Posted by Dave T on June 01, 2008 at 03:43:54:
The Paper Game is home study course that John Behle used to sell. I don’t know if he still does. Maybe you can find a used copy on ebay.
Who holds the truth? - Posted by PEPE
Posted by PEPE on May 28, 2008 at 18:05:56:
For many years I’ve seen numerous “self-made” millionaires come on TV and “preach” the gospel of the no money, no credit needed path to happiness. But at the same token, I’ve seen many others rebute this truth with their “it takes money to make money”. Is this the proverbial, he who speaks the loudest speaks the truth? On one side you have those who respond to words of “hope”, on the other you have those who think of themselves as “realistic” and somewhat pesimistic. Please enlighten me, who speaks the truth?
Re: Who holds the truth? - Posted by GOD
Posted by GOD on May 30, 2008 at 11:20:44:
Matthew 19:26
But Jesus looked at them and said to them, â??With men this is impossible, but with God all things are possible.â??
Re: Who holds the truth? - Posted by Maurice
Posted by Maurice on May 29, 2008 at 21:17:04:
It takes money to make money but it doesn’t have to be your money.
I’m surprised in this day and age of crazy sub prime loans that there is anyone left who doesn’t know how easy it is to borrow money.
Now it isn’t so easy as it used to be to go to a bank and get a loan, but the point is that you can use leverage, in other words borrowed money, to multiply your own efforts.
You have already seen some examples of deals done with borrowed money.
My own first real estate deal was done with all borrowed money back in 1972.
This was before any of the “Nothing Down” books was even written.
Real estate investing is a business. You use what resources you have and make the best of them. If you have money, use it. If you don’t, then you are more restricted in what you can do but it is still possible to make a start.
If you do things right lack of money will soon be the least of your problems.
Re: Who holds the truth? - Posted by John Behle
Posted by John Behle on May 29, 2008 at 12:40:16:
You believe it when you see it and you see it when you believe it.
If you never attempt to do nothing down deals or creative real estate deals, you might not believe they were possible. If all you have is traditional training, even with a real estate license, etc. you might be under the impression that the creative real estate field is a bunch of baloney.
I’ve bought many nothing down deals from Realtors and others that might have said before that time that it was not possible to do a nothing down deal. Many still don’t even see or understand what happened and would continue on saying it was impossible.
Kind of reminds me of standing at the bottom of a very tall tree one day and I was told to climb up it and stand on a very tiny platform at the top. My mind said it was impossible. Then Randy did it. So, immediately I knew it was possible and if he could do it I could also. Then a few feet from the top, it seemed impossible again and only sheer willpower overcame that last step.
Like I said, some things you don’t believe until you see them. Most people in real estate have little or no training that would leave them to believe that nothing down or creative type deals exist.
So, your average “investment adviser” would say that what is on the infomercials is nonsense and impossible. That the guru is just doing the commercial for the money. Well yah… But that doesn’t mean it isn’t possible or valuable information.
Having money and credit can open up a few more doors to a few more techniques and ways to make money. But, throughout the years I think my most profitable deals have probably been those that didn’t take money or credit.
I was sitting in a CCIM seminar one day and one of the instructors was named Hugh. Hugh knew the financial calculator like few other people in the world. Yet over and over he liked to make the statement that “There is no way you can ever get over a 30% rate of return without doing drugs” (he meant selling them).
Every time he did, one of the other instructors “Roger” would look over at me and we would share a laugh. Roger had my book “The Paper Game” and knew dozens of techniques to get much, much greater returns than 30% without risk, needing capital, credit or dealing drugs.
The point is Roger knew something Hugh didn’t. Too bad sometimes that the Hugh’s of the world close their minds when they get a little knowledge and stop themselves from the experience of learning more.
Nothing down deals? I’ve bought millions of dollars of properties and notes also for nothing down. Sometimes I am lucky and the agent is a big help, like the time I bought a property from the brother of an instructor for one of the big name gurus. That was an easy deal to put together. But, more often than not, you have to do the deal despite a Realtor, seller, attorney, title company and others that are of little help and usually stand in the way.
Yes, someone with no credit or even job can do creative real estate. Some succeed big, some don’t. But some do. The techniques can work and they are possible. The fact that one person does it and another just puts their home study course on the shelf has to do with the individual.
It’s even possible to “get rich quick” though most people don’t. More often than not I have seen people starving while trying to get rich overnight when they could have done a little bit of a “Miller and Schaub” approach of “making it big on little deals” - that’s where all of the nothing down techniques basically came from. Bob Allen just popularized them to the general public and then Carlton Sheets took his material and has popularized it even farther and broader.
But overnight? Yes, it is possible. I usually spend a great deal of time trying to talk people out of “going after Mobey Dick in a rowboat”. Sometimes they have a bucket of tartar sauce with them too. Yet, the average person will usually starve to death looking for the big deal. But, when you know what to look for or who to call, then they are possible.
A relative grew up in the pawn shop business. He had the sense to be able to smell a deal. His pawn shop was on a property bordering a large Motel. Being very personable, he got to know the employees managing the Motel. He found out it was in foreclosure. He called me and wanted to start negotiating with the owner. I said Mike, forget him. He’s a temporary owner. Let’s talk to the future owner.
An insurance company held the first and a previous seller held a second on the property. We made a couple calls and found who was handling the foreclosure for the insurance company on the Motel. We met with Chris. We said Chris, we’d like to get you out of this mess. They owe you about 1,700.000. We’ll give you 850,000 to buy your note and we will deal with the owner, foreclosure and later the Motel. He didn’t even squirm or blink and said OK. My stomach sank at that point with buyer’s remorse. That feeling where you know you missed the mark on a much greater profit.
But he did blink and squirm when we said. "And you’re going to loan us the $850,000 to buy your note for $850,000 at 7% interest. That was when market rates were about 10-11%.
He paused, squirmed a little then said OK.
So, for nothing down - since the insurance company was loaning the full amount needed to buy their own note at a 50% discount - we stepped into a Motel worth 2.3 Million.
That’s nothing down, $1.45 million instant equity and a positive cash flow of a hundred thousand a year.
When I first started in real estate I had next to nothing. I bought two properties the first year for nothing down. Then, I figured out a great deal about what I was doing wrong to waste time, etc. Over the next three months I bought a million dollars in property. I found ways to improve that by building a buyer’s brokerage. I hired 10 agents and sent them out writing offers all day long and was buying a million dollars a month in property. That may not sound like too much these days, but that was in the time of $40-50k houses.
I decided I basically hated dealing with tenants and toilets, so we sold off properties and then only bought properties to be sold off on seller financing. Then I found out I could take the same techniques I had learned to buy real estate creatively and I could go right out and buy seller financing. I became a not buyer and investor and found it much more interesting and profitable than plain real estate. Since I had learned to do real estate for nothing down, I learned to do notes for nothing down. I put money in my pocket every time I buy a note and have a positive cash flow left over with none of my own money invested. Until I didn’t need investors anymore.
Re: Who holds the truth? - Posted by Rick, the Probate Guy
Posted by Rick, the Probate Guy on May 29, 2008 at 09:45:12:
Pepe - Most all of the replies here are great, however, like most newer or infrequent posters, you’d probably like a simple, straight-forward, soundbite answer.
I say that what is preached is possible.
However, most of the people promoting themselves as guru’s really don’t do deals. Some may have done a few deals, some may have never done a deal, and a few may really and truly be in the trenches, possbily everyday.
As my buddy Mike Cantu says, you can make life-changing money in five years of working this business; however, they probably won’t be your first five years.
As to how you sort out the truly experienced from the guys and gals who want to pump you up with sunshine, that’s not so easy (initially).
If I were starting over, I’d go to lots of investment club meetings, spend the $25 to get in, buy lots of books in the under $50 price range (you can get some good recommendations right here on this website), visit discussion forums like this one, and others, and meet people who are actually making it work. You don’t need to take $1,000 bootcamps (at least not in the beginning, and maybe not ever).
Personally, I’m drawn to the old guys who sit in the back of meetings, don’t say much, aren’t high profile, who’ve been doing this stuff for many years. I about choked one time when some guy showed up to a little group that I attend who boasted that he had mastered the business in just six months time and was the guy behind “1-800-something-or-other.” Needless to say, I didn’t go out of my way to sit close.
I hope you find your way in this business and be prepared to make a few wrong turns; you can always make a “u-turn.”
Re: Who holds the truth? - Posted by Killer Joe
Posted by Killer Joe on May 29, 2008 at 07:53:45:
PEPE,
Perhaps a little inside glimpse of a real-life home run deal would allow you to see how it is possible to create a large profit using mostly knowledge and contacts. This means no big money investment - just smart manuvering.
I’m going to use an example that a friend of mine related over lunch a while back to illistrate my point. I know all the players involved, as well as the properties in this story. So what I’m relating here is a real world deal, not a theoretical example.
Here’s the deal…
A commercial building in my town was on the market for $385K and the owner was in financial distress. My friend owns a title company (knowledge + contacts) and approached the distressed seller about the property.
The seller insisted the property was worth the $385K he was asking (and it was), but the clock was ticking and he was about to go into foreclosure on that building and several others. My friend looked up the mortgage balance, and that balance was $75K.
Now this is where the early bird gets the worm in this story…
My friend approched the seller and offered to pay him $95K whick broken down into its components meant taking over the $75K mortgage and paying the seller $20K on top of that. The seller, who was in no position to wait for other offers agreed to the terms. All it cost my friend was $5K upfront to erase the arrears on the mortgage.
This property was actually comprised of two lots, one with the building on it, and a second adjacent lot that was vacant. My friend knew of another investor who was looking for a vacant commercial lot to build a self-carwash business on, and he spun that lot off for $80K immediately. Again, knowledge and contacts coming into play.
My friend took the $80K, and gave the seller his $20K over the existing mortgage as was agreed to, and put the other $60K in his pocket.
Now he has a building that is worth many times over what he paid for it, and he did this all with very little out of pocket expenses.
The take-away here is to understand that the #1 ingredient in any truly profitable real estate deal is to find someone who is in financial distress, and offer them a solution that not only puts out their fire, but makes you a profit at the same time.
The reality of this particular deal is that although almost any creative investor could have put this kind of deal together with the seller of this property, no one else did. So the moral of this story could certainly be that knowledge and contacts far outweigh the need for money in many cases.
Hope this gives you a better understanding of how things can work once you get to the point of realizing that you absolutely, positively have to be out and about actively looking for opportunities. And remember this, it’s a numbers game. The more deals that you come across, the better chance you have of finding those deals that will make sense and be worth pursuing.
In the long run it’s not “location, location, location” that matters, it’s “motivated seller, motivated seller, motivated seller” that matters.
KJ
Re: Who holds the truth? - Posted by DaveD (WI)
Posted by DaveD (WI) on May 29, 2008 at 06:45:17:
You can do it either way. Having money affords you the luxury of being lazy… as money can subsitute for imagination and grit.
On the other hand, as long as you know how to attract a deal, and recognize a deal when you see one, tying it up for about ten bux isn’t too hard either. (Hint: Motivated sellers aren’t as concerned about earnest money as they’re concerned for a solution.) You have ten bux, don’t you? Then you pass it on to a bargain hunter, or partner up with someone with money, or partner up with someone’s money (two different concepts, btw). That’s the cool thing about RE. Don’t worry what other folks think… just find something that works for you… and get that $10 working, OK?
Re: Who holds the truth? - Posted by Potash
Posted by Potash on May 28, 2008 at 21:31:33:
This will probably go right over your head, and I will have wasted 10 minutes typing this, but I feel like doing a good Deed for no particular reason, I certainly have enough to feel guilty about, perhaps that is my motivation, perhaps attonement is the opiate of the rich, or maybe I have a fungal infection.
Firstly…although there are exceptions, most of the people marketing nationally on TV or radio would be best characterized as “self described” millionaires. Many have Bankruptcies in their past and/or future. Most that really are millionaires (not really a big deal these days), made their money selling books/tapes/courses/boot camps etc. If you already knew this, you are in the minority, most people believe pretty much everything they see on TV.
I could move to a new city tomorrow with just an old SUV and a couple thousand dollars in cash to cover basic expenses, and I would make a $100,000 my first year from Real Estate investment. I could do this because I have a broad range of knowledge of how things work, both real estate related and not. You can not do that. I know this because of the question you asked and the way you asked it.
It is much easier to make money if you have a hundred grand in the Bank. Anyone that says otherwise probably has never had a hundred grand in the Bank.
Lastly, and most importantly, it is I that speaks the truth. Cast out all false profits. On all the Twenty Dollar Bills you collect in your wallet, on the back where it says “IN GOD WE TRUST”, amend that to read “IN POTASH WE TRUST”. Although this will remind you of our chat and provide you with a motivational and positive mental image, the main benefit is that this simple, but very neurologically evocotive action, done repeatedly over time, will form new neural pathways in the Corpus Colostrum of your Brain which will help link the otherwise seperate hemispherical concepts of ‘action’ (left brain) and ‘money’ (right brain). Within a couple of months you will begin to act reflexively when presented with a money making opportunity. Do not let me down PEPE.
Re: Who holds the truth? - Posted by David Krulac
Posted by David Krulac on May 28, 2008 at 20:26:19:
There are many ways to buy a house with nothing down, for example it can be somebody else money not yours.
On the other hand after you do some deals and have generated cash, you will see some fantastic deals for buyers with cash and able to settle quickly.
You have a more difficult problem with this. - Posted by Rich-CA
Posted by Rich-CA on May 28, 2008 at 20:24:47:
He who speaks the truth speaks the truth. Volume, media, followers and so on make no difference. The way you tell who is telling the truth: verify what they say, test what they teach, see if it works as presented or if you have to make significant changes to get it to work. Research. Some things are common sense, others only sound like it.
When I was working in Internal Audit at a Fortune 500, the key to a good audit: if another auditor could take the audit plan, follow it using different samples, and come to the same conclusions. The key to a method that works is if you change the specifics without violating the givens (for example if the method assumes an appreciating market, you cannot execute it in a declining market and expect the same results), you should be able to obtain the same or similar results. If you cannot, then there is a flaw in the method.
Many “gurus” tell people what they want to hear: making lots of money is easy. They say this in lots of ways. The fact is: if their easy money making methods worked, they would be doing that instead of the much more difficult and demanding seminar circuit.
Yes, but - Posted by Moses
Posted by Moses on May 30, 2008 at 14:22:15:
Yes, but he hasn’t written a book on creative real estate investment yet so we have to stick with what we can learn from simple humans.
Thanks John - Posted by phil fernandez
Posted by phil fernandez on May 29, 2008 at 17:06:58:
Again you’ve articulated perfectly how great creative real estate can be in building real wealth.
That made the Hair - Posted by Kenneth Hocking
Posted by Kenneth Hocking on May 29, 2008 at 13:50:49:
on my Bald Head stand Straight up!
WOW what an awesome AWESOME Post THANKS
Re: Who holds the truth? - Posted by DaveD (WI)
Posted by DaveD (WI) on May 29, 2008 at 06:31:30:
I’m voting for the fungal infection, but then I always like your posts.
Re: Who holds the truth? - Posted by BigV
Posted by BigV on May 29, 2008 at 05:19:23:
Potash, how would you make that 100k? On the one hand, I understand that 100K is not that much, as it’s even possible to accomplish if you were to become RE Agent and made all of the money by comissions. It would be easier to make that cash selling $1M dollar homes and not 100K homes, however.
Secondly, you’d probably use different techniques depending on the city you were in, right? I mean, what works in Detroit, MI may not work the same way in Los Angeles, CA. True, buy low and sell high works everywhere, but the methods would be different in both cities, correct?
In Detroit, you may start with REO’s, while in LA you’d be better off hitting preforeclosures.
SO, if you don’t mind sharing, what kind of things would you do in day one to move you closer to 100K/year?
Re: Who holds the truth? - Posted by PEPE
Posted by PEPE on May 28, 2008 at 23:39:11:
â??IN GOD WILL ALWAYS TRUST; IN POTASH, I WILL LEARN TO TRUSTâ??,
You are absolutely right, two items I lack, knowledge and $100,000 (after the sixth zero my writing hand became numb). However, based on what I (avidly) have read, I donâ??t think my situation is unique, bad credit and no money seems to be a common factor. Unfortunately I have not met in person and within my immediate proximity anyone in similar circumstances that has achieved what many of you have been able to achieve. It is overwhelming when one reads about deals reaching millions of dollars. I am a firm believer that before you run you need to learn how to crawl. But, where does one starts? Iâ??ve tried the Carlton Sheets system, a bit unrealistic, Iâ??ve then tried the McCorkle system; well we all know where that went. And then I fell for it again; the updated editions of the Carlton Sheets system, different packaging same content. I am fertile ground, where and how do I start?
Re: That made the Hair - Posted by Corine
Posted by Corine on May 29, 2008 at 14:39:55:
dito. SHOW ME HOW !!!
Seriously. What book shoud I be reading? What should I look for. I’m seriously motivated.
“The Paper Game” by John Behle nt - Posted by phil fernandez
Posted by phil fernandez on May 29, 2008 at 17:09:20:
nt
Re: “The Paper Game” by John Behle nt - Posted by Corine
Posted by Corine on May 29, 2008 at 17:21:02:
Great. Amazon? Open to suggestions.