Rich Dad - question about one of his examples - Posted by Greg

Re: More than one right answers… - Posted by GL(ON)

Posted by GL(ON) on February 06, 2002 at 08:18:02:

All right, go ahead. Take Kiyosaki’s books as your guide and try to get ahead using the “wisdom” in his books. What do I care?

My statements are based on facts and experience. But every time I go into details, that doesn’t count with you. It goes right over your head. And when I say take his “big picture” and enjoy it , you don’t like that either.

What it comes down to is that you don’t disagree with what I say, it just annoys you that I think your hero is a phoney.

Re: Again whatever… - Posted by JohnBoy

Posted by JohnBoy on February 05, 2002 at 24:33:39:

I didn’t see anything about asking anything pertaining to tax sales. He asked about a house he claimed to have bought from foreclosure.

Here is what he said:

“”“In RDPD, Robert K. gives an example of a house bought in Arizona. The market was poor, and $100K houses were selling for $75K. He bought one in forclosure for $20k (which he borrowed), advertised it for $60K with no money down. It sounded as though he financed the $60K for the buyer. How could he sell the house to someone with no money down if he already owed $20K on it? Wouldn’t there be a 1st lien holder for the 20K? What would they say about selling it to someone else and not paying off the original 20K. I assume Robert did not pay off the 20K since he sold it with no money down.”“”

The question is a general one that pertains to anyone buying a property with a mortgage on it and then reselling without paying the mortgage off. How can you do that? Simple! Sell on a wrap!

If he or you or anyone owed $20k and there was a 1st lien on the property for $20k, then how can you sell it for no money down when there is a 1st lien for $20k on it? Simple! Sell on a wrap!

What would the lender say about selling to someone else and not paying the $20k mortgage off? Who knows! Who cares! They could call their loan due. Then just refinance! They may say nothing at all! They may not even find out!

But the general question was how can you sell a property by financing the buyer if there is another lien already on the house as a 1st mortgage? Does it matter what the details of RK’s deal were to be able to answer such a general question as this?

Re: Correct me if I am wrong… - Posted by GL(ON)

Posted by GL(ON) on February 07, 2002 at 11:34:38:

We are getting off the topic here. I started out by warning newbies to be careful.

If you know what you are doing and are prepared to handle the risk then go ahead and do sub2 deals.

Let me ask you this. Would you recommend to a person who has never done a real estate deal in his life, that he should go out and start doing sub2 deals right away without any help or training? Or would you try to warn them of some of the pitfalls?

Re: Not Exactly… - Posted by GL(ON)

Posted by GL(ON) on February 07, 2002 at 11:29:20:

My hat is off to you if you can make money following his advice.

My own knowlege and experience teaches me that Kiyosaki is not speaking from experience. His knowlege is second hand, third hand or simply made up based on nothing. He is telling inexperienced people what they want to hear. Some of it can be dangerous if taken literally.

Re: More than one right answers… - Posted by Suzanne

Posted by Suzanne on February 07, 2002 at 24:32:01:

“What do I care?”

I know you care, or you wouldn’t be defending your position so much. It is very good to care. You and many who back up RK see things in a different light.

You are right that this book can not be used to start real estate investing, start your own company, or jump into investing.

His books can be looked at in a cookbook type sense, but very different than what you believe it is. It is not a cookbook on how to do, it is a cook book on where to go.

“All right, go ahead. Take Kiyosaki’s books as your guide and try to get ahead using the “wisdom” in his books.”

I already did with the step by step where to go approach. That is why I am here. I took his concept about changing the way I look at finances and making money. Then I looked into what type of business I would like to be in. Sampled some, because he never says specifically which business to get into. He gives suggestions and says to go into the one you would like best. He says if you get into se-self employment you need to get over into B-business as in having other people doing the dirty work for you. Another way to put it using other people’s time to make money for you.

Now I am here excited and learning the nuts and boltz of Real Estate Investing. I would have never gotten to this point if I did not read his books. These concepts are not taught to the lower class or poor. Many middle class do not even know them. After you know them, you think it should automatically be common sense.

I honestly believe RK puts them in the simplest terms possible because he knows that there are people who will have trouble understanding what he is saying if he doesn’t. If he told the how to in his deal that was being asked about, exactly how many people would know what he is talking about if he used real estate terms or even be able to follow the transaction without some knowledge of REI? Not many. They would be asking can this actually be done legally and really get a contervisal storm going.

He writes as if that this would be the first time the reader has ever heard this stuff. Many people who try to help others in the financial sense can’t pass their knowledge to others without confusing the other person even more. It is so basic to the knowledgable person, that they have a tough time putting it in a basic format. I tried helping someone study for a test while in college. It was basic to me, but I could not get the concept across to the other person because I could not put the information back into laymen terms.

When I am ready I will take the next step he suggests and get into investing. I have alot to learn about the subject, but am getting my feet wet through learning about it at motelyfool.com.

As a final step always keep learning, and learn from others who are more knowledgable than you are.

As someone pointed out to me, this is a first grade course. You need to learn your basics in first grade before you can go on to second grade. You need to pass grade school before you can get to high school. I imagine for some that this is so irritatingly simple that they blow it off. For others they can not think it is this simple, and have to look for the compelexity in it.

There is wisdom to be learned in his books. I guess it depends if the person feels that he or she already knows this wisdom, and/or if the person is open to receiving this wisdom. I get a sense that you are already past RK’s books and are ready for something more advanced. I do hope you find what you need and what you are looking for as your quest for fiancial knowledge and wisdom continues.

Wisdom… - Posted by MatthewC

Posted by MatthewC on February 06, 2002 at 11:56:11:

The problem seems to be the disagreement of “wisdom”. More and more, I see the ability to see simplicity in a world of complexity is where wisdom lies. You seem to see wisdom as the ability to make things complex.

Now before you get upset that I don’t think details matter, I do read contracts and the fine print. I try to be meticulous in presentation and implementation. Details matter. But remember, if details mattered the most, the engineers and accountants of the world would be running the major companies and be the entrepreneurs of the world.

Your statements are based on YOUR experience. That was what I am saying. It is a limiting factor. As I said, there are 6 billion people on this world and nearly 300 million of them in the U.S. It would be a bit vain for anyone person to think they have all the answers in any one subject area.

I don’t blindly believe everything that I hear or read. But I also realize there are things I can learn from other people with new ideas and concepts.

Actually, it doesn’t bother me at all that you think my “hero” (try the word “a teacher, educator, speaker, etc.”)is a phoney. What bothers me is that you are stating your opinions and presenting them as undeniable and unquestionable facts.

Good question… - Posted by MatthewC

Posted by MatthewC on February 07, 2002 at 14:19:49:

If a person has never done a deal in his life, I would not recommend that they do ANY deal without some education, sub2 or not.

There are some people I would simply say “Don’t do Any Deals”, period because their psychological makeup just isn’t there. I don’t want to get into what types of people they are but those people do exist.

But to answer your question directly, sub2 deals are not for the inexperienced or newbie unless they get a good education or have some guidance. And yes, I would warn of pitfalls BUT I would also state the possible remedies.