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Updated almost 17 years ago, 02/27/2008
Very Tough Questions from a Newbie
Hi Guys,
Firstly let me say Thankyou for the opertunity to get these questions answered by the best of the best.
I'm a 20 year old wannabe millionaire who's really struggling in life and in need of some real estate help.
Before I begin just a really quick piece of background info, I havn't had an easy life, I had everything taken from me when I was 10 and have been living in an abusive house hold for the past few years struggling to get my education and become a great person in life. Last Year at the age of 19 I decided to go back to School and finish in order to grab my diploma and proove to myself no matter what you can always push yourself a bit further.
Luckily I was born with a good head on my shoulders and despite being abused I always knew I could do great things in life If I just belived in myself.
After atending various seminars ie Anthony Robbins and Dr John Demartini I started to get the crazy idea that at the age of 20 I could outshine every single other teenager/young man and really live a passion filled worthwhile life.
So I've decided that this year I'm going to go full throttle into investing and make a great life for myself and one day future family/friends.
However I have a major problem and this is where my ' Tough Question ' comes from.
I've worked various jobs and because I never held myself to high esteem they were always bottom of the barrel, retail or temp jobs that usually had a manager who treated you like dirt thus giving me a really nasty taste in my mouth for ever wanting to work again.
To be frankly honest, I dont want to ever work again. However By work I dont mean work, I mean a career working for someone else, working in a field I dont enjoy or in an area that I have little or no control of and cannot profit from. I understand being young you have to start at the bottom and I've done that already, I've learned sales skills and I belive If It came down to it I could negoatiate anything out of anyone.
My First Question is -
1) How would I start investing in my first property if I dont have a Job, thus meaning no bank will loan me money?
2) My Total savings Equal $500 at the present and I'm lucky to live with a relative who charges me VERY little rent, How could I use this $500 to get started?
3) What should I do to overcome this problem of working? I want to work for myself and profit from my hard work as opposed to making some ' company ' and some ' boss ' richer. I Belive my time and work ethic is worth alot more than I'm being paid.
4) Would anyone have a copy of http://www.amazon.com/Turned-into-Million-Estate-Spare/dp/0671253689
' How I turned $1000 into 5 Million in my spare time ' for sale or spare they would be willing to sell me?
5) Is it impossible or stupid to want/ask for a mentor?
The reason I ask this is because alot of millionaires I've talked to always say ' Find a Mentor , Find someone who's done what you want to do and learn from them ' But everyone I've spoken to who has done what I want to do doesn't seem to want to offer mentoring or advice, regardless of how much I proove myself or how much money I offer them.
6) Is there any field of real estate I might enjoy as a career to get started earning some money ( For investing ) that would give me a really great advantage in property market knowledge that doesn't involve being an agent?
7) Trump once said ' borrow borrow borrow and even if you dont need to borrow some more ' Could explain this logic to me? I would assume the less you borrow the less you have to pay back and the smaller your fee's would be from interest?
8) I belive I could turn $5 million into $50 million in a matter of years, but my problem is getting that first $5 million, exactly how is one supposed to do that without having a full time job and alot of savings?
9) Is there anything I could do TODAY to get the momentum needed for my future investments.
Thankyou Kindly
- Paul
You can do anything you put your mind to!
Where you came from...What you have or haven’t done, does not matter.
Maybe take a look at “bird-dogging” or “wholesaling”… There is a lot of info here on those topics..
Also find local investor groups to your area… Learn all you can!
Call all the ads in the paper from other investors…Instead of asking for a mentor, call the investors and offer to work as an “Apprentice”.
Keep at it!
What I'm going to say can be taken quite harshly -- if you don't dig a little deeper for the real point of what I am trying to say. It's up to you to consider my words as a put down, or a reality check -- you determine your own destiny. That said, here it goes:
1. The world is filled with people who have been abused.
2. The world is filled with people who complain about bosses.
3. The world is filled with people who only have $500 in their pocket.
4. The world is filled with people who talk a good game about all of the great things they are going to do if somebody would just give them a break.
YOU have got to get a job -- too bad if you don't like it.
YOU have got to save money -- too bad if you can only save $50 a week.
YOU have got to read lots, and lots of books -- too bad if they cost $49.00 on Amazon.
YOU have taken an important first step in reaching out. The people here will help you, but YOU have got to ask the right questions and YOU have got to take the right ACTIONS.
Your childhood is not the problem.
Your finances are not the problem.
Whether you have patience could be a problem -- it may well take you 5-7 years to begin to get where you want to go, and that's if you work really, really hard at it.
You can do it, but it is YOU that has to do it -- no excuses and no sympathy.
Good luck!
I set a goal… Probably 20 years ago now, to be a full time Real Estate Investor... And, I just became one, just over a year ago… Things take time…
Never, Never, Never give up!
My first piece of advice. Drop the victim act.There is no place for a victim anywhere(welfare line maybe?). If you had it bad,and you may have. The best thing is to never be there again so do not start any conversation or introduction ever playing the victim. Ok on to some of your questions.
Where to start making money.
1. Get a job. I know this is not something you want. With a job comes something you need,MONEY.
2. Sell what skills you have to an employer.
3. Develope more skills,continue your education.
4. Learn everything you can about what it is you are actually trying to do.Right now no matter what you think you lack even the most basic understanding of business.
Do these things now not later.
Brief history about me so you know where I am comming from.
I dropped out of high school.Did the retail/crap job from the age of 17-21 or so.Then I went back to school and on to colledge.Got a middle management job I hated(but i did make a very small amount of money...that was needed later).Saved every penny I could.Then I went through a realtor to purchase my first property.This almost turned into a nightmare.Everything was wrong. To high closing cost,to little value,not worth what I paid.Pissed I decided to learn what my realtor should have know.So I got a realestate lic. I learned very little in that process,but some.I worked both my middle management job and realestate job for over a year.Selling new and existing property learning from a very skilled broker the business. Bakc to school again this time for a broker lic.Then(very important part)with the money saved and some knowledge hard learned I started to buy property.Unlike alot of investors if I could not turn a property in 30 days I did not buy it.I also continued working with clients(mostly banks and other investors) servicing and maintaining properties,listing them ect...all the time learing and staying one step ahead of the market.I have turned over 50 properties at this point.And made my clients (investors and banks)money. Now several years into this business I am helping banks liquidate the hundreds of forclosures they are faced with,and in the process building my own net worth and net worth of investors I work with.This is not a business for someone who does not want to work...and work very hard. An average day for me is 10-12 hours of WORK.I now earn over 6 figures on any given year.This year looks great as well.
You expressed a desire not to work.And played the victim card as your introduction.Change you life.Change your attitude.And realize nothin is going to be given/handed to you.Earn your station in life.I am so sick of the people who think they are owed somthing lol.So in short change everything about who you are and you may amount to more than a drive through fast food employee.
Alright, I think we got off to a bit of a bad start.
Firstly Thankyou for the honest Answers, You're right the Victim attitude wont get anyone anywhere. My post was originally to show that after all the crap I'd been through I'm proud to arrive at the next challenge hence the reaching out to everyone here, I appologise if I sounded like I was whinging or giving a sob Story, belive me I'm not feeling sorry for myself, I'm all ready to go with the next exciting chapter in my life.
The reason I said ' I dont want to work ' was mainly because my mentors ie Sylvester Stallone, Robbins would always hint ' never work for someone else ' as it takes your focus away from what you want to do.
I was hoping there might be a way I could work for myself and only for myself as opposed to working for a boss and earning a weekly salary.
If I could have things my way I'd work 9 - 6 week days for myself keeping all the profits and putting it all into real estate, However I'm yet to figure out exactly how to start that without any previous savings or current income.
I read alot of books and watch alot of ' motivating material ' but these materials always seem to lack the ' before I was a millionaire I worked <insert> for <insert> to save <insert>. I guess I was a bit misguided into thinking you could just start off investing without having to have a job or save up huge lump sums of money.
Is there a career out there that would let me work very close to real estate and allow me insight on investing?
Paul - It is great you have this focus from such a young age. If you continue to work towards your real estate goals then you will probably be one step ahead of most investors. However, the reality is that there is no free lunch in this country (for the vast majority).
You need investment capital. There are no short cuts here. Maybe you can convince a private investor to loan you funds, but more than likely you are going to have to suck it up for a few years - work for The Man, live VERY frugally, and save every penny; all the while staying focused on your goals, reading, attending local RE investment meetings, watching and learning your local market, looking at houses, etc.
Manage your credit carefully. Pay credit card bills on time and in full. If you don't have a line of credit, get one. Start building a credit history, and do not miss a payment. Good credit will be one of your most important tools down the road.
When the time comes, and you have adequate capital saved, you'll be ready to buy a place - maybe a place of your own to turn into a rental two years later, and you'll find that the ball will be off and rolling.
My best advice to you would be to work all the hours you possibly can. Get a job in sales - these skills will help you down the road - try to find work in the housing industry - get paid for work that will help you in your investing down the road - but get work, save and stop dreaming that someone is going to do it for you. Live frugally, and the money will come and you can start investing.
if you have no money to invest right now.
you can still analyze deals.
go to as many Realtors as possible.
they will sponsor you to be a Realtor.
you investing will improve if you look at deals.
Remember The 100:10:3:1 Rule.
What this rule says is that if you look at 100 properties, put offers in on 10 , and try to arrange financing for 3 , you may end up buying one.
You can learn to write every deal as conitional to you getting financing.
When the seller finds out you can't get financing , they may be willing to work with you on seller financing.
Now if you can get a seller to finance the purchase for you and you can find someone to lease option the place from you. You are really making good money then.
$500 would be enough maybe as a down payment on a mobile trailer.
Don't laugh a lot of real estate investors are going in the trailer direction.
Good luck.
OK upgraded, it's time for a little "tough love" from your uncle.
1. Quit watching taped seminars. If you're smart, and it sounds like you are, you've noticed by now that most of them are pretty much all alike. I once likened them to "teaching me how to blow smoke up my own a**" So I told my boss that if I was going to do his job (blow smoke up my a**, ie; motive ME) that I should be getting HIS override on my sales as that was HIS job.
2. I spent many years as an employee and an employer. In my experience it's bad "followers" who create bad "leaders". Check your ATTITUDE, it may be what's causing some of your grief with your supervisors.
3. GET ON A PAYROLL and stay there. It's good for discipline and the bottom line. I'm not saying you have to be a clock puncher or cubicle rat for the rest of your life, but it can't hurt. Great place to network and the coffee and computer are generally "free".
4. Build a large cash reserve. I've got the assets to put together some sizable deals, but I can't do them if I don't have a few $K ready cash for earnest money. I also have to pay my utilities and buy groceries.
Enough said. I'm starting to repeat what others have already posted.
I doubt you need a mentor, they're generally a waste of time and from your OP I'd say you've already wasted enough time and money on seminars. GET TO WORK.
all cash
Since you're so young, you have the luxury of chosing which path you'd like to follow. It might be beneficial to you to find a job in Real Estate. Yeah, you'll be working for someone but you'd also be getting paid and learning the business. There are many career paths out there. Become a Real Estate Agent, mortgage broker, work for a property management company, etc.
Aim high but be realistic. Just my 2 cents. Good luck.
Paul,
You need a skill.. You need to learn how to make repairs if you want to get into this business. I would suggest that you go into construction work for a while. Other wise you are going to be relying on other people to do work for you all of your life.
Originally posted by "TC":
You need a skill.. You need to learn how to make repairs if you want to get into this business. I would suggest that you go into construction work for a while. Other wise you are going to be relying on other people to do work for you all of your life.
Somehow I doubt that Trump, or Zell mind "relying on other people". Truth is, only middle-class folk are worried about relying on other people -- rich folk build empires through other people.
It's a common misconception, but fatally flawed.
That said, you need to get income, so if you can get a construction job go for it.
Actually, now that everyone else has beat you up (which is good for you), I think you are in a very good position to step off into the right direction.
If you do not want to work for someone else, you must have some job skill of your own that will generate income. If you are in school, you are at the opportunity place right now to learn something that will be valuable to you in the future.
Money never just comes out of thin air. You must have some trick that generates income. That's a skill that you can learn.
People get what they want out of life. You see the guy who pumps gas at the gas station? He's there because all he wants out of life is to sleep in front of his big screen and drink beer. He doesn;t want any more than that.
If you really want more, you have to want it enough to work for it. If you are willing to do the studying and do the work, you can have darn near anything that you really want. That's one of the very nicest things about living in America. There is oppoertunity for everyone. All you have to do is reach out and take it.
If you want to invest in real estate, you need knowledge, and you need good credit. It's hard for someone with nothing to build credit without a source of income. That's where a job comes in.
If you get a college degree, you have a chance of getting a job that will teach you skills that you can use for a real estate career. You also have a salary that you can use to build yourself a really good credit report.
Wealthloop, Trump may not install toilets, but you'd better believe he knows to the penny how much he should be paying to have 2500 toilets installed. Rich people don't get rich by allowing the hired help to take advantage and over-charge them.
Originally posted by "PNW":
Of course, what you said is true. Not sure of the connection between what I said and that though -- I think it's important to respond to what a person actually says rather than reading a whole lot into it that was never there in the first place.
That said, your advice is quite sound, and I hope our young friend pays attention to you.
All the best!
Originally posted by "WealthLoop":
Originally posted by "TC":
You need a skill.. You need to learn how to make repairs if you want to get into this business. I would suggest that you go into construction work for a while. Other wise you are going to be relying on other people to do work for you all of your life.
Somehow I doubt that Trump, or Zell mind "relying on other people". Truth is, only middle-class folk are worried about relying on other people -- rich folk build empires through other people.
It's a common misconception, but fatally flawed.
That said, you need to get income, so if you can get a construction job go for it.
WL,
Perhaps you are OK paying someone 200 bucks to fix a faucet or put the breaks on your car, I like keeping my money and doing the work myself.
TC,
I couldn't agree with you more. What makes this country great is the right of every citizen to do what they want with their life. Some will prefer to fix toilets and others will pay others to fix toilets, so they can pursue other activities.
I guess it's all a matter of personal preference and no one outlook is either right, or wrong in the absolute sense.
If your time is worth a few hundred bucks an hour, paying somebody $100 an hour to do something is the intelligent thing to do. It's the same reason I don't stuff envelopes -- I hire somebody for $15 an hour to do that kind of work -- I'd be a fool to do it myself.
This is basic economics. A smart businessperson always pays to have others do that which he can get done cheaper than his own time is worth. If your time is worth a lot, you cannot afford to do most things yourself, so you hire others to do it. If your time is worth almost nothing, then you can afford to do almost everything yourself.
Make sense?
WL,
Of course I get it. Thats why I pay a kid to scrape and paint my basement walls for 150 bucks on my rehabs. While he is doing that, I can concentrate on the more important projects. I work full time as a software programmer and I can't believe how many people that I work with don't have a clue how fix their car or fix a plumbing leak. In my opinion these people are at the mercy of others. I grew up poor on a farm and under those conditions you have to know how to do everything yourself.
There is also the pride factor that I struggle with all the time. My father would disown me if he knew that I paid someone to fix something that I am perfectly able to do. It's a mind set that many people now days would not understand. I was watching a flipping show the other day. This guy bought a rehab and didn't have a clue how to do anything. He paid his friends to come over to replace a front door, while he stood there looking stupid and he actually was stupid. Stupid in a way of not having any idea how do to any of the work himself or even what that job was going to cost him in labor and materials before he started it. He lost his butt on that flip.
Upgrade, I would find an investor at your REI club ask them "HOW YOU CAN HELP THEM" You will learn tons. That being said I think you will need to get a job. The construction field would be good. I would stay away from Residential. Have you looked at the electrical, HVAC, or plumbing fields? I know most companies in the US will send the new guys to a 4 years vocational school at nights.
Good Luck
Upgraded,
Much like everyone else here has said, anything is possible when you focus. The best example I can think of at the moment is the movie "the pursuit of happiness". The main character and his young son end up homeless after numerous hardships. He decides that he no longer wants to live that life so he changes it. He does everything in his power to change his future and, through determination and focus, he lands the perfect job and lives happily ever after. :wink:
If you want something not easily attainable then you must work that much harder or smarter to get it. I'm not going to answer the questions that you posted except number 9. You need to learn, that simple.
I decided many years ago that I do not want to live as I was raised, nothing against my parents or anything. I went to college and landed a great job which pays more than I ever thought i would make. I was then finally convinced to start real estate investing and so I started learning, meeting people and acting, not watching. Now, I have studied real estate and learned how it works. I consider myself a full-time investor, even though i currently have a full-time job. I sold one house, about to sell another, and have two more houses that I am currently working on. Ask anyone on this forum who has been around what I knew when i started, nothing. And yes, I learned 70% of what I know from the great people here. I made it a point to leave the "rat race" of being broke and decided to make a change. Through working my *** off and being focused on my goals I have made a change, its visible now.
My point......work your *** off to get what you want. Be determined and do what it takes, no laziness here
Originally posted by "**********":
Thanks for letting us in on your life. This is one of the best threads I have read in a while. Kind of his home. I want to tell you about my best friend Dan.
We grew up in fairly well off Palo Alto CA during the Hippie era. My folks were were educated, well to do and straight as an arrow. Dans folks split up when he was3. His mom was heavy in to the the drug scene and hung out with the band members from the group Grateful Dead!
We had food and nice clothes and Dan did not. He ate most meals at our home. Dans mom spent every dime she got on booze and pot and lsd etc.
Dans mom was in one abusive relationship after another and Dan watched his mom get beat for many years. The odds were truly against him.
Dan did manage to keep up good grades and also got a baseball scholarship, but an injury ended his life long dream.
I had a fancy car as soon as I turned 16 and Dan was bound to his bicycle for several years out of high school. HE NEVER ONCE COMPLAINED!!
WHAT DID Dan end up doing while I was away at college?
Dan mowed lawns and did yard work 7 days a week 12 hours a day all summer long. He purchased an old JUNK pick up truck with a DUMP bed.
Dan ran an add in the local weekly newspaper " I HAUL JUNK"!!!!!!!
He spent the next several years sifting through peoples crap, taking crap from all the wealthy folks and continued to work very long hours doing very hard work for little pay! He was a Super Small Time garbage Man!
He still never complained. By the time I was out of school, round one, Dan had managed to purchase a beat up old Bobcat Tractor and junk end dump truck. You can probably see where this is going, I hope.
Still continued to work long hours doing back breaking work for several more years. By this time most of us had graduated college, had good paying jobs and drove fancy cars. dan did not. He worked his *** off and saved EVERY PENNY HE MADE.
We all got real nice pads and Dan insisted on living in a trailer for super cheap and never wasted a penny while we all lived large for that time period.
Dan had saved enough to put a down payment on a new Bob Cat Tractor and End Dump Truck after about 10 years of this. Were talking 100,000
in equipment. He got his contractors license as well and had the BEST reputation in town and the BEST work ethics of anyone I know, still does.
He was now able to charge 75.00 per hour which in 1990 or so was very good money. He continued his frugal lifestyle and soon had saved enough CASH for a house on the "other side of the tracks" in a pretty bad neighborhood. He bought an 800 square ft house in EAST PALO ALTO
for 85K and we all thought he was crazy for doing this.
Dan continued to manage his business and his money very well for the next 10 years. Got married and had kids and built his business up to 4 Bobcats and 4 end dumps in the mean time. Still worked very long hours doing very hard work and still NEVER complained.
FAST FORWARD:
Dan owns and operates a Commercial Engineering Firm and has a fleet of Tractors, Trucks and a thriving business and is very happy and doing very well today! Did his childhood suck? YES! Were the odds against him? YES!
Make your own conclusions here paul! Hope this hits your heart a bit and help in some small way.
BTW- Dan sold his 85K home in the hood last years for, get this...
1.2 MILLION and bought a beautiful RANCH an Ashland OR for CASH and continues to work his butt off, manage his money well and lives the life that he alone created for himself...
God bless America -- that's what I'm talkin' about!
Originally posted by "**********":
Glad you could relate! I admire guys like DAN.
I find myself in a similar situation TRYING to finish Law School at 45, with a 5 year old, a wife and while running 2 businesses and doing REI all at the same time!
Think I will pass the bar the first time? Our mayor, a good friend from school is sitting for the fourth time.
Life is hard and thats the motivation to succeed.
NEVER give UP on YOUR dreams.......
I guess I had it easy -- I went back to law school when I was 35, but thank God I had the luxury of being able to go full time. I can't imagine being able put in the hours of study with the plate that you have before you -- my hat's off to you.
As for the BAR -- it's all a matter of study. As you know, learning the law is about learning definitions and a logical thought process -- it doesn't take a particular genius. What it takes is lots of study.
Find a way to take time off to study. Take Bar-Bri classes or another Bar prep course AND ACTUALLY ATTEND THE SESSIONS AND DO THE HOMEWORK.
Do that, and you'll get to the exam and wonder what all the fuss was about.
As for your friend the Mayor I have one word to say if he doesn't pass this time -- IMPEACHMENT!
Good luck! :wink:
The most important thing you need to have is an entrepreneurial mindset. That means a few things:
1) A desire to really learn from smart people (which means helping them as well)
2) A constant eye for bargains for things you need to grow your business - and refusal to spend money on things that won't help you grow your business
3) A willingness to work, work, work
4) A recognition that two things divide great businessmen from people with great ideas. First, great businessmen know how to sell. Second, great businessmen always make sure they collect their money.
Awesome post **********!
Kudos for the inspirational story.
Hi, I'm still Lurking.
Just a bit disorented from the answers. Alot of confusing Emotions and thoughts at the moment.
There's another goal of mine I didn't really mention and that is to move to the USA and become a Citizen. Something I've been in the process of earning for many years and is going to be taking up most of my time this year ie making $17 000 for the Green Card Interview, Assuming I win it that is.
The story is great but I'm very different from the Guy in it, I'm trying to figure out why I'm so impatient at the moment.
Also not sure if Investing is really what I want to do anymore.
Originally posted by "Upgraded":
Just a bit disorented from the answers. Alot of confusing Emotions and thoughts at the moment.
There's another goal of mine I didn't really mention and that is to move to the USA and become a Citizen. Something I've been in the process of earning for many years and is going to be taking up most of my time this year ie making $17 000 for the Green Card Interview, Assuming I win it that is.
The story is great but I'm very different from the Guy in it, I'm trying to figure out why I'm so impatient at the moment.
Also not sure if Investing is really what I want to do anymore.
Where are you now? I would imagine that all the advice and inspiration in this thread are applicable just about anywhere that has a free economy. However, I have to admit I'm biased...living in the greatest country in the world and all (USA).
I'm in Australia and I really really hate this place, The ' Goal ' of Moving to America is both hard if not impossible to do legally.
Granted I'm sure there's special Exceptions for billionaire investors, but not for starting out Aussies.
Regardless gotta keep a positive mindset, I've done enough schooling to apply for the lotto so its in Gods hands now.