Rule #1 of Real Estate Investing - Caveat Emptor

3 Responses

Comments

1. Bryan Casteel March 13th, 2006 at 5:07 am 1

   Josh, thanks for adding on. You bring up another aspect that I didn’t think to touch on and that is how the Gurus make this business seem so easy and what that does to the quality of the investors. This is a problem in my opinion and I continue to be amazed at how different the actual business is from the expectations that I had from the Gurus that I paid to see.

   When my partner and I got to the end of our first year in business, we stood back, with no profits and a bunch of properties and bills and we were amazed at how naive we were when we got started. If you had asked us at the beginning of the year if we knew everything we needed to know, we would have said “Absolutely” because of the education we had paid for. In reality we knew just enough to get into the business, but not enough to truly succeed. In order to succeed we needed to make a million mistakes and learn from them. We learned a lifetime of lessons in that first year that you just can’t get from books and tapes and a weekend RAH-RAH session. That is why I started ProHabber, to try to pass along some lessons that I learned the hard way. Everyone will have to learn from their own mistakes anyway, but maybe I can save one or two mistakes by writing them down in a public place.

   Those that can’t handle the truth about how difficult this business is but still want to believe in the dream sometimes let their morals bend and try to profit from screwing other people. Beyond that, I am sure that many of the worst offenders didn’t even learn from the Gurus, but from a buddy who heard from his uncle about the techniques from the Gurus.

   It is a problem, but just like eBay, you can’t blame the Gurus for someone that doesn’t have enough ability or brains or moral fiber to make it legitimately in this business.

2. Colby Callahan March 15th, 2006 at 5:45 pm 2

   I couldn’t agree with the both of you more. I am a commercial loan officer, and I have grown very tired of other “professionals” sugar coating deals until investors are too far into the process to turn back. They quote a rate they know they can’t hit, with terms their lender may not even offer. I have quoted a real life rate with terms, and the poor saps go down the road of purchase contracts, etc with another lender based on verbal quotes. Once the purchase contract expiration is coming into sight, the lender calls to say, “I’m sorry, your loan doesn’t qualify for the rate and term previously quoted due to…Blah blah blah. Your new rate is something horrible.”

   The oldest trick in the book and it still works today. This trick also still irks me today. Besides my rant about bad brokers, I have written a few articles I think investors (especially new investors), may find helpful. They discuss some of the potential problems borrowers should realize, and how to prevent such things from happening.

   Articles regarding…
   “True Net Operating Income”
   “How to Determine Income Property Value”
   “Park Owned Mobiles - Worth It?”

   Can currently be located on http://www.GoArticles.com. Just search by Author for Colby Callahan.

   I will be adding more, let me know if there is an issue you would like me to address. All comments are appreciated. Emails can be addressed to Colby@BusinessLoanStore.com.

3. Billy McLender March 28th, 2006 at 9:21 pm 3

   I think I found one of the Gurus you speak of:

   http://www.thephatphree.com/features.asp?StoryID=2364&SectionID=11&LayoutType=1&StoryMonth=3&StoryYear=2006

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