Maybe I wasn’t wrong after all! (long) - Posted by Buck_GA
Posted by Buck_GA on August 02, 2002 at 12:03:06:
A little while back I read a Ron Star reply to someone’s request for help. Then another post from a reader criticising Ron’s answer saying he was only trying to promote his book. The poster further justified his reply by saying that in all the years, Ron was still working a full time job. Well I searched the posts and found nothing indicating that Ron was promoting his book. I read Ron’s message to the newbies that said it would take 15 years to be successful. Well I disagreed with that statement, but that’s ok, we all have opinions.
I then asked Ron a question: Are you comfortable in you position as far as real estate investing and your job goes? I expected him to answer “Yes”, at which, I was going to reply, "That’s what we are striving for! Our personal comfort level. If he is happy holding a job and working real estate part time, then indeed, he is successful. "
Ron Star burst my bubble! He replied that you weren’t happy with your job and your level of real estate income. I didn’t criticize him for it or look down on him for it. If anything, he was an example of some of the “less fortunates” that didn’t make a million dollars in three years or less as so many gurus try to sell. So much for that.
Later, I read his article again. Again, I disagreed with his 15 years to success. But one thing about his article that was pleasant reading – No Hype! I am so tired of hearing the fast-talking hype about getting rich quick with real estate. It is true, Real Estate is a great vehicle to do so, but not every investor will get there so quickly, if at all.
Then, today I read this entire thread. I learned something new! Ron hasn’t been working for 25 years. Rather, after, what 15, 20 years? Ron got his a$$ kicked by a bad deal! It doesn’t matter to me why that happened, the fact is that a fifteen plus year veteran got bit hard by a deal gone bad. Thats a WARNING! A warning to newbies! A warning to the seasoned investor! A warning to ME!
Additionally, I learned today that so many investors from the timeframe in which I first started learning real estate investing have gone bankrupt or are in jail. This is news to me.
I first started learning real estate investment in 1985 with a Carlton Sheets course. I had several opportunities to apply the techniques but chickened out… buck buck buck buck! I was never comfortable with the risk to reward ratio. According to the methods of the day, I was expected to buy property using any means I could find. Risk my credit from anywhere I could get it, Risk the bank calling a DOS clause. Leverage the property to the max and Risk not being able to afford to make payments with only $100/month positive cash flow.
Until now, I have believed that in that period I had made a bad mistake. I thought I was wrong. Now, maybe I am thinking I was right in postponing my investment activities. At the time I was looking into this, another investor took action. He purchased 6 homes placing $4000-$6000 down each and taking over payments. Then he rented each house for $100/month over the monthly payments which ranged from $400-700/month. One month he came buy happy to see that one tenant in his six homes was still there. Five had bailed out and by the time he found out it cost him 2 months payments each. He had to take time off work borrow the money to make payment and clean up the properties and find new tenants.
In all fairness in 20/20 hindsight, I believe it would have been the wrong thing for me to have invested in real estate in the way I knew how back then. Now things are different. I know different techniques and they have built within them certain safeguards that have made me more comfortable with investing. I am working steadily towards getting my first piece of property and building my business.
Ron Star’s statement that it will take 15 years to become successful, is, in my opinion, wrong, but, I will give him this – It may not take 15 years to BECOME successful, but it could very well take 15 years to PROVE your success.
BTW, I am certainly glad I did not criticise Ron Star as earlier mentioned, otherwise I would be eating crow right now.
Thank you Ron, and thank you all for this lesson I learned.