Real estate didn't work for me - Posted by Too embarassed

Posted by Berno on February 13, 2006 at 13:33:17:

If the bashers out there don’t think that there is good money o be had, then why waste time on this site? Like I stated before, I would be willing to bet most of us here make a modest or decent profit on real estate while some make a great deal of money…and of course some fail. I too would like to bring in more, but there is a 2 1/2 year old girl at home that likes seeing her Dad quite a bit. When she starts school, ahnging ouot with friends and starts thinking her Dad isn’t so cool to be around, I’ll start making more deals. (BTW…I hope to have her help some day since I do most of my own rehab work!)

Real estate didn’t work for me - Posted by Too embarassed

Posted by Too embarassed on February 11, 2006 at 08:37:57:

I’ve been coming to this site for over five years now. I’ve even been to the CREOnline convention. I’ve probably got tens of thousands of dollars in courses from every author worth buying from. I’m educated in real estate. Some authors are better than others. Most are selling the same information repackaged.

I’ve bought and sold a few houses and even have couple of rental houses. The thing is, I’ve never been able to make any money. I’ve been able to make a thousand dollars flipping $20k junkers to landlords on occasion but never more than that. More than often it seems like if I don’t actually own the house before I sell, I get taken advantage of and lose the deal and the money. People who buy from flippers have become very aware that it’s easy to go around you. Every deal where I was to make substantial money has been lost to greedy buyers who figure out how to screw me. Therefore, in my area you need cash/title to flip houses. I don’t have that kind of money. And with a thousand dollar margin, borrowing leaves not enough to make it worth my time.

I’ve always heard that one should build a cash reserve before buying to hold. I believe this to be true. My rental properties have proved to be a forced savings plan. I never really wanted to be a landlord. I’ve always been interested in buying and selling. After years of experience here in my own market in the South I’ve discovered there’s A LOT of competition. And in my immediate area there are a lot more new houses than potential investment properties.

All I’ve ever wanted to do is real estate. I caught the bug over 20 years ago. I started pursuing it about five years ago trying to build a cash reserve. I’ve spent way too much of mine and my family’s time and money with practically nothing to show for it. I’ve pretty much lost hope. As we speak I’m now looking at the car business. I’ve got what it takes to make something work. But it’s not always the person, it’s a lot about your market.

I have a friend who owns a franchise. He failed in Texas. He then bought a territory with the same franchise in Ft. Lauderdale FL. and is now the number one franchisee in the franchise doing over a million a year in revenue netting about $250k a year. I’m stuck with the area I’m in and trying to make the best of it. My wife is from the area and doesn’t want to move. Believe me I’m stuck. My wife’s family is here, my business is here, my sons going into high school.

I’m not sure why I’m writing this but I woke up early this morning and this is what came to mind. That I should try some last ditch effort and post something at the site that got it all started for me.

Where does one start when everything you’ve tried has pretty much not worked? You know everything that’s been written on the subject of interest and it still doesn’t work. You need money to flip houses regardless of what some will tell you. Too many contract stealers in the area. The demand for junkers is there but so is the competition. People now think thier junkers are trimmed in gold and worth much more than I can pay for them.

All the time and money invested into a real estate education and I still don’t know how to make money. It’s been over five years and I still haven’t found a niche that makes me money. I don’t know where the next five years will take me. I do know that the last five years have been very dissapointing. Five years is a long time and it’s definetely long enough to know that I’ve been doing something wrong.

I almost feel like this is a signing off to this site. It’s been months since I’ve even thought about real estate. It’s to the point that it hurts to think about it. There’s money out there to be made but I’m just not sure anymore if it’s in real estate. It’s been my experience that in real estate you gotta have money to make money. Yes, it can be somebody elses money BUT, let’s not forget holding costs, margins, demand, local market, etc. It’s not worth my time to flip anything for a thousand dollars.

My advice for someone just starting out, besides education. Do like my friend from Texas. Do your homework and move to THE best location in the country for what you want to do. For the amount of time I’ve invested into the business, I should be making a living at it. Somethings very wrong.

Thanks for telling the truth. - Posted by EquityHunter

Posted by EquityHunter on February 15, 2006 at 17:36:10:

Most people on this site are bs ers. It’s not easy as you have said. No one is making a fortune in re. They are just getting by. People selling courses are getting rich. It’s hard work and takes plenty of patience. But what’s the alternative? Walmart? That’s what keeps us going. Also you have to love the business. If you don’t, get out. Thanks for your real candor. I know you are speaking from your heart.

Re: Real estate didn’t work for me - Posted by SmallTime

Posted by SmallTime on February 15, 2006 at 15:02:22:

We just purchased our first 2 houses at the end of last year for $57k. After we (my friend and I) finish rehabbing, they will be worth $60-70k each. We’ll either rent for positive cash-flow, use the equity to leverage next project, cash out re-finance, or just sell. What’s so hard about that? If we can do it, you can too.

Stop being depressed and Change your model… - Posted by Sean

Posted by Sean on February 13, 2006 at 08:54:44:

Man, sounds to me that adjusting your game plan was needed LONG ago…

Look I can relate to being in a flat/dead market… I live in an area of the country that’s by census numbers LOSING POPULATION SINCE THE 1950s… you can’t get more slow/buyers market than where I live…

I’d love to move someplace where there is a vibrant economy and know that when I have a house for sale it won’t be sitting for a LONG time, or that I’ll have to hunt long and hard to find a buyer for it… and bend over backwards to get it sold… but that isn’t going to happen… Like you, at least for now, I am somewhat tied geographically to where I am so, I just have to make the best of it.

I would never wholesale for $1000 margin… that’s not even worth my time… even in a slow market that sort of deal is just going to lose you money in the long run. One of the nice things about being in a slow market is FINDING DEALS is a lot easier… while hyper markets make selling a lot easier, you have to fight a lot harder to find the deals. Here its the inverse, finding the deals is easy, and the barrier to entry is relatively low. Of course right now its become a complete fad to invest in RE here… so tons of Newbies are out there paying WAY too much for things, and going to get their arses handed to them… But that’s ok… because that means instead of picking up a house that needs 25k or so in work before its ready to sell for 50-60% of its ARV after I’ve repaired it… I’ll get to pick up completely rehapped houses for 50-60 cent on the dollar in the next 12-24 months.

I will agree with you that most national speakers don’t have a clue how to operate in dead/slow markets… I just shake my head and laugh when I hear a speaker from LA come and talk… and tell me how he deals with really old houses… like houses built in the 1970s… The homes I usually do have an average age is probably 75+ years… my oldest being built in the 1880s.

I am friends with a local Homevestors franchisee… and he did not fail, but did struggle for quite a while when he started out because he bought into the formulas that they were teaching him at their company… finally he realized that in this town you don’t get generally buyers to pay as much as they told him he would get… and has since adjusted his business model and plan and is doing pretty good… and now Homevestors has sold 2 more franchises in this area as well… which I think is a bit overkill… and will likely see one if not both of these guys eventually flush out once the latest fad dies off… not that there are a lack of ugly houses, just a lack of buyers to support em all.

Now, what would I do? Well if wholesaling is your desire, you need a STRONG buyers list… locally some wholesalers I know have a buyers list of about 600 deep… but in reality only about 25 of them are really true players…

Me personally wholesaling is very very little of what I do, and I started out with less than nothing when I began, I have done rehabbing and retailing or holding… always buying very very very much below market, so I can sell in ways no one else can or is willing to… its still work, and its still frustrating, but it works… Not only that, but whenever I do offer something wholesale, which isn’t all that often, I can speak with absolute authority on the value of the home and the cost of the repairs…

Instead of trying to flip, maybe you need to repair them yourself… If you buy right, the money will be there, trust me on that. It will likely be COSTLY to borrow it, but you figure it into your costs up front and you will be fine. Rehabbing and retailing is far more work than just quick flipping… but you don’t have to worry about being screwed trying to play middle man in a deal.

Re: Real estate didn’t work for me - Posted by Crassus

Posted by Crassus on February 12, 2006 at 12:27:30:

I’ve read your post and I must say I applaud you for actually coming out and stating a very real fact about RE flipping. Despite the media attention and success stories we constantly are exposed to on this board and others, the fact remains that short-term flipping, buying at 70-75% and then flipping for a fee or higher price as quickly as possible is very tough to do, especially in a hot market. Until recently, I lived in San Diego, which was, until last year, an uber hot market. I belonged to some RE investor clubs and networked with CA investors and don’t think I came across more than 2 or 3 people who made any substantial money buying at a big discount and then reselling for quick profits during the years 2002-2004. I did meet many, many people-hundreds, either online on in person who made a killing in CA buying, as Robert Campbell recommends, when the market
was down, often at below current market price but not always, and riding the appreciation swing up. The luckiest bought CA RE between 94 and 97. A good portion of these people exchanged their highly appreciated CA real estate in 2003 and 2004, single family houses that appreciated 300-400k-you may think that these were rare windfalls but I assure you this was quite common-far more than people buying 70% under and flipping-anyway they exchanged for investment property in less expensive areas with more value and upside potential. The flippers who did make money during the big CA boom made their money buying at market price or if they were particularly skillful, at 2-10% under value and holding for perhaps a year or so, selling and making huge bucks on the appreciation.

I know appreciation is a diry word in some creative real estate forums and the only valid way to invest is supposed to be the conceptually fool-proof way-buying below market and flipping or keeping for cash-flow but these methods, although they work for a good many people and are theoretically safer-after all you can’t be absolutely sure of future appreciation- aren’t always easy or feasible in a particular market and especially market cycle.

I relocated to Denver Colorado for non RE business reasons. The market’s been stagnant here for the last 5 years. Many predict, with the recovering CO economy, which is counter-cyclical to CA, the market will improve. We’ll see. But even here, with the exact opposite market situation of CA from 02-04, flips are hard to do. The problem isn’t so much buying low enough-it’s still very tough to do even in a flat market- but selling quickly enough to avoid thinning margins.
My recommendation for you, after my long ramble above, is to perhaps acknowledge that flipping is not for you.
If you want to continue to invest in RE, my suggestion is to buy rental property that at least breaks-even in a market that is currently stagnant. Make sure you have some cash reserves too. With even 2-4% appreciation and leverage, your return won’t be that bad-and wait for the market to pick up in your area. I doubt we’ll see 20% appreciation in Texas, Georgia or Colorado but we most likely will see improved local economies there and improved appreciation of maybe 5-9% annually. Then when the market slows down there, sell and exchange for another slow market that is poised for an upswing-like CA will likely be in 2010 or 2012. The land constrained markets are where the really big bucks are made but the cycle has to be on your side.

The beauty of this approach is that you don’t have to do nearly as much work as the short-term flippers do-real needle in the haystack finding stuff, knocking on doors, etc. Concentrate on increasing your earning power in your own business or job so you have more money to invest.

Re: Real estate didn’t work for me - Posted by Frank Chin

Posted by Frank Chin on February 12, 2006 at 05:57:05:


I’m in NYC. Don’t feel bad because I tried my hand in flipping for a year, i.e getting true deals, not those that’s a mere 10% below, and found that there’s not enough to go around. The major reason here in NYC is becasue of the high land value for junkers, builders simply pay cash for the land to build on.

In fact I partnered with a birddog finding just such deals and my part was to come up with the cash to tie down the deal. You can do the same.

But the important points I find for someone in business is:

  • Its good to plan, so you have some reference points to move ahead.
  • BUT things rarely go according to plan.
  • Find out what’s wrong with the original plan and adjust accordingly.


  • Should you start partnering with someone with cash?
  • Should you start scouting in a wider area for deals??

Also, there’s an issue of personality. I have about 8 employees working for me, and I find that what comes easily and naturally for one, is difficult for another.

We sell tires at our business, and the current “help” behind the counter simply gives the price out. The guy before him sold cars, and when a customer comes in, chats with them, find out their needs, where else they looked, etc. This guy’s success rate in “closing the deal” is much higher. But realize the skill level to do this is different.

There’s probably more issues involved. But its time to get your creative juices flowing.

Frank Chin

Re: Real estate didn’t work for me - Posted by Texas DragonFly

Posted by Texas DragonFly on February 11, 2006 at 20:42:19:

Hello Too! Where in the south are you? I too am in the South, an East Texas town of aprox 75,000 people to be exact. Believe me, I feel your pain. I too have tried to do some flips only to have a buyer with money wait until my contract expired and then worked directly with the seller. I have since moved on to working on Rehabs. Even so, rehabs aren’t much easier. In the past couple of days, I have found some potential properties, you know, the ones with grown up yards, needs new roof etc. Problem is these types of homes sell for 40-50k in GOOD condition! Such a depressed market down here. If I wanted to do one of these deals, I’d have to offer below 20k! And my experience shows that these owners are so stubborn that they would rather hang on to the property and pay taxes than to sell “grandpa’s” house for 15k! I have been fortunate to pick up a home or 2 for this price, but they needed lots of work. It just doesn’t seem like there are enough motivated sellers here to make rehabbing a living. I would love for someone to prove me wrong. However, I love real estate, and I plan on keeping on. I know I’ll succeed, but probably only after I leave the south.

Don’t worry, you’ll get a 2nd chance … - Posted by Robert Campbell

Posted by Robert Campbell on February 11, 2006 at 20:06:14:

All is not hopeless. Don’t shoot yourself yet. Here’s how you can make your fortune in real estate:

  1. After the impending real estate crash, buy a fixer at a bargain-basement price.
  2. Use contractors who are desperate for work to convert the dump into a gem.
  3. Rent it out at break-even cashflow.
  4. Sell it 5 to 7 years later at the market cycle peak.
  5. Put your money in the bank and repeat steps 1 through 4.

Robert Campbell

Re: Real estate didn’t work for me - Posted by me neither

Posted by me neither on February 11, 2006 at 18:42:27:

I worked for real estate.

Re: Real estate didn’t work for me - Posted by Elizabeth (NJ)

Posted by Elizabeth (NJ) on February 11, 2006 at 18:12:28:

Dear Too,

I’ve read about half the postings here in response to your initial posting and I hope you have taken solace & learned from those who have taken the time to respond to you. That’s what this site is all about.

  1. I recommend that you join a real estate investment club in your area. Go to the meetings - many of the people there will be new to investing & others will have a range of experience and you will hear their stories of success, disappointments, etc. and you can learn from them.

  2. Find a mentor in your area who can teach you how to get and hold onto great deals - yes, even flips – that won’t be stolen from you. I suspect that you’ve had some deals stolen because you may have openly discussed what I consider proprietary info. Keep all your important information to yourself. That includes the address of the property if you are not in contract with the seller yet. And contrary to your comment, there’s absolutely no way anyone can steal your “flip” if you & the seller are in contract and if your contract properly protects you. If you’re unsure about your contract form, consult with an atty - it will be well worth his fee to get an iron-clad contract that serves your needs that can be used in your future deals.

  3. Develop a “niche”. Determine ahead of time what you will do and what you won’t do. If you want to buy and flip, develop a strategy & a formula for making those kinds of deals work. And don’t be fooled by people who tell you that you can only make about $5K on a flip. Many people on this site do only flips and have been doing very well for themselves. There’s a lot of info on this site to help you.

  4. Keep in mind that most of us have had at least as many (or more) failures as successes. The trick is to keep going despite those failures. And if you’re not learning from the failures and missed opportunities, then you’re not learning at all.

  5. YOU are the only one who can motivate you. The books, tapes, whatever, can give you practical advice, but only you can push yourself forward and over all the hurdles in your way.

  6. Finally, don’t be frozen by analysis paralysis.

Good luck & happy hunting for great deals.


Re: Real estate didn’t work for me - Posted by Hank

Posted by Hank on February 11, 2006 at 17:22:48:

Have you tried to partner up with someone that is experienced or maybe hook up with a mentor?

I bet they could steer you in the right direction.

It can be very hard starting out, but like they say…

“If what your doing is wrong, then the opposite must be right”

Good Luck

A matter of perspective - Posted by Bigfoot

Posted by Bigfoot on February 11, 2006 at 16:24:48:

The tone of your message is what didn’t go right for you. OK I have a few good deals, a lot of mediocre deals, and 1 nightmare. As I look back at them, I realize that my nightmare is simply a learning experience. My first ‘investment’ type of deal was a junker back in '92 to use as a personal res. We (the wife and I) picked it up for $20K and put a lot of sweat into it. A few years later we refied, paid off the land contract, and took out cash to buy a rental. A couple of years later, we’d outgrown the place, so refied again and moved to a larger place, using the appreciation to finance the down payment on our new personal res. Kept the old place as a rental too. Refied again in '01 and bought yet another rental. This past year the taxes caught up and the total PITI surpassed what I could get as rent. NOW do I concentrate on the negitive cash flow? Not at all. That place in essense became 4 places. Out of that I got 2 rentals that DO have cash flow, plus a decent personal res. Meanwhile it contiues to appreciate.

Conversaly, I bought a junked 3 unit, where I did do my dilligance, and was out and out lied to by the village and building insepctor, about what would be needed. When I complained, they filed suit, which I did not win. Am I furious? You bet. But I know this is simply part of learning my lifelong career. I will simply avoid that town in the future, and move on.

Finally, I have never yet been able to get an acceptable offer on one I rehabed, so I’ve just held on to them and taken the appreciation. I simply went to plan B, which I don’t think you have. Net worth has increased 10 fold since I started keeping track in '96 when I bought that first rental.

My .02 is that you haven’t failed enough to find the succeses. Don’t be afraid to fail, woory about the chanches you miss when you don’t even try.

Re: Real estate didn’t work for me - Posted by Bill H

Posted by Bill H on February 11, 2006 at 14:47:07:


Read your post and the others…lots of good advice.

The first thing you need to realize is that any franchise, guru, book, tape, seminar, etc…only offers you the opportunity, education and chance to LEARN…AND…POSSIBLY…SUCCEED…none of them GUARANTEE anything.

Now that you are down and depressed and thinking about quitting…take these ten little two letter words and print them out on a sheet of paper as large as you can to get them all on one sheet of paper. Put them on the mirror of your bathroom, in front of any place that you can…they are the TRUE key to success.


If you think you can, you can…If you think you can’t you are beaten before you get out of the gate.

I know a guy who spent over $70,000 for books, tapes, seminars…and has NEVER bought ONE property. He too got all the “Good Materials”…but has so far failed to put them to use.

Good Luck,
Bill H

Hammers, hype and full toolboxes. - Posted by John Behle

Posted by John Behle on February 11, 2006 at 14:35:57:

Your post seems to invite a direct and pointed answer, so I’m not going to step lightly to avoid anyone’s feelings. At the same time, all we have to work with is your post, so all the details may not be there. But, with what is…

I don’t see a sign of any kind that you know how to find a good deal. Not even a good one let alone a great one. Trying to flip properties with as little as a thousand dollars profit is one of the absolute worst approaches you could possibly have taken. A real estate agent would make a great deal more with much left effort and little risk.

If you can’t make at least 5-10k on a flip it is a waste of time. And… flipping properties is one the most overblown, over-hyped techniques that is out there, but it is followed closely by almost every “popular” technique out there. Flipping hasn’t worked for you and you are not finding deals that are good enough. When there are, it seems like there is a total lack of control and you are prone to getting ripped off. Again, at least an agent has protections. Having greater control is an essential element.

When you do find a good deal, trying to flip it in the way you have has just been a set up to get ripped. And, that’s a big part of the challenge in the whole approach. If you do have enough margins to make a decent profit, a large portion of the buyers are going to do anything to get it. I wouldn’t even consider that approach without having the funds to control it. Raising money for real estate deals is absolutely simple when the deal is good enough. But, consider something else.

I don’t buy that you are as educated as the post claims. It isn’t about the amount of money you spend, but about the quality and reality of the education. All in all, the more expensive courses are usually the worst choice. Some are so ridiculous that you could get the same information in a few cheap books or course than the thousands you pay because of the “guru’s” popular name. That is solely a result of marketing and self promotion. It doesn’t mean that course is better, usually it isn’t. True educators and practitioners tend to shy away from traveling the circus circuit. Way too often, the big names have little experience, little to teach and sometimes even an incredibly appalling lack of education. Some can?t answer even the simplest questions if it isn?t in their script. It also leads to some teaching impractical or even un-ethical or illegal techniques because their own education is so lacking that they don?t even know laws, procedures or reality.

But, in whatever courses you have, they seem to have glossed over how to find a good deal or you’ve missed it. That doesn’t surprise me. My guess would be the courses are “trendy” courses focused on how to make millions on some “new” technique. Reality is there are very, very, very few techniques out there that are new or approaches that are so amazing that they are copyrighted and proprietary. Those are sales pitches. There are whole courses claiming to be the latest new, exciting, proprietary and advanced techniques that you could find in many books or courses from the 80’s. Yet, they claim they created it.

So, from your post. The education you have is inadequate in the area of finding great deals. You are over-focused on doing what you think or have been told is the best approach instead of finding what really works. You don’t have the team and resources needed - like capital to capture or truly control a great deal if you did dig one up.

Also, you get ripped off. Either you do not know how to protect your interests or are too timid or trusting. You either have to change that approach to protect yourself or find a less “thief prone” method of trying to make money. If you haven?t read ?Winning through Intimidation? by Robert Ringer, read it today. If you have, read it again. Too many people deprive themselves of the book because of the title which Robert said one day was his worst mistake. It would more aptly be titled ?How to not lose through being intimidated and ripped off by others?.

Your rentals sound like mediocre deals at the best, but we have little information on that. Again, the deals are NOT good enough. It isn?t about the market. There are deals in any market and techniques that work in any market. Just not always the same ones in each market. Again, that is a problem with the latest ?trendy? course. The technique they claim will get you your Lear Jet may not be practical in your area. And, not knowing what techniques work in a particular area is again a lack of education. Both in real estate principles and practices, but in local market conditions. Few courses teach you how to know your market.

Make your money when you buy. Period. That is the absolute greatest error people make these days. The books aren’t titled “making money on mediocre deals” (though that title would get two thumbs up from John Reed), yet that is basically the premise of many courses. A great deal can lessen the need for carrying costs, etc.

I see three flawed approaches you have taken.

  1. Flipping deals for too little profit to make it worth your while.

  2. Trying to flip deals with bigger profit, but not taking necessary actions to protect yourself. In some cases, the only true protection is to have the required money of your own or a private investor.

  3. Mediocre rentals. A friend of mine wrote a great article twenty some years ago. He was probably the best real estate accountant the country has ever seen. He compared the typical approach of people buying rental properties with little or no cash flow - with getting a second job at a 7-11 or something similar. The job won out financially. That doesn’t mean quit real estate, it means there are flaws to some of the typical approaches people take - especially when it comes to holding and managing properties for the long term.

So, what is the solution. Learn to find great deals. That IS possible, but takes some training and focus. Many courses and authors truly do not teach or even know some of the best sources of good deals. A part of the problem with that is the “hyper-focus” of much of the newer courses. From a marketing perspective, it is great for them, but not necessarily for the student. People buy into the latest “technique” and lose the heart of the profits of creative real estate investment.

It’s the old “hammer” analogy. “He that is good with a hammer thinks everything needs a nail”. And they have elaborate courses teaching how to use a hammer and send their students out looking for deals that need nails. Then the next guy makes his marketing mark in the world by coming up with a course about screwdrivers and everyone raves about how wonderful the approach is.

A couple decades ago marketing took over the real estate education industry and reality took a second place. It’s become the “Scotch Boutique”. A skit from Saturday Night Live focuses on a store in a mall whose sole product is “Scotch Tape” and illustrates the error of being too focused. The characters just could not understand why there were not lines of people waiting to get their tape.

I have NO IDEA going into most deals how it will turn out and what techniques will be used. I don’t run around with a hammer. I look for a problem and have a full toolbox with the appropriate tools. Most great deals are much different than how they looked on the surface and different tools (techniques) are used than would have been anticipated. Most of the time, it is a combination of many tools. It might be a foreclosure deal where we buy the first, discount the second, trade out the third, refinance the property, sell back to the original owner (or someone else like the tenant), pull the owner out of bankruptcy, fix up their credit and arrange a lower rate refinance and make profits on all elements of the deal while saving someone?s tail end.

That’s a big part of the problem too. The “hammer guy” finds what could be a deal - but - because he has a hammer and ?hammer training and focus? doesn’t pull it off. They do not see the potential of a different technique and in most cases wouldn’t even understand the technique that would actually pull it off. Some of my very best deals have been referred to me by hammer people.

Besides finding better deals, even more important is ?creating great deals?. My best deals are usually deals that very few people could even see as being a deal. A total lack of knowledge about my techniques I am using. You look at a deal and see potential based on your knowledge and the techniques you know. I look at a deal and see other areas of potential. Most people do not know enough about a deal to know the potential. Again, just running around looking for visual clues to properties that need nails. The true potential of deals is usually much deeper under the surface than most potential investors look - or know how to look.

Before real estate I was a mechanic, built street racers and ran a gas station. I can still get into a car and based on sounds or other clues usually know what is wrong. Over a phone call, I can tell a relative why their car won?t start or runs poorly. Most real estate investors are like the clueless person standing on the edge of the freeway with a dead car - when wiggling the battery cable would solve the problem.

True, long term, real estate profits are best accomplished by having a rounded knowledge and a full tool kit. A problem solver approach works. People have real estate problems and you can profit from fixing them. It doesn?t have to look a certain way. A problem comes along and I may buy the property, I might buy the note, I might refinance their loan, make a hard money loan, do a sale-option-leaseback, or maybe a consulting fee.

When you have the tools, you can also live off of the deals that others can?t handle. All of a sudden, the ?competition? at a real estate club or in your town, ends up bringing you deals all day long that they can?t put together. I guess my background also helped solidify this in me. I started one of the first REI groups in the country almost three decades ago. Being a real estate agent, exchangor and better educated than most of them led to helping them. Every week, almost every day, I had them bringing me deals where they ?smelled? a deal, but did not know how to put it together. Way too much of the time, I took my time and taught them how to do it and was lucky if they even picked up the cost of the lunch.

Eventually, I started charging consulting fees and then went on to giving them a referral fee for me to do the deal. Mainly because they griped about my hourly fee. Charge them $150 per hour for ten hours a work and they totally overlook the $30,000 profit they made and think I over-charged them. No thanks! I learned to give them the $1500 and not even tell or teach them how I did the deal or what I made. I usually did teach them though, so they could do the next deal themselves.

I took much the same approach when I made the transition to note investment. Eventually I was thrilled with the real estate version of ?diploma mills? churning out people that only knew enough to be dangerous. When they know you as the number to call when they can?t put a deal together or broker it to their ?national database of investors? then there are deals all day long. I can?t think of a deal I have ever lost to one of these guys, but they have brought me many. I just send them away confused. They know they made $1500, but have no clue I made $15,000 with techniques they will never know.

Need to go, so I?ll have to end the post now. As long and tedious as my posts are sometimes, I should probably say ?thus endeth my epistle?.

Re: Real estate didn’t work for me - Posted by Ed Garcia

Posted by Ed Garcia on February 11, 2006 at 13:52:39:

Too Embarrassed,

You wrote your post to vent and hopefully get encouragement from our group.

They have each given you their perception of your scenario and what should be done.

My question to you is what is your next step?

Ed Garcia

Re: Real estate didn’t work for me - Posted by Brian (UT)

Posted by Brian (UT) on February 11, 2006 at 13:09:13:

Maybe you were partly right, how about giving us a clue? Where were you trying to do this, and what gurus did you try for inspiration? Maybe that is part of the problem but as far as we know you could live in Antartica and bought EZmoneySams course, only usable in India during monsoon season.


Re: Real estate didn’t work for me - Posted by Mark (SDCA)

Posted by Mark (SDCA) on February 11, 2006 at 12:06:53:

First, I am a firm believer that personality plays a HUGE part in the success of REI.

For me, I have done probably 2 “flips” in my entire life. I think I maybe broke even over the 2 of them.

I bought a MHP and lost more money than I ever thought possible.

I bought and held 4-plexes. It was ok and I made decent appreciation and not bad cash flow but the PITA factor was way up there. The best thing I ever did with apts was to get out when I did.

But my financial success in buy and hold SFR has dwarfed any failures in other areas. I don’t “see” any of the traditional problems that authors write about or maybe they just don’t bother me. What I do know is that this niche is “mine”.

So my advice is to keep looking. It sounds like flips are not for you. And maybe houses aren’t either. But something else might just be…

Good luck,


Take a Long hard look in the MIRROR - Posted by PJ

Posted by PJ on February 11, 2006 at 12:03:19:

Too embarassed,

First off, realize this post is NOT to bash you - It is just the truth & you should be thankful I’m not charging you for this great advice :slight_smile:

Also, I am a full-time Investor for 1.5 years now in a very, very competitive market in the south.

You are blaming other people (rehabbers, contract stealers, sellers, market) for YOU not being successful in real estate.

You are taking NO responsibility at all for not being successful.

Think about this. Do you realize the big problem in this?

It seems you are placing the weight squarely on other people’s shoulders in order for YOU to make money.

With your current attitude, I guarantee you will NOT make money in ANY business, ANY locaion in the world.


Succesful people don’t depend on “other factors” to make them successful - they make things happen.

Real estate, like any other business, is hard.

If it were so easy to make money in real estate, every joe blow would be a full-time investor.

By your post, I can tell you still dont “understand” how to make real estate deals happen.

$1,000 on a flip? Are you kidding me? The minimum I make on flips is $3,000 & as high as $11,000 on a simple contract assignment.

Some people are not cut out for business. They expect to be spoon fed and things work out like they do in Seminars and courses.

Guess what, it doesn’t work that way. YOU gotta roll with the flow and make things happen - that’s what successful people do!

Now, lets look at some specific things you BLAME for YOU not being successful:

You say your market is bad and too much competition.
I work in the south in a city where you will see a bandit sign EVERY street corner. I’m probably in the top 5 most competitive markets for real estate.

So what if you have tough competition? You can either sit back n let people run over you, OR , you can take it as a challenge and do something.

I do aggressive marketing and try to keep myself with good leads coming in.

Also, if OTHER investors in your area are making money - WHY CAN’T YOU? What are they doing that you are NOT ?

Yes, I have had buyers cheat me and try to go behind my back - guess what, I take the necessary steps to PREVENT buyers from going around me - With all the courses you’ve taken, Please tell me you KNOW how to do this.

Yes, I have Sellers asking Full Market Value and some asking 5k over market value. So, what do you tell these sellers? " NEXT ! " - Again, you should already know this from all your courses.

YOU say you have no money or credit. I made ALL my money this year WITHOUT getting a single loan, WITHOUT lifting a single hamner, WITHOUT using any credit. Heck, I didn’t even USE MY NAME on anything.

So, take a long hard look in the mirror. If you wanna be successful, start with CHANGING yourself.

Once you “fix” your mind and have the correct attitude, then only can you set your self up for success - that goes for ANYTHING in life really.

Good luck,

Dear Too: - Posted by David Krulac

Posted by David Krulac on February 11, 2006 at 11:37:44:

  1. Most people who have invested in re have been in your shoes at one time or another. Having been in re since the 1970s, I can tell you that almost all the people from then are either dead or out of the business.

  2. There is a high turn over rate in re. Its not easy and there is more and more competition every year, particualrily with the runup in prices. In 1981 when interest rates were 18-20% most people dropped out or didn’t enter re. But I’m not praying for that either.

  3. IMHO, almost every market is workable, and I’ve invested in 7 or so states and looked at property in other states too.

  4. For me I like investments close at hand but other have been sucessful with long distance investment.

  5. The re market is dynamic, what worked before might not work now and vica versa.

  6. To a man with a hammer verything looks like a nail. I believe that you/me/everybody needs to have many tools in our real estate tool box. Junkers are one niche in the market, but I wouldn’t do only junkers.

  7. There are niches and if you find the right niche in your market, there may be little competition. If junkers are highly competitive, then you either need another niche or you need to get to the junkers before everybody else.

  8. There has been lots of hype and re has been oversold.

  9. You definately can make money in re.

  10. re is not for everybody and if you decide its not for you its not really embarrassing.