Live Where You Like... - Posted by Curt Dalton

Posted by D on September 07, 2002 at 13:08:10:

.

Live Where You Like… - Posted by Curt Dalton

Posted by Curt Dalton on September 04, 2002 at 01:34:38:

or live where you believe you can make it in this business faster and easier?

Big decision I got to make…what are your thoughts?

I’m in a bit of transition here and even though I’ve done the “Ben Franklin”, I still can’t seem to choose. So I was hoping some of you folks out there might have a few ideas that might help.

Thx for all responses,
Curt

My “Beginners Success” Reposted - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on September 04, 2002 at 15:21:05:

Curt Dalton-------------

I have a model for being successful in real estate investing. I am reposting it here, with some recent revisions, since the search function is not working.

Please note the first step is figuring out an investment approach you like. If it works where you live, there is no reason to move. Now, part of figuring out the investment approach is to pick one that will work where you want to invest, if possible.

Here is my Advice For the Beginning Real Estate Investor to Become successful.

First, recognize that it will probably take several years of real estate investing before you will reach your personal financial goal. Assuming that you want to have enough income from your investments to not have to work for money, I estimate about 10-15 years, if you work part-time at it while having ?a day job.? If you get to a point where you can do it full time, it may take a few years less.

Some people have other suggestions about how to get started. They often say, ?just do it.? Go out and start trying and learn as you go. Maybe that will work for you. My opinion is that it is better to know more before you start paying out your money. You might try to avoid mistakes by reading many books before you start?I did?but you will still make your own mistakes?I did, anyway. However, you will probably avoid a lot of the more common mistakes.

The secret to success is persistence. If you want to reach a goal, you have to keep going until you reach it. Financial independence with real estate means you have to keep going for years. Thus, while you want an investing approach that makes you money, you also want an investing approach that makes you happy as you go along. If you do not get emotional rewards, you will probably stop before you are successful.

YES FOR SUCCESS:

Y----You---------------Enuff said about that
E----Environment-----Where you invest, and when
S----Strategy-----------How you extract money from the environment

The strategy you employ has to suit you. My strategy could be completely wrong for you, unless you are a lot like me. If it is comfortable, you will continue with it. If it is not comfortable, you will chaff and will want to quit. And might quit, long before you get to your financial goal.

The strategy has to work in the environment in which you invest. Here is a strategy: buy 200-acre farms and subdivide them down into 5-acre ?ranchettes? which you sell to homebuilders or people who will live on them. Now, try using this strategy in San Francisco or Manhattan. Not going to work. What might work in San Francisco is to build a 15-story condominium complex and sell the condos to the owner-occupants. But, would you expect success if you were to build another 15-story complex 12 miles east of Winnemucca, NV? I don?t think so. Maybe 5-acre ranchettes there? Possibly.

If you are not doing too well with your investment program, you can change the strategy, or you can move it to a different environment, where you expect it to perform better.

Your strategy has to give you a competitive advantage, as the economists say. Investing in real estate is competitive. If there is a good deal to be bought, there will be several people interested in buying it. You need to develop an approach that takes advantage of your strengths, and hopefully requires few activities at which you are weak. You need a strategy that uses the resources you have.

What are the resources you can bring to bear on real estate investing? They will vary from person to person. They include such factors as: amount of cash you have saved, how good is your credit rating, amount of income you have, particularly that above what you need for living expenses. How much time do you have, and in what part of the week, month, or year? Resources include the contacts you have?people you can call on for advice, money, help, or encouragement. Your knowledge is important?what you know about the environment in which you invest, the market value of properties, what your customers want, either renters or buyers. What experiences can you bring to bear? How about repair skills, decorating skills, salesmanship ability, imagination, guts, cautious evaluation? All these can be part of your resources. Go with your personality, tastes, beliefs, values, interests, and passions. Do not get involved with approaches that irritate you or make you feel unhappy. For instance, suppose you think landlords are scum-sipping rip-off artists. Do not become a rental property owner. There is no law that you must. Instead, consider rehabilitating rundown properties and selling them to poor people with special government loans.

As an example, I like helping people. I like to invest in lower-income areas, helping people have a clean, nice, safe, comfortable house in which to live. I rent properties to them. When I sell some property, I am happy that I am able to help a first-time homeowner get into a part of the American Dream. Some other people like to find rundown homes in higher-income areas. They spiff them up to be beautiful and then make a profit selling for much more than they paid for the properties. That does not interest me. The buyers of those properties could buy many different properties. They don?t need me. And I don?t need them.

I also like to do research. I do not like to negotiate. I buy bargain properties at auctions, usually delinquent property tax auctions. I do not have a real estate agent to show me properties and to assure me that the property is in good condition. I have to do research on the location of the property, the condition of the property, the liens and loans against the property, the market value in the area, how much it will cost to fix up the property, and much more. My negotiating is raising my hand at a public auction and saying ?Four thousand and one.? Then ?four thousand and three.? Easy negotiating for me.

One thing I consider important is that you know how real estate works. What is the importance of different types of deeds? How do you know what loan is the first loan and what does that imply? And there is so much more you can learn. After over 20 years of real estate investing, I am still learning. It is not boring being in real estate.

I think you should expect to spend about six months to 18 months studying about real estate, real estate investing, and the real estate market where you plan to invest ? the environment, as I put it. As you study, notice the different types of approaches that different people use or advocate. Ask yourself ?how does this fit me?? Imagine the different steps of the process, the activities that have to be taken. With what kinds of people will you be engaged? In what neighborhoods will you be investing? How well will you be able to accomplish that particular strategy of investing? What might prevent you from enjoying it? Being successful at it? What psychic rewards might you get out of it.

If you are considering becoming an investor in long-term rentals, as I am, I suggest you read a couple of books on property management. This may give you some notion of what you will face and you can consider if it is to your taste. If you plan to rent properties, learn to calculate expenses of owning them?they will be worse than you imagine. Figure out what kinds of properties will provide you with profit if you own them. Learn about taxes, especially income taxes and how real estate can help you. Plan to learn about the laws related to the approach that you take. If you are doing rentals, know the ?landlord-tenant? law for your state.

How do you learn about real estate? My suggestion is to take classes at community colleges near you. There are probably classes for people who want to apply for a real estate license. You can take them too.

Read books on real estate investing. Most RE books are mediocre. A few are good. Almost none are excellent. But, you can still learn if you read them. Start at the public library and borrowing books from friends, neighbors, coworkers, relatives, etc. Buy used books, audio tapes, and video tapes at bookstores or online at such sources as e-bay and half.com. I consistently pay less than 1/2 original price for the materials I buy there. Some is terrible, just like many real estate books. But some are good…

Talk to other, more experienced investors. See if there is a local real estate investors group that meets once or twice a month. Read newspaper articles and columns about real estate. If your local paper does not have nationally-syndicated real estate columnists, find one that does, even if it is not nearby. Get a subscription to the Sunday edition mailed to your home.

Go on the Internet to see what you can learn there. There are many different sites devoted to real estate investing and to real estate for sale or rent.

While you study these things, learn about the area in which you want to invest. What are the different neighborhoods like? Where are there vacant, run-down properties if you want to do fixer-uppers? What are the trends of prices and where are people moving to or moving away from? What kinds of properties make good rentals in your area? What are the prospects of making money by buying low and then selling high, not carrying rentals?

I like Bill Greene?s suggestion from his “Think Like a Tycoon” book that you look at 100 houses before you make a single offer. And that is of properties similar to those you plan to buy. If, as you go along, you change your mind about the types of houses and neighborhoods in which you will invest, you may have to look at many more than 100 houses. The idea is to learn market values and what the competition is like?either rentals or other properties against which you will be competing for buyers. When I started out investing seriously, I did this and my knowledge of values increased greatly over a few months of time. Study the multiple listing service properties and the newspaper advertisements for properties. Read realtor.com listing for your area. See them and then follow up to find out for what they sold.

Meanwhile, get your finances lined up. If you have a poor credit report, start cleaning it up. Pay off outstanding debt and put explanations into the credit file. Get erroneous information removed. Cut down your expenses. Save money for investing. Yes, it is definitely possible to buy properties with no cash out of your pocket?I have done it. However, you have more opportunities for profit if you are prepared to pay cash or at least make a down payment. This is increasing your resources with which to operate.

Depending upon your investment approach, you may want to get an equity line of credit secured by your home. Or you may want to ask banks for unsecured personal lines of credit. You may want to stop throwing away all those credit card solicitations and actually apply for some. Naturally, try to get those with good terms. But sometimes it is possible to make so much money with just one property transaction that you will be willing to use high-priced money to enable you to get into the deal. Use high-priced money for properties you plan to resell soon, not for long-term holding.

Some people talk about getting a ?mentor,? an experienced real estate investor to personally train you in real estate investing. If you can find somebody who is willing to spend time helping you, fine, go ahead and give it a try. But, you don?t need a mentor to work in real estate investing. Very few investors have ever had a mentor. I call it ?self-mentoring.? The approach that you take to investing will be very personal. Do get to know lots of different investors so you can get help with the local ?nuts and bolts? of investing: referrals for good attorneys, cleaning people, repair people, learn where to get carpets and plumbing supplies, discover the good escrow and title companies, and all the other services and goods that you will need to be successful. Ask about difficulties you have and individual problems of people you know and on the on-line real estate forums. I don’t think you need a “mentor.”

Try to understand the approaches that these different investors have and their thinking about different aspects of investing. Ask what they like and don?t like, what works for them and what doesn?t. Then you can borrow some of their ideas and approaches in formulating your own direction. But you probably will not find a formula that somebody else uses that will suit you to a tee. Mix and match. Take a little bit from here and a little bit from there. Make them into a coherent program that will generate money for you.

There are many, many different ways to make money with real estate. With a little imagination, you may even create a new way to do so that nobody else thought of. But, most of these ways can be put into three categories, which you can remember if you can say ?CAT.? C is for CASHFLOW. This means you get more money in from a property than you spend owning it. A is for APPRECIATION. Over time, property values tend to go up, the amount and rate varying with locale, the economy, and market conditions. Held long enough, most properties will go up unless everybody is moving away for the town or you do not maintain the properties. T points at TAX SAVINGS, or tax benefits, which means that you may reduce the amount of taxes that you pay on your other income, non-real estate income. This is over and above the tax write-offs for your investment properties that reduce your taxable income from the properties. Some people mistakenly add to this list of categories ?pay down? or ?amortization? on the loan. This is actually a sub-category of cash flow. It is the ?forced savings? aspect.

Before buying properties, ask yourself which benefit you want to maximize. In general, you can?t make all three categories big with any one property. You might make one big, one moderate-sized and the other one small. So choose the investment strategy and the property which fits your goal–C, A, or T. For instance, when I buy bargain properties at tax sales, I get very little tax benefit. If I want tax benefit, I will buy a house at market value, but getting financing terms that allow me to get a break-even or slightly positive cash flow. I can also speculate on appreciation with this type of property. Appreciation is irrelevant for the bargain buys; the profit is built-in upon purchase.

Some people advocate getting a “team” together before starting–attorneys, CPAs, loan brokers, maybe real estate agents. I don’t think that is necessary. I would certainly suggest that you not delay your investment actions until you get a “team” together. I advocate learning a lot about the local real estate laws and the federal tax as relates to real estate investing. Then you can be your own team in part. People make a lot of mistakes by not consulting with attorneys. They sell properties and have to pay terrible taxes?unnecessarily?because they do not understand and consult accountants.
So, do not hesitate to call upon professionals when needed. When you run into problems that a professional can help with, then is the time to find one. One–not a team, in my opinion.

To be successful in real estate investing, in my opinion, you need both movement and guidance. You have to get out and actually invest in properties to make a profit. So you have to be active. Go and do it. But don?t do it blindly. Learn a lot before you start making deals so that you don?t make too many mistakes and so you have a strategy that will fit you and the environment in which you invest. Some people get stuck in the learning phase. You will never know everything about real estate investing, so get started even when you don?t feel you know it all.

There are two major mistakes that can lead to real estate investment failure, I think. One is doing nothing ? there is no profit in that. The other is rushing out too soon and making expensive mistakes. I once read a magazine article about a couple in Chicago that bought, as their first investment, a run-down apartment complex in a very poor neighborhood in Chicago. I forget the title of the article, but I think it should have been ?How we lost a million dollars with no money down.? They did not know how to manage rental properties at all and this property was an extremely difficult one to operate. They made many mistakes, lost the building in foreclosure, and lost all the money they had invested.

So, become active, yes. But do it with caution. There is a lot of money to be made with real estate. Because real estate can cost a lot, there are a lot of ways to lose a lot of money with real estate. The sellers and real estate agents selling a property are not always honest about that property. Nobody will look out for your interest as well as you do. Learn enough to be realistic about properties and how investing works.

Expect to spend about 10 to 20 hours a week studying real estate during your learning months. Even though that sounds like a lot, believe me, there is a lot to learn. If you thought it would be easy to get rich, I disagree with you. However, it is possible to get rich with real estate. The average individual can do it. And it is easier than most other businesses in which you could invest your time and money. And, because you can tailor your investment program to fit you, your chances for success are high. Also, real estate is a “forgiving” investment. You can make mistakes, possibly a lot of them, and still make a profit from a property. I’ve made some very serious errors. And still my wealth and property holdings build up.

Just recognize real estate is a business. It will take time and effort. Some people might say it takes that four-letter word ?work,? however, if you have a program that fits you and gives you enjoyment, you can convert that word into another four-letter word: ?play.? Many people treat real estate investing as a game and play it to win not only money but also freedom to lead the life they want. It can do that for you.

Good Investing********Ron Starr

My “Beginners Success” Reposted - Posted by Ronald * Starr(in No CA)

Posted by Ronald * Starr(in No CA) on September 04, 2002 at 15:21:03:

Curt Dalton-------------

I have a model for being successful in real estate investing. I am reposting it here, with some recent revisions, since the search function is not working.

Please note the first step is figuring out an investment approach you like. If it works where you live, there is no reason to move. Now, part of figuring out the investment approach is to pick one that will work where you want to invest, if possible.

Here is my Advice For the Beginning Real Estate Investor to Become successful.

First, recognize that it will probably take several years of real estate investing before you will reach your personal financial goal. Assuming that you want to have enough income from your investments to not have to work for money, I estimate about 10-15 years, if you work part-time at it while having ?a day job.? If you get to a point where you can do it full time, it may take a few years less.

Some people have other suggestions about how to get started. They often say, ?just do it.? Go out and start trying and learn as you go. Maybe that will work for you. My opinion is that it is better to know more before you start paying out your money. You might try to avoid mistakes by reading many books before you start?I did?but you will still make your own mistakes?I did, anyway. However, you will probably avoid a lot of the more common mistakes.

The secret to success is persistence. If you want to reach a goal, you have to keep going until you reach it. Financial independence with real estate means you have to keep going for years. Thus, while you want an investing approach that makes you money, you also want an investing approach that makes you happy as you go along. If you do not get emotional rewards, you will probably stop before you are successful.

YES FOR SUCCESS:

Y----You---------------Enuff said about that
E----Environment-----Where you invest, and when
S----Strategy-----------How you extract money from the environment

The strategy you employ has to suit you. My strategy could be completely wrong for you, unless you are a lot like me. If it is comfortable, you will continue with it. If it is not comfortable, you will chaff and will want to quit. And might quit, long before you get to your financial goal.

The strategy has to work in the environment in which you invest. Here is a strategy: buy 200-acre farms and subdivide them down into 5-acre ?ranchettes? which you sell to homebuilders or people who will live on them. Now, try using this strategy in San Francisco or Manhattan. Not going to work. What might work in San Francisco is to build a 15-story condominium complex and sell the condos to the owner-occupants. But, would you expect success if you were to build another 15-story complex 12 miles east of Winnemucca, NV? I don?t think so. Maybe 5-acre ranchettes there? Possibly.

If you are not doing too well with your investment program, you can change the strategy, or you can move it to a different environment, where you expect it to perform better.

Your strategy has to give you a competitive advantage, as the economists say. Investing in real estate is competitive. If there is a good deal to be bought, there will be several people interested in buying it. You need to develop an approach that takes advantage of your strengths, and hopefully requires few activities at which you are weak. You need a strategy that uses the resources you have.

What are the resources you can bring to bear on real estate investing? They will vary from person to person. They include such factors as: amount of cash you have saved, how good is your credit rating, amount of income you have, particularly that above what you need for living expenses. How much time do you have, and in what part of the week, month, or year? Resources include the contacts you have?people you can call on for advice, money, help, or encouragement. Your knowledge is important?what you know about the environment in which you invest, the market value of properties, what your customers want, either renters or buyers. What experiences can you bring to bear? How about repair skills, decorating skills, salesmanship ability, imagination, guts, cautious evaluation? All these can be part of your resources. Go with your personality, tastes, beliefs, values, interests, and passions. Do not get involved with approaches that irritate you or make you feel unhappy. For instance, suppose you think landlords are scum-sipping rip-off artists. Do not become a rental property owner. There is no law that you must. Instead, consider rehabilitating rundown properties and selling them to poor people with special government loans.

As an example, I like helping people. I like to invest in lower-income areas, helping people have a clean, nice, safe, comfortable house in which to live. I rent properties to them. When I sell some property, I am happy that I am able to help a first-time homeowner get into a part of the American Dream. Some other people like to find rundown homes in higher-income areas. They spiff them up to be beautiful and then make a profit selling for much more than they paid for the properties. That does not interest me. The buyers of those properties could buy many different properties. They don?t need me. And I don?t need them.

I also like to do research. I do not like to negotiate. I buy bargain properties at auctions, usually delinquent property tax auctions. I do not have a real estate agent to show me properties and to assure me that the property is in good condition. I have to do research on the location of the property, the condition of the property, the liens and loans against the property, the market value in the area, how much it will cost to fix up the property, and much more. My negotiating is raising my hand at a public auction and saying ?Four thousand and one.? Then ?four thousand and three.? Easy negotiating for me.

One thing I consider important is that you know how real estate works. What is the importance of different types of deeds? How do you know what loan is the first loan and what does that imply? And there is so much more you can learn. After over 20 years of real estate investing, I am still learning. It is not boring being in real estate.

I think you should expect to spend about six months to 18 months studying about real estate, real estate investing, and the real estate market where you plan to invest ? the environment, as I put it. As you study, notice the different types of approaches that different people use or advocate. Ask yourself ?how does this fit me?? Imagine the different steps of the process, the activities that have to be taken. With what kinds of people will you be engaged? In what neighborhoods will you be investing? How well will you be able to accomplish that particular strategy of investing? What might prevent you from enjoying it? Being successful at it? What psychic rewards might you get out of it.

If you are considering becoming an investor in long-term rentals, as I am, I suggest you read a couple of books on property management. This may give you some notion of what you will face and you can consider if it is to your taste. If you plan to rent properties, learn to calculate expenses of owning them?they will be worse than you imagine. Figure out what kinds of properties will provide you with profit if you own them. Learn about taxes, especially income taxes and how real estate can help you. Plan to learn about the laws related to the approach that you take. If you are doing rentals, know the ?landlord-tenant? law for your state.

How do you learn about real estate? My suggestion is to take classes at community colleges near you. There are probably classes for people who want to apply for a real estate license. You can take them too.

Read books on real estate investing. Most RE books are mediocre. A few are good. Almost none are excellent. But, you can still learn if you read them. Start at the public library and borrowing books from friends, neighbors, coworkers, relatives, etc. Buy used books, audio tapes, and video tapes at bookstores or online at such sources as e-bay and half.com. I consistently pay less than 1/2 original price for the materials I buy there. Some is terrible, just like many real estate books. But some are good…

Talk to other, more experienced investors. See if there is a local real estate investors group that meets once or twice a month. Read newspaper articles and columns about real estate. If your local paper does not have nationally-syndicated real estate columnists, find one that does, even if it is not nearby. Get a subscription to the Sunday edition mailed to your home.

Go on the Internet to see what you can learn there. There are many different sites devoted to real estate investing and to real estate for sale or rent.

While you study these things, learn about the area in which you want to invest. What are the different neighborhoods like? Where are there vacant, run-down properties if you want to do fixer-uppers? What are the trends of prices and where are people moving to or moving away from? What kinds of properties make good rentals in your area? What are the prospects of making money by buying low and then selling high, not carrying rentals?

I like Bill Greene?s suggestion from his “Think Like a Tycoon” book that you look at 100 houses before you make a single offer. And that is of properties similar to those you plan to buy. If, as you go along, you change your mind about the types of houses and neighborhoods in which you will invest, you may have to look at many more than 100 houses. The idea is to learn market values and what the competition is like?either rentals or other properties against which you will be competing for buyers. When I started out investing seriously, I did this and my knowledge of values increased greatly over a few months of time. Study the multiple listing service properties and the newspaper advertisements for properties. Read realtor.com listing for your area. See them and then follow up to find out for what they sold.

Meanwhile, get your finances lined up. If you have a poor credit report, start cleaning it up. Pay off outstanding debt and put explanations into the credit file. Get erroneous information removed. Cut down your expenses. Save money for investing. Yes, it is definitely possible to buy properties with no cash out of your pocket?I have done it. However, you have more opportunities for profit if you are prepared to pay cash or at least make a down payment. This is increasing your resources with which to operate.

Depending upon your investment approach, you may want to get an equity line of credit secured by your home. Or you may want to ask banks for unsecured personal lines of credit. You may want to stop throwing away all those credit card solicitations and actually apply for some. Naturally, try to get those with good terms. But sometimes it is possible to make so much money with just one property transaction that you will be willing to use high-priced money to enable you to get into the deal. Use high-priced money for properties you plan to resell soon, not for long-term holding.

Some people talk about getting a ?mentor,? an experienced real estate investor to personally train you in real estate investing. If you can find somebody who is willing to spend time helping you, fine, go ahead and give it a try. But, you don?t need a mentor to work in real estate investing. Very few investors have ever had a mentor. I call it ?self-mentoring.? The approach that you take to investing will be very personal. Do get to know lots of different investors so you can get help with the local ?nuts and bolts? of investing: referrals for good attorneys, cleaning people, repair people, learn where to get carpets and plumbing supplies, discover the good escrow and title companies, and all the other services and goods that you will need to be successful. Ask about difficulties you have and individual problems of people you know and on the on-line real estate forums. I don’t think you need a “mentor.”

Try to understand the approaches that these different investors have and their thinking about different aspects of investing. Ask what they like and don?t like, what works for them and what doesn?t. Then you can borrow some of their ideas and approaches in formulating your own direction. But you probably will not find a formula that somebody else uses that will suit you to a tee. Mix and match. Take a little bit from here and a little bit from there. Make them into a coherent program that will generate money for you.

There are many, many different ways to make money with real estate. With a little imagination, you may even create a new way to do so that nobody else thought of. But, most of these ways can be put into three categories, which you can remember if you can say ?CAT.? C is for CASHFLOW. This means you get more money in from a property than you spend owning it. A is for APPRECIATION. Over time, property values tend to go up, the amount and rate varying with locale, the economy, and market conditions. Held long enough, most properties will go up unless everybody is moving away for the town or you do not maintain the properties. T points at TAX SAVINGS, or tax benefits, which means that you may reduce the amount of taxes that you pay on your other income, non-real estate income. This is over and above the tax write-offs for your investment properties that reduce your taxable income from the properties. Some people mistakenly add to this list of categories ?pay down? or ?amortization? on the loan. This is actually a sub-category of cash flow. It is the ?forced savings? aspect.

Before buying properties, ask yourself which benefit you want to maximize. In general, you can?t make all three categories big with any one property. You might make one big, one moderate-sized and the other one small. So choose the investment strategy and the property which fits your goal–C, A, or T. For instance, when I buy bargain properties at tax sales, I get very little tax benefit. If I want tax benefit, I will buy a house at market value, but getting financing terms that allow me to get a break-even or slightly positive cash flow. I can also speculate on appreciation with this type of property. Appreciation is irrelevant for the bargain buys; the profit is built-in upon purchase.

Some people advocate getting a “team” together before starting–attorneys, CPAs, loan brokers, maybe real estate agents. I don’t think that is necessary. I would certainly suggest that you not delay your investment actions until you get a “team” together. I advocate learning a lot about the local real estate laws and the federal tax as relates to real estate investing. Then you can be your own team in part. People make a lot of mistakes by not consulting with attorneys. They sell properties and have to pay terrible taxes?unnecessarily?because they do not understand and consult accountants.
So, do not hesitate to call upon professionals when needed. When you run into problems that a professional can help with, then is the time to find one. One–not a team, in my opinion.

To be successful in real estate investing, in my opinion, you need both movement and guidance. You have to get out and actually invest in properties to make a profit. So you have to be active. Go and do it. But don?t do it blindly. Learn a lot before you start making deals so that you don?t make too many mistakes and so you have a strategy that will fit you and the environment in which you invest. Some people get stuck in the learning phase. You will never know everything about real estate investing, so get started even when you don?t feel you know it all.

There are two major mistakes that can lead to real estate investment failure, I think. One is doing nothing ? there is no profit in that. The other is rushing out too soon and making expensive mistakes. I once read a magazine article about a couple in Chicago that bought, as their first investment, a run-down apartment complex in a very poor neighborhood in Chicago. I forget the title of the article, but I think it should have been ?How we lost a million dollars with no money down.? They did not know how to manage rental properties at all and this property was an extremely difficult one to operate. They made many mistakes, lost the building in foreclosure, and lost all the money they had invested.

So, become active, yes. But do it with caution. There is a lot of money to be made with real estate. Because real estate can cost a lot, there are a lot of ways to lose a lot of money with real estate. The sellers and real estate agents selling a property are not always honest about that property. Nobody will look out for your interest as well as you do. Learn enough to be realistic about properties and how investing works.

Expect to spend about 10 to 20 hours a week studying real estate during your learning months. Even though that sounds like a lot, believe me, there is a lot to learn. If you thought it would be easy to get rich, I disagree with you. However, it is possible to get rich with real estate. The average individual can do it. And it is easier than most other businesses in which you could invest your time and money. And, because you can tailor your investment program to fit you, your chances for success are high. Also, real estate is a “forgiving” investment. You can make mistakes, possibly a lot of them, and still make a profit from a property. I’ve made some very serious errors. And still my wealth and property holdings build up.

Just recognize real estate is a business. It will take time and effort. Some people might say it takes that four-letter word ?work,? however, if you have a program that fits you and gives you enjoyment, you can convert that word into another four-letter word: ?play.? Many people treat real estate investing as a game and play it to win not only money but also freedom to lead the life they want. It can do that for you.

Good Investing********Ron Starr

Maybe si maybe no - Posted by D

Posted by D on September 04, 2002 at 11:03:33:

Hi Curt, I lived in Marin county for awhile just north of San Fran. Also in Fremont and Newark in the east bay area. I now live in a very small dot on the map in Oregon. I dont think there is any way in those parts of CA. I could do the same deals I do here in Oregon, at least not find them as quickly. I know you can find a deal anywhere but there are areas in the country where finding a distress sale is much much harder in my opinion. In some parts of the bay area houses are selling in one day, my neighbor put his house up in San Leandro and sold it for $11k more than it was listed for. I saw a segment on the news about high property value across the country, they were talking about San Francisco, San Diego, Salt Lake City, Denver, San Antonio, Ft. Lauderdale, Boston and New york. I think there were a couple more but cant remember. Im sure there are people making all kinds of deals in these places but for what Im doing, buying low and selling on a wrap, I may have a harder time right in the middle of those places. For what I`m doing it seems better for me to be on the outskirts of a population rather than in the middle of it. For me, I prefer a little more rural.

I think you have hit on something wondering about different areas, the problem seems to me is the grass is always greener on the other side of the fence (or over the septic tank). What area to choose? To answer your question I think if you are living right in the middle of a very hot market you might do better buying distressed property being in a town with a mixed bag of neighborhoods with some rural areas around too.I dont think things will be "easier" but you may find more distressed property so you might buy and sell a little "faster". I dont know what the “Ben Franklin” is. That is my opinion, however, if you are a “newbie” just starting out I wouldnt advise just up and go somewhere if you dont have any experience in real estate. You mentioned you were in “transition” does that mean you can take off and check out other areas? If thats the case, great. The very first thing you might do is check out the area you are in FIRST. Where are you by the way? Just my 2 cents. D

Re: Live Where You Like… - Posted by GL(ON)

Posted by GL(ON) on September 04, 2002 at 09:05:39:

If there is any doubt about it, I suggest you stay where you are.

It is possible to make a very good living and even to get rich as a real estate investor, almost anywhere.

The less “popular”, in other words the less investor activity, the easier it is.

Many people think you have to go to a “hot” market or a “big city” to make money. This is untrue. You can do very well in almost any town or city in the US.

It is very common to think you would do better someplace else but there is less advantage than you think, and more disadvantages that you never thought of.

Re: My “Beginners Success” Reposted - Posted by Eva-VA

Posted by Eva-VA on September 04, 2002 at 23:37:44:

Ron - being a “newbie”, I enjoyed reading your post so much that I printed it off for future reference. It’s probably the most “real” logical way of approaching REI. I thank you for leaving out the “hype” and telling it like it is. Others may not agree with your approach but to each their own opinion. I’ll read your words any day of the week. :o)

Re: My “Beginners Success” Reposted - Posted by Joe C. (AR)

Posted by Joe C. (AR) on September 04, 2002 at 23:22:03:

Realistic, conservative and sensible advice. If you can do it faster, more power to you, BUT the basics mentioned still apply.

  1. Find your niche
  2. Keep learning
  3. Be persistent
  4. Cash and good credit provide additional opportunities
  5. Do your homework
  6. Enjoy what you do

I don’t think the REI “superstars” would argue with Ron’s basics at all.
Just my .02
Joe C. (AR)

I disagree… again - Posted by D

Posted by D on September 04, 2002 at 20:46:32:

Awhile back I commented on your “beginers success” post, It may take 10-15 to become successful for some folks but I dont believe that is the norm. If you havent got some real experience and made some money within 2 years you are not trying. I see you still direct “newbies” to read it. I see you don`t mention that you have a regular job. So I guess in your case it takes longer than 15 years. If most people who know how buy and sell real estate gambled all they owned in Vegas and lost on one roll of the dice they should be able to pull up their boot laces and do it all again.

Please dont be offended, Im not trying to offend you but I must tell you most of your “beginers success” post makes me want to pull out whats left of my hair. I appreciate some positive aspects of it but it is a long winded schmeal full of feel good fluff and much of it screams out to me the exact opposite of what it takes to make money with real estate. By the way, what do you mean when you say “what psychic rewards might one get out of it”?

The first thing “newbies” should know in my opinion is you dont need to fill your mind with a bunch of cr@p. Thats what your friends and relatives are for, and people who think they know everything about real estate usually dont. You can LOOK at a million houses but if you cant FIND just ONE with a motivated seller in it you dont have squat. And if you listen to ANYONE who says you cant do it or it takes 10-15 to do it, your lost. Thats what really gets me about your "beginers success" post, you write like youre a total professional on real estate but you give terrible advise. Everyone has their own opinion but why do you direct all the new folks to your post like its gospel? Hopefully youll find a couple of deals that make you financialy secure within the next two years not the next 15. Just my 2 cents D

Very good advice. Excellent post. nt. - Posted by randyOH

Posted by randyOH on September 04, 2002 at 17:36:40:

nt

Re: Maybe si maybe no - Posted by J

Posted by J on September 08, 2003 at 18:17:35:

Okay, so I read this thread having a related question to Curt’s. That is, I am tied down and not able to move right now…and I’m living smack in the middle of one of those high priced areas D mentions (Alameda in the East Bay area of metro San Fran). So, from my point of view, is there any way I can get into REI where I live to replace a full time income within a few years, or is it only possible to do the slow road of 10-15 yr. appreciation of investments. What kinds of deals are people able to do in the SF area for present-day income?

I have also heard several stories about 1 day sales, bidding wars, laid-off-dot-commers getting into the same racket, etc. and figure that distressed sales in SF would be hard or impossible to find. I have also heard that another challenge unique to the SF area is in finding good, cheap labor for doing fix-ups.

Any suggestions/encouragement to help this newbie would be much appreciated…

Re: Maybe si maybe no - Posted by James Buster

Posted by James Buster on September 04, 2002 at 19:45:12:

>I saw a segment on the news about high property value across the country, they were talking about San Francisco,
>San Diego, Salt Lake City, Denver, San Antonio, Ft. Lauderdale, Boston and New york.

Living in the SF Bay Area as I do, the notion that prices in San Antonio or Salt Lake City are “high” seems absurd.

Re: Maybe si maybe no - Posted by Curt Dalton

Posted by Curt Dalton on September 04, 2002 at 18:05:00:

D,

Thanks for your insights, you make alot of sense. I’m not tied down to an area…moving would not be a problem at all. Currently, I’m in the Triangle area of No. Carolina. Market seems slow here and is expected to continue that way for quite some time. I guess that would bode well for this biz, huh?

Thanks again for your time,
Curt

Agree 100%, good post. nt. - Posted by randyOH

Posted by randyOH on September 04, 2002 at 12:01:03:

nt

I would! In fact what are his basics? - Posted by D

Posted by D on September 05, 2002 at 02:15:43:

Hi Joe, I would call those “a given”.

Here`s my basics;

  1. Find distressed property with motivated seller.
  2. encumber property. (Buy in my case with hard money)
  3. Sell (My case on a wraparound).
  4. Try not to let fishing get in the way.

Good luck to you! My 2 cents 2 D

D = Heidi? - Posted by michaela-ATL

Posted by michaela-ATL on September 04, 2002 at 22:20:16:

i bet it was you, that has posted similar attacking posts in the same vain, hiding behind various names.
this is so low

Re: I disagree… again - Posted by michaela-ATL

Posted by michaela-ATL on September 04, 2002 at 22:14:28:

have you even considered, that you may have a different definition of what 'financial independence is"? i believe ron is talking about not having to work another day or doing another deal and still having enough money coming in from your real estate holdings.
whereas you seem to only look at it as being able to quit your job and doing real estate full time.
there’s a big difference. as has been suggested to you before, why don’t you write a post, that you can direct all the newbies to, instead of going the cowardly route of always attacking ronald starr, because his advise is different than what you ‘hot shot’ real estate millionaire think? then they can go to both posts and make up their mind who they want to believe. you keep saying, you don’t want to offend, but you are offensive. you do attack and it’s totally uncalled for. how come you don’t have the guts to give your real name like ronald starr does, and instead hide behind the alias ‘d’?
michaela

Re: Maybe si maybe no - Posted by D

Posted by D on September 04, 2002 at 20:56:49:

Hi James, thats what I heard. Ive never been to San Antonio but got conned into helping someone move from Salt Lake City to my area awhile back and the place was going nuts getting ready for the Olympics, There was aLOT of new home condtruction and prices had shot up at that time on existing homes, Im told they still are and building hasnt stopped. Youre right though, it was nothing like the bay area. D

Re: I would! In fact what are his basics? - Posted by JohnB_NJ

Posted by JohnB_NJ on September 07, 2002 at 24:24:25:

I don’t know you D but I agree with you 100% about the way to get rich in this business.

If I had to wait 15 years to be wealthy, I would find another way.

I also beleive you have the right to voice your opinions if they are based on facts. But I know many investors that like to get rich slowly “the old fashion way” and then Mr. Star’s advice is right for them. It is clearly not right for me, you and many others but so be it. Mr. Star’s advice could be just right for the people that like their Job and want to get rich slowly.
So, again, I don’t know you, D, but I do agree with your approach. But please remember, this isa community of friends. Please respect the rights of others. If you havea problem with Ron …take it to Ron.
Have a good day and the best of Success to you.

-JohnB_NJ

Wrong, not me. (nt) - Posted by D

Posted by D on September 05, 2002 at 24:17:05:

nt