R.e. Investing Seminars

[Doug in NC]

Went to a Free real estate investment preview seminar (targeted at realtors) this week. Although the marketing explained that realtors could make big money by selling to investors, the crux of the seminar explained that it is the investor (not the realtor) who is making the big money in real estate. I must admit, I would love to join the network they were putting together. Just difficult to stomach paying nearly $5K for a 2-day seminar plus coaching (and some books and tapes) for a year.

On the other hand, I was fascinated how a realtor was able to go from a $60k a year job to $600k a year as investor. She actually showed us a few of the deals she was involved in. Sure, the $150,000 profit deals don't happen every day (for small investors), but making $20-30K on 4 deals a year would get me out of appraisin' pretty quickly.

What I really liked about the seminar teacher was that she didn't just give out the same tired old get-rich-quick information. Instead, not only did she give real life examples, but she also shared a few of the techniques she has used.

I liked her open-minded approach that "every property is for sale". Her technique was to look for un-advertised properties to invest in. This way, you don't have to get caught up in a bid war, fighting over the same foreclosures and deals on the MLS that all of the other investors in town are clamoring for.

One of the upcoming seminars is being offered in Hawaii. I would like to go to that one, if for no other reason than my family could use a nice vacation - and it would be a tax write-off!

 

[DTB]

Check out the new book by the man who started Keller- Williams it looks very good. I just skimmed it and will be buying it soon.

Many different approaches in it.

 

[Dee Dee]

Doug,

I think the secret is knowing the market you're buying in intimately (like a good appraiser would know it ), analyzing where it might be heading in the forseeable future (typical buyer motivations, inventory supply, job base, rental market, etc.) and knowing what your personal financial tolerance level is. The last thing I would do is trust anyone else to do that kind of homework for me.

Timing is the key. What might have been a fantastic money-making venture a few months ago could turn out to be a ball-and-chain tomorrow, depending on what that market area is doing.

For $5000, I think I'd take a pass and hit the bookstore. Can't help but wonder how much of that $600,000 income the Realtor makes was from convincing people to pay for seminars.

 

[Bobby Bucks]

I'm going to add a few more books to my library this winter. I haven't bought any in a few years because there is so much info online. Anyone know of any new ones which aren't rehashes of the old ones? It seems all the classics about nothing down, foreclosures, etc by Robert Allen, Sheets, Givens,Wade Cooke, et al are obsolete since every jackleg in town is now camped out on the courthouse steps. The last offer I made on a small rental had 16 offers the same day......the Sheetzers were out in force that day. Plus, the RE agents are marketing those MLS hot sheets to everyone. The game has definitely changed. For one thing, I am completely out of the landlord business. IMO there is too much competition due to neophyte investors overpaying for SFR rentals and
mucking up the market. I'm amazed how many vacant for rent signs I'm seeing. GRMs are completely out of whack. I'm sticking to lot/land flipping until I figure out a new angle.

Mike are you referring to the book by Gary Keller titled The Millionaire Real Estate Investor ?

 

[Smokey Bear]

I've been attending RE Investment courses in the Bay Area - the classes are very affordable, and very good. Once you've taken a group of classes, you can join their mentoring club where a lot of investors get together and we learn from each other, and it's led by the same people.

Finally, once you've completed a few more courses, you can join their "Investor's Showcase" where they present investment properties that have been offered to them by various agents/builders/owner's etc. They charge a relatively small fee to buy these properties, some are group deals etc. They've gotten enough of a reputation that people bring deals to them, like pre-phase I offerings. They got the pre-phase I offering of the Ivana Trump Tower in Las Vegas, got great prices, reduced down payments etc.

Most of their courses cost between $99 and $250. You shouldn't be paying $5,000 for a RE investment course, it's just not necessary.

 

[Karl]

The Inevestment market of RE seems to be very similar to the Investment Market of the Stock Market a very few years ago.

Once EVERYONE was in the Stock Market what Happened

HMMM see ANY resemblances??

Next it will be Bond Market.

 

[Doug in NC]

Actually, the $5k includes a personal website, books/tapes, and one year mentoring. The mentoring part is the important part. I have a basic knowledge of a lot of different investment angles, as Bobby has mentioned, but its the details that scare me. (ie. what to avoid, what not to avoid, out clauses in contracts, etc.) From that perspective, if you paid someone $5k to teach you, and successful mentoring you through your first few deals, it would be worth it (especially in lieu of the alternative, where you lack the knowledge and courage to even get started). I think they also guarantee you will make $20k on your first deal (I would like to see that part in writing though).

Don't know about others, but I learn best by hearing information, so live training is a good thing for me. I just have difficulty grasping some techniques by simply reading a book. Maybe I'll have to settle for a good course on cd.

After much thought, and considering my wife's aversity to risk, I may try a lease-option first (possibly with a partner). This would involve minimal out-of-pocket initial expense, but would still give me the opportunity to start building up a RE portfolio. That property could then be sold a year or so down the road, or equity could be taken out for further investment (especially a property in an appreciating market). As is the case with most beginning investors, getting through the first few deals is the biggest challenge, since most don't have much capital lying around to buy properties with.


Bobby, as you have mentioned, you may want to keep an eye on some of those properties that the neophyte investors bought up. Once they have owned that property for 4 to 6 months and haven't been able to sell or rent it, they will be the ones offering a deal for you to take it off their hands.

Mike, I tried to find out when the January event was scheduled through the coaching-institute.com website, but events were only listed through December. Unfortunately, I won't be able to attend because I am heading into my usual Winter slow appraisal cycle - no extra cash flow, especially after making tax payments for the quarter. <_<

 

[Karl]

I'm confused IF I knew of a deal that I can make 20,000 in less than 30 days (Use to be 40,000 that should give you a clue) WHY would I share that information with people that will cut a Appraisal fee for 25 bucks?? Cause surely they'll offer 5,000 more for the Home & Sell for 5,000 less & still have made 10,000 Check my math BUT I THINK thats better than a 25 cut Appraisal fee. Now IF I were to share that FAST CASH making deal with 500 people each weekend, I could see that 20,000 drop really fast to 1,000 a equivilent of the 25 Appraisal fee cut. That I see on a daily basis NOW!! & has ANYONE attended one of these where they talk about the FACT that in the event your FAST CASH Purchase exceeds the 30 days YOU will be required to make a PAYMENT!! Just suppose that 30 turns into 120, can you hold on?? OH thats right those PAYMENTS are TAX DEDUCTIBLE.

Only thing you need to remember NEVER Invest MORE than you can afford to LOOSE.

Actually not really all that confused 500 people @$99 NOT including all the "Continued Education" Books & Video Tapes ETC ETC Please check my math BUT 500 X $99 equals 49,500 for a weekend!! Thats better than 20,000 in MAYBE 30 days.

I'll also BET that a percentage of the people there have a "DEAL" for you to get started.

 

[Dee Dee]

The people that are running these investment groups aren't stupid. They fully intend to make money, regardless of whether or not those who join the group succeed in doing the same. Because the housing market has been ripping along over the past few years, almost everyone has been profitable, but from what I'm gathering from many fronts it appears that these investment groups are starting to look more and more like dog and pony shows for latecomers.

Cynthia, I'm not trying to pick on you here, so please don't take what I'm going to say as a personal jab.
You posted a good example of a point I'm trying to make.

I've been reading articles about Ivana Trump's project in Vegas, and the last I heard they were having difficulty getting construction financing, and that the original contractor had quit. Not only that, but nobody seems to know how much Ivana is investing of her own money into the project (if any), or if she simply sold the rights to use her name (maybe to annoy Donald, who's busy hyping his own project in Vegas right now). And those big-name movie and sports stars that have supposedly bought into these mega projects? More often than not the units were given to those people in exchange for using their names for endorsement...just like they do with tennis shoes and fancy cars.

Developers depend on pre-selling projects in order to get financing, so in the case of a huge project like Ivana Towers, there are around 950 high end condos that need to have commitments from buyers before the developers can convince lenders to look seriously at financing them. So, if their initial grand opening cocktail bashes don't pull in enough buyers, the developers have to team up with investment clubs and hot shot brokers to sell the dream. The pitch is that it's a great flip opportunity, and that only selected investors (ego food) can get in with special financing....and look at the big names who will be your neighbors!

In the recent past, this may have been a pretty sure thing, but the market is changing in most of the cities that have seen rapid appreciation. Big construction lenders are taking a closer look at the buyers in these projects. If the buyers aren't putting much down, they're more likely to back out if it appears that they can't make a quick flip (note: keep an eye on many of the larger SFR builders and check out how many pre-construction cancellations they've been getting over the last few months). Not only that, many of the pre-sales of these larger projects were priced using pre-Katrina costs to construct, so by the time construction starts those projects may go well over original estimates.

I think you see where I'm going here. There are many long-time big investors who are predicting that a sizable number of proposed projects will never be built at all because they're too risky to finance. Some are saying that less than half of the proposed projects will never break ground or could go bankrupt before they're completed. How many investors are going to go along with putting larger downpayments or paying a higher price after they've agreed to something else, just to be sure the project flies....especially if there are a growing number of signs that the market is cooling and the project may not be complete for another year or two?

Back to the investment clubs. I wonder if the commission that they tack on for introducing their exclusive members to these hot-lead projects is refundable if the whole deal goes south. I would certainly be looking closely at the fine print. Like I said, they have no intention of losing.

This same scenario is playing out in may parts of the country, not just with condo projects, but also with single-family residential subdivisions.

Like I said before:

I think the secret is knowing the market you're buying in intimately (like a good appraiser would know it ), analyzing where it might be heading in the forseeable future (typical buyer motivations, inventory supply, job base, rental market, etc.) and knowing what your personal financial tolerance level is. The last thing I would do is trust anyone else to do that kind of homework for me.

I'm sure that some investment clubs might offer things that would be helpful tools to learn different ways to invest, but I'd be wary of any carrots that they tried to dangle.

Call me a skeptic, but I think that a lot of naive people are going to be be getting burned within the next couple of years, and they'll be kicking themselves for not seeing what would have been obvious if they had not been blinded by the lure of easy money.

As always, I wish everyone success.

 

[Bobby Bucks]

Doug here is a link to a site which I’ve found to be a good reference for investment related questions.

http://www.thecreativeinvestor.com/

It has dozens of forums for RE categories such as tax strategies, rehabbing, subdividing, landlording, selling notes etc. It is free to join, but they have an optional paid membership which entitles you to limited benefits and the ability to send private messages to other investors. I only have the free one, because from what I’ve observed, the ones sending all the PMs are people trying to sell you products.

There are a lot of MBs there and some overt hucksters The answers you can get range from the ill-informed to excellent advice. There are attorneys, accountants, agents and others in specialized areas. If you join, I would advise not posting that you’re an appraiser or you’ll get bombarded with questions about their latest deal which didn’t appraise for their expected value. There was a thread in there recently that would rival the mortgage grapevine for harshness.

I had a nasty situation a couple of years ago with a tenant and thought I was going to have to hire a lawyer for a hostile/forced eviction, but someone in there had been in a similar situation and their advice saved me some hefty legal fees and got the tenant to voluntarily leave in 30 days without burning the place while exiting.