All Forum Posts by: Ryan Urban

Sure. And in general, the approach to REI depends on one's goals. I'm getting into REI for diversification & long term appreciation purposes only, not to make a living. I work about 50 hours a week at a job I enjoy very much, so I don't have the time or the interest to do this as a business.

At the same time, my eyes are always open for opportunity. I guess the bottom line is that I don't have time to waste on phony REI programs, and that's why I brought the topic up.

One opinion I've seen on these boards is that the place to start is this website. I agree completely with those who say that a newbie should read and participate in these forums before they commit to spending money on a "guru".

...

Mike, great input.

When I mentioned pyramiding, I was referring to the practice of using equity from one property to buy another. At least I think that's what it means - I've read so many books, posts and articles I may be losing track!!

I agree with you completely, and that's why I'm doing things the "old fashioned" way - find a good property, get it at a good price, down payment, regular loan, positive cash flow, buy & hold - instead of following all the gurus and "no down payment" schemes. As John mentions above, there really isn't that much "new".

I'm just curious as to whether any of the "guru" programs are legitimate. Otherwise, I'm perfectly happy and comfortable doing the "get rich slow and careful" routine. As a matter of fact, if there is a SECRET, that may be it. It's just not as exciting, and that's fine with me.

I have a CPA and I know I should get my hands on a good estate planner soon. I have a cursory knowledge of estate planning, and I know enough to know that I'd better get to it!

Thanks very much Mel.

I couldn't agree more - this site is 24-hour access to some great advice, input, brainstorming. I'm thrilled I found it.

Hopefully before long I'll be able to return the favor and provide some good advice -- once I'm a "seasoned veteran"!!

:clap:

Well, that's a two-part answer.

First, I've decided on multi-family, buy & hold, maybe pyramid strategy. Not sure about the pyramiding, but we'll see. Standard 10% to 20% down payments, one to three properties depending on costs, offering 70% to 75% (based on appraisal) to begin, will buy nothing over 80%. I have a pretty strong nibble on a pre-foreclosure fourplex at 79.6%, I'll know in a couple of weeks from the bank.

Second, I'm always looking for other ideas. I've looked at (and purchased books on) mobile homes, tax liens, flipping, wholesaling, you name it. That's why I've asked about gurus and their programs. I'm just curious what's out there, and researching the different strategies has been great fun.

As I mentioned earlier in this thread, I'll spend the money on a program if it's legitimate. With so many hucksters out there, though, it's tough to tell.

An update as I chase my first deal:

My agent and I are looking at multi-family units in Colorado Springs & Pueblo and a couple have caught my eye. I decided to get a pre-approval to make the process easier, so I (to make a long story short) went to lendingtree.com to see what popped up.

I got a quick pre-approval on the phone from one lender, including 6.75% with 10% down. When I got the paperwork to start the real application process, it included a 2% origination fee.

No way.

I've emailed the lender and said that I'll not go above 1% for an originiation fee, and the interest rate must be 6.75% or below. Everything's negotiable, including loan terms.

I'll keep you posted.

There's a big difference between a warranty and a money-back guarantee. If you go to Ford and ask them for your money back after a few days you're in for disappointment. They'll try to fix the car under the terms of the warranty, but money back ain't gonna happen.

You're right, I'm definitely cynical. I'm new to REI, but my business/marketing background goes back a long way. I've seen too many business owners fail even when they were somewhat prepared, and I have a strong gut feeling that many people are jumping into REI based on what they see on infomercials alone, without cash and/or good credit. Failing doesn't just mean not succeeding; it can mean financial ruin, wrecked marriages and great emotional pain.

Interestingly, when I read posts from people who have purchased this guru's or that guru's program and complained, most of the complaints were about how difficult it was to get their money back, and not about the quality of the plan itself. It makes me wonder how many people really followed the plan from A to Z, and how many just gave up when they realized that they actually had to put out some effort. I know from experience that only a tiny minority of small business owners follow their business/marketing plans to the letter.

I guess what I'm trying to determine is this: If you bite the bullet and pay $2000, $3000, $4000 for the "full" package from one of these gurus, which of these programs are truly fundamentally, strategically and legally sound? Or is it possible to even know?

John:

Money-back guarantees are used so regularly and so extensively that they generally are not as effective as advertisers generally wish. The market has been saturated, in other words. A big caveat here, however...

It does depend upon the product/industry. You don't see any 30-day money back guarantees on cars or SUV's. But you will see it on products and services that overall do not cost the business a great deal. Circuit City once suspended its 30-day guarantee on big screens during Super Bowl/College Bowl season. As I bet you've already guessed, people would "buy" the big screen, then have Circuit City pick it back up after the games/parties and get their money back.

Indeed, a money-back guarantee is most effective when the product/industry has a less than stellar reputation. You think Ford & GM would sell more cars with a 30-day money back guarantee? Of course, and they'd be bankrupt in a year. And even a money-back guarantee can't be trusted -- I constantly read that people have nightmare situations getting their money back from these TV RE gurus. A guarantee is only as good as the company offering it.

I read that people like John Beck and the other gurus have phone staffs that harass you without mercy after you buy the "starter" kit. A $40 purchase can turn into a $5,000 purchase by the time they're done with you.

My personal opinion is, hell, I'll pay a couple of thousand dollars for a program if it gives me strategies and information that make the investment worth it, and that the information I get can't be found online or in the library.

In this particular case, yes, I'd be more interested if there were a money-back guarantee that I could depend on. I'm just not convinced I can.

I found (through this great site, of course), the Fannie Mae-owned homes search engine.

Does anyone have any experience with buying Fannie Mae homes?

Can an investor hope to buy a home significantly below market value from Fannie Mae?

Any other insights on this bargain-hunting method?

Thanks!

Great points. I guess I have two conflicting opinions on what is happening in this industry:

First, having worked with many small business owners over the years, it's my opinion that the vast majority of the small businesses that fail, do so because of a lack of business/marketing planning. I cringe when I see young people trying to get into REI with no money and poor credit, just because of some infomercial they saw, book they read, or class they took. Anything can happen, but I'd guess their chances are not good.

(As an example, I just put a bid in on a fourplex that will be bank-owned next month. Young guy, bought it with no money down and an ARM. Now he's screwed. I can't say he's an infomercial sucker, but I'd say the chances are at least 50/50.)

Second, I do believe that any good system will work if it is implemented properly. The key, of course, is the "good". That's where we have to look closely and read this forum for input. Most of the time, from what I've seen, it can take thousands of dollars to get the "full" program, and there are no guarantees. For the sake of the people spending this money, I sure hope those courses have "good" information, including complete business/marketing planning.

The biggest value to business/marketing planning is that sometimes it indicates that you SHOULD NOT start the business or make a deal. Knowing BEFOREHAND is much better than allowing your excitement to control your decisions, and ending up with maxed out credit cards and ruined credit.

I'm always looking for new ideas, and in this industry, it looks like a crap shoot at times.