Re: Thanks Tony! - Posted by Tony Colella
Posted by Tony Colella on April 28, 2006 at 15:20:56:
Couple of comments.
Just be sure that we understand NET income. Too often we see folks compute a Lonnie deal as the $200 (or whatever they payment the sell the home for) per month and count this a NET. They multiply that deal by 10 and come up with $2k per month.
Business and reality are different unfortunately. The taxes on those deals are high and there will always be vacancy, turnover, repairs etc. that consume not only capital but income.
The note does expire in the short term but a growing portfolio of them can certainly get you started.
From what you wrote there will be offsetting financial penalties in your favor. Day care costs will no doubt represent a good savings alone.
I also like your thinking in regards to hiring your brother instead of partnering or perhaps partnering but only in regards to his labor. Something like he makes $500 when the home sells, you keep the payments and any balance from a down payment. This way he has the incentive to get the home done quickly and you are not dipping into your income to pay him while the house sits vacant.
For what its worth Ken, I have read many, many, many, many (get the picture) folks who post here with desire in the hearts and grand (not to mention fast) success in their eyes but once reality hits they disappear from here.
Think about the “Newbie Challenge” posters who a month later are never heard from again. I am all for a group challenge but when goals exceed reality, ability or true desire, failure hits hard and fast.
One thought you wrote and have me believing makes you stand apart is your willingness to do whatever it takes. So many write that but when we begin to show them the path, they find that they are not really willing to do what it takes. They were hoping to just write a check or put a deal together, collect payments and not have to get dirty.
For me landlording was a dirty word until I saw how many truly wealthy folks I knew actually started and built their wealth that way. I walked in eyes wide open and decided to get over my preconceptions and ego and got dirty.
If I can do it, anyone can.
Best Wishes,
Tony