@Robert Jordan
Studying since '98 and still trying to break the ice? I'll give you an A+ for persistence, if you were studying the right thing. I have to wonder what you were doing from 2008 to 2012. I was buying properties that I couldn't get a mortgage on because they were too cheap! I still have the Sheets material in my basement and I have a few books written by Mike and Irene Milin, who were one of the infomercial/seminar organizations that would come around every year, selling a kit and support package for around $900. At the time, I'd never seen $900 all in one place and I couldn't buy the kit if I wanted to. I would go to the seminar every year and take notes though, and then I'd go to the public library and look up every program and term they used. Most of what they were selling wouldn't work in our area, or anywhere outside of a metro smaller than Chicago as far as I can tell. That being said, I had to buy a couple of properties with no money down, just to satisfy myself that it could be done. Our first one was a small commercial property that was leased to a quasi-governmental agency that we bought from an estate. The owner's brother was a broker and had it priced lower than it should have been, so we gave him his full asking price, got a commercial mortgage, and borrowed the down payment, I think from a credit card. We've never seen a seller financing deal that made any sense for a broke person. The real money came when we sold that property six years later for double what we paid for it, and we were able to pay cash for foreclosures from banks that were going out of business in the big collapse.
To a couple of your points, now that I have a little money, quite a bit of it made in real estate, I can't imagine what value someone with little experience and less money could have to offer me in a deal. I'm always willing to listen, but I didn't get here by accident. The idea of an equity partner never appealed to me anyway, so my wife and I are content to do what we can do ourselves.
I always had the feeling that most of the people who rushed to the front of the room at those seminars to buy the kit, probably never did much in real estate. I'd exclude Carleton Sheets from this because I think his books and tapes were reasonably priced and I don't think he over hyped the mansions and sports cars theme like so many of them did. I think if people wanted it enough, the information was out there for free and people paying for the kit were looking for an easy way. Disappointed, no doubt, when they found out that if money came easy, everybody would be billionaires
and the money would be worthless.
The only thing I could say is the same about any two deals that we've done is that all the sellers were more motivated to sell than we were to buy and most of the properties were in some form or level of distress. Other than that, you just have to be prepared to act when an opportunity pops up, usually from somewhere unexpected. The ones that got away were the ones we weren't prepared for and couldn't act fast enough.
I never agreed with the seminar hustlers when they said that low interest/high purchase price was the same as high interest/low purchase price as long as the payment was the same. Those people get real quiet after a tough period in the market. If cash flow gets tight, people with no equity get hit the hardest. Cash flow being equal, I'll take a lower purchase price every time, as long as I can pay it off early if I want.
I'm not saying there's anything wrong with studying, but it's been 24 years, dude. Can you think of a property that you could have bought 24 years ago that is worth less today? Not to mention that a 30 year mortgage would be paid off in 6 more years, even if it was worth less. The cheapest property I ever bought was 2 lots in Ohio in 2011 for $1000. There was a $1500 buyer's premium, so I was in for $2500. (It cost the bank almost $5000 to sell it to me!) I found a buyer on craigslist who offered me $5000 down and 8% interest on another $5000 and he paid me off in about 18 months. Flipping vacant land.....you never know what the next opportunity is going to be, but you can keep studying after you buy a property or two. Good luck, man!
