All Forum Posts by: Matt H

Just a word of advice to beginners who have not yet bought any property....

One major problem that a lot of new people run into is just getting started. The biggest problem I believe is that people end up thinking too much and almost talk themselves into either doing it later, or not doing it at all.

The key is just this..."don't think so much". Just do it. Just do the actions. And do not think so heavily upon these idiotic worst case senarios that will never happen, like a bank foreclosure. Ya right.

Just get a property and rent it out. Just do the actions it takes to buy and stop thinking so much and over analyzing everything. You just got to get that first deal out of the way. Once you get that first deal out of the way it's like losing your virginity. After that it only gets easier. So stop looking at pics of property, jerking your weed and fantasizing about what it would be like to have one; instead just go find one and do it!

No one knows what they're doing the very first time. All you got to know is this. You just got to find one, make an offer, get a mortgage, or two, buy it and rent it out. No big deal. That's the steps. So what are you waiting for you wanker!

To answer your question, Alberta has more oil in tar sands than all of Saudi Arabia. We're the largest supplier to the US in the western hemisphere. So all of a sudden a ton of multi billion dollar developments were started. Meaning a ton of jobs. Meaning zero vacancy and property values soaring. So in this case tons of buildings are being converted into condos. So I'm pretty sure these people buying it are going to do a condo conversion on it and cash out themselves.

All I'm saying though is the younger you are, the more risk you can afford to take. So for this dude he's 23, and has no money. So he should buy no money down and he could afford to take the risk. What's the worst that coud happen? You have to sell the property and cash out. Big deal. Chances are that might never happen.

I didn't mean it like that though. If you can do no money down deals, and they cash flow, then I'd say go for it. Your still young enough to absorb any potential major chances to the market.

Personally, I think it would be just a great feeling to do a deal where you get two things: The property, and cash at the time of close. Wouldn't that almost feel all wrong! LOL Because I know people who've done that. That would just be hilarious. Like a 75% first and a 35% second, and end up with cash at close.

Wholesaling ahh? Hmmm good to know. I'm in Canada so we have pretty similar systems althought not 100% the same. Ya wholesaling, I like that.

I know that a lot of you are new to real estate investing. And I know that sometimes doing "no money down deals" can seem intimidating at first. And then if you're credit doesn't check out, or you can't get a mortgage you could run into difficulty.

So here is another easy way to make up to 10k per transaction with no investment required other than your time:

1) You find a bunch of real estate clubs in your town or city. Find out when they meet. Then attend a meeting so see what it's like. See if they allow for members to talk about properties they have for sale, or if there's a chance for you to do that in the club.

2) Find some online forums for real estate investing in your state. Locate the key sections of your newspaper to advertise real estate investment opportunities in. And get yourself prepared by finding as many key avenues as possible.

3) Then here's what you do. Go out either with a realtor, or on your own and find properties that make for excellent rental properties. Or ones that could easily be turned into more than just one unit. Such as a house that has a separate entry into the basement. A side by side duplex that could be turned into four units. Or even a small apartment building.

4) Next, get an offer in and get it pending. You're not actually going to buy it. So you want to get as long as a condition removal date as possible. Just make it subject to financing. That's all you need. Ask for at minimum 1 month to remove that condition.

5) Then on the contract write: "Hulk Hogan or Nominee". Be sure to write "or Nominee". If the seller asks why, just say make up something like "well in case I need to involve a partner as a back up". That way you can sell that contract to a third party. (check your local state laws to make sure there's no conflict with this). In most places this is legal.

6) You need to find rental properties that will actually cash flow. If they won't cash flow then those contracts wont' be worth anything to a seasoned REI. So get a few of those. Anything ranging from a single family house, up to an apartment building. And infact apartment buildings might be the ideal thing for this.

7) So lets say you get an a small walk up apartment building in "pending" status. The seller has accepted your offer. Now you have say 1 or 2 months to remove conditions. So then you take that sales contract and all the information and proforma on the building and you begin to advertise it. Advertise in your paper, on the online forums, but especially do some major networking at the REI clubs in your area.

8) You're goal is to sell the contract. You can do this because you put the buyers name as "Hulk Hogan and or Nominee". That means you can assign that contract to a third party. Typically you can sell these kinds of contracts for about 1% to 3% of the asking price. So on a million dollar building that's at least $10,000 dollars profit. And all you had to do was a little searching and bargaining.

9) Best case scenario is that you tie up an apartment building worth 1m and then sell the contract for $10,000. Worst case scenario is that for some reason you can't find an assignee so you do not remove conditions. That means that after the condition date lapses then the property simply goes up for sale again and the contract you have becomes null and void.

10) Also if it's coming close to condition removal date, ask the seller for an "extension". Write up an amendment to the contract giving you more time to remove conditions. That way you can keep trying to sell that contract for a little while longer. This is quite typical when selling a property to ask for an extension.

So anyway this is one very easy way to raise some capital and get your foot in the door when your just starting out. The risk in doing this is practically none existent so you can forget about worrying. And eventually once you've raised some money doing this you can start to make some serious offers of your own.

Sounds like it might just barely work. But still work. Ideally though if I were you and you're just starting out here's what I'd do:

I) Consider for a moment that you're still young and still have lots of time and energy on your side. In light of this it's better to "raise some serious captial" in the early stages of your investment career. To do that you should flip a few houses. Buy a bad house in a good neighborhood. Do cosmetic rehab for cheap and flip on the mls to make like anywhere from $50 to $250k net net.

II) Once you've done at least one flip you'll have the 10% down to start looking for a small apartment building. Every $100k will buy you $1m dollar building. So you might find something perhaps up to 30 units if you shop around. That way you're property is guaranteed to give you strong cash flow.

III) Moving forward...want more buildings...well now you know the process. So flip another house to raise capital. Then buy and hold another apartment.

The reason I'm saying this is because say you buy that fourplex. What exactly will do for you? You can't retire from your job off that. All your buying is a headache with little to no cash flow. What your goal should be is to do a few very strategic power plays that will allow you to then have enough cash flow coming in each month so that you could retire from your job if you wanted to. Which getting just one apartment building will do for you. Because right now you most likely can't quite your job. That's the problem for most people. If you quit you have no income. So try to get to that point in the shortest amount of time where you're actually financially free from the rat race. From then on it's smooth sailing. Right now you should be turning your drive time though into study time. Everytime you get in your car should be another class listening to audio realestate courses like "carlton sheets" and "Dolph Deroos". If you do that before long you'll be well on your way do doing well in REI.

You should approach every transaction with the mindset that you're trying to develop a win-win solution for all parties. You're not trying to out smart the other party. And they shouldn't be trying to out smart you. Just be honest with them. If they have a realtor then you just talk to the realtor. Let them find out all the question you have on the place.

If you're a mortgage broker then why not do "no money down" deals yourself, flip the houses yourself and keep all the profits? You don't need to share any of it. Just watch that show "flip this house" and "property ladder" on TLC to learn how it's done. Or by a book or video. It's not that hard. Certainly not rocket science.

That's true. Like if you look at a sunset that's priceless. Or if you take a walk on the beach with your family that's priceless too, and all those kinds of rewards to life that fall into that catagory. But that's the problem. You can't actually put a price on it? In some respect those types of things are not on the same parallel as actual cash money. But success in my opinion is definitely measured by monetary rewards. Cash is one great measure of success in life. Not the only measure but definitely one strong one. Even Nepolean Hill talks about this. And although he puts it as #10 on the list in think and grow rich in other titles he talks about it a lot as well. So that's why I think that if you make some money you should at least use part of it to reward yourself and those you love, and or to help some good cause. Otherwise you'll just end up hoarding it and being some greedy bastard.