All Forum Posts by: Ali NA

I have been reading conflicting information about receiving gift of equity funds from sellers. It used to be that you had to be a relative to receive a GOE from the seller. However, as of 2004, you no longer have to be a relative, is this correct? From what I have found, if you are getting more than 20% the buyer has to contribute 5%, if its 20% or less, they do not. Is there anyone that can clarify this? I found someone online that had posted a section of the "mortgage regulations" where it stated you no longer have to be a family member. However, many mortgage lenders do not seem to be familiar with this sort of scenario.
Can anyone help?

Alina, I completely agree with you! Taz is way off base. I know you do this for a living as do I, and so I know you have first hand knowledge of what you are talking about. There is a lot of misinformation out there...as is the case with many subjects.

What I said was based on real life experience dealing with consumer advocacy groups that have been trying to expose the credit industry.

I know many people, family included that have had their credit ruined from dealing with debt consolidation companies and BK attorney's.

Many of the BK attorneys are trying to convince people that they need to file BK over $5000 worth of debt, its disgusting.

I know I have really helped many people as I'm sure you have. I like your website by the way!

As for Taz, I did not understand your response to my email at all so i will let that go.

Everyone will have their own opinion about what is the "correct" way to do something. That is the great thing about living in a republic. We have the choice to do business with whomever we want.

I disagree. I don't just look at credit as leverage, I look at complete financial wellness. In order to truly maintain financial wellness, a good rule of thumb is that if you do not have the CASH to buy clothes, electronics, etc, then DO NOT BUY THEM. If you don't have the cash to buy something, then you CAN'T afford it. Be responsible with your credit. Open as few cards as possible but be responsible.

Financial wellness isn't just about credit, its about balance. its very easy for people to put everything on a credit card and not have any personal attachment to how much they are actually spending. That is why casinos give people chips instead of letting them bet with cash.

Buy consumer goods with cash. If you don't have the cash, don't buy it. And....save.....save for the things you can't afford. That's what people used to do.

yes, I do know this subject. I do this for a living...

Dept store cards typically have the highest rates, worst fees, worst penalties and if you can only use them at dept stores they tend to create situations where people buy items (clothes, shoes, electronics) that they cannot afford.

If you can get a dept store card, you should be able to get a secured credit card. Many people start off rebuilding their credit using a secured credit card. I would never recommend getting a dept store card. There are many other ways for someone to rebuild good credit history without having to get a dept store card.

If that is what you currently have, then paying on time will definitely help you. However I for someone looking to establish or rebuild credit that doesn't have any credit cards I would recommend many other options.

fyi: I opened a Macy's card many years ago before I knew all the rules about credit. Its the only dept store card I own. I have rarely used it and when I have I have paid it on time if not in full each month. Even with an excellent credit score the interest is 25%. That is not a good deal!

Well K Gold, doing what is "right" is an interesting dilema these days.

Think about it, collection agencies are third party companies. If I have a delinquent cell phone bill with at &t and I do not pay it and they send it to collection well, they have violated our contract. I have a contract with at &t , not an outside party.

Once it is with a collection company, now I no longer have the opportunity to do what is "right" and setlle my debt with at &t. In fact, they will no longer talk to me because its been truned over to a third part. This third party now tacks on their fees and begins harassing me with phone calls at home, at my job, calling my neighbors,etc.

Lets say I break down and eventually pay off the debt to the third party and what do I get in return??? My credit score severely drops and the collection stays on my report for 7 years!!!

DOES ANY OF THIS SOUND "RIGHT"??

The consumer is being left with no choice to do what is "right" these days.

The credit card companies WANT consumers to become delinquent. It is much more profitable for them to have delinquent consumers. So who fights for the consumer?

If you were to lose your job and fall behind on your bills and wanted to call your creditors and work out a payment plan, you would think that would be reasonable. Why wouldn't your creditors want to get their money? No. Instead they will quickly turn it over to a third party and sell it off. Why? Because when a credit card company has to sell off bad debt, they get to file an insurance claim for three times the original amount of the principal. So if you ran up $50,000 in credit card debt and it became delinquent....the credit card company get an insurance claim of $150,000.

So you see, the system in not set up to help the consumer. It is set up for the credit card industry and the credit bureaus to make lots and lots of money and there is no voice for the consumer.

What happens to the consumer? Their credit reports end up ruined. They can't get all of these bad things removed from their reports so everything they do costs them more. More in car ins, health insurance, credit cards, loans....they will be paying sky high interest rates (more money for the credit industry).

Oh and what happens to the millions of people that are being harassed daily with phone calls telling them what scum they are for not paying their bills, well....a good portion of them committ suicide. Yes, that is the cold hard reality.

I have a client who is a young single mother. She was being harassed by collection agencies pretty badly. She tried to reason with them ( the worst thing you could do) and they told her that if she could not pay her bills then she was not fit to be a mother and that they were going to call Child protective services and have her child removed. She was a wreck!
I helped her and we got the calls stopped.

It seems doing what is right is not an option anymore. That option is being taken away from us.

Thanks Rozi!
I know that there are no guarantees with real estate investing but if you do as much research upfront and educate yourself, you will minimize the risk. I read a great book called "secrets of a millionair mind"...I have it listed as a recommendation on my website. Its such an inspirational book. The author talks about how poor people think "either, or" and wealthy people think "why not both". I loved that!!!

My biggest challenge so far has been my spouse. He doesn't understand what I am doing and is always in a state of panic. If anyone knows anything about panic or read "the art of war" you will know that panic is contagious. Its bad enough I get nervous or start to doubt myself but when you have another person close to you doubting everything you are doing, it can be very dangerous.

His personality is such that he believes in the old "a day's work equals a days pay". So whatever cash flow I have coming in, he doesn't really see that as income. He often implies to me and to others that I am not "working".

Even though I have a very successful credit consulting business in addition to my cash flow properties. Because I do not have a 9 to 5, he doesn't view me as working. Its very frustrating.

I know there are many other investors out there that may have similar issues with their partners.

My solution so far has been to NOT discuss my deals until the very end, until I am about to close. Plus, I handle my properties and any issues myself. It is my business and I will run it as my business.

I know in the beginning I fell into the trap of waiting to make a decision only after I had gotten some sort of vaildation from my spouse. Once I truly believed in myself and trusted that I had done all of my homework, I no longer counted on that approval from anyone else.

Its funny how in life we can be surrounded by people that have never taken a risk in their life, never started a business, never bought an investment property, yet they will be the ones giving you all of the reasons NOT to do something or why it will never work!

With time and experience has come some wisdom. All of the ups and downs of investing have taught me great lessons. I continue to read, learn, seek advice and take risks. I do this in every area of my life. Life really is what you see it to be. Like they say, there is no reality, only perception. I see greatness and opportunity. Life is good.

I own property in NJ where I reside but also own property down south. I have no idea how teams work and so far I haven't needed to partner up. I guess people team up to help with funding and I can see how that would give you a greater advantage.

For now, my father is managing the properties I currently own. Once I close on the 8 units I have a property management company that will be taking care of the properties.

I look for properties with good cash flow. I have traveled quite a bit and have a great understanding of many hot markets throughout the country. Beause of the economy I am being more cautious but I will buy in any state as long as the property has good cash flow and in a great rental area.

I do extensive research up front to make sure the area I am buying in is really solid and in demand.

Yes Caesar, you most definitely get that high credit score and you can do much faster than you think!!!

Those late payments can be removed so don't worry so much about that. There are several additional factors that make up your credit score.


Pay your bills on time, don't apply for department store cards, don't apply for too many credit cards (3 is enough), try to keep your utilization under 50% and don't close accounts even if you do not use them.

You can have the score you desire well within 12 months!!!

Be proud of yourself for staying on top of your credit, educating yourself about it and being responsible with your credit going forward.

Dear K Gold,
Why would you pay off old debt or settle it when you can just get it removed?
Collections over 2 years old generally do not hurt your score very much. However, if you make a payment or pay off a collection 5 years old, that is NOT hurting your credit score, you will now make the collection CURRENT. That will drop your score dramatically because now it shows as a recent collection.

I know, it sounds nutty doesn't it. If you try to keep in mind that the credit industry is not set up to "help" the consumer but to keep the consumer a slave to debt, then it will make sense.
Its like you get punished for paying off your obligation. Do not pay anything off.

If you are getting harassing phone calls etc, I can help you make that stop. The only time you may be required to pay anything off is if you are applying for a mortgage. The mortgage company may request that you pay off any outstanding obligations. If that is the case, make sure you pay off those debts the same day you close.

I have worked with many mortgage people who do not understand how all of this credit stuff really works and once they run someones credit for a loan, they will tell them to pay off a bunch of stuff hoping that will increase their score by the time they close. WRONG!!! What happens is the clients score drops and they no longer qualify for the loan. So make sure you do it all at the same time as closing.

Also, keep in mind, each state has a statute of limitations for how long a collector can legally go after the debt. Some states its only 3 years.
Yippeee!

Hi Victor,
I currently own two rental properties in that area right now. I do have experience in rentals in that area and have been researching it for over 3 years. There is a base there that supports the town. The base just got lots and lots of money for new projects and improvements and many of the based that have been closed down are relocating there people to this base. The stats for the area show that 75% of the town are renters.

My father is a retired Air Force General and gets a monthly review as to what is happening with that base. The town around that base is growing in leaps and bounds because it can hardly keep up wit the rental demand. Because the town is in the midwest part of the country properties there never really have great appreciation, but they also never have severe lows.

Its a great area for consistent cash flow.

As for improvement costs, I would estimate maybe $3000 per duplex. Mostly they need cosmetic work..paint, landscaping, new front doors.

Right now I have all three duplex building under contract, I am still working on the fourth duplex. I believe I will have the funds to close. It will be tight.
However, I already have my eye on two other properties there.

What would you propose?