Posted by TB Mel on May 01, 2006 at 21:03:41:
could you just walk around in the hay in your bare feet.
Mel
This is just brilliant! - Posted by Luke Hoppel
Posted by Luke Hoppel on April 29, 2006 at 07:16:02:
Check it out!
Re: This is just brilliant! - Posted by Greg(FL)
Posted by Greg(FL) on April 30, 2006 at 20:17:42:
What I find most interesting about these kinds of guru insider secrets (which often aren’t really so insider) is the unspoken truth about how much time it takes to find the exact right situation and prosper from these “unique profit centers”.
JMHO.
I’ve personally found my time better spent in other ways.
Greg(FL)
Brililance ain’t what it used to be (nt) - Posted by Joe Kaiser
Posted by Joe Kaiser on April 29, 2006 at 21:43:27:
.
Scott is missing one thing… - Posted by lukeNC
Posted by lukeNC on April 29, 2006 at 11:15:43:
This is a very very rare thing…
I tried this technique on my own with very limited success a number of years back.
Most times, if there was a judgment obtained against someone AND they had a big chunk of equity, that creditor would have executed against the debtor and forced a sale of the house and/or gotten paid off.
Or, the house would be exempt because it was owned by entireties. Even if the other person dies, the house is still exempt from execution.
Very very rarely will you find a judgment against a person(s) who owns a house with a big equity position and be able to buy it at a good enough discount to get a good profit.
It can work, but it takes ALOT of research to find that exact situation.
The other issue - Posted by John Behle
Posted by John Behle on May 01, 2006 at 11:04:43:
Yes, one major drawback is the time in research and energy required to put together some of the so called “simple” and brilliant techniques.
The other issue can also be the mechanics and steps required. Sometimes a technique is taught as being all someone needs for the rest of their lives. So simple anyone can do it from their kitchen table in their pajamas with two hours a day.
Then, when it comes to reality, there are steps and resources that are essential. A great example is the concept of trading paper for notes. I learned about the technique through an educator named John Berven and was amazed and took the steps to put it into practice.
A few years after that a guy by the name of Joe Land was teaching a similar technique. Land made it sound so simple that anyone with a pre-school education could do it. I used to watch some of his presentations and shake my head because I knew the truth of what it takes to make the deal work.
Eventually, “60 minutes” even followed Joe around and exposed him and his simplistic techniques. I thought the comments at the very end were good. They interviewed the President of the National Association of Realtors and his comments were something to the effect of “sure, it’s possible. I could do it. But the students he is peddling this to could not.”
When I had learned the technique through John Berven, I ran home to try it. I found there were things you needed to know about negotiation and things that needed to be prepared and presented well. I found you needed a portfolio of paper, a good relationship with a mortgage company, good credit or an investor with credit, capital or credit to put together the paper portfolio and skills in finding and pre-qualifying the properties.
Well, I put all that together and the technique works great with the right resources and knowledge. Many techniques are that way. That particular technique could occupy all of your activities. You could build a career around it, but it would be difficult. Many other techniques would be much, much, much harder to build your entire strategy and career around. Yet, gurus spout them as the latest and greatest discovery, give it a fancy name and build a whole course around one little idea. Convince the student that that one technique is all they will ever need.
Reality is the best approach is usually to have a strategy involving many related techniques. So, instead of putting all the work into building a paper portfolio to go out and trade for real estate, you build a whole strategy around the many, many ways to profit from paper. Instead of just one technique to buy or profit from real estate, many techniques.
“He who is good with a hammer things everything needs a nail”. Many real estate investors are just running around wildly looking for nails to hit or trying to use a hammer on the wrong problem. They pass up a deal where a screwdriver would work because all they have and want is a hammer.
That’s why I view investment ideas as a toolbox. The more tools I have in the box the more deals I can do and do them easier and more profitably. Sure, you can sometimes pull a deal off with the wrong tool, but it can be time consuming. I once swapped out a radiator with just a multi-purpose pocket tool kit. But, it would have been fast, simple and easy with a the right tools.
I view it like looking for treasure too. Someone comes along and teaches a technique as the “be all end all”. Some pearl of wisdom meant to solve all the needs and problems of the beginning investor. So, their followers are running around wildly looking for Pearls… and stepping over diamonds, rubies, gold, silver, etc. Sometimes they don?t see them, recognize the value or believe there is any value.
They even get in arguments sometimes about which technique is better instead of learning them both. Some of the world’s biggest gold, silver or diamond minds came about when someone was searching for something else. Sometimes the guy with blinders on tripped over the silver mine while looking for gold and went on their way - leaving others to capitalize on what could have been their find.
With almost any profitable technique in real estate or paper investment you need someone with a need. That can range from a problem like being in foreclosure to someone that needs to move out of state to a new job. The thing that gets in the way of anyone making use of the technique they know is finding the right person, circumstance or scenario. They take their tool and look for a place to use it.
I do things differently. I find the need, the circumstance, the problem or the person. Then I pull out the right tool or in most cases combinations of tools to make the deal happen. I solve their problem and make a profit. I may have very little idea going into the deal how it will look at the end. I?m looking for the person with the need not something to practice my favorite technique on. Solving that person?s need could range from buying their property, financing their property, new conventional financing, hard money loans, bringing in an investor, doing an exchange, a sale option leaseback, or whatever.
I may make my money from buying the property, making a loan, brokering a loan, buying the paper, trading paper or at the very least, even charging a consulting fee to solve their problem. When you become known as a problem solver, deals come your way and you spend more time working on deals than looking for them.
So, one deal that came to me was a man in foreclosure, bankruptcy and risking death from the stress of the whole situation. We made him a hard money loan to stop the foreclosure, refinanced to take out the second, third, fourth and fifth loans with a new more attractive second loan, fixed his credit and then refinanced months later with a new lower rate first loan. Through multiple tools his problem was solved. And, I received points on the hard money loan, a commission on the new second, new first and referral fee from the credit repair company. Most people would have just taken their screwdriver and walked away. Since he didn?t really want to sell, most investors would have no interest or capability to help.
Another deal involved someone wanting to buy a home she had lease optioned for the last year or so. It had gone up in value substantially and she could profit from it and own her own home. The owner of the home wasn?t thrilled about the lease option at this point and she would lose the deal if she could not meet the agreed terms and time period. She also wanted money to start a new business. She had mediocre credit, no cash, needed cash for her new business and her assets were in trusts. We arranged a new low doc loan as a first on her property she wanted to buy. I then searched and found a lender that would make her a second against equity she had in a condo in another state. Difficult since it was in a trust. She borrowed what she needed for the down on the new property and extra money for her new business.
Sometimes the techniques are created to solve the problem. They then become another tool in the kit. Kind of like the mechanic that fashions a tool and eventually everyone has it in their toolbox. Here?s an example. Years ago a couple came to me with a problem. Their son in law had borrowed money against their home for some deal. About the same time their daughter decided she like the son in law?s friend more. So, an old couple was worried about a five year balloon they could not pay on their property because of an ?Ex-son-in-law?. So, the scenario is a five year balloon and no way to pay it. Eventually I figured out discounted paper could solve the problem. I plugged the numbers in and determined they could buy a note at a large discount to trade for the existing second with the balloon. Borrowing extra to buy some more notes would bring in income to offset the larger payment and the balloon is gone with no increase in their monthly payments. Just needed to create a little ?brain equity? for this one.
Another technique came about when someone was griping to me about the deal they had sold on seller financing. She had purposely sold the property below market with a low rate to find an easy buyer and to minimize her tax hit. Now a year later, the buyer was getting ready to refinance and she did NOT want the money. She wanted an installment sale, not a tax problem. When someone is in a position that they would rather have payments than cash, that usually gets my interest. I put together a way that I could step into her position, receive the cash and keep her note and installment sale in place. A great deal for everyone. She keeps the note and installment sale she needs, the new home owner refinances like they want and I receive the cash the seller did not want and use it for investment.
That doesn?t mean someone can?t focus or specialize on particular techniques, just that there is no need to step over diamonds in the search for pearls. From a perspective of finding deals, being a problem solver is like a marketing magnet and attracts all kinds of opportunity.
Re: This is just brilliant! - Posted by Luke Hoppel
Posted by Luke Hoppel on April 30, 2006 at 22:29:40:
Sure, I agree that it’s not a get rich scheme; very few things are these days and I don’t know of any at this time. It’s just another source of revenue.
I don’t think investors should put all their eggs in one basket. I think you should diversify and have multiple income streams. The argument of having a niche could be used here but I don’t consider L/O’s, fixers, wholesaling a niche. I think a niche is something that not everyone knows about.
I do think it’s very creative and I like that.
Luke
Re: This is just brilliant! - Posted by Joe Kaiser
Posted by Joe Kaiser on April 30, 2006 at 21:59:27:
Greg, you hit on a key concept, the needle in the haystack thing.
Understand, opportunity is often just that difficult to find, but I don’t
think that’s all bad.
Profitable “needle in a haystack” opportunities can be exploited. The
challenge is creating a system that can grind through haystack after
haystack, spitting out the needles quickly and efficiently.
So you’re right, it’s not so much the “insider secret” at all. Those are a
dime a dozen. What is valuable is a system that efficiently processes
them.
Creating just such a machine is what I’d focus on.
Take the above example. I’m confident there’s a way to exploit that
“secret” given the tools available to us today. I know because it’s one I
currently work.
Joe