All Forum Posts by: Toyin Dawodu

@Debbie Lee , It is so unfortunate that you have been victimized so callously. However, keeping the name of the culprit or the company secret will not help your cause.

For example, 300 fellow investors have responded to your post. I am sure if you ask each of the three hundred people to send an email on your behalf to appeal to this company, you'll have more impact than trying to do it yourself.  So if I were you, I will immediately reveal the name of the company, so that others don't fall prey to the scam artists out there masquerading as "gurus" coaches or teachers.

As to how you would get your money back, its very simple. You need to use the law. 

I have had to resort to using the law in the last four months to recover my money from businesses who feel they can rip me off.

Most rip off artists bank on the fact that consumers will not have the money to hire an attorney to file a lawsuit because its costly. You don't always need an attorney to file a lawsuit and force the other side to the negotiating table. 

You've already lost $41,000 minus your small refund. Yes attorney's will cost you some money, but there are ways for you to file a lawsuit without using an attorney.

Its hard for me to give you any guidance since you did not disclose all the facts here. If you want help, I have ways for you to apply lawful pressure on the company so that you can get your money back.

I am not a lawyer, and I don't give legal advice. Prior to buying and selling over 400 houses, I once owned and operated a law firm and a legal protection agency for consumers and I had eight attorneys working for me. 

I do not believe the law allows any guru to hold you to a contract they have not performed or may not be able to perform, especially if they falsely promised you things that are not true.

If I have a copy of your contract, I can show you how to go after the guru or the company without spending any more money than is necessary.

I am not doing this to solicit your business, I just want to help and hopefully help sanitize the industry for newbies that really need help breaking into the investment world.

Good luck. You can reach out if you want. 

Hopefully your plight will be a lesson for others. Before you part with your hard earned money, make sure the so called gurus can proof to you how they can help you. Make sure you call at least some of the students they have helped or make them show you proof of what they have done.

@Engelo Rumora, thanks for the compliment. It's always so tempting to be looking all over the world instead of your backyard. It reminds me of that book, "Acres of Diamond or "The richest man in Babylon" where some guy sold his house to search the whol world for Gold, only to discover that the house he sold contained the Gold he was seeking. I see a lot of newbie investors and veterans make the mistake all the time. I just hope readers of both posts will think carefully before venturing too far.

Some investors have been lucky to purchase and profit from buying properties away from where they live.

For others, it's been a disaster, especially if you don't know what you are doing.

I once ran into a lady who owned a property in Ohio. She lives in California. The property has been vacant for almost six years. It has accumulated code violations, tax liens and possibly growing mold.

This leads me to the question, should you buy in your back yard or venture out of state?

Most experts say you should not buy investment property more than forty miles from where you live.

I live in Riverside, CA, about sixty miles east of Los Angeles.

Under normal traffic, it takes about forty five minutes drive.

For those who live in the Riverside area and work in LA, the traffic is a grind. It takes two hours in the morning and two hours at night coming back home.

I have bought a lot of properties. At the last count, I have over 400 properties bought and sold under my belt. Sometimes when I mention that accomplishment here, some people think I am boasting or trying to advertise.

This is my take, I believe everyone reading my contribution  should know under what authority I speak. My goal is to speak especially to the newbies. There is so much information, or dare I say, misinformation that a lot of newbies become confused and get lost in the shuffle. Hence they end up being paralyzed instead of joining the veterans and making money in the twenty trillion dollar real estate industry.

I bought most of my properties in and around my area of Riverside and San Bernardino Counties. It's a metropolitan areas of about three million people known as the Inland Empire.

Every Empire must have its King, so I sometimes refer to myself as the King of Inland Empire, when it comes to buying and selling properties, because I have bought a lot of houses here.

A few times, I have had to venture sixty miles away into Los Angeles thinking it made sense. The numbers were right, but I failed to add the cost of my time, driving back and forth, inspecting and safeguarding the property.

Since I buy about 5-10 properties a month, I always like to drive around my properties on weekends just to do inspections and review work done by contractors.

The first time I bought a property in Los Angels, I had to travel there during the week. The sixty mile round trip took six hours. It took me almost four months to sell the property. The frustration of back and forth traveling forced me to dump the property without realizing my minimum profit of $30-40,000 per deal.

Since then, I laid down my rule for buying in Los Angeles, or away from home. I must net $1,000 for every mile of the property distance. So if I get a call for a purchase in Los Angeles, I will not pull the trigger for a purchase and flip unless I can net sixty thousand dollars.

Although I buy all over the nation today and I know it's hard to apply the same rule. However, I still try to make sure there is enough profit on the table to hire all the help without have to jump on the plane or drive across country. My current deal is almost 5,000 miles away from home, but there's about $90k in the deal to play with.

Whether you buy to flip or hold, distance is a huge factor to your profit and cash flow.

What is your rule for buying long distance? Should newbies even try it? What advice do you have for newbies who want to buy away from home?

@Cathy Wells, the point is well taken. Buy and hold, flip, wholesale, the bottom line is for you to know the pitfalls so you can pick a strategy that works for you. I still do buy and hold, but I do it in a way that preserves my $40k or more profit upfront regardless of the economy.  If you have one rented house, your cash-flow can never cover your rent, if you have a vacancy. If your renter fights the eviction, and your eviction process lasts three months, there goes your cash flow or savings for the year. But if you are buying and holding smart, you will never have an eviction or repairs until you sell.

@Dooreuhn Cee  This is a debate. If you have nothing to contribute, you have no right to insinuate comments that are opinionated instead of  stating your intelligent views about the subject. I am not advertising anything. I have been doing this long enough to know the pitfalls for most wannabe investors who are feeding on the wrong information. Its the wrong information that is keeping 95% of the aspiring investors from making any money. Real Estate investment is not about buying properties, its about making money. 

How can you buy and hold when you have no money and no credit? 

@Elizabeth Colegrove @Jeff G. @micha Copeland,  I think my argument is to make the newbies aware of the pitfalls regarding buying and holding. I still maintain that it is hard to buy and hold if you have no money and can't qualify for a loan. Even if you can qualify for a loan, your strategy must be clear in terms of what you want to achieve. Yes, you can take all the care you want? but the bottom line is cash. Even if you are wholesaling, you will still have more cash in your pocket compared to trying to buying and holding when you are just starting out unless you have other sources of income.  Micha is right, its sometimes possible to wholesale and make quick cash.

I was once a buy and hold investor. Then one day, my light was turned off by the power company, in the house I lived in.

How could that happen? I had 40 houses, but I was always robbing Peter to pay Paul. Edison, the power company was Peter, so once they caught up with my tricks, my light was shut off.
I was frustrated and very broke. Then one day I attended Ron Legrand's seminar and he spoke about quick flips.
His presentation was so good, I paid to follow him to Las Vegas to hear more.

Since then, I have quick flipped over 400 houses.

So each time I hear new investors talking about buy and hold, I feel real bad. Today I ask myself, why would anyone buy and hold?

I once hired an assitant who is a real estate agent. During the interview, she told me she was an investor. Then I asked her, how many properties she had. She stated that she had three properties, one of them she had owned for over 12 years.

Then I asked her. "How much money are you making? She said Nothing, the rentals were barely breaking even and one was vacant.
Then I asked, "how much have you made in 12 years? Nothing she stated.

So the question is, does buy and hold strategy work for new or veteran investors?

This is a debate that everyone should contribute to?

Should you buy and hold? What if you are cash flowing a few hundred dollars a month?

Let's do the math. I buy a property with no money down. I flipped it in 90 days and made $40,000
You are a buy and hold investor, you buy a property, rent it out and you have a cash flow of $150 per month after paying your mortgage.

How long will it take you to accumulate $40,000? The correct answer is 266 months or 22 years.
So do you want to wait 22 years to make $40, 000?  or do you want to make the money now so you can accumulate enough $40,000 to actually pay cash for a few deals in a few years and then think about buying and holding? 

Which leads me to the one reason why buy and hold can make some sense.

If you are retired, you don't want to earn the peanuts interest paid by banks. It may make sense to buy a property cash, rent it out and get above average return on your money.

Another way it makes sense is if you are buying units and can buy enough and get to a cash flow that can replace your current income.

So let's hear from newbies and veterans, does it really make sense to buy and hold?

@Justin Bernsten, you should do whatever you can to get into the house because it will be your first opportunity get into the business. That's how I got my first house, it was an FHA financed home. You can fix it up and sell it, make some money and use part of it for your next deal. But if you find a good deal, you don't need any money.

@Account Closed Well said Joe. The name of the game is finding good deals.

 Which one comes first, the chicken or the egg? The money or the deal?

I really want the veterans to weigh in on this topic because it will help the newbies a lot. I got a lot of direct response from newbies about lack of money.

As many have stated also on the post, money or finance is another reason keeping them from making their first deal.

My question to veterans, "did money really keep you from making that first deal?" If it did, how long did it keep you from that first deal?

Sometimes we have to crawl before we walk. For example, I remember when I bought my first house, I had to qualify for the house as owner occupant. It was a HUD property, but I also knew I was getting it way under market. My goal was to fix it up while I was living there until I sell it. But that never happened. Four hundred houses later, I have not had to qualify for another loan or go cap in hand begging any bank or lender for money to finance my deals, I make them chase me.

So how did I do it? How did I buy four hundred properties with very little or no money? Some of the veterans know the secret, so I am going to discuss how I did my first few deals here. Please give me your response if this resonates with you or if you have done this too.

When I began heavily buying properties, I had been toying with this idea of taking over loans subject to. This was a popular concept in the eighties, until it the lenders started the their "due on sale clause" noise.  But for those who know how, it’s still a good and easy way for a good deal maker to buy properties with little or no money.

So I bought my first take over deal and took title to the property. Two weeks later, I sold it with a wrap around and netted $5K, plus another $20k in the back end. Then I leveraged the $2k cash for down payment on the next deal, and on and on.

HARD MONEY TO THE RESCUE

When I first approached a hard money lender to finance my first real deal, he literally laughed me out of the door. I gave him the deal scenario and he told me he would only finance 70% of my purchase price. Then I asked him, “where do you expect me to find the rest of the money?’ His answer was, “you should have been buying the property for 70% of market value to begin with” Then I asked him “who will be stupid enough to sell their property at 70% of market value?"  His answer was. “Toyin, they are out there, you just have to find them” He was right. I found at least eight five of them that he financed to the tune of $8.5M. I did not put penny down on any of the deals. On some deals, he also financed the rehab and I ended up with money in my pocket at closing.

WHAT IS THE LESSON?

As a newbie, your focus should be on finding good deals. Once you find the deal, the money will show up or you will find a partner or a mentor to walk you through the process of getting it financed.

Another problem I see from the comments on my last post is that most newbies do not know a good deal even when they see one, so they spend their time chasing bad deals that no lender will finance unless you are putting 30% down and qualifying for a loan.  I’ll probably address this topic next.  What is a good deal and how to find them?

Hope everyone will jump in and tell us if money is really the problem or the right deal is the answer.