Is there still hope for me to be an investor - Posted by Bruce Reeves

Real Estate Investing
#1

Posted by Gerry on May 13, 2007 at 12:11:34:

I don’t understand why you would have a problem with offering 100K for a property that is “worth” 160K.There are many sellers that are not financially motivated. They have a house and they want it gone, they don’t want the hassle associated with selling through traditional channels.You would provide them with a valuable service by delivering instant liquidity along with a timely, hassle-free transfer.

I have purchased 200+ homes at 50%-70% of market value,at the time of purchase. I am up front with the sellers about my profit motive, I go so far as to disclose what I plan to sell the house for and what my target profit should be. If they have a problem with me earning a profit, I move on.Not one seller has ever complained that I took advantage of them, some have even referred me to others that want to sell hassle-free.“Nothing astonishes men more than common sense and plain dealing”.

#2

Is there still hope for me to be an investor - Posted by Bruce Reeves

Posted by Bruce Reeves on May 13, 2007 at 10:47:57:

I have tried for more years than I care to admit (ok, how about an attendee at the first creonline convention in Vegas and blue vase awards) to get fully involved in the investing business. I have rental property, completed a L/O on a free and clear and a rehab that went well and made money.

Here’s the rub. Something is holding me back and it is the investing techniques that require a certain level of risk. I can handle risk on my part, but not on my seller or buyer’s part. The thought of “selling” a house on L/O or Owner Financing wrap with a house that a bank holds the note and ability to call the loan is more risk than I can take for the seller / buyer and still sleep at night. I keep imaging a family moving in, kids in school and all settled in and something goes wrong and I get to tell them the deal I got them is not going to work. I fully understand the techniques to minimize risk to near zero but still cannot deal with it.

Setting up marketing campaigns to generate calls and screening sellers (even if automated) is not something I want to do either.

Also, offering someone 100k for a house worth 160k is not something I can do. I understand it may be the best deal for the seller considering their circumstances, but it just does not work for me.

If anyone has a strategy that will avoid these issues I would certainly like to hear about it.

Perhaps creating and passing on owner financing on free and clear houses where there is no bank involved or using private investors to buy houses outright similar to Merle Woolley’s technique.

I have been off and on with this business more times than I can count. Other than buy and hold long term with rentals I may should just forget it and go about my buisness, but for some reason I can’t.

#3

Service business - Posted by ken in sc

Posted by ken in sc on May 16, 2007 at 07:32:51:

You need to get your head on straight about what this business is all about - or get out of this business. This is a service business. You are not offering 100K for a 160K house, you are offering a service to buy their house immediately with no hassle. That service costs money (equity) for the seller. He must decide if he is willing to pay for that service. Period.

You don’t like ls/op or wraps - OK, I don’t either. But to not want to market for people who may want and need your service, that makes no sense! Believe me there are folks who want that service and are very willing to pay for it. Heck, I tell people that straight out over the phone saying something like “You can get more money the Realtor way, my program is quick and easy but it will cost you money”. If you are honest with them, and honest with yourself about this business, you can do it.

On the other hand as Dave said buying a rundown house and fixing it up to rent is a basic way of using RE to gain wealth. That may be more your speed.

Ken

#4

Re: Is there still hope for me to be an investor - Posted by Todd (AZ)

Posted by Todd (AZ) on May 15, 2007 at 19:25:08:

Hi Bruce,

Wow, I seem to have my NLP hat on today. Just answered a question
about rapport skills. This business is more psychology than anything
else.

The short answer, is you have some belief systems in conflict. That’s
what’s happening. You have some deep seeded beliefs about possibly
hurting the other person or taking advantage of them, which conflict
with the name of the game in real estate investing … making money!

I wish I could refer you to my website and podcast, which are free and
some good information for real estate investors. But I dont’ want to
violate the rules here by posting such.

What you are going through happens to many more people than you
know in some form or another. The 3 solutions you face, are …
explore the belief system and why you have conflict … find one of the
many other ways of investing in real estate that doesn’t conflict with
the belief that limits you … get out of the business altogether.

I would certainly be happy to talk to you about it (no charge!). I have
been an investor for 17 years and study the success patterns of people
in this business (and why many fail). I promise, it’s nothing weird, and
I won’t “sell” you anything. Email me privately.

Best to you,

Todd

#5

Re: Is there still hope for me to be an investor - Posted by DaveD (WI)

Posted by DaveD (WI) on May 15, 2007 at 14:13:52:

This site is about creative RE investing. Basically, all kinds of ways to buy for little or nothing down out of your pocket, and off-loading the commensurate risk onto others where possible.

If that thought doesn’t appeal to you, then you are in the wrong business. No big deal. Just find another investment vehicle that gives you the upside you seek, with out the messy details. Not sure how successful you will be in that pursuit, either. You see, most of your limitations seem self-imposed.

Your post is chock full of stuff you DON’T want to do, and you wonder why you are spinning your wheels. What DO you want to do? Attitude and desire will get you there, provided you know where that is. You’re kidding yourself if you think otherwise.

One last thought. Buying and holding long term still works. Ain’t flashy, but gets the job done.

#6

Re: Is there still hope for me to be an investor - Posted by Anne_ND

Posted by Anne_ND on May 15, 2007 at 07:29:27:

Bruce,

Try investing in mobile homes using Lonnie deals (see the mobile home newsgroup). It’s possible to create value out of thin air by offering financing for affordable housing.

The monetary risk is low, the rehabs are simple compared to stick-built houses, and you can feel good about helping people get into their own homes. And the yields are quite delicious.

good luck,

Anne

#7

Re: Is there still hope for me to be an investor - Posted by Tim

Posted by Tim on May 15, 2007 at 07:27:08:

OK, it seems that you enjoy real estate investing or you wouldnt be coming back to it time after time.

Have you thought about commercial real estate or building?

Just get yourself into another segment of this business so you can be more comfortable with your dealings.

Tim - VA

#8

Re: Is there still hope for me to be an investor - Posted by Ronald

Posted by Ronald on May 14, 2007 at 22:26:39:

Bruce,

Well my friend, I believe it is time for you to move onto other ventures.

If you cannot offer a seller a low ball amount or sell on owner financing/lease/purchase, etc, etc you will either have to move on or change that mindset of yours, because if you don’t you will not succeed in this business or any business. you are offering these sellers $100,000 for there house that is worth $160,000 because you have overhead,expenses and you need to make a profit. If you want to offer them $150,000 for their house that is worth $160,000 and it needs $10,000 in repairs, well then you are in the deal for about $160,000-$165,000 not including holding costs,etc. You are upside down.

You have to change your mindset or move on.

Just my opinion.

#9

Re: Is there still hope for me to be an investor - Posted by nhs76

Posted by nhs76 on May 14, 2007 at 19:11:09:

There is no shame in acknowledging what is and is not within your personal comfort zone. In fact, doing so is a source of strength. Good sleep at night, every night, easily beats two pairs in the poker game of life! :slight_smile:

#10

Re: Is there still hope for me to be an investor - Posted by John Vosilla

Posted by John Vosilla on May 13, 2007 at 19:40:11:

Perhaps you should just become a master of the auctions at the courthouse steps. Foreclosure sales, tax deed sales ect… No dealings with motivated sellers prior to the sale…