All Forum Posts by: Account Closed

Originally posted by MikeOH:

How'd I do? Is that the guru business plan?

Well, your hat and membership card we probably safe after the previous slip, but now I'm not so sure. The members will probably want to vote on it now. ROFL!

Originally posted by MikeOH:

I don't think I'd use Wade Cook as an example of a secret you have developed. Here's the real "secret". He's been personally bankrupt. His company is bankrupt. He is currently serving 88 months in prison!

Mike

Now, Mike, we all agreed at our last super secret tin foil hat society meeting in your basement we were going to keep that SECRET to ourselves. Now, we have to find a NEW super secret to keep, uh, secret. :cool:

Well, there ya go. Sub3 is a made up term 'cuz it removes all the risks of sub2.

David, I don't mean to be rude but your sub3 technique is not new. My parents were doing that 40 years ago and my grandfather did it long before that!

I must say, I am incredibly impressed you created a brand new, never before seen technique in dealing with REOs over lunch.

Respectfully, I submit new things you think you are creating are in fact rediscoveries of things done for thousands of years. No, I am not interested, nor asking, for proof your techniques are in fact new and unimaginably creative.

What's that? Did I sense you asking, "Why not?" Please, let me explain.

Real estate investing is a very public activity. All sorts of people see the results of deals before, during and after they go down. On those really rare occasions when something truly innovative comes along, it spreads like wildfire. Closing attorneys talk to their friends, many of which are also attorneys, who talk to their friends, etc.

There are no secrets in real estate investing, now in the area of information marketing, that is an entirely different matter. ;)

I am all ears too! But, I suspect it is one of those guru made up scamming terms like "Flex Options". ROFL!

Originally posted by nationwidepi:

Rich, that could be said about many other commercial investments s well such as NNN properties. the 50% rule, as used and explained by MikeOH is for residential properties only and not commercial, however, I do agree that OE ratios can vary dramatically depending on each individual situation and should not be considered gospel, but only as an average estimate.

Yes, the 50% rule as discussed here refers to residential units, SFH - Apartments.

NNN leases already have the expenses figured in by reducing the rent the tenant pays.

Originally posted by MikeOH:

Taz,

How about elaborating a little more on this? Do you mean that the REITS and other large investment groups are using stock offerings/shareholder equity to generate the capital?

Mike

Many are doing just that very thing.

Originally posted by nationwidepi:

Originally posted by Taz:

Say what you want about properties not cash flowing in any area, it just ain't true.

REITs and large investment groups use different leverage and their debt is structured differently than smaller investors can usually structure. Theirs cash flow or they keep adjusting the parameters until they do.

Taz, while I agree these larger investment groups have many more options than an individual investor, placing more money down does not make an investment better. It has been said many times here on BP by many that when analizing a deal, you should calculate financing on 100% of the acquisition and rehab thus taking out the debt leverage from the equation.

That doesn't take debt leverage out of the equation, it maximizes the negative impact debt leverage has on an investment and is perfectly proper for someone needing to highly leverage a property.

REITS have the ability to pay all cash for properties or use other creative means for leverage. While that may give them a better bottom line, it does not turn a non-cash flow property into a cash flow property.

This is exactly why cap rates are used in commercial. They remove the debt leverage from a deal so that you can compare apples to apples without playing around with debt leverage numbers.

Yes and no. Smart investors consider the debt they are likely to carry on an investment when arriving at the CAP rate they will use to value the cash flow stream of any investment.

Originally posted by Dave V.:

Originally posted by Taz:

I encourage you to get and read the annual reports of a few publicly traded REITs or RE Holding Companies, it will be an eye opening experience.

Considering the lack of ethics prevelant in financial reporting these days, it might also be a total fabrication.

If it is then it is a basis for a class action lawsuit. I'd be interested in any concrete examples you might have.

Say what you want about properties not cash flowing in any area, it just ain't true.

The larger operations holding multiple properties are not carrying the kind of negative cash flow each month you think your area is demanding.

The real issue is the market rents make it hard for highly leveraged properties in your area to break even, much less cash flow. All that means is the guru methods don't work all that well. Get used to it, more and more areas are going to look like that for a long time.

REITs and large investment groups use different leverage and their debt is structured differently than smaller investors can usually structure. Theirs cash flow or they keep adjusting the parameters until they do.

I encourage you to get and read the annual reports of a few publicly traded REITs or RE Holding Companies, it will be an eye opening experience.

Originally posted by Ivan Jouikov:

The reason I feel trust issues, is because these are supposedly real-life events that were the "rock bottom" from where they had to learn to invest in real estate. If that really happened, this kind of detail could not be possibly forgotten or get mixed up.

About the only thing "real life" in his materials is his name.


You are correct. That is the marketing path. Now, one of his "multiple streams of internet income" is a course showing how you to can set up a marketing machine just like that.

It isn't just a difference between the way he told it and she told it. The little details are different, very different and the little details always betray the fibber. That is why attorneys are trained to ask the same question multiple ways to uncover inconsistencies in a "story".