All Forum Posts by: Wendell De Guzman

Thanks Dennis for your quick response. I won't get his system though as I have done all the strategies you mentioned.

I totally agree with @Account Closed: over-all Chicago is a good place to invest. Property values are not that expensive, the job market and the economy is stable and therefore there is cashflow and even some potential for appreciation.

Having said that, as Ryan said there are some bad areas - which is true for many cities. The crucial thing is to really learn the area wherever you invest.

Has anyone heard of him or does anyone here implemented his strategies? How did it work? What is it precisely? Is it "subject to" and then you sell the house on lease options?

After doing this for 10 years...and if I were to do it all over again, I would suggest...

1. Focus on 1 strategy and learn as much as you can about it (get a book, attend a seminar, get a mentor - you can do all the theoretical learning in one week because of #2 below)

2. Have a BIAS towards ACTION (e.g., I read Ron Legrand's book...then I immediately applied it and got my first deal in 30 days... Do not be a seminar-junkie...you cannot learn everything just by attending seminars or attending classes. You have to implement what you are learning as quickly as possible).

3. Network with as many" real estate people" (real estate agents, investors, mortgage brokers, wholesalers, rehabbers, landlords, title companies etc) as possible

It depends on your interests, skills and existing resources. You don't need a long term plan necessarily. Have a bias towards ACTION. By moving forward and acting, you will learn more about what it is you really like and what it is you want to be good at. You don't have to know all 30 steps before you act. You have to taken step 1, so just figure out what steps 2 and 3 are and do them.

Me personally, I experienced practically ALL the real estate strategies available for residential real estate.

In 10 years...I wholesaled a LOT of deals, I did buy-fix-resell (retail) deals, subject to that I leased optioned, SFRs that I rented, I owned and resold land, I owned a 36-unit apartment building in a war zone, and I am part owner now of a 133-unit apartment complex in a nice area.

After experiencing all these real estate strategies, I realized...

1. I love the deal making aspect of real estate

2. I hate landlording and the hassles of dealing with tenants directly

3. I am not very handy or good with the details of a rehab project

4. I am good at raising capital

and so...

I decided I will focus on 2 things: wholesaling houses and buying-and-keeping 100+ unit apartment complexes in nice areas. Wholesaling and getting a BIG apartment complex allow me to use my skills in deal-making while getting a BIG apartment complexes allow me to use my skill in raising capital. An apartment complex big enough allows me to just hire the right people to deal with tenants so I don't have to deal with them.

@Holly Scanlon, how did the auction go?

Answer is: it depends.

Yes, from a mathematical standpoint it makes sense NOT to pay down your mortgage. Why pay extra to pay down a 4% mortgage when you can invest and make more than that?

However, depending on your situation, it might make sense to pay down your mortgage so you don't have a lot of overhead, specially if you don't have enough passive income yet (from real estate) or your job is not that secure.

I deal with people in foreclosure all the time. Unfortunately, some of them are landlords or real estate investors who are losing their own personal residence because they overleveraged themselves.

As Robert Kiyosaki said: Leveraged is a 2-edged sword. It can help you if you know what you're doing but it can hurt you if you're not careful with it.

So my vote is: do not pay extra to pay down a low interest mortgage but be disciplined with your finances so you can invest that extra cash and get higher returns.

There are 3 possibilities:

1. You can invest in turnkey SFR properties. I know a guy in Cincinnati OH who has houses you can buy for $30K each that can be rented out for $600-700/month. You can get 3 properties for $90K and get $1800 to $2100 a month cashflow. Using the 50% rule, you will NET about $1,000 a month. That's a 12% Cash-on-cash return.

2. You can also invest in tax lien certificates in Illinois. My partner's return is about 20% per year. Redemption period is 2 years. You don't necessarily get properties but the cashflow is awesome.

3. You can invest in apartment buildings and get 12% CCR and about 20% ROI.

Lashinda,

This is an example of what happens when you don't know the 70% rule. When I wholesale, even if the property does not need any repairs, I always strive to get the house cheap. An example of a deal I got was a house worth $120K. No repairs.

I got it for $55K.

I sold it to a buyer for $85K.

I could have sold it higher. But I did not because I want to give my buyer a great deal. When you wholesale a deal to another investor, you need to leave money on the table. Otherwise, you won't be a wholesaling for very long because your investor-buyers will realize you're trying to wholesale them bad deals.

Welcome Charles.

You don't need a real estate agent's license to invest but it sure comes in handy so you'll have access to the MLS. The best way to start is work for an experienced real estate investor in your market and learn from him/her. It sure beats learning from a book or audio CD or from a guru.