Rich Dad Epilogue

[Account Closed]

Hello BP, i re-read Rich Dad Poor Dad and just notice in the final chapter "Epilogue" he used a non-qualifying loan. But what i'm confuse is just what is loan is? It is Partially Seller Financing? Subject To? Or something i'm not award off. 

[Aaron Mazzrillo]

Originally posted by @Account Closed:

Originally posted by @Aaron Mazzrillo:

Originally posted by @Account Closed:

Originally posted by @Aaron Mazzrillo:

Back when that book was written there were no doc loans. They called them liar loans and basically they were funded by what you told them you earned and nobody ever questioned it or asked for any proof of income, bank statements or filed taxes. 

 So that would mean this method the book mentioned will no longer work & is not one of the above methods i mentioned.

 There is plenty of money out there just waiting for an enterprising entrepreneur to put it to work. When you make the decision that you will only rely on institutional financing, you decide that you want to live a life of mediocrity and that you will be controlled by others decisions of what is right for them regardless of of illogical that is.

When you make the decision that you will work to find private lenders who share your vision and want to help you realize it, you will find more than enough money to satisfy your needs. I closed a deal last Friday. I paid $135K. My private lender funded $135K. He then called me and told me how I should fix it up and sell it. So, not only did I get almost 100% financing (I have to pay 2 pts and closings costs), I also get the sage advice of a guy who has flipped more than 500 houses.

There isn't a bank on the planet that is going to suggest to you how to run your deal. Their only mantra is; Make the payment on time.

Already planned to use other method than the traditional & boring bank loan because i just love to use my brain, that's why i'm into real estate. Aaron, can i assume most of your deals are flipping and may i asked do you used a property manager/ Architect to handle the rehab because it can save you time for other important matter instead of being there on the scene?

 I run a full spectrum real estate business; I hold, wholesale and retail. Just depends on the deal. I play in the entry level market and it is all pretty much straight off the shelf from Home Depot. First time home buyers are easy to please because they don't really know what they want. They just want to stop paying rent or living with mom. Therefore, an architect is never called for unless you plan on doing some additional square footage which is not part of my business model. 

I'm a turn and burn kind of investor. I don't like being bogged down on a rehab for months and I detest working with government entities like code enforcement and the building department. Surprisingly, most of my best deals are clean and fix, then sell fast below market, especially in this hot market. I am doing a rehab now that is costing me $6K. New counter tops, some paint, fix a window, replace the tilt up garage door with a roll up, and some other minor tune ups. 

When inventory is low, there is zero reason to do a full blown rehab. I think most investors do it because they don't know any better and/or they just want to impress their friends with the pictures they post on Facebook. Why spend $25K to sell for $200K when you can spend $5K and sell for $185K? Less in, more out and a faster sale because it is "sweat equity" deal. First time home buyers will fall for that gimmick again and again in a hot market. 

As for the design, I don't really get involved too much. Most houses I don't look at before I buy and probably only see once before I list to sell them. It is the contractor's job to walk it and write up a rehab proposal. Why do I need to be there? I don't know how to swing a hammer. I know how to write checks so I stick with what I know. He does the work and sends me pictures. 

Real estate can be a completely hands off business, but most are too scared to actually take that next step. They think they need to micromanage every aspect of the buying, fixing and selling. Sit home, buy houses cheap, send your contractor out to fix them and have your listing agent do the walk-thrus to tell you what needs to be touched up. If you hire a listing agent, make him/her work for the money. He/she should be perfectly capable of doing a punch list and even picking out colors/textures that will get the house sold. If not, get yourself a new agent.