Have You Had Great Success? - Posted by Zack

Posted by Murman on December 30, 2004 at 06:24:43:

:o)

Have You Had Great Success? - Posted by Zack

Posted by Zack on December 29, 2004 at 09:07:39:

I posted a messege yesterday “I’m New…How Did You Start Out?” about being new and wanting to know how to start out. I received advice that I appreciate, much of which stated that I just need to get out and start doing it. I agree; I was just wondering how many of you have actually had successes that compare to those in the “Success Stories” section of this site? On one hand I know not to expect easy money, but I work hard and I know that if I don’t expect to make much I won’t. Thanks.

Reality vs. Sales - Posted by Philip

Posted by Philip on December 30, 2004 at 05:00:28:

Zack,
I am a born skeptic.
I don’t trust anything that is for sale.
When I first came to this site(the mobile home forum, actually) I thought…"well, something else for sale…"
I was right and I was wrong.

They do sell things here, but you can actually get more out of the free archives than most resources even get close too providing.

The biggest success stories are usually folks who have already had some experience in real estate, or who have a experienced sponsor/mentor…but not always is that the case.

My experience has been success without the “homerun” deals.
I HAVE made money in the 2 years I have been working at it…not a living, because I am part time…but many have done better…and some NEVER even tried.
The only thing I have bought from this site is a $30.00 book.

Ed Garcia is right.
Do.

I don’t follow my own advice close enough.

If you don’t get a good start here, go to the mobile home forum archives and read, read, read.
Posts from Anne, Doc, Tony, Lyal, Lonnie, Ernest,…did I mention Doc Whisler?
Punch these names into the Archive search and then put some paper in your printer and you will have a BIG book of advice.

It is NOT easy money…but like someone said…it is easier than most!

Do. Persist.
Just like these folks said.
Real estate made money before this site…but here you can jump ahead with someone else’s experience!

Philip

Re: Have You Had Great Success? - Posted by spideymanrdpd

Posted by spideymanrdpd on December 29, 2004 at 20:25:09:

If some knows an easier way to make money let me know. As far as I am concerned my money does most of the work.

95% of people FAIL in Real Estate - Posted by Ben Glinsky

Posted by Ben Glinsky on December 29, 2004 at 12:35:58:

Zach,

GREAT QUESTION.

95% of people FAIL in Real Estate. Its no different than any other business in any other industry in the world.

Thats why 95% of people are broke and living paycheck to paycheck while 5% of the people are RICH.

The fact is its EASY to make money, ESPECIALLY in Real Estate. The only difference between the 95% and the 5% is that the 5% NEVER QUIT.

You’re exactly right not to expect easy money. There’s a learning curve in everything we do, and nothing is ever easy the first time we try it.

Take the time to learn and ask questions just like you are doing, continue to build your network, and DON’T QUIT. Thats what gets you into the 5% club. :slight_smile:

Have an awesome day,

Ben
817 490 9297

Re: Have You Had Great Success? - Posted by Ed Garcia

Posted by Ed Garcia on December 29, 2004 at 11:32:54:

Zack:

Here is what I tell a Newbie who is starting out.

First, is to evaluate how much time you are going to be able to commit
to Real-estate? If your approach is hit and miss, so will be your result.

Second: Go to the street. It is the best teacher. Rather than talk about
doing deals, reading in the library, getting courses, JUST DO IT.

You’ll find in the long run, the street is the best teacher. Not only that, by getting out an doing it, you’ll learn your MARKET, meet people to build a NETWORK, learn the demographics as well as the geographics of your area, and of course you would have over come the biggest obstacle in getting started, PROCRASTINATION.

Third: Read every Article you can in the How-Articles of this site, as well as the Success Stories. Then follow the various News Groups, which are live and inter-reacting. Ad the Archives of this site for looking up questions and getting multiple answers and your journey has begun.

We need to do what we call, penciling out a deal. When doing that, we
ask ourselves a battery of questions necessary in structuring a deal.

I’m going to give you 5 steps to get you started.

(1) How much do we want to make?

So many times I hear someone act as if they are afraid of loosing a deal
because of the profit they put into it. Forget about it. I’d rather be sorry about the
deal I did not make, rather than the one I did. The profit is what protects you in a deal.
Don’t be afraid to make it.

When doing a deal I want to make at least 30% and believe me when I
tell you, when I structure a deal with 30% in it, I never get it. Some how the profit always
dissipates, even after I thought I figured it to the penny.

Would I do a deal with less profit? Yes but I would do it as a flip,
lease option, or as a leveraged deal with positive cash flow.

(2) Determine the Value of the Property.

The next thing I must do is determine what the property is worth. The
obvious thing to do, is comp it. Don’t let the seller or real-estate broker tell you what it is
worth. Get it compted yourself.

(3) Deferred maintenance.

Usually I figure my profit after taking off the deferred maintenance,
otherwise it distorts my profit. So it must be figured in the beginning to determine your profit.

(4) Game plan.

What do I want to do with the property? Do I want to fix it and sell it?
Do I want to keep it long term or short term? When I buy a property, I have a plan for it.
And usually I buy it with that plan in mind. This part is so important, I’m going to go into more detail by giving you an example.

Remember, you make your money on the buy.

GAME PLAN.

Each deal speaks for it?s self. For example, if I bought a house for
Lets say $50,000 and had to put $10,000 into it for fix up. I?m in this deal
$60,000. Now what would that house have to be worth in order for me
to feel comfortable to buy it, and debt service it on my line of credit.

$70,000 ? No I don?t think so. I have no room in this deal for
error. What if after a month or two I don?t sell it ?
Now remember, we can play the what if game all day. I can create a fast
Sale for the purpose of this posting to make myself look good, but
that?s Not the answer. So remember we have to always be careful with
hypothetical questions and answers. The profit structure on this deal is
not good enough for me to do the deal.

$80,000 ? Were getting better, but No. I have to keep in mind that
things can go wrong with my deal. What if I sell it after 2 months, and then
the sale falls through after being under contract for 45 days because of
financing.

Now I have had the property for 31/2 months, and have to put it back on
the market again. Also what if the market changes or slows down ?
Even though I show on paper that I have a $20,000 profit, that?s not
so.

For the fun of it, lets take this so call $20,000 profit and structure a

Game Plan around it.

(1.) I plug in 6 month worth of debt service on my deal. I?m in the
deal $60,000. Interest, depending on the interest of your credit line,
Let say for the benefit of our example is 9.5%. Our payments would
Then be $475 per month. 475X 6 = $2850.

(2.) What ever the market value you come up with, always cut it 5%.
Because realistically, the potential buyer is going to want you to
Discount your price. Now if you don?t have to, great. But lets face
It. If you were trying to sell it for $80,000 and someone offered
You $ 76,000, you know you wouldn?t want to wait for another
Buyer. You would still be debt servicing the deal. With you luck,
You wait another month or two and the next buyer would make
The same offer. Terry Vaughan will tell you, that the first 10% of
a deal is water. I agree with Terry, but for the purpose of this
deal we?ll just keep it at 5%. So lets take off another $4000.

(3.) I always plug in a realtor. Now I know that there are a lot of
Geniuses out there that don?t need them. They are so great that
they can sell the property themselves. Great, you plug in a
Realtor. 76,000 X .06 = $4,560.

Lets recap. A sale of $80,000, gives us on paper a $20,000 profit.

$20,000
-$ 2,850 Debt service
-$4,000 5% Discount
-$4,560 6% Sales commission.

Potential Profit $8,590.

As you can see the profit dissipates quickly. And personally I don?t
Think It?s enough to take the risk your taking with your line.

How about $90,000? Now all of a sudden the deal can make sense.
We have between a $17,500 and $18,000 profit.

Lets look at our LTV (loan to value). 60,000 divided by 90,000 =
67% LTV.

So you see the deal speaks for it?s self, but the structuring of a deal
with a Game Plan is what will let you know if you should do the deal.

(5) Financing.

How am I going to take my deal down? An I going to create a seller carry
back, and use a lender to give some money to the seller? Will the seller carry back the whole deal? Will I have to buy it with a combination of down payment and financing?
Or will I pay cash and then refinance it later, getting all of my money back.

These are just a few basic fundamentals of doing a deal. I hope this is
some help to you.

Happy Holiday’s

Ed Garcia

Re: Have You Had Great Success? - Posted by Stew(NE)

Posted by Stew(NE) on December 29, 2004 at 09:44:03:

The people in the Success Stories ARE us. Good luck. If you look at the name of the posters they match the people who post here. I have one over there. You still need to get out there and do it.

Re: 95% of people FAIL in Real Estate - Posted by David Pierce

Posted by David Pierce on February 03, 2005 at 17:33:56:

Ben, This is interesting, I hope to hear from you today
David Pierce

Re: 95% of people FAIL in Real Estate - Posted by Brian J. Dow

Posted by Brian J. Dow on January 17, 2005 at 11:40:58:

Ben,
I’ve been receiving your property listings, mostly in TX, for the past year or so. I am curious if you ever find anything in the VA area. I see the occasional listing for TN or NC. Let me know. Also, I am interested in flying out to TX to meet with you in person to discuss some of the impermeable land trust info that you are always mentioning. Thanks for your time and continued info flow.

Respectfully,

Brian J. Dow

Re: Have You Had Great Success? Check these sites - Posted by John

Posted by John on May 23, 2006 at 14:24:15:

Info on Flipping Properties, Real Estate Investing, Buying Investment Properties.

flippinginfo.com and realestate-investinginfo.com

Great info for starters.
Good Luck!

Re: Have You Had Great Success? - Posted by Bob

Posted by Bob on January 02, 2005 at 19:04:34:

>When doing a deal I want to make at least 30%

30% of what? Annualized yield? Gross sales price on resale? And is that cash on cash, or do you include principal paydown, tax benefit, and appreciation (if any)?

Re: Have You Had Great Success? - Posted by dave

Posted by dave on December 30, 2004 at 14:56:59:

only one thing i’d change. the realtor. without mls, most relitters would be totally lost. relitters don’t sell houses, mls does.

i’ve been a broker for years as well as a mortgage broker. never sold a house through a relitter

Thanks Ed! - Posted by Murman

Posted by Murman on December 29, 2004 at 12:22:36:

As I am a new investor too, it is nice to get the advice from the pros. I found this site a few weeks back and love it. Incredible resource of information. For now, I have the money but not the knowledge. This site is gives one a lot of information to use as a tool for good decision- making. Thanks again! I am absorbing this stuff like a sponge.

Thanks Ed! - Posted by Murman

Posted by Murman on December 29, 2004 at 12:22:31:

As I am a new investor too, it is nice to get the advice from the pros. I found this site a few weeks back and love it. Incredible resource of information. For now, I have the money but not the knowledge. This site is gives one a lot of information to use as a tool for good decision- making. Thanks again! I am absorbing this stuff like a sponge.

Re: Have You Had Great Success? - Posted by Warren Priske

Posted by Warren Priske on December 29, 2004 at 11:19:21:

Zack,
I want to dispell the myth that real estate is “easy money.” I prefer to call it “easier” money. Don’t let anyone tell you that real estate isn’t a job. But I think it’s one of the best and highest paying jobs you can have.

If you think this is good… - Posted by phil fernandez

Posted by phil fernandez on December 29, 2004 at 18:20:00:

…go to the next CREOnline Convention.