Should I trust this "mentor"? - Posted by David-Mi

Posted by HR on February 07, 2000 at 17:18:46:

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Should I trust this “mentor”? - Posted by David-Mi

Posted by David-Mi on February 06, 2000 at 02:21:48:

I found a real estate agent (he’s liscenced but works only as an investor)who will work with me. He said he would work with me step by step in putting lease options together.

After I talked with him at his office (a mobile office in one of his properties under contract) he told me to forget about lease options,“just get them out of your head”, he said. He specializes in putting people with poor credit (that can be financed) into low cost homes. The price is non-negotiable to make sure he makes a profit from his buying price.

He told me not to worry about the sellers because the qualified buyers are harder to find (different from what I learned) Meanwhile I am directing all my buyers that called on my ad to one of his houses.

I just have this eary feeling that I am getting scammed and won’t get paid anything if a transaction occurs.

I feel like I should be matching my own sellers with my buyers.

Do you think I am just being paranoid ar is this guy who has a bad reputation in the Real estate community (I just thought it was because he is one of very few who are involved with creative investing) really on the level with me?

Thanx!
David

Re: Should I trust this “mentor”? - Posted by Alan

Posted by Alan on February 07, 2000 at 19:26:08:

  1. Who says he has a bad rep and why?

  2. Does he have a current RE license? (Was it revoked? Or does he just not work well with other
    realtors, if so why?)
    2a Just because someone tells you about their bad
    reputation doesn’t mean they are “coming clean” and
    are good to deal with) (if it was he who told you)

  3. With whom does he have the bad rep?

  4. I wonder why he told you one thing on the phone…
    ie, that he would work with you step-by-step in
    lease options, and then when you spoke with him in person he totally wrote off the L/O idea. Why?
    Was it a bait-and-switch situation, or did you give him
    information on why you wanted to do it that did not
    seem realistic on further investigation?

  5. Your buyers list is your work product. It is for
    sale, not to give away.
    Information about buyers and sellers is the stock-in-trade. Are people not frequently
    referred to “forclosure lists” , which they buy,
    and also advised to pay for information on how to
    find their own pre-forclosure sellers?
    What if you found a lot of preforeclosures, and spent alot of time researching this, and then called all of
    your (I hate this) "friends and neighbors and family"
    to see if they wanted to buy? What if none of them were in a position to? You wasted your time, the
    sellers time and your friends, neighbor, fam time.
    Now what do you do? Get another hobby or shop your list?

(Seems sellers are easier to gather data on, as to
timing needs than are buyers, I think…buyers don’t
file things, or default…but those sellers that do
will buy something later, not necessarily in your market (your city)).

  1. What’s in it for the Realtor/investor? Is he really
    going to teach you the business, or will he just tell you how hard it is and make you feel greatful that you can 'help’
    all these calls you are getting, and refer them to him.

(6.a) Best motivation for realtor to work with investor? Any suggestions? Do you use them as buyer’s broker with you as the buyer, and of course pay them
a commission that way. Is this realistic in the real
world, or would they be more likely to flip to
another investor?

  1. You didn’t mention that you had any sellers, but yes, I think your instinct is right , that you should
    match YOUR sellers with YOUR buyers.

  2. If you refer everyone to the Realtor, how are you
    going to get referrals to continue your business?
    (The first goal of business is to stay in business.)

  3. A way to stay in business is to do deals where everyone makes money-ie, Close the Deal, pay everyone,
    (realtor if any, mortgage broker, rehabber, atty, go to the next closing.

  4. Buyers with questionable credit. It’s a market.
    They are not shocked and surprised.As Lonnie Scruggs
    explains in his books, mobile home buyers, as an example, don’t care so much about the price, but the
    terms mean alot.

We are taught that we should reduce
our life long payment on our house by paying down
the principle. However, what if you can’t? What if
some unexpected problem arises? You are less likely
to pay off your mortgage, but in fact, refinance. Except that you can’t refinance if you just got laid
off.

There is a plus and a minus side to everything.
Some people can afford a low payment for quite a long time. Perhaps it’s a little better than renting, but
it is, in a way, a form of rent control. Lets say it’s a mobile home…the lot rent may rise, but the MH payment will not.

Is that insane financial planning? Not really,
In a way, it’s conservative. The mobile home lot is not
financed on an adjustible rate mortgate that can
go too high to be supported by a low-pay, but
easy to replace job. It is often easier and quicker to find low pay jobs on the spur of the moment than it is to find professional jobs, or get
licensed in another state.

Years ago, we were encouraged to “buy all the house you can afford”.
We were taught to mortgage to the hilt. This is how
I was brought up. Well, maybe that is not the right advice for everyone all the time. People Do lose their
professional jobs…engineers, allied health profesionals Do get laid off. These people Do go into
foreclosure.

  1. There is always a buyer and a seller at some
    price. Hopefully with awarness and without deceit…
    It’s the American way? It’s also the Korean way, the
    Vietnamese way, the Greek way, the way of anyone who
    makes a living buying and selling and has the knowledge
    or skills to ALWAYS make a living despite lacking a
    degree or license or meeting other restrictions, or while attending school. It’s the way of anyone who
    doesn’t work for the government.

  2. Time is money. How many many informercial and ad
    work on this. Whether it is the time it takes to look
    for a bargain, or the actual Time-Value-of Money
    math, we pay in this economy for goods and services,

  3. Attracting bad credit folks through an ad is not in and of itself,
    predatory. It could be , but how you handle your leads
    from that gathering process and then on is up to you.

  4. …and perhaps they are just as well off in your
    hands as in that of the mentor.

  5. If you have already handed over leads to this
    mentor, follow up… continue to keep in touch, and
    see how it turns out. don’t just become his employee
    that you work to feed him leads, but rather build your
    own knowledge base, and see what happened, what went
    right, what went wrong, what the ads pulled and what
    happened.

This is the only way to learn. If you don’t have followup, you will never know, you’ll not have a business. Once your leads become his customers, you
have no way to really know how they were handled, unless you follow up. If they were handled badly,
you won’t know. You also won’t learn about all the options they may have chosen.

  1. Attempt to, at all times, be the one who controls
    how skinny the deal is. Give YOURSELF room, or the other party will occupy it.
    Like this analogy: you rent a room, but you have another spare den. The tenant move stuff into the den without consulting you. you complain. The tenant says,
    Well, you weren’t using it anyway, and besides, I need
    it for my clothes to air out. But then you say,
    But my mother is going to visit to go shopping next weekend and I need the room for her. then the tenant says, "my handicapped child needs this room and He’s coming next weekend to meet with his kidyney donor for a surgical consult for
    a kidney transplant."
    So it’s like that, an ANAOLGY, NOT and example. This
    is the push of the various parties trying to make their
    own need the most important ones to be considered.
    Once that has not been covered in a contract, once
    that fictional “room” is occupied, you’re open to
    being expected to make the deal less favorable to you.
    I didn’t mean this as a real example. Anyway, it’s up
    to you where to go from there, just have an out, and
    look for the best deal up front, because, maybe tomorrow, YOU’ll be the one needing the kidney transplant.
    16a…so to summarize, your position is that you
    desperately need every dollar of that transaction, and then, if you feel like you CAN consider a possible
    alteration of terms, then do that in a way that also
    makes sense to you.

  2. Would it be in the realm of your dealings with
    this mentor to have him put up some money in escrow
    to make offers, and then split profits at closing?

This would be a good thing to see answered here…how
to set that deal up, ie, WHAT can a LOCAL MENTOR do
for you financially, and get something to pay him
for his time, and you for yours?

How to write a contract for that so that each party
is covered with non-circumvent clauses–is that
how it’s done? I’m not sure.

Just general thoughts on business.
Comments welcome.

Finder’s Fees - Posted by John Behle

Posted by John Behle on February 06, 2000 at 17:50:57:

Piper touched on the fact that a “finder’s fee” may not be enforceable with this agent. It goes far beyond that - IT IS ILLEGAL for him to pay you a finder’s fee. For him - on his side of the transaction. It’s not illegal for you to receive one, but as a licensed agent, he is in violation of the law to pay a finder’s fee to an un-licensed agent.

Now whether he is a good guy, bad guy, etc. is a different matter - which has been covered. I believe some of the comments made are very important though. First, Piper’s point of not making it a practice to “Trust” or “Not Trust” someone is extremely important. I’ve learned through hard, sad and painful experience that it is poor business practice to even let the concept of trusting someone be a conversation you let your brain have.

Now, my experience tells me that if you have a gut feeling about someone or some good reason not to trust them, run like heck. It’s nearly impossible to protect yourself from someone that is dangerous - either by design, inexperience, sloppiness - or worst self sabotage.

I just believe it isn’t worth the time, stress effort and risk of dealing with people that you can’t or shouldn’t trust. We have to protect ourselves from our own tendancies. One of mine is to want to trust people. Another is to want to give people a chance and the “benefit of the doubt”.

Business isn’t about being a philanthropist. Business should be followed professionally. The fate and future of you, your family, employees, etc. can be too severely damaged by trying to “help” people. I’ve found that there needs to be a separation. You can give your time, energy and financial resources to help people outside of business without having to risk the business.

That doesn’t mean business is “cut-throat” or that you can’t and shouldn’t have “philanthropic” type philosophies and practices. I’ve just learned that there needs to and can be a line of protection for the business.

What’s this have to do with your post? Not much, but some of what was said dredged this up for me.

Re: Should I trust this “mentor”? - Posted by JPiper

Posted by JPiper on February 06, 2000 at 12:56:49:

Just a couple of points.

First, I don?t make a practice of assuming that ?gossip? I hear is true. I listen, because it might be?.but I don?t assume it?s true. You have to be careful when you start hearing about someone?s ?reputation? from someone else. One question might be why are they giving you this information, and what?s in it for them. Do they have first hand knowledge of this, or is it hearsay?

Second, I don?t ?trust? people I do business with. I don?t ?not trust? them either. That isn?t an expectation I enter into a business relationship with at all. I check things out, I get things in writing. When you do this ?trust? is not an issue.

Third, you will be unable to enter into an enforceable written agreement with this guy concerning your buyers. Written agreements for finders fees of this type are NOT enforceable without a real estate license.

JPiper

Re:It’s like dealing with the Devil… - Posted by Ed Garcia

Posted by Ed Garcia on February 06, 2000 at 11:59:23:

David:

I am a mentor. I teach people to become deal makers. If they are already deal makers
I teach them how become better ones. (This is not a solicitation)

I am also an advocate of financing. I feel that with the knowledge and understanding of
Financing, it puts you into an extremely powerful position. Because when you have
the money available to do your deals, you negotiate your deal from a stronger position.

This guy is not just trying to mentor you. If he were, he would have not told you to
forget about lease options. This guy is willing to teach you the business from his stand
point, and use you to as an employee.

His stand point: Is what I call a MOOCH KILLER.

He finds buyers who have credit problems and slams them into a house. They know that
they are limited to any negotiating because of their credit history. They become his prey.

Believe it or not this guy will probably make a lot of money. As you can see with this
M-O ( motive of operation) he has found a NITCH.

This guy is a SLIME BAG, but believe it or not, you could probably learn a lot from him.

David, where I would like to caution you is, that as you spend time with a guy like this.
You develop his mentality or thinking process. His M-O has been around since the beginning
of time and does work. It’s car salesmen mentality.

If you go with him, odds are that you’ll make money. The question is will he ruin you and
make you not care about your fellow man. I don’t think so, I think you have a conscience.
I think that if you go with him and have the attitude that you’re there to pick his brain,
You’ll also learn to over come objections.

David, I’ve done business with the devil.(an expression) There in nothing wrong with that
as long as you know who your doing business with. Once you understand that you’re doing
business with someone who is not honorable, you protective shield goes up and you don’t
let that individual get close to you.

It would be nice to do business only with people that you like, but that’s unrealistic.

David, the choice is yours and I’m sure that you’ll do, what you feel comfortable with.
But in order to be successful in this business, I’m afraid that you’re going to have to learn
how to deal with the devil. Don’t be afraid, I beat him all the time.

Ed Garcia

Re: Should I trust this “mentor”? - Posted by Ben

Posted by Ben on February 06, 2000 at 08:15:48:

Sounds like you answered your own question. If the guy has a bad reputation he got it for a reason. If you proceed with this guy, get everything in writing, independently verify EVERYTHING he says and make sure you have an attorney reviewing and locking up the deal tightly.

I felt I had to weigh in on this post… - Posted by Daniel Lubell

Posted by Daniel Lubell on February 09, 2000 at 17:25:35:

I was recently at a convention of real estate investors who all had their own “best” methods of doing deals. The funny thing was, in spite of some really bad advice that was given out, these people were all still making money. That is precisely why this is such a good business. You can really screw things up and still make money in spite of yourself!

Which is precisely why both Mr. Piper and Mr. Garcia might both be partly correct.

To Mr. Piper’s credit, I am sure he does not “stick it to the buyer” as hard as he possibly can. He probably does not do so because:
A. It is bad business
B. Jim Piper is already successful and does not have to scoop up every morsel of profit.

To Mr. Garcia’s credit, the answer is yes, owner financing does tend to cost the buyer more money.
This is a marketplace where such things are the rule, and so the risky buyer will pay “what the market will bare”.

Having said that, I think it is the kind of business that draws people to the center. In other words, it makes people a little kinder, because they can afford to be kinder. Here is a real life example that just happened to me.

I had arranged some money for a guy on a lease option basis, and I took two of his homes as collateral. He did not pay, we went to court and the judge confirmed that both properties were now ours. If I took both houses back in leau of his payments, I would gain by about $25,000.00. On the other hand, he asked if he could have till Friday to pay. Mind you, we did not HAVE to do this, we already leagally took away his property (in court). But we figured, what the heck, and my partner, Rick Vesole, gave him till Friday.
If he pays, great. I am happy. I don’t need to take a pound of flesh. If he does not pay, I will start up the barbeque for that pound of flesh.

This is not the first time we have been this nice. It is just a question of being fair and the luxury of making enough money to afford to do so.

So, are there sharks in the water? Sure. But the successful ones tend to be nicer sharks. They will only take a leg, not an arm and a leg. Are they doing good things for people?

Well, to quote Bill Zechendorf, one of the most famous and successful real estate investors of all time, “I would rather be alive at 18% then dead at 6%”.

Dan Lubell

Hey Ed What Are You Smoking - Posted by phil fernandez

Posted by phil fernandez on February 07, 2000 at 22:00:07:

Hi Ed,

Ed I’m having trouble with your logic here. As creative real estate investors we are filling a need. A need where credit challenged wannabe home owners need us if they are in the forseeable future going to be able to acquire a home of there own. We are filling that need.

Are we going to lend them money at the current rates. Of course not. We are taking a risk. We are going to lend them money at a rate that will compensate us for our risk. These are the same people that you have turned down because of poor credit. Why do you think that if you can’t be Robin Hood, that we should be Robin Hood.

You make no sense with your argument.

Re:It’s like dealing with the Devil… - Posted by David-Mi

Posted by David-Mi on February 07, 2000 at 15:30:02:

Thanks for the input Ed, I have read many of your threads in the past and you usually give sound advice.
I don’t know who is wrong or right on this issue but it did make me put things into perspective.

One of the facts I forgot to mention is that he openly admitted that he has a bad reputation with the local Realtors, and not one Realtor has bad things to say about him but every one I talk to who knows him!
I just thought it might be the possibility that he is the 1% of all real estate agents who specializes in creative real estate financing and works with investors. Therefore he is a minority, one of few people who really understands how to make money in this business and it threatens his colleagues.

But, when he told me that most of the deals he does the house usually goes into forclosure, but by then he’s made his money and is in and out.

That is what sent the red flags up. I understand being in the business to help people,to help get them what they want when it seems impossible when no one else will help;but how are you helping people when their situation just gets worse with a forclosed house now over their heads?

This is part of the reason I had an interest in lease options because they have time to repair their credit and YOU can educate them how to do it.

But that is just my opinion and I am only a newbie so what do I know?

David

Ed, just admit you are wrong! - Posted by ray@lcorn

Posted by ray@lcorn on February 07, 2000 at 11:57:55:

Ed,

Man, am I glad I didn’t turn on a computer this weekend. That weird radiation that comes out of the screens must have been especially heavy in Southern California the last couple of days. For those of you that have never been there, that’s why the place is so strange … too much silicon. Gums up brain cells. Makes you think you are ten feet tall and bulletproof. Here in the mountains of the east we get the same effect from corn liquor… but the next morning we’re sober. That SoCal silicon brain fade is permanent. It takes the form of the curse of the almost knowing, also known as “Name That Tune” approach to problem solving… you’re certain you’ve got the right answer after hearing a rumor about the question. It’s also prevelant in the news media and Washington DC. I think Al Gore invented it…

Face it Ed, you went off half-c*cked. You got your back up about a guy that MAY have a bad rep, who MAY be trying to hustle some leads, and who MAY take advantage of people, though I see that info nowhere in the post. YOU drew the conclusion that he was a shark, then manufactured an argument to support it. You GAVE him an “M.O.” (BTW, that stands for “modus operandi” which is Latin for “method of procedure”, not that accuracy has any place in this thread) with no more information than the fact he works with people with poor credit. In the words of Herbert Spencer (paraphrased), “There is one malady that will render all cures useless. That is contempt prior to investigation.”

News Flash: The guy works with people who have bad credit. SO DO YOU! SO DO I! WHO IN THIS BUSINESS DOESN’T? He11, I had pretty bad credit myself at one point in my life. I know firsthand what it takes to clean somebody up to get them a loan. Does that make me a SLIME BAG? Give me a break. Why are you such a saint for providing the service and the rest of us Mooch Killers(?) (where did that come from anyway, what a term… sure it isn’t Pooch Itchers… it rhymes with “nitch”… you know, if you lie down with dogs you’re bound to get some fleas… or something like that)

You remind me of arguing with my wife… and that is something I have a LOT of practice at! You start out reacting to incomplete information in an inappropriate manner, then tell the other person it is their fault you got it wrong. You are defending the indefensible, and Piper called you on it. Thank you Jim, I don’t know that I could have stomached the bile that arose listening to a LENDER tell me about ETHICS. Talk about the pot calling a kettle black… When’s the last time you heard of a bank CUTTING a rate for a “credit-challenged” (whatever happened to “deadbeat” or “bandit”)buyer. NO WAY! It is as simple as the risk/reward ratio in a cap rate… the higher the risk, the higher the reward. If everybody could walk into a bank and get what they need, then what would we need mortgage brokers for?

Now for those of you who don’t know us, let me say that I love Ed like a brother, and he knows I’m just joining his and Piper’s fun. But I love it so much when he is WRONG, I just couldn’t resist.

Hope the weather breaks in LA… that silicon cloud is a big one!

ray

Wow. Someone really pushed you button. - Posted by Paul Macdonald

Posted by Paul Macdonald on February 07, 2000 at 01:59:35:

Ed,

I do believe Mr. Piper is correct on this one. This Realtor could very well be a slimeball but without additional information its only a possibility.

But WOW! once again. You really got fired up on this one.

Paul Macdonald

Ed, now I feel terrible… - Posted by Paul_NY

Posted by Paul_NY on February 06, 2000 at 23:56:04:

Ed,

When you say…
“He finds buyers who have credit problems and slams them into a house. They know that they are limited to any negotiating because of their credit history. They become his prey”

…that makes me feel awful.

I have sold many single family houses to people with poor credit and held the paper (some of which I sold later) and all of these people are very happy. They now pay less than the rentals they moved out of, they have nice yards, enough bedrooms for all the family members, no more landlord complaints, tax deductions etc., safe housing, no arrogant upstairs tenants, and most call it an upgrade from where they were presently living.

These buyers are now my references! I hand out a list of formerly sold properties with names and phone numbers to prospective buyers to ensure they can trust me.

I explain everything upfront. If I intend to sell the mortgage after some time, I tell them!

I presently hold paper on payors with horrible credit. I feel like I’m giving them a second chance.

If there is financing for people like I described, it’s me who is at fault. I didn’t know that it was available. I don’t know where to obtain it. If I did, I wouldn’t be discounting my notes, I’d be getting paid in full at the closing!

Perhaps there is something that you can teach me. Your post makes me think I’m missing something. I do not want a bad name in this business. I want to be known as fair and honest.

Bumm’d Out!

Re:It’s like dealing with the Devil… - Posted by JPiper

Posted by JPiper on February 06, 2000 at 12:49:53:

Hi Ed:

I found a number of your points were points that I have a general philosophical difference with. But first, just so there is no confusion, let?s admit that we don?t know this guy that Tony is talking about, and that therefore it is hard to know what this guy has a ?bad reputation? for. Personally, I try to make my own mind up about things like that?.not to simply blindly accept others opinions. So all of my following comments are about your general points?not about Tony?s guy specifically.

The first point that I have a difference with is the concept that a person who ?finds buyers who have credit problems and SLAMS (my emphasis) them into houses? is a ?SLIME BAG?. Ed, you need a spanking for that one alone?.but then you follow with things like ?the question is will he ruin you and MAKE YOU NOT CARE ABOUT YOUR FELLOW MAN (my emphasis).? Ed, PLEASE, give me a break! You even use words like ?M-O??..a word frequently associated with criminal investigations?..and NITCH (you spelled it so it looks like *itch, when it?s really spelled niche). Or the use of the words like ?devil? and ?mooch?. The use of enough negative words and phrases lets us all know I guess that ?finding buyers who have credit problems? and providing a house is a BAD thing.

As you know Ed, I deal with people with credit problems. I?ve dealt with them for most of my business career. I provide them with houses to live in?.and I charge very high prices for that privilege. Contrary to your viewpoint, I don?t first of all view myself as a ?slime bag?, nor do the people who acquire houses from me view me that way either.

The fact that people have credit problems does little to eliminate their desire to own a home. Nearly EVERYONE in this country wants a home?.good credit, bad credit, no credit. They all want them. But when the guy with credit issues turns to the financial system to acquire a house, what he finds is that he can?t qualify eventhough he may not ever have missed a rent payment. OR, he finds that yes he may qualify if he can put a LARGE down payment up?.OR find a seller who will carry a large amount of the needed equity?..so that one of those lenders you rave about can do this loan.

So bottom line?..suddenly this guy with credit problems finds himself froze out of homeownership for the time being. But guess what?..he STILL wants a house. This is where I, or the other ?slime balls? out there, enter the picture. We are willing to deal with this guy with credit issues?..but of course, we KNOW that it entails some risk, just like the lenders know it. Therefore we expect to be COMPENSATED for this risk?.either through cash, higher sales prices, higher payments,etc. Will be negotiate? Of course not?why would we? Let this guy go somewhere else and find someone else willing to sell him a nice house. In fact, let him call Ed Garcia to see if even Ed can find him a loan that he has the cash to do.

How many of these people do you suppose I get hugged by, referred by, sent Xmas cards from, etc? These people are THANKFUL for us slimeballs Ed?.because without us they wouldn?t have a house. They would somewhere sucking their thumb in a rental waiting until they can qualify with the banking system?.if ever.

Step off the beaten track someday?get off in some lower end neighborhoods where the blue collar folks live. Ask a few of them how their credit is. You?ll find that nearly all of them have one issue or another. Why? Because the nature of their employment can create layoffs, or job injury, etc. These people may be good people, but at the same time the financial system may not be interested in them. Ask these people if they think someone who sells them a house is a ?slimball?.

It?s business Ed. Just like we buy from motivated sellers, we deal with motivated buyers?..that?s how you create a MAXIMUM spread. I know you know all this Ed. And in case you think that spread is not justified from a risk sometime, think again Ed. Again, people with a history of problems, despite their intent, tend to continue to have problems. The ability to work with those problems, deal with them, can create large profits?.and LOTS of good feelings from those people you call ?mooches.?

Have a nice day Ed.

JPiper

Re: Should I trust this “mentor”? - Posted by pros77

Posted by pros77 on February 06, 2000 at 10:08:12:

IF THIS GUY HAS A BAD REP, I WOULDNT DEAL WITH HIM MY SELF, HIS BAD REP AND PRACTICE COULD DESTROY YOURS.
DONT LET THIS GUY CAPITALIZE ON YOUR EFFORTS. MAKE SURE YOU GET PAID FOR YOUR REFFERAL SERVICE OR STOP THE FLOW OF LEADS YOU GIVE HIM. YOU WORK TOO HARD TO JUST GIVE IT AWAY… LAMAR

Re: AJAX… - Posted by Ed Garcia

Posted by Ed Garcia on February 08, 2000 at 01:38:29:

Phil:

I started out answering David’s post about mentoring. The subject matter was mentoring.

David’s concern was, is the guy who supposedly is going to be his mentor trust worthy.
I could tell that the guy who was suppose to mentor David had another itinerary. This guy
was not an investor if you take notice.

I tell David in my post,

This guy is not just trying to mentor you. If he were, he would have not told you to
forget about lease options. This guy is willing to teach you the business from his stand
point, and use you to as an employee.

His stand point: Is what I call a MOOCH KILLER.

Now Phil, A Mooch Killer, is a term that’s been around for at least 33 years that I know of.
It’s an old finance term referencing sales people taking advantage of and targeting people
who would normally not be able to qualify for a loan. The slanderous term Mooch if you look
it up in the dictionary means to get things with out paying. To mooch a cigarette. There are
other definitions, but you’ve got the idea.

At this point, David strikes me as someone who is trying to learn the business, and may be
a little naive due to lack of experience. I could tell that he didn’t trust his so called new
mentor, and that’s why he was coming to us for help. This was later confirmed if you read
the post that David posted later today. As a matter of fact the part where I referred to the guy
who was going to mentor David as a SLIM BAG, was also confirmed in David’s second
post.

When I’m talking in the post that you’re referencing. I’m talking to David, knowing that
this is all new to him.

I think much to much was made out of the negative comments that I made when taken
out of contents.

For starters, this guy is not a investor like us.

This whole string is a Jim Piper fluke.

It started out with me answering a posting that David posted trying to make him aware
of that, even with aggressive sales people who may not be honorable, that a lesson can
still be learned.

And more or less, rather than be afraid of them, learn from them, and pick their brain.
Jim Piper, pick up on the negative aspect of my posting and ran with it.

Piper saw the posting, took the information out of context and attacked me.
Piper knew once I take a stance I won’t back down. I on the other hand, realizing what Jim
was doing to me and decided to take the stance that Jim dealt me and support it just for fun.

I’ll tell you Phil, it’s not easy dodging bullets from everybody when your taking the side of
an issue that you don’t even believe in. I knew I was going against the grain and fighting a
unpopular position, but I didn’t care. For people like yourself who have seen me on this
site for the past 2 ½ years you should have known something was up. That certainly not the
Ed Garcia that you know.

I gave it my best shot Phil, and 2 times challenged Piper and tried to get him to trade sides
with me. But he wouldn’t do it.( the rat) If you follow the post, you can see where I called Piper
out and realize what he is doing to me.

Once Piper challenged me, on my answering post I said to him,

Well Mr. Piper, I think I touched a nerve.

Now Jim, you know what I think of you, and so with that in mind I want you to know
that this posting is not about you. I also know that you’ve been dying, I repeat dying,
to get into a verbal exchange with me and you know it. Even though were the best
of friends, you know you’ve been waiting for me. Just wanting to get a piece of old
Garcia. Piper you love a good go around, and I stimulate you because you know I’m a
worthy opponent. You’re an old warrior with out a battle. I can see the smile on your face
as you’re are reading this.

So with that in mind, I say lets get it on.

When I talked to Jim by phone, he said that when he saw the above statement, he had to call his wife Concetta, over to the computer and said, look Concetta, Ed knows what I’m doing.
As a matter of fact, Piper even confirmed the smile on his face at the time this was happening.

He also confessed that he had been waiting for the right moment to ambush me.

The bad part of this is, I don’t think Jim is satisfied doing this just once.

Mean while I’m considering joining a convent.

But bottom line, is the whole thing was for fun Phil,

Ed Garcia

Re: AJAX… - Posted by Ed Garcia

Posted by Ed Garcia on February 08, 2000 at 01:24:01:

Phil:

I started out answering David’s post about mentoring. The subject matter was mentoring.

David’s concern was, is the guy who supposable is going to be his mentor trust worthy.
I could tell that the guy who was suppose to mentor David had another itinerary. This guy
was not an investor if you take notice.

I tell David in my post,

This guy is not just trying to mentor you. If he were, he would have not told you to
forget about lease options. This guy is willing to teach you the business from his stand
point, and use you to as an employee.

His stand point: Is what I call a MOOCH KILLER.

Now Phil, A Mooch Killer, is a term that’s been around for at least 33 years that I know of.
It’s an old finance term referencing sales people taking advantage of and targeting people
who would normally not be able to qualify for a loan. The slanderous term Mooch if you look
it up in the dictionary means to get things with out paying. To mooch a cigarette. There are
other definitions, but you’ve got the idea.

At this point, David strikes me as someone who is trying to learn the business, and may be
a little naive due to lack of experience. I could tell that he didn’t trust his so called new
mentor, and that’s why he was coming to us for help. This was later confirmed if you read
the post that David posted later today. As a matter of fact the part where I referred to the guy
who was going to mentor David as a SLIM BAG, was also confirmed in David’s second
post.

When I’m talking in the post that you’re referencing. I’m talking to David, knowing that
this is all new to him.

I think much to much was made out of the negative comments that I made when taken
out of contents.

For starters, this guy is not a investor like us.

This whole string is a Jim Piper fluke.

It started out with me answering a posting that David posted trying to make him aware
of that, even with aggressive sales people who may not be honorable, that a lesson can
still be learned.

And more or less, rather than be afraid of them, learn from them, and pick their brain.
Jim Piper, pick up on the negative aspect of my posting and ran with it.

Piper saw the posting, took the information out of context and attacked me.
Piper knew once I take a stance I won’t back down. I on the other hand, realizing what Jim
was doing to me and decided to take the stance that Jim dealt me and support it just for fun.

I’ll tell you Phil, it’s not easy dodging bullets from everybody when your taking the side of
an issue that you don’t even believe in. I knew I was going against the grain and fighting a
unpopular position, but I didn’t care. For people like yourself who have seen me on this
site for the past 2 ½ years you should have known something was up. That certainly not the
Ed Garcia that you know.

I gave it my best shot Phil, and 2 times challenged Piper and tried to get him to trade sides
with me. But he wouldn’t do it.( the rat) If you follow the post, you can see where I called Piper
out and realize what he is doing to me.

Once Piper challenged me, on my answering post I said to him,

Well Mr. Piper, I think I touched a nerve.

Now Jim, you know what I think of you, and so with that in mind I want you to know
that this posting is not about you. I also know that you’ve been dying, I repeat dying,
to get into a verbal exchange with me and you know it. Even though were the best
of friends, you know you’ve been waiting for me. Just wanting to get a piece of old
Garcia. Piper you love a good go around, and I stimulate you because you know I’m a
worthy opponent. You’re an old warrior with out a battle. I can see the smile on your face
as you’re are reading this.

So with that in mind, I say lets get it on.

When I talked to Jim by phone, he said that when he saw the above statement, he had to call his wife Concetta, over to the computer and said, look Concetta, Ed knows what I’m doing.
As a matter of fact, Piper even confirmed the smile on his face at the time this was happening.

He also confessed that he had been waiting for the right moment to ambush me.

The bad part of this is, I don’t think Jim is satisfied doing this just once.

Mean while I’m considering joining a convent.

But bottom line, is the whole thing was for fun Phil,

Ed Garcia

Re: Ed, just admit you are wrong! - Posted by Ed Garcia

Posted by Ed Garcia on February 07, 2000 at 14:14:14:

Well look who just arrived on the scene.

The man of a few words.

How are you today Mr. Alcorn? I feel like it’s shark feed time and someone smells blood.

But that’s OK, come on in, the water is fine.

Now for some reason you have decided to team up with Piper, which means to me that
You haven’t read any of the other postings in which I state that I am just taking this
stand to defend the other side of this issue. But that’s OK, because as usual, you don’t know
what’s going on.

You tell me I’m wrong.

You state,
Face it Ed, you went off half-c*cked. You got your back up about a guy that MAY have a bad rep,
who MAY be trying to hustle some leads, and who MAY take advantage of people, though I see
that info nowhere in the post. YOU drew the conclusion that he was a shark, then manufactured an
argument to support it. You GAVE him an “M.O.”

Ray, David say’s in his posting,
He specializes in putting people with poor credit (that can be financed) into low cost homes.

That mean the man is targeting to buyers for a specific reason.

David then say’s,
The price is non-negotiable to make sure he makes a profit from his buying price.

That’s the reason.

Now you’re going to tell me this is NOT a “M.O”. Or maybe I’m just reading into it?

We both know better.

You then say,
News Flash: The guy works with people who have bad credit. SO DO YOU! SO DO I! WHO IN THIS BUSINESS DOESN’T? He11, I had pretty bad credit myself at one point in my life. I know firsthand what it takes to clean somebody up to get them a loan. Does that make me a SLIME BAG?

Just for you to know Ray, the SLIME BAG was the dealer, not the buyer with poor credit. But as usual,
You’re off and running, putting together a post that’s entertaining, but I don’t know what you’re talking
about when your done. You know Ray, one of your dazzle them with bull sh*t postings.

You say,
Give me a break. Why are you such a saint for providing the service and the rest of us Mooch Killers(?)

I’m not a saint Ray, I’ve done it. And I’ll do it again if the opportunity presents it’s self.

Ray, let me ask you? How do you feel right now? Are you asking yourself what am I doing in this
conversation, when I really have nothing to contribute.

Or maybe it would be fun to take a shot at old Garcia. You can’t beat me Ray, you don’t know how.

You’re trying to make me say I’m wrong when there is no wrong. It’s my perception of this business.

You can disagree with me, but that don’t make you right. You see to be right, there have to be facts
to support you’re position. Not just a matter of opinion.

But if we are going to base it on a matter of opinion, then who’s opinion will weigh out.

Will it be yours, who maybe has done a deal of this type in 1977. Or mine who has done thousands
of deals and did one two weeks ago.

You see, I can take the other side of the issue and be right about that as well. the reason is because
both sides have a right. I think you’re at a disadvantage because you just jumped in.

Ray, also the term mooch killer is a term that most of the pro should know. So if you’re not familiar
with it I understand. (smile)

At any rate I’ve got to go, so you have a nice day,

Ed Garcia

Re: Ed, now I feel terrible… - Posted by Jimmy

Posted by Jimmy on February 13, 2000 at 20:35:15:

I feel likeI am stuck in an episode of Its a Wonderful Life!

Slither…slither…slither… - Posted by John Behle

Posted by John Behle on February 07, 2000 at 12:16:06:

Reminds me of a conversation one of my employees had at the county recorder’s office. He was doing some research in the “non-public” area that the title companies use. Someone asked him what he did and he said his boss bought mortgages - seller financing.

“OH! - YOU’RE ONE OF THOSE PEOPLE! - YOU STEAL MORTGAGES FROM LITTLE OLD LADIES!” Chris and I had a good time with that afterwards. Whenever we met he’d say “slither, slither, slither!”

Discounted mortgages are a good illustration. Do we “steal” the mortgage by buying it at a discount - and the lowest price we can negotiate? Who really took the discount? When did they take it? Was there really a discount?

Did this note seller take a discount? Not really - he/she likely took the note because it was the best offer they received on their property. Unless of course he decided to take the ?worst offer? and passed up cold hard cash.

If this seller had insisted on “cash only” (including bank financing) what price would he have gotten for the property? LOWER - or “discounted”. So, you can look at it as he took a discount when he sold the property, not the note - but wait…

He received a higher price by carrying the financing. So, it’s not the seller taking a discount …and…we haven?t even looked at the potential tax benefits of taking the paper during the time the seller had it or what lesser yield investment he/she might have put the cash into.

I guess it was the buyer paying more. But did he? What is more? Paying market value for a property with seller financing - is that more? Well sure, if he had cash and could close in 20 minutes or could go to foreclosure sales - he could drive the price down or pay hard money rates or do an equity sharing arrangement with an investor - EITHER way they pay more in interest or equity participation.

Is a buyer paying more when he/she might be paying less than they would in rent or even the same amount - with tax benefits that they wouldn’t have had. If it’s an appreciating market, they end up with equity instead of a landlord, a chance to get on their feet, build a next egg, improve their credit, etc.

When you watch market cycles, you see that in a declining market, sellers go towards offering terms before dropping prices. The terms soften before the prices do substantially. You hit a point where properties are offered “No down - no qualifying” on seller financing rather than admit the market has turned and the prices are dropping. The thing that happens next is that the prices do go down.

It’s a supply and demand market. The real estate or mortgage market will never have the same dynamics of the stock market. You’ll never open the paper and see that a 3 bedroom house is going for $117,000 that day. A ?GOOD? appraiser will take into account the terms of sale of the comparable properties and recognize this teeter totter situation between terms and price.

The real estate market is too “unique” and in the case of notes - it is an “in-efficient” market. Most notes are very unique and weighed by multiple criteria - like credit.

The conventional financing market has finally stumbled across a new model. Funny thing is it is the same model that “paper buyers” have used for 30 years in the discounted mortgage market. Notes are rated and purchased at lower or higher yields. That’s not new to the conventional market, but they are finally looking at variable ?pricing? as circumstances change.

As someone’s credit improves (later they?ll take into account LTV’s, etc.) they will now adjust the rate. Before the option was a new loan. Lender’s want to keep that already established business and buyers want to avoid points, fees, etc.

AND … lenders want more of the “sub standard” market and the higher yields. Greedy, greedy, greedy! - or does it give people a chance?

In most circumstances someone with bad credit worked hard for it. It has a lot to do with both money management and their thinking. The cycles go on again and again and again. The financing industry knows this and yet still reach out to assist that market.

We just had one where the seller was a few days away from foreclosure - not even aware of it. You could call her Cleopatra - the Queen of Denial - but that’s a much longer story.

We considered making her a loan to keep the property, but she was so wishy washy about even wanting to that it was very un-comfortable. She did ask at one point in a very negative way “I guess I’m too much of a mess to make a loan to aren’t I?”

One of the things she had said a few days earlier was that “this kind of thing had never happened to her - she was so embarrassed.” Well, guess what a title search on the computer turned up - another property a few years earlier that she had deeded to the bank “in lieu of foreclosure”.

So, we took a deed. No cash and she was very grateful to not have a foreclosure. We helped to clean and pack the property, rented 3 large storage units for 3 months and paid several hundred dollars to have a crew move her things. Guess what? Three months has passed and she hasn?t paid her storage unit or even gone by to change her address. She gets the notices, we?ve called, mailed them, etc. Again - DENIAL. I just hope she realizes she can?t stall the storage unit company for a year like she did the mortgage company.

The point? Cycles, cycles, cycles. It?s a matter of thinking and mindset. That?s why I feel that looking at and dealing with the mindset is so vital. Otherwise, we are caught in cycles. So many times someone with bad credit is caught in a cycle of their own making (not always). Lending or selling to them is an extremely risky process and can be a great service if it in any way assists them to progress. Yet, while one moves on, another files bankruptcy. Save them one minute and become their next victim later.

The institutions have learned that. That?s why they are so hesitant to ?give someone a chance?. They aren?t prepared to do it what may be the only ?safe? way by the one on one ?hands on?, careful approach that a private investor can take. Are there sharks out there? Of course. Is everybody. NO. Can you make a profit and assist someone at the same time. Of course. Can you NOT make a profit and assist people??? Not for long.