All Forum Posts by: Fred Shandler

After two months of religiously studying this board and reading numerous books, last night I finally attended my first REIA. I felt extremely prepared as I had a sold foundation of knowledge (much to the thanks of many posters on this board) and I've read numerous times about the importance of these meetings.

This REIA boasted a reputation as the states largest and most accomplished organization that has transcended the boundaries of other organizations (a paraphrase).

"Excellent", I thought. Now I'll have an opportunity to hear and see successful investors and pick their brains and be even more prepared going forward. Right? WRONG.

6:30-7:30 - Beginner Q&A Session. I'd say there were 40-50 newcomers at the Q&A session. Surely, I thought, they'd split up the group for a more effective and direct interaction. Unfortunately, that was not the case as all questions (maybe 5-7 questions) were dominated by 2-3 people in the group. I did manage to ask “Is it possible to find properties that cash flow in this state, based on 100% financing”. I thought this was a solid question, and the 100% financing part of the question was to avoid the “well it depends on how much money down” answer. He actually laughed at my question and said, “you’ll never get 100% financing!” I responded, “that was not my question, I ask that for purposes of analysis”, at which point he goes on to talk about how PURCHASE PRICE DOES NOT MATTER, TERMS MATTER. HUH???? What the F is this guy talking about? Surely, it had to be me. He was the pro and I’m just a non-property owning newbie. I brushed it off and moved on.

That sure didn't go as I expected, but that was okay because there was an enormously successful speaker to follow and surely he'd make this evening worth the trip.

OR NOT

The best way to describe him was reckless. He is standing there showing people copies of cashed checks ($100,000-$300,000), making people cheer and chat and even touch each others shoulders, while boasting about his "proven system!” Was I in an investors group meeting or was this some kind of wacky cult? He'd give stuff away and the crowd would go nuts, they'd laugh cheer and scream! "Anyone can do it, with no money down and no credit. Who wants to cash checks and go on vacation or drive a nice car"? I could not believe the reckless rhetoric that was spewing from this guy’s mouth. AM I THE ONLY ONE ACTUALLY HEARING THIS???

I sat through the rest of his speech, as he did intertwine a useful bit of information here and there, but that was usually followed by his "$2,400 PACKAGE OF MATERIALS THAT HE WAS SELLING FOR ONLY $499"! or his "ALL DAY SEMINAR THAT SHOWS HOW TO _______________" (fill in the blank).

Final thoughts:

Although this was a terribly disappointing experience, I'll go back. If, for nothing else, to pick up a few tidbits of useful information.

At the end of the night I did scratch my head and ask myself: "Was it me or am I the fool for thinking this"?

Thanks Mike, I thought something didn't seem right.

How did you roughly calculate the difference in property taxes, from what it normally would be under the 50% rule (how did you figure $80 more per month)?. What percentage of the 50% rule do property taxes usually run?

Thanks!
Fred

thoughts?

yes, they are correct. The property is in New York. Maybe given the high taxes, 2+ family properties are the way to go?

Asking: $30,900 (assessed for 38K)
Taxes: $1,799
Currently rent: $750

The 2% rule works: 2% of 30,900 = $618

However: at 6.5% my payments would break down as follows:

P&I: $195
Taxes & Insurance: $233
(I estimated 1K for insurance, is this fairly accurate)?

Total Payment: $429

Operating expenses: $375 ($750/2)

Cash flow: -54

Are my calculations correct, specifically assuming 1k for insurance?

I calculated the MOST I could pay would be 20K

P&I: $126
Taxes & Insurance: $233

Total Payment: $360

Operating expenses: $375 ($750/2)

Cash flow: +$15

What are your thoughts, is cash flow too close to operating expenses? Would you offer less (although anything less is close to 50% of the original asking price, is that an unrealistic? offer).

Thanks!
Fred

So (beginner question coming), you see a house with potential water problems (or really any problem, for that matter). How exactly do you handle having a professional come out and inspect? Do you tell the home owner, "alright, I'll have to come back with a contractor to assess the basement"? Do you try to come back the same day, next day?

Mike, is there a reason/advantage to not buying then quitclaiming and having your LLC make the purchase?

Thanks
Fred

Interesting. So why/when would one have to apply for a commercial loan on a residential property?

^good formula! So (beginner question coming), you see a house with potential water problems (or really any problem, for that matter). How exactly do you handle having a professional come out and inspect? Do you tell the home owner, "alright, I'll have to come back with a contractor to assess the basement"? Do you try to come back the same day, next day?

Thanks
Fred

with regard to an relator - My impression (from posters) is that the best deals are found though talking to home owners/whole sellers/birddogs (bascially not using a relator). I understand they are valuable in that they can show you homes on the market, thus having a better understanding of your market. But, my impression was that most deals are not found through a relator?

Thoughts?

Fred