No money down, no risk - Posted by Hal
Posted by Hal on October 24, 1998 at 09:18:33:
Vincent,
In my opinion, Tim is exactly right. Those who worked the CS system made money and are grateful to him; those that have not worked and/or had unrealistic expectations, dislike his program.
I, for one, think it’s a great value. I went to a $1500 Homebuyers of America seminar that didn’t offer half the value of CS’s $180 course. It is well worth the money.
Understand where CS stands in the history of American re investing. CS learned from Al Lowry and Bob Allen, nothing down masters. At the time these giants were most influential (70s and 80s), real estate was appreciating wildly every year. Thus, if you could only own real estate, you could expect a 5% (or greater) appreciation in your property every year. Thus, under these conditions, a $100k house would be worth $105 a year later, and $110,250 two years later. Hold it for five or six years and your $100k house could increase in value $25,000.
Under these conditions, the issue thus became how to acquire as much real estate as possible. For just to acquire and hold meant almost certain wealth. Allen, CS, and others thus developed techniques to acquire property with none of your own money. Theoretically, you could thus acquire infinite properties (since it cost you nothing) and infinitely increase your net worth. CS split off from Lowry, and his system has been around ever since.
The only thing I don’t personally agree with in the CS system is the properties he has you buy: anything for no money down. I personally don’t agree with that. Sheets is comfortable holding a property with just a +$100 cash flow, and I am not. One decent maintenance expense and your cash flow is gone. Also, you can’t expect those great appreciation values anymore in many markets, so the buy and hold technique is riskier than I, personally, and comfortable with. I prefer to buy, rehab, and force appreciation through improvements.
Does that mean CS system is no good for me? No! It means I use it to buy the kinds of properties I like.
His system is basic to real estate investment. It’s a great beginning point. Like many folks, you will probably want to invest in future courses when you get a better idea of what specific techniques you want to master.
I, for one, will always be grateful to CS for his late night infomercials. I belittled his ads as being too good to be true. It wasn’t until I had renovated my personal residence, and experienced how much money you could make (even part-time) in real estate, that I became a believer. If I hadn’t ever seen his ads, I might never have been so enthused to start.
One final note: I strongly suspect his students confuse cash flow with total income and property value with net worth. The returns of his video students is exaggerated; it’s HIGHLY atypical to get that kind of success in the short run, but not necessarily in the long run.
Why don’t you buy it and see what we are talking about? You have a 30 day money back guarantee, you know. You have nothing to lose, other than a little time.
Much success to you,
Hal