Posted by Anne_ND on July 28, 2003 at 10:20:10:
if you take offense so easily, you will find real estate investing to be a long road.
good luck,
Anne
Newbies going off half cocked - Posted by gerald(tx)
Posted by gerald(tx) on July 27, 2003 at 13:22:47:
With the market down, bargain properties galore, RE seminars and infomercials proliferating again, we are seeing tons of newbies in the arena. I don’t really mind this, there’s enough for all of us, but I get perturbed when I have to stumble over greenies who don’t do their homework.
Example: I recently bought a 2yr old house Sub2 right before foreclosure. $140k home, owner had put $30k down, owed $110. I went in behind a kid who had no money, no credit, no smarts. But he told the owner he was “a Real Estate Investor.” Said he would buy the home, for her to call the mortgage co for payoff. Then he grabs the phone and asks the lender if he would do a short sale!
Needless to say the lender just laughed, then hung up on him. The owner was so embarassed and angry, she threw the kid out of the house. I mean, how naive can you be, asking for a short sale on a new home in perfect condition, under builder warranty, with $30k equity! (kid had no money, but would flip it to another investor if he could get a short sale???)
When I come in, she is POed, will not talk to me, another “Real Estate Investor” unless I showed her my financial statement, bank statement, and credit report. Once I broke through this and qualified, is was simple. I gave her $9k to bail her out and give her U-Haul money. And I wound up with $30k equity on a nice new home while saving her from a foreclosure on her records.
Again, I’m not against this horde of newbies coming into the arena. It’s just when they are trying “magic seminar creative techniques” that they really don’t understand in the real world, things that they really haven’t done their homework on, that they become a nuisance.
Re: Newbies going off half cocked - Posted by rm
Posted by rm on July 28, 2003 at 19:02:59:
And, still, the newbie created a more appreciative seller, who was probably easy to work with once you jumped through a few hoops.
Congrats on your latest deal!
Re: Newbies going off half cocked - Posted by William Bronchick
Posted by William Bronchick on July 28, 2003 at 09:26:01:
Barney Zick used to say, “if you are motivated but uneducated, you are dangerous; if you are educated, but unmotivated, you are a bore at a cocktail party.”
I think a good combo of education and guts is important. Being in the education business, my view is somewhat subjective, but I really believe one of the best ways to spend your money is investing in education. Rather than put $20,000 down on a house, spend $5,000 on advertising for motivated sellers, $5,000 on educating yourself on creative ways to buy the house with less down. I agree with you that many newbies simply hang around chat boards, hear a few ideas, then go off half-cocked. The concepts may sound simple in a 90 minutes seminar presentation, but there’s a lot of details involved, particularly in subject-to’s, foreclosures, lease/options, etc. And, as good as this website and its contributors are, you CAN’T learn it all from the Internet (and, if you don’t at least have a good base of knowledge, few people are willing to answer very basic questions here that can be found in a $15 paperback).
Now, the other side of the coin is people who go to seminar after seminar, read book after book and do NOTHING. I often tell people NOT to buy one of my courses if they already bought a dozen others and haven’t done ANYTHING. Sure, there are details and angles in my course that aren’t in others, but if you never make an offer, what’s the difference?
The bottom line is, a newbie should get educated, do a few SIMPLE deals, then spend some more on education, do a few more deals, then move on to the complex deals. The most experienced investors I know still go to seminars, read books and continuing learning, myself included.
Re: Newbies going off half cocked - Posted by Jorge
Posted by Jorge on July 27, 2003 at 16:16:04:
I am wondering if you ever made any mistakes when you started ? The one thing I can say about these newbies that do stupid things like that… is that they atleast tried? wouldn’t you agree? I personally won’t do anything until I run it by some of you smart folk…
I don’t want you to think that I am offended by this. by no means… we all have to vent and sometimes when you vent someone will see what happend and learn from that… but putting them down for trying??
But what do I know…
Im still learning:)
jorge
Re: Newbies going off half cocked - Posted by IB (NJ)
Posted by IB (NJ) on July 27, 2003 at 14:34:40:
Gerald, this is why I always recommend that newbies don’t tackle pre-foreclosures right away. This is someone’s home you’re dealing with and if you don’t know what you’re doing, you could cause someone to lose 10’s of thousands of $$$. In this situation, it’s fortunate that you came along to clean up the mess.
In a sheriff sale (another arena I don’t recommend for newbies), one could lose his/her own 10’s of thousands of $$$
REO’s and FSBO’s are a good place for newbies to start IMHO
I think you’re missing the point… - Posted by IB (NJ)
Posted by IB (NJ) on July 27, 2003 at 22:02:39:
as a newbie, you’ll get kudos for trying. But you should ‘try’ with other types of RE investing. Not with pre-foreclosures. What if this woman would have refused to deal with anyone else thanks to this newbie? A good investor would have missed out on $30k and someone would have lost their home. The mortgage co. could have also (although maybe not legally) refused to deal with her. A number of catastrophic things could have happened.
Re: Newbies going off half cocked - Posted by John V, Fl
Posted by John V, Fl on July 28, 2003 at 01:02:41:
I think with what seems like more newbies to the rescue than motivated sellers these days that they could be temporarily holding up housing prices…
Re: I think you’re missing the point… - Posted by Jess
Posted by Jess on July 28, 2003 at 24:18:52:
Wait, let me get this straight – all of these real estate books and seminars tell you to go after “distressed sellers” because that’s where all the bargains are. They say that you can find them in the newspapers, on the Net, and on the Sheriff’s lists - as pre-foreclosures. So now YOU’RE saying, “Newbies - you can try the newspapers and such, but DON’T TOUCH PRE-FORECLOSURES”… So, how about notes? Can we not do those because we’ve never done them before? Or maybe land purchases… or apartment complexes? I mean, we’re new, and we’ve never done them before, so I guess that means that we can never try…
Let me ask you a rhetorical question: had you ever done a pre-foreclosure before you did your first pre-foreclosure??
Look, the kid tried, and he learned that that approach doesn’t work… so, maybe he’ll try it a few more times before he gets the idea, but either way the bottom line is that he did not get the deal and it’s still out there for all the “professionals” who do know what they’re doing.
What’s the big deal? THE KID IS TRYING TO LEARN/BE/DO! LET HIM!
Re: I think you’re missing the point… - Posted by jorge
Posted by jorge on July 27, 2003 at 22:22:21:
No… I got the point… you are right… us newbies…should not go for something that you need more specialized knowledge. I understand that. Just the way you came across like if you never had made a mistake starting out. Maybe your subject line should have read something more like " NEWBIES… PLEASE DON’T GO FOR PREFORECLOSURES… THIS IS WHY… " And then told you story…
My point is that alot of people starting out when they read things that are said by the veterans that makes feel that if they try something they are going to be criticized… it just makes it harder…thats all…
anyways, enough said.
happy investing,
jorge
Re: Newbies going off half cocked - Posted by DFR
Posted by DFR on July 28, 2003 at 15:22:23:
Here is where you can thank the Carlton Sheets of the world. Oh sure make a fricken fortune it is as easy as 1,2,3. Place ads in the newspaper people will just flock to you and you will be rich in no time. Foreclosure the MAGIC word.
Re: I think you’re missing the point… - Posted by IB (NJ)
Posted by IB (NJ) on July 28, 2003 at 08:34:20:
Courses and gurus? How about your common sense? Does that have a say in the matter?
Yes you should try new things. But you should seek the advice of professionals (like the one on this board) before you snatch a phone from the seller (without telling her your plan) and start asking about a short sale. After all, on my first one, I seeked the advice of the veterans on this board FIRST.