approaching $400,000. Would it be your advice if I couldn’t make 10% up front cash which nets 6-7% I should walk? Heaven forbid I walk on a deal that only makes me $30,000 because I won’t work that cheaply. I guess that is the day I will truly have arrived. We aren’t digging ditches here so I don’t really look at this as work per se, so I’m not sure I’m with you on the whole not worth going through the trouble so I ought to walk away. Again, for a lot of people out there trying to get started this $5K could well represent 2 months or more of their regular salary. That may be the kind of windfall that changes their life and gets them to realize they don’t have to be a slave to a paycheck. I guess if they wanted to leave their current job and become a real estate agent or loan officer they would have that option. You and I both know there is more to it than sitting at a desk taking listings and making loans. They still have their hassle factor…and then some.