By steady cash flow, I mean- a predictable AND consistent flow.
Lonnie Deals are both extremely predictable and very consistent in that you have a high liklihood of being paid and the amount is the same month after month. If the debtor defaults, you sieze the MH, resell it and the payments start all over.
On the judgments, the cash flow depends upon your collection methodology (e.g.- passively sitting on a lien on real estate as opposed to aggressively garnishing wages). Once you’ve got a collection pattern down, the cash flow should be statistically predictable (e.g.- will collect 50% within three months, 10% in 9 months, and so on…) but not always consistent (i.e.- the statistical deviation). While both methods should provide predictable cash flows, Lonnie deals provide near pefect predictability and more consistency (i.e.- the SAME amount, month after month), while the judgment method provides lump sums unless you negotiate a payment plan with the debtor. The judgment method strikes me as easier to do on a no-money-down basis if your state allows non-attorneys to collect on a contingency basis (e.g.- instead of buying the judgment, you split the collected proceeds with the creditor). Michael Warren says there are ways around the contingency issue even if you are not an attorney and your state only allows attorneys to collect on contingency. I’d be curious to hear his solution. Let’s stay in touch & compare experiences.
I wish I had discovered information like the stuff on this site just out of college- good luck.
NEWBIE: Which course to start with? - Posted by Keith Elliott
Posted by Keith Elliott on January 07, 1999 at 10:47:28:
Hi all,
I recently graduated from college and have started my first job. I have also bought a condo for the tax benefits and to help with establishing credit. I have seen a lot of courses on TV and have read about several on this website, but I must confess that I still am unsure as to which course to invest in. I live in Columbia,Md (between Baltimore and DC)and the only thing that I haven’t seen a lot of have been Mobile Homes. This is the only category that I can rule out for the time being. I have seen Carlton Sheets’ infomercial about 70 times while I have been in college and everytime, I told myself just wait until you graduate before you jump into real estate… well, I believe now is the time to take action, but what action? Please, can someone be kind enough to share some advice as to which course I should pursue? I do not have money for downpayments, but I do have good credit. I just recently bought a condo. I really want to start learning so that I can get into the business…
Re: NEWBIE: Which course to start with? - Posted by J.P. Vaughan
Posted by J.P. Vaughan on January 07, 1999 at 14:24:49:
Judgments are the WORST possible way for any beginner
to start in this business. You can get hammered in a
New York second if you don’t know what you’re doing.
JHyre may want to start there because I believe he is
an attorney and has specialized knowledge to begin
with. You don’t.
I think beginners should start with quick flips, lease
options or Lonnie deals. I’m not a beginner.
Ron LeGrand’s “Quick Turn” real estate course is excellent
for a beginner. You can find a complete description in
our Online Catalog.
Re: NEWBIE: Which course to start with? - Posted by JHyre in Ohio
Posted by JHyre in Ohio on January 07, 1999 at 11:22:49:
Keith:
Welcome to a great site. I too am a newbie and have learned a ton here. I am personally partial to judgment investing and Lonnie Deals- they require little start-up cash and produce steady cash flow at very high rates of return.
Judgment investing consists of buying court judgments at a steep discount and collecting 'em. In the alternative, you may be able to get the judgments for free and split the collection proceeds with the original creditor. This technique is rarely discussed here, so check the Wealth Investment Network website, Run by one Michael Warren, for more details.
Lonnie Deals basically consist of flipping mobile homes- buy low and immediately sell high by financing. Lonnie Scrugg’s articles in the how-to section provide a good base of info. His 2 books are dirt-cheap given the value of the info contained therein.
I am a fairly cautious person, so to the probable derision of many, I will start with judgment investing in March and Lonnie Deals in July. This gives me time to marshall funds and research the c**p out of everything in detail.
If you can afford it, the convention in Dallas strikes me as a steal. The price, especially after accounting for the hotel stay, seems a pittance compared to the info provided. While I did not know of CREOL last year, the attendees were uniformly very positive about the last convention. Check out the banner at the top of this page for more info. Hope to see you there.
Keith,
Try going to the other newsgroup on this site (newsgroup II) and see what is said there.
also, check out the courses here on this site for sale. they are all good, you just need to read the material presented for each one, and buy the one that fits what you want to do.
C. sheets course was good for “basic” foundation, but after purchasing it, I also went and got Legrands course, because I wanted to focus on flips. His course offered more specific info, and material for that purpose.
So, decide what you want to do, and then buy the course that shows you how.
When you first start, post here, and all your ?'s will be answered. This is your BEST place to get all the questions answered by GOOD people doing the REI business daily.
Good Luck, and happy investing,
Jim
Could you tell me again where this “Wealth Investment Website” is located. Also, do mean by the term steady cash flow, lump sums or do you mean monthly checks. And are you suggesting the lonnie Deals is the course for this?
Posted by JHyre in Ohio on January 07, 1999 at 12:09:14:
I did not think that mobile homes were very common where I live because I saw relatively few of them. I got the address of all 500+ mobile home parks in Ohio off of Big Yellow. It turns out that I’m near plenty of parks that were not immediately apparent. Oftentimes, parks are “hidden” because of the stigma often attached to them.