Posted by Brent_IL on January 30, 2002 at 11:36:38:
I don’t think it’s the right time for a newbie with no job and reduced income to get a home equity loan.
Once you learn how to do CRE deals without money, you can use your own resources to make it easier.
the resession got me too - Posted by Dakotajim
Posted by Dakotajim on January 30, 2002 at 10:18:08:
hi all,
Just thought I’d post to get a little support! A week ago I got laid off from my 70K/yr. JOB. Over the past year I have attempted to get started in REI, with little success. I guess that’s due to having a cushy secure job sort of took the edge off my RE desire. It was easy to put off getting started for real due to the steady income. Now, of course, things have changed. I am a problem solver by nature and have a high interest in concepts I have read on this site. I realize that REI is not going to solve my immediate problems, but it may be able to start supplementing my income. I have excellent credit (at least right at the moment). I’d be interested in comments/ideas concerning what to do next especially from those that have been in a similar situation. I have read alot of recent/archived posts and have a hard copy of many including Johnboy’s " how to get started" post. I have purchased a course as well. I guess I’m interested in your thoughts on how this current recession would/could affect how I get started. Any comments (positive or negative) are appreciated. Thanks in advance. Jim
Are you a NODAK OR SODAK? - Posted by Corey ND
Posted by Corey ND on January 30, 2002 at 23:01:00:
Jim where you from?
I am in North Dakota
Re: the resession got me too - Posted by JoeS
Posted by JoeS on January 30, 2002 at 16:31:08:
Boy did I get razzed! I advised Dakotajim to get a HELOC to get started, and a few people did not agree with me. I have my reasons for the answer…yes, he probably does have a severance package, and he will probably not land another 70K job to start. What he does need however is some motivation to get into this great business, and a HELOC would be just that. With his present layoff, a rehab loan might not be the answer. Everyone needs some motivation not only to get started, but to stay in this business. I am sorry if some did not agree with me, but I am sure some will.
Re: the resession got me too - Posted by eric-fl
Posted by eric-fl on January 30, 2002 at 16:12:36:
FWIW, I have a well-paying job that I have NOT been laid-off from, nor do I anticipate I will. However, it is a high-pressure job, and one where a single mistake could result in a termination. So I’ve decided to start making plans as if I were going to be laid off. For starters, I’ve started putting aside some savings. Just cash, period, no bonds, no stocks, cold, hard, liquid cash. Too late for your situation, I know, but still an important point for those still working a job who want to make the switch. Second, I’ve been exploring different avenues to make side-income. Not all are RE-related. There may be things you can do as well, in addition to real-estate, to get you over the hump in the meantime. Third, if you were making 70k a year, you probably had some skills. Why not slum it? It will probably be hard to get another 70k job right now, but my plan is simply, how much value could you add to another company with your skillset, especially if you were cheap? Like, 40k or 50k? Make the case to the new company that, you’re not taking the lower salary because your desperate (even if you are), make it such that you want to trade the lower salary for flexibility with hours, since you have some sidelines (like RE.) Even in a bad economy, companies know a good deal when they see one; make it attractive enough for them so that you can get a job that allows you to more comfortably get going in RE in the meantime. At least, that’s what I would do were I in your position. And you never know when I just might be!
Re: I hear you… - Posted by DC-IL
Posted by DC-IL on January 30, 2002 at 14:51:40:
Jim,
Your story really strikes a chord with me. I know exactly where you are coming from about your past discovery of this site (and REI) and your inaction to pursue real estate because of the job.
I’m ashamed to admit that I’ve lurked here for the past 4 years and have YET to do anything about it…all because of my cushy job. My problem has been that I’ve been too comfortable and have gotten 4 years older. I’ve read somewhere that “You can either make excuses, or make money…but not both!” I always made excuses not to do deals (too much competition in my area, too much risk, not enough cash reserves). What has me taking action TODAY is the fact that I work for a boss (at my not-so-cushy job anymore) that I don’t get along with. A recent event at my company was pinned on me almost resulting in my termination. I was very angry and bitter about it…both very destructive emotions. Rather than being a baby about it, I decided to use this to my advantage. It has given me resolve to not EVER want to work for SOMEONE who controls my payday. I CONTROL MY PAYDAY! No doubt you’re probably feeling this way too, Jim. Use this negative energy to take action today. I have a feeling that you’re going to make it, buddy. Hang in there!
If you can swing it, try to make it to the REI Convention that JP and Terry put on each year. It will give you all the enthusiasm you need to begin forging your own way. You will never need to depend on somebody controlling your payday again.
Good luck my friend!
Re: the resession got me too - Posted by JFinke KC
Posted by JFinke KC on January 30, 2002 at 14:05:51:
Jim,
First of all, I would NOT get an equity loan as previously recommended. Wihtout a steady income, an extra installment loan could put a strain on your cashflow. However, You may want to look into an equity based line of credit for your REI needs, although, you would be better off with an unsecured line-of-credit. You do not want to jepordize your own home.
I was in a similar situation about a year ago. At the time, I had just started educating myself in REI and didn’t feel I was properly equiped to just jump in. I got another job and have been investing part time until I can build enough cashflow to quit. This is not a suggestion, just an expirience.
If I knew then what I know now, things would have been very different. I would have began advertising for motivated sellers and concentrated on flipping and contract assignments as well as taking properties subject to their existing financing and lease-optioning as an exit strategy. To me, these strategies seem the best for generating instant cash with little out of pocket cost.
Your best bet in REI is to learn as much as possible as quickly as possible. Even if you have some savings, try to avoid using your own money. Try to get together with other investors in your area. Maybe you can form some type of partnership.
I wish you the best of luck,
JFinke KC
Re: the resession got me too - Posted by JoeS
Posted by JoeS on January 30, 2002 at 10:27:04:
In retrospect, while you had a JOB and excellent credit you should have started in real estate. Now, it may be a bit tougher, but not impossible. My advise is to talk to your local banker with whom you have done business, and arrange an equity loan on your home, if you have equity. If you do not, then interview several reputable mortgage brokers to see if they can locate a program for your circumstances.
Re: the resession got me too - Posted by Shawn MM
Posted by Shawn MM on January 30, 2002 at 11:47:36:
Jim,
I’m a newbie, but my two cents would be not to take out a second mortgage right now. I’m guessing a 70K job gave you some severance, and a little cushion to use. You’ve purchased a course, that’s great. Study study study. Then make your plan.
I was living above my means, two new cars, etc. I sold them both, drive used cars, and paid off credit cards with the savings. Just a thought.
Good luck,
Shawn MM