no money down investing? Is it smoke and mirrors? - Posted by Jack Palmer

Posted by Jim on June 15, 2000 at 01:52:41:

Welcome, Gavin. Glad to hear it. Wholesaling to investors is an excellent way to start. It requires very little training and has very little risk to you and you begin to generate a good start up income.
Again, Welcome. I hope you can find information and support from many of those that post here.

no money down investing? Is it smoke and mirrors? - Posted by Jack Palmer

Posted by Jack Palmer on May 20, 2000 at 19:38:39:

I have purchased the Carlton Sheets no money down investment program and am scared to death I will lose what little money I have getting in over my head with no money down deals. Has this program worked for you guys? How did you make your first no money down deal work? Man I need mentoring.

Re: no money down investing? Is it smoke and mirrors? - Posted by Sean

Posted by Sean on May 21, 2000 at 08:38:00:

If by “Smoke and Mirrors” you mean is it just a illusion and not real? Its real. If you want to pay full price or give up other advantages, you may or may not do it using “No Money Down”. Could you have made a better deal, all cash? Probably so! Keep in mind the old R.E addage “You make your money when you buy! You realized your money when you sell” You will probably make more money, all cash, or or a combination of other techniques. But can you make money with no money down ? Certainly you can! It just may take you a longer time to realize it. Buying a SFH at full market value or over and trying to get a real positive cash flow on just the rent comming in and waiting for it to appreciate to make you some money, is a long row to hoe! You may be able to realize some IRS tax advantage on depreciating it in the mean time, but its still one of the least remunerative ways to reap rewards in the R.E Investing Business. In fact it has been our experience that buying SFH for straight rental property investment, is a ell of a slow way to make any money in the R.E. Investment Business. However it is a more simple and basic way to get started and learn all the other ins and outs as you go. We did it that way and looking back are not sorry we did, but hindsight is always better than foresight and if we knew all we do today, then we could have increased our income considerably by other than what appears to be the Carlton Sheets Method. Take it for what it is-- a relatively inexpensive way to get started and basic primer on R.E. if you have no previous experience. However, keep your eyes and ears open and learn all you can from other investors, with by far the best source being Real Estate Investment Associations (REIA) and sites such as this.

The greatest mentors in the world are all at… - Posted by HR

Posted by HR on May 21, 2000 at 07:19:10:

Barnes and Noble. And your library. For about $20, you get the wisdom that took those authors thousands of dollars and million of pints of blood and headaches to learn. Avail yourself of it.

There is also a lot of great, free info here. Avail yourself of that, too.

Good luck,

HR

Smoke and Mirrors, Math and Magic - Posted by David Butler America’s Note Network

Posted by David Butler America’s Note Network on May 20, 2000 at 22:51:05:

Hello Jack,

In a word - YES… it is possible, and sometimes it is smoke and mirrors! I graduated out of college with a business degree in 1976. On my way home, I picked up a book, WINNING THROUGH INTIMIDATION, to read on the plane. For some, the message is to be obnoxious and overbearing in negotiating deals. The real premise of the book however, was “Do Your Homework”. Probably wouldn’t have sold as well with that title. The context was real estate oriented, so all of a sudden, that made me think of real estate as a career.

On the plane, I also wound up reading an ad for Mark O’Haroldsen’s HOW TO WAKE UP THE FINANCIAL GENIUS INSIDE YOU. So, by the time I got home six hours later, I had decided to become a real estate investor.

A short time later, I became a real estate agent, while at the same time ordering all kinds of different books on the subject. In early 1977, I got my first listing. Then a lady called for a place to rent. I signed the lease for my listing… now I had to find a way to buy it.

By borrowing $10,000 on a 10% first mortgage to my grandmother, and $3,500 more from a brother-in-law, I had a 50% ownership in the property with no-money down, paying $13,500 cash for the home.

Eight months later, I my brother-in-law wanted out, so I had another friend give me $5,000 for 50%. I paid my brother-in-law back his $3,500… and now I still had my 50% share, plus $1,500. About 18 months later, my new partner and I sold the home for $26,000 with $6,000 down, and a Wrap mortgage for the balance, at 12%, payable over eight years.

Over the next few years, I did eight more of those deals. Some where pretty good size, like the 13 unit and 1.5 acre property I bought with a group of doctors, which had paid handsomely over these past 22 years. In between, I have done a few “flips” off of foreclosures, some subdivision land flips, and a lot of note investing. Even now, a lot of my deals have partners in them. More firepower, less risk, and really keeps my cash at a minimum level invested.

There are over 150 ways to do nothing down deals. The key to how risky they are, depends on your circumstances, and your effort. Many beginners start without a clear plan, and get way ahead of themselves in terms of what they have learned.

These message boards are loaded with a lot of good articles and free information that bears a great deal of study. Their bookstore on this site is loaded with some pretty good courses too. The two site hosts are active investors themselves, and practice what they preach.

Franklin Roosevelt said “The only thing we have to fear, is fear itself”. In real estate investing, that is generally true, but I would add that “The only thing we have to fear, is ourselves”… study hard and get well grounded on the business. That’s the only way to follow the best advice ever given - INVEST IN WHAT YOU KNOW.

Fortunately, right here on this site, you can become an expert before risking any deal… and a pro after getting a few deals under your belt. But you have to put in the time, and learn to walk before you run. For some, it may come faster than for others, but build the foundation, losing your fear in the process. Knowledge is power, and it should be easy to pull the trigger on any deal, once you have done your homework.

If you come on to these boards, and outline a deal, and then ask for other people to tell you whether or not it is a good deal, I would have to say that you have not learned yet, nor have you done your own homework. That’s the clearest sign that you are ready. When you know for yourself that it is a good deal, and don’t need any one else to tell you. That’s usually the safest bet too, in my experience!

Hope this helps, and best wishes for your success.

David P. Butler Vice President, Broker Relations

Re: no money down investing? Is it smoke and mirrors? - Posted by Cheryl

Posted by Cheryl on May 20, 2000 at 21:12:19:

I would like to know also, how is it possible to get money at closing? Is there a chat line for Carlton’s students?

Re: no money down investing? Is it smoke and mirrors? - Posted by Joe Anderson

Posted by Joe Anderson on May 24, 2000 at 14:42:41:

Sean - I’m new to this, am taking the CS Coaching program and last week was directed to this site by my coach. I’ve been readig the postings. Find them very encouraging but I am still “stuck in the mud.” I intend to go to the REI club in my area for the first time shortly. I was interested in your posting regarding the fact that you stared buying SFH is a long row to hoe and a slow way to make money, but I think that you said it was a good education that you wouldn’t have missed. I was wondering if that was becaue it was the best way for you to get out of the gate and start? Mine is the common lament, I can’t seem to get started. I think that I have what it takes,but I’m starting to wonder. Is there anything you would recomend reading that would help start me off? By reading the postings I am getting the common thread that getting started is just a matter of doing it. As of this moment, I want to get going but think that in some ways this all seems too good to be true. I’m concerned that I am missing something and have the feeling I am watching three card monty game and thinking that I know where that card is, that it’s easy, I can do it, when intellectually I know that’s not the case. I guess I am wondering if I’m missing something. Any suggestions? Any anecdotes by anyone that couldn’t pull the trigger, finally did, are successful and can identify what held them back and what finally got them started?

Is there anyone that posts on this site from Denver? The Denver area?

Re: The greatest mentors in the world are all at… - Posted by RButler

Posted by RButler on May 22, 2000 at 24:22:23:

Which books would you recommend to get started? Or which course would be worth buying to start out with? I keep researching all the different courses and all I get is more confused over which ones are genuine opportunites and which ones are just ways for someone else to make monet from me.

Re: no money down investing? Is it smoke and mirrors? - Posted by Arthur Lewis

Posted by Arthur Lewis on June 05, 2000 at 12:11:11:

It is NOT possible to get any money at a closing. There was a time when it was possible to obtain an inflated Appraisal from a dishonest appraiser. Then if the lending party was very lax , would use that figure.
They would lend 75% and that would cover the entire sale cost. That firtually meant that the buyer did not have to come up with any down payment. That was years ago. Now Banks, etc. obtain their own appraisals and do an indepth search of the value before lending any money. I have tried to obtain just one property that Carlton Sheets purchased with no money down. He has never responded. Moreover, I have asked for the N/A of just one of his “students” who purchased a property with no money down. Still no response. I have written to him several times. Then I wrote to his newest pitchman > Kurt Gaudy< Still no response. Common sense dictates that HOW could you possibly receive any cash back, especially since you are not putting any money up to begin with. Lending organizations are not stupid. Searh the Web for “William J. McCorkle”. He was another Carlton Sheets. Now he and his wife are doing 15 years for his no money down real estate fraud.

Re: no money down investing? Is it smoke and mirrors? - Posted by Jim

Posted by Jim on May 23, 2000 at 05:06:48:

How about this… I just last week, paid full retail price (owner financed) at 9% (above market rate) and walked away from closing with $10,000.00 cash and generated a $324.94/month income for the next 30 years (or whenever the buyer refinances). How was this possible?
I don’t know about the other people who post, but here’s my numbers.
Buying price-$235,000 w/ $15,000 down (not a no money down)
Seller financed note of $220,000 @ 9% (to get them to take the deal)
Payments of $1,770.17/mon PI + $156.57 TI (taxes & ins)

Sold w/ NO QUALIFYING!
Sale price - $265,000 w/ $25,000 down ($10,000 profit!)
Seller (ME!) financed $240,000 @ 11%
Payment of $2095.11/mon PI + $156.57 TI ($324.94 dif)

Why would anyone buy from me at these rates and prices? Someone who can’t qualify to buy a home, but has the income and cash. I let them fight over who gets the next house!
It was a simultaneous closing, so I didn’t bring a dime. In a way, it was a no money down. Myself, I don’t use banks to buy or sell, unlike some teachings.

Re: The greatest mentors in the world are all at… - Posted by HR

Posted by HR on May 23, 2000 at 19:39:08:

  1. Investing in Real Estate by McLean and Eldred, 2nd Edition. $20.
  2. 5 Magic Paths to Making a fortune in re by Lumley; $20.

Once you know what you want to specialize in, there are some more detailed books to read (for example, Myer’s Buy it, fix it, sell it, profit book for rehabbers). These two, though, give the basics and are the best of the best. I also recommend Bob Allen’s Creating Wealth and Multiple Streams of Income.

Good luck,

HR

Re: The greatest mentors in the world are all at… - Posted by Raymond Wottrich

Posted by Raymond Wottrich on May 23, 2000 at 11:58:12:

I would recommend 3 books that provide general context to the wealth building process; besides the fine information that is provided here.

“Creating Wealth” by Robert G. Allen
"Super Self" by Charles Givens
"Real Estate Money Machine" by Wade Cook

The nothing down concept means you don’t use your own money to get the deal. If you tie up a great deal that you’ve found, you’ll have little trouble finding investment capital to partner with you. You can run deals by the experts on this board for their feedback, also.

Good Luck

Re: The greatest mentors in the world are all at… - Posted by JohnBoy

Posted by JohnBoy on May 22, 2000 at 01:00:38:

One thing is for sure and that is any course you buy from this site is GENUINE! All of these courses have been evaluated by the owners of this site and they won’t offer any courses for sale here if they’re not genuine. As far as which course to start with, that will have to be up to you to decide. The best way to do this is go to the “Success Stories” and “How to Articles” links on this site. Read ALL of them. Then decide which type of deals most appeals to you and pick a course in that area. The courses here are all geared toward that particular type of investing. They don’t just give brief information on a lot of different types of investing to make up a 300 page course. It all pertains to that type of investing.

Re: no money down investing? Is it smoke and mirrors? - Posted by JohnBoy

Posted by JohnBoy on June 08, 2000 at 01:42:31:

Yes it IS possible to get cash back at closing with no money down. I’ve done this more than once. Not only did I get cash back at closing, but I still retained 20% in equity on the property also. This can still be done.

Re: no money down investing? Is it smoke and mirrors? - Posted by Ramin

Posted by Ramin on May 24, 2000 at 16:57:09:

could you tell me the steps you toke to accomplish this deal. Imean from start to finish

Re: no money down investing? Is it smoke and mirrors? - Posted by scott in va

Posted by scott in va on May 23, 2000 at 18:13:49:

did you get the terms with the buyer b4 you went to the seller or how did you figure it and how did the buyer get it without qualifying

Re: The greatest mentors in the world are all at… - Posted by Jim

Posted by Jim on May 25, 2000 at 23:41:31:

Those are excelent books to start with… I also recommend “Quick Turn Real Estate” by Ron LeGrand. I know… his courses are very expencive, but his book gives some good insights to the strategies he uses.
His book is designed for the beginner, almost like a 150 page sales brochure. Using less expencive training to understand proceedures you can (and I have) used many of his strategies to make a lot of deals. And YES, I did eventually buy his courses (part of my ongoing education), but only after proving his strategies could pay for it.

Re: The greatest mentors in the world are all at… - Posted by Jim

Posted by Jim on May 25, 2000 at 23:59:36:

I really thank you for this site and the forum you have created here. I just found your site this week and really appreciate what you have here for the newcomers. I just wish I had this kind of resourse when I started.
I’m finding, in my ongoing education of the Real Estate Industry, the more I learn the more I realize I don’t know and the more I learn the more I earn! Every book, course and seminar has some tid bit that can be applied to anybodys arsonal. So many times, in my past, I have kicked myself after learning about differant type of deals I passed, not knowing that there was a deal there. So, I will look in to the courses you recommend here for my ‘liberary of learning’, as I call it.

Re: no money down investing? Is it smoke and mirrors? - Posted by Jim

Posted by Jim on May 25, 2000 at 23:12:35:

  1. I found what the seller really needed was a good steady income from the house. (ripe for seller financing)
  2. Constructed seller financing offers for her that would satisfy the needs. She needed a higher income then bank rates would allow. So, cut down for higher rate.
  3. Bought on a land contract to give her full security that she doesn’t let go of the house until I fulfill the contract.
  4. GOT THE AGREEMENT SIGNED and noterized!!!
  5. Ran Title search to check for any clouds. (clean!)
  6. Recorded Land Contract.
  7. Ran ‘NO BANKS ALLOWED!’ ad. Got 27 calls over three days.
  8. Picked the best of the buyers and put them in the house. Sold with a Land Contract, NO CLOSING COST, yet (in about 15yrs there will be. Sooner,if they refi). Collected Down from Buyer! Put the rest in my Buyers List (for the next one).
  9. Gave $15,000 to seller!
  10. Went to Calistoga, CA for a weekend of Spas, Food and Wine on the rest!!!

Re: no money down investing? Is it smoke and mirrors? - Posted by Jim

Posted by Jim on May 25, 2000 at 22:56:17:

Simple! I created it with the seller knowing full well what the market will bear. And made it easy for a buyer to get in (if they meet my standards).