paperbiz.com - Ed Garcia, JimIL, JPiper - opinions please - Posted by JB in MD

Posted by Bill Taylor on May 14, 2000 at 22:32:17:

JB bring us a deal you are looking at to the chatroom some night. Don’t go out and spend anything more than you already have. There are usually folks in that room more than glad to help you and tear your deal apart and advise the best they can. You have to go out and find a deal and not another course. You may have enough to be lethal but with a little help from some of the guys and gals here you can suceed. Give the people here a chance and they will be there for you.

paperbiz.com - Ed Garcia, JimIL, JPiper - opinions please - Posted by JB in MD

Posted by JB in MD on May 14, 2000 at 22:09:30:

Hi all,

I saw a post below recommending someone check out this website paperbiz.com. I am a newbie so a lot of things look good to me on first glance. Is there any catch here other than the $390 to start up? Has anyone participated in Graystone Mortgage’s Beacon Program? John Alexander seems like a real shoot from the hip straight up kind of guy, but in a time like mine (newbie, limited funds to use in startup, don’t know who to trust completely, etc.)I am leary of tying up $400 in any one program. Before you bash me, (some of you old pros are good at that, you know who you are!) I do realize that you have to invest in your education to get somewhere in this business and I have done that in several other courses that I have purchased (LeGrand, Bronchick etc.). I know just enough now to be lethal to myself.

Also, what is the difference here from working with Ed Garcia?

All opinions are appreciated, even if I don’t like them!

God Bless,

Jason

Jim - never got to tell you, had a great time hanging out with you, Dirk and Brandy at the bar Saturday night after the conference. My friend Rick was with us, remember? It is people like you that make this business accessible for beginners, and that made me want to attend nesxt year!

Re: paperbiz.com - Ed Garcia, JimIL, JPiper - opinions please - Posted by Fred Chambers

Posted by Fred Chambers on May 16, 2000 at 22:41:49:

I am an Associate with GrayStone Mortgage. The program is THE REAL DEAL. I would HIGHLY recommend anyone, but especially a newbie to become an Associate. Currently GrayStone is concentrating & focusing on doing simultaneous close. They have a truly FANTASTIC program that you can work with Mortgage Brokers, Realtors & R.E. Investors.
One of the primary benefits of being an Associate is that Mon-Thur daily live interactive conference calls are conducted.
The calls are moderated by John Alexander & Bill Koerner, the president & chief underwriter (respectively). You can get ALL of your questions answered & they will take you by the hand to get your deal completed.
If you are serious about this business, you should have your $390 initial investment returned to you in no time.
Your most important question is - Am I willing to invest $390 to have some quite literally take me by the hand & teach me about the simultaneous close? Final point - you are not just buying a course, you are getting LIFETIME
FREE personal consultation whenever you need it.

Re: paperbiz.com - Ed Garcia, JimIL, JPiper - opinions please - Posted by Jim IL

Posted by Jim IL on May 16, 2000 at 24:24:32:

JB,
Wow, saw my name in a post title with some REALLY BIG GUNS and was floored for a minute.
I don’t even belong in a class with these guys.
Someday though, I will, just watch!
Anyway,
Was glad to see your little note at the bottom.
I do remember, and thank you. I know we all had a great time, but did you have to tell the world I hang out in bars?
Just kidding.
It was nice to talk REI with like minded people over a beer or few and relax.
Got me revved up , thats for sure.

And, believe it or not, I actually do know a little about your question here.
And, what everyone else said is true. Graystone has a program that may work for some, but frankly, you can do deals with out buying there stuff.

Have a nice day,
Jim IL

Re: paperbiz.com - Posted by JPiper

Posted by JPiper on May 15, 2000 at 01:37:17:

If you have courses from Bronchick and LeGrand you have more than enough information to go do a deal. You don’t need another course to get that first deal under your belt.

You can sell a property to a buyer by getting the buyer a loan (Garcia), or by selling owner finance and then selling the note. My preference is to use loans…I think they put more money in my pocket when all is said and done. There are proponents of selling owner financed notes though…I’ll let them speak to the advantages of that technique as they see them.

Either way, I don’t think you need Graystone to learn the technique of note selling, or for that matter, to go do a deal. Do a search on Mark NC in the archives…he’s written some good posts on the note technique. Perhaps he’ll respond to your post here.

Bottom line, get out there and do a deal…education is always nice…but action is part of what this business takes.

JPiper

Re: paperbiz.com - Ed Garcia, JimIL, JPiper - opinions please - Posted by Ed Garcia

Posted by Ed Garcia on May 15, 2000 at 24:07:05:

To JB in MD:

I’m sorry to say that, I’ve answered this question so many times. I now save my
answer to reprint it when the question comes up again.

Here is what I tell a Newbie who is starting out.

First, is to evaluate how much time you are going to be able to commit to
Real-estate? If your approach is hit and miss, so will be your result.

Second: Go to the street. It is the best teacher. Rather than talk about doing
deals, reading in the library, getting courses, JUST DO IT.

You’ll find in the long run, the street is the best teacher. Not only that by getting
out an doing it, you’ll learn your MARKET, meet people to build a NETWORK, learn
the demographics as well as the geographics of your area, and of course you
would have over come the biggest obstacle in getting started, PROCRASTINATION.

We need to do what we call, penciling out a deal. When doing that, we ask ourselves a
battery of questions necessary in structuring a deal.

I’m going to give you 5 steps to get you started.

(1) How much do we want to make?

So many times I hear someone act as if they are afraid of loosing a deal because of the
profit they put into it. Forget about it. I’d rather be sorry about the deal I did not make,
rather than the one I did. The profit is what protects you in a deal. Don’t be afraid to make it.

When doing a deal I want to make at least 30% and believe me when I tell you, when I structure
a deal with 30% in it, I never get it. Some how the profit always dissipates, even after I thought
I figured it to the penny.

Would I do a deal with less profit? Yes but I would do it as a flip, lease option, or as a leveraged
deal with positive cash flow.

(2) Determine the Value of the Property.

The next thing I must do is determine what the property is worth. The obvious thing to do, is comp
it. Don’t let the seller or real-estate broker tell you what it is worth. Get it comped yourself.

(3) Deferred maintenance.

Usually I figure my profit after taking off the deferred maintenance, otherwise it distorts my
profit. So it must be figured in the beginning to determine your profit.

(4) Game plan.

What do I want to do with the property? Do I want to fix it and sell it? Do I want to keep it
long term or short term? When I buy a property, I have a plan for it. And usually I buy it with that
plan in mind. This part is so important, I’m going to go into more detail by giving you an example.

Remember, you make your money on the buy.

GAME PLAN.

Each deal speaks for it’s self. For example, if I bought a house for lets
say $50,000 and had to put $10,000 into it for fix up. I’m in this deal
$60,000. Now what would that house have to be worth in order for me
to feel comfortable to buy it, and debt service it on my line of credit.

$70,000 ? No I don’t think so. I have no room in this deal for error.
What if after a month or two I don’t sell it ?
Now remember, we can play the what if game all day. I can create a fast
Sale for the purpose of this posting to make myself look good, but that’s
Not the answer. So remember we have to always be careful with
hypothetical questions and answers. The profit structure on this deal is not
good enough for me to do the deal.

$80,000 ? Were getting better, but No. I have to keep in mind that things
can go wrong with my deal. What if I sell it after 2 months, and then the
sale falls through after being under contract for 45 days because of financing.

Now I have had the property for 31/2 months, and have to put it back on
the market again. Also what if the market changes or slows down ?
Even though I show on paper that I have a $20,000 profit, that’s not so.

For the fun of it, lets take this so call $20,000 profit and structure a
Game Plan around it.

(1.) I plug in 6 month worth of debt service on my deal. I’m in the
deal $60,000. Interest, depending on the interest of your credit line,
Let say for the benefit of our example is 9.5%. Our payments would
Then be $475 per month. 475X 6 = $2850.

(2.) What ever the market value you come up with, always cut it 5%.
Because realistically, the potential buyer is going to want you to
Discount your price. Now if you don’t have to, great. But lets face
It. If you were trying to sell it for $80,000 and someone offered
You $ 76,000, you know you wouldn’t want to wait for another
Buyer. You would still be debt servicing the deal. With you luck,
You wait another month or two and the next buyer would make
The same offer. Terry Vaughan will tell you, that the first 10% of
a deal is water. I agree with Terry, but for the purpose of this
deal we’ll just keep it at 5%. So lets take off another $4000.

(3.) I always plug in a realtor. Now I know that there are a lot of
Geniuses out there that don’t need them. They are so great that
they can sell the property themselves. Great, you plug in a
Realtor. 76,000 X .06 = $4,560.

Lets recap. A sale of $80,000, gives us on paper a $20,000 profit.

$20,000
-$ 2,850 Debt service
-$4,000 5% Discount
-$4,560 6% Sales commission.

Potential Profit $8,590.

As you can see the profit dissipates quickly. And personally I don’t think
It’s enough to take the risk your taking with your line.

How about $90,000 ? Now all of a sudden the deal can make sense.
We have between a $17,500 and $18,000 profit.

Lets look at our LTV (loan to value). 60,000 divided by 90,000 =
67% LTV.

So you see the deal speaks for it’s self, but the structuring of a deal with a Game Plan is what will
let you know if you should do the deal.

(5) Financing.

How am I going to take my deal down? An I going to create a seller carry back, and use a lender
to give some money to the seller? Will the seller carry back the whole deal? Will I have to buy it with
a combination of down payment and financing? Or will I pay cash and then refinance it later, getting
all of my money back.

These are just a few basic fundamentals of doing a deal. I hope this is some help to you.

JB after giving you a tip or two on how to view a deal, I would like to close by telling you that Bill
Taylor’s suggestion for you to bring a deal forward here in the chat room was a good one.

Also so I would like to tell you that if you read the “How-To Articles” and specifically go to
"A Glossary Of Common Terms Used In Loans And Lending" by Ed Wachsman you should have a
good understanding of the basic fundamentals of the business, as well as the terminology and the
language. As you know this News Group is invaluable. This site is a definite example of
"People helping people".

Ed Garcia