Posted by JohnBoy on December 04, 2000 at 01:11:28:
If you are coming out of debt and you have minimal cash to work with then you don’t want to focus on holding properties right now for rentals. You should focus on building up your cash first. Once you have enough cash built up to carry you through any bad times that might develop from holding properties, then look into holding them as rentals if being a Landlord is something you want to do.
If cash reserves are low then look into doing flips and lease options to get started until you can build up cash. You can do flips and lease options that will allow you to make some cash and be out of the deal quick without being tied to it for any length of time. In and out! That’s where it’s best to focus to build cash up before committing to any long term obligations.
You can find a lot of information on this site pertaining to flips and lease options in the “How To” and “Success Stories” sections. The link to those are up at the top left corner of this newsgroup. You can also type in “Flips”, “Flipping” and “Lease Option” in the search archives section of this site. Search the archive section that is on the “MAIN NEWSGROUP” at this site. This newsgroup here is mostly for questions pertaing to Charleton Sheets and other gurus selling courses. This is only ONE of SIX newsgroups on this site. You will find much more valuable information on all the other newsgroups because that is where all the investors that are doing deals like this everyday post their messages and responses.
Posted by Robert on November 25, 2000 at 09:14:51:
I know who one of the couples from Ohio on Carlton’s infomercial who state they have a 4k per month cash flow. It’s funny because most of their properties have been foreclosed on over the last 12 months. How can someone with a 4k per month cash flow lose most if not all of their properties?
Posted by E.B Wright on November 27, 2000 at 10:44:21:
Everyone:
It seems that people will take the smallest bit of information and use it to buck a bad idea. I am glad to read that some people are using their heads in responses to this discussion.
The Sheets method is not a get-rich-quick scheme. He emphasizes that in both his commercials and the tape (or CD) set. He also teaches that people have to be careful with their dealings, because…as with any business… you are dealing with money and it is easy to ruin yourself that way.
I bought the Sheets system about 2 years ago and I recently purchased a house. I did not use his methods (time was against me) but I did learn a lot about real estate from him. So much, that I am confident in my purchase and look forward to purchasing homes in the future using his method.
Posted by JohnBoy on November 26, 2000 at 18:29:34:
It sounds like that $4k cash flow was coming from many properties they acquired. Meaning small cash flow amounts off most properties. The minute they end up with a several vacancies, non paying tenants, legal cost for evictions and incur expenses to fix up the properties to get ready to rent again, that $4k cash flow would be gone in a hurry! That leaves them with multiple mortgage payments that aren’t getting paid because they have non paying tenants or empty properties with $0 income coming in.
Think about it?
If you had 10 properties that each had a mortgage payment of $1k per month and you ended up with 4 of those empty or tenants that stopped paying the rent, that’s $4k a month you need to cover those payments until you get them rented again or get the dead beats out before you can re-rent them again! Bye bye $4k cash flow! Hello foreclosure city!!!
This is WHY is important to properly weigh your risk on each deal and make your profit going into the deal!
If you don’t have the funds to cover the bad times then buying to hold as rentals is NOT the way to go!
At least if you were doing lease options and getting decent option considerations, and SAVING that cash until you had enough put away to carry you, then you will have the tenant’s cash to cover your expenses when they don’t pay or when you need to evict them and wait to go through the process until you can get another tenant and collect more option consideration!
What you seen is probably a informercial that was recorded back when who knows when, which at that time they were making $4k per month cash flow. It only takes a few properties to go bad with vacancies or non paying tenants to wipe you out FAST! Plan ahead and figure in the risk before just jumping in and buying any old property just because you can get it with no money down! ALWAYS, ALWAYS, ALWAYS make your profit when you buy!!! Otherwise you can end up just like them!
Posted by little joe on November 25, 2000 at 15:14:23:
buying and maintaining real estate is not an overnight get rich quick business. You must crawl before you can walk.the courses offer some answers to real estate questions,that are offered on tv,however I have been buying and selling for 15 years and you can get in over your head real quick if you dont watch your dealings very closely. Happy investing ,and let everybody know what kind of deals tou have done.
I’d be willing to bet they borrowed more money than the property was worth and as a result they could not pay their debts. Their debt was higher than their cash flow.