All Forum Posts by: Jason Mathews

Naema,

I find it difficult to believe than none of the responses you received contained any useful info other than go to the library, join a club and good luck.

To become a wholesaler or contract flipper, you need a ton of knowledge about all aspects of real estate not the least of which is how to value a property which in itself can take months if not years to learn.or a ton of cash.

If i were you, I would decide where I want to invest. Then contact a local realtor you think you can trust. Ask him or her to find you the most motivated seller he can find of a 2-4 unit property. Have the realtor pull comps for you to prove that you are in fact able to but this property below market value by at least 20%.

Then hire a local contractor or a friend who knows construction and bring that person with you to advise on repair costs. Then make an offer on the property based on the comps you have looked at and subtract from the offer the cost of the repairs plus 10-20% extra.

If you get the property, you will be able to finance it with your current credit score using the FHA Owner Occupied Loan programs which your trusted realtor can advise you on.

If the seller doesn't take your offer, move on and find another. Eventually you will find a seller motivated enough to take your low offer.

Once you take possession of the property, fix it up over time as fast as slow as you want. Buy a book on how to paint, how to fix sheetrock, how to install a kitchen etc or look on line at sitse like www.askthe builder.com.

After you have been in the property for 12 months, known as seeding time you should have been able to fix it up, and get the other 3 units rented and be getting good rental income.

Now go apply for some cashout refi money. With a property in good condition, getting good income and your agreeing to continue to live in the property, you should be able to get 80% of it's then value which will be at least what the value was when you bought it plus the value of your upgrades.

You will have established your self as a homeowner, learned how to value property, learned how to negotiate, learned how to make repair estimates, learned how to do the repairs, learned how to get tenants and deal with them, AND there is a good chance that your property will be worth enough over your mtg balance to allow you to refi cash out.

Then take the refi money and go buy another. If you end up with $20,000 cash when the dust settles, plus what ever you were able to bank from the rentals, say $30,000, then do a quick calculation to determine what amount your cash on hand is 20% of. If you have $30,000 at that point, $30,000 is 20% of $150,000.

Now go find your self something that you can buy 20% +/- under market value less the repair costs you will be able to estimate on your own, and buy this one conventional and repeat the process or if you get the property under contract at a low enough price, throw some ads out on the web prior to closing, ad 10% or what ever you think you can get over your contract price and see if you can flip the contract. If not, go to settlement, do the repairs, rent the property, wait a year (seeding time) and do it again.

I gave the same advise to my young son when he graduated from Rutgers in NJ in 2005. Today he owns more than 45 rental units, and has income over 15000 per month. Some he wholesales, some he keeps, some he remodels and flips.

whatever you do, good luck and remember the profit is made when you buy, not when you sell.

If it weren't the case, you'd have received a lot more responses to this thread by now by the 60,000 members of this site... :-)

I have already told you all a few posts back what I am trying to accomplish with this thread, but I will be happy to explain it again.

1. I am trying to find out if any of the 60,000 members have taken courses they found either while searching for knowledge or that were sent to their mail boxs by on-line marketers,

And if anyone responds, weather the courses were worthwhile or not. Did the info contained in the course actually work or not work.

2. I wanted to bring awareness to all investors both newbie and oldie that not every scheme or tactic out there was written or created by real estate "Experts", but rather by individuals that may or may not have anything more than good writing and marketing skills.

3. I wanted to make everyone aware that half information in the wrong hands can literally be catastophic to the true investors among us.

No disrespect here J, but you write in generalities like "most people" and "most courses" and "they" never take action".

I have given you "specific" examples of how over hyped information to over hyped markets has had a catastrophic effect on Specific markets.

The Charlotte example I gave you wasn't a suppasition (sp), it was a fact.

The scenario I gave you about short sales wasn't a guess, it was a fact.

The scenario about foreclosures wasn't a theroy, it was a fact.

Ever wonder why banks stopped allowing buyers to get cash back at settlement? remind me to tell ya one day.

I just did a google search on "real estate investing courses" and the results are - Over 65 million results.

Here is a fact for you, check it yourself if you like.

Real Estate Investment courses on line between 1995 and 2005 = 63,000

Real estate investment course on line between 2005 and 2010 = 928,000

Are those results conclusive of somthing, I don't know, but it worries me greatly when one of those course is created by a flipper in Florida who sells an e-book online using copies of his checks, most of which were dated prior to 2005. Heck man, a monkey with a paint brush could make money prior to 2005.

Interesting fact or scarey thought?

I am simply trying to create awarness and maybe there are people in that 60,000 memership you speak of that just haven't found their way to this thread yet.

I guess we will have to agree to disagree.

You sound like you beleive that Newbes were born under a rock yesterday.

It is almost impossible for anyone above the age of 15 to not know or at least think that one can create wealth by investing in Real Estate. We have all been inindated with Real Estate News stories, on every conceivable topic, especially over the last 10 or so years.

One would have to be deaf, dumb, blind, ignorent and living in a cave not to know that wealth can be created through investing in real estate, but also fear entering the arena due to all of the information AND dis-information about bubbles bursting, foreclosures increasing and prices falling.

Newbes may go out and search for information about how to get the knowledge to get into the arena and hopefully get some of that potential wealth for themselves, some may stuble onto this site and get valuable information or they may stuble into this site and read a banner ad about "building a 6 figure income in 6 months using none of their own money or credit".

I am not saying that that banner ad is BS, I haven't reviewed it, but to me it looks too good to be true.

To a newbe, who doesn't know any better, it may look like an answer to a dream.

If I were talking about 1 newbe buying one course, I wouldn't care, but with the power of the Internet, I am talking about 100s of 1000s of newbe's headed off half cocked in the wrong direction.

Besides the eample of Foreclosure Riches I have given before, Let's talk about Short Sales.

Millions of Investors - newbes and experienced think that Short Sales are something new. New within the last 5 or so years. They are not new. I was buying homes on short sales in the 80's. The big difference between then and now is that back in the 80s when an owner sold his home on a short sale, the bank went after the origianl owner and recorded a defiency judgement. Some banks still do.

A few years ago, the orange haired kid mentioned in my origianl post began marketing a course called Short Sale Riches". The basic course material was excellent and I am sure it all worked just fine if you were in Florida or Arizona (two of the hardest hit states for lis pendens filings).

One of the things the course taught the purchaser of the course to do was to contact realtors to bird dog for them for people who were behind in their mortgages so that the investor could go under contract for a short sale and the realtor would get and market the listing.

Prior to that course and hundred of others like it hitting the internet, few realtors were persuing Short Sales, in fact few knew what they even were.

Suddenly X number of purchasers of that course are contacting X numbers of realtors in their particular areas and suggesting the bird dog concept.

I don't know if it had anything to do with what followed or not, but almost over night, realtors began listing and working their own short sales with every MLS system in the country listing Shortsales. Suddenly the Banks Loss Mitigators are inundated with requests from indipendent SS Investors (newbes who purchased that course) and from every realtor in the country who now thinks they know how to help sellers out of problem mortgages.

Suddenly the banks are less willing to negotiate the kind of discounts that the Short Sale Riches course suggested and probably were able to close on. Now most of the short sales properties listed in the MLS systems are listed at current market value as oppossed to discounted values, and the banks are less willing to negotiate with investors.

Many a newbe today buys what they think will be the answer without knowing the basics of investing and many of the products available jump right over the basics.

Can buying Notes, Probates, Foreclosures, short sales, tax liens, single family, multi family, MHP whatever make you money? -

Yes, if you know the basics first.

I suspect that most newbes either don't know the basics or loose site of them and jump right into TNBT.

So, again, I agree that there are two types of newbie, but I don't think any of them were born yesterday and they all know that investing will take knowledge, study and work.

They just don't know which course of study to go after and can easily fall pre to the marketor with the slickest web site, the coolest videos and most testimonials.

Again, it didn't matter to me if the person was pure newie or old pro, I was just hoping that some of the folks who purchased the course's whether to begin their knowledge quest or expand their knowledge would respond.

Thanx for that input, but I'm not looking for the secret. In fact, I don't beleive there are any secrets, there's just some stuff people don't know. Imagine if you will for a minute how a newbe might view REI.

The newbe reads all over the Internet that RE is one of the few tickets available that will allow them to ride the train to wealth especially in todays market with prices and interest rates at their lowest.

The Nugu's are the only one's talking and they all have the next big thing (TNBT) to offer.

Using nonsense examples like Donald Trump and Robert Kiyosaki, neither of which, by the way actually made their fortunes in REI.

That is all fine if you/they already know what to work hard at and be committed to.

But if they don't and the newbe either stumbles onto TNBT or goes searching for it, he or she may end up with either the wrong information or only half of the information.

Well, Like you, I am currently doing between 20 and 30 flips a year. Over the last few years, I have purchased everything from SF to MF to Small shopping centers. This past summer, I travelled throughout Europe and purchased a 23 room Hotel in Switzerland that came with a 2008 Bentley Continental Supersport (the car in my Profile Photo) and a secondary building that for the sake of description I'll just call a Duplex. Then I traveled to Kranjska Gora Slovenia where I sold off the hotel for what I paid for the whole package and kept the Duplex and the Bentley.

I havn't really considered creating my own course, but if I did, I suspect the reason I'd considered it might surprize you.

I considered it because it infureates me to see NUGUS selling Real Estate Investment courses that I suspect are total ********. It infureates me because what they really create is a bunch of idiots running around with less than half the knowledge necessary to invest correctly.

(I don't have the time to purchase every course out here in www land, so I am hoping to hear from those that have purchased them.)

I gave you the example of the Foreclosure Riches crap in a previous post. All those Foreclosure Courses did was create a Hyper Market for foreclosures which inturn caused entities like the FHA, VA, and Fannae Mae to start offering their foreclosed properties at market value as opposed to what they could get and the worst part is that novice investors were sucking them up through straws.

Prior to 2005 I purchased several apartment buildings in Charlotte NC. In those pre-2005 years, apartment buildings in this area could be purchased at 5-6 times gross. The same scenario is also true of the Alleghany County (Pittsburgh Pa) market, the Buffalo, Rochester, NY Markets, some areas of Ohio especially Toledo,

When the Bubble Popped in early 05, novice investors who had been making some serious money in the big 5 or 6 Bubble-ized states began running for cover and doing everything possible to unload the last properties they had purchased. It was Crap Investment Courses that helped to get the Bubble expanding in the first place and it was those same crap courses that lead to all the novice investors to NEED to unload the bad investments they had recently made.

Putting property under contract with the goal of flipping that property for a higher price prior to closing, selling the contract, purchasing property for the sole purpose of simply waiting for the price to go up 20% is NOT INVESTING, it is SPECULATING.

These Novice investors began searching for ways and places to keep their momentum going forward.

Up stepped the NUGUS. (New Guru's) with all sorts of Investment Riches Courses. Some of these Nugus were the same Novices who made money pre bubble, some were information marketers who turned their attention from selling e-books on internet marketing to selling e-books on Real Estate Investing.

Every ezine, Newpaper and web site in the country began talking about the Under Valued Charlotte Market. An entrepreneur from California who was under indictment by the Feds for fraudulent real estate schemes purchased a very large tract of land in Charlotte and began building townhouses. When they didn't sell he hired a company called Convergent Aquisitions to create a 50 page white paper that basically over glorified the Charlotte MSA and began advertising all over the Web.

By mid 2006, Charlotte Multifamilies were selling at 10-12 times gross with no underlying reason for the sudden increase in value. Novice investors armed with nothing more than the knowledge they had gained from other crap courses began sucking everything in sight up through straws. No Income & Expense projections, No thorough understanding of Cap Rate analysis, No knowledge of Vacancy rates, nothing. Just pure unadulterated HYPE.

I sold every property I owned in that market and made out like a bandit, hey I am human. I figure, if they want to stick their heads in the sand and ignore reality, somone is goin to smack their butts.

About the same time all sorts of Wholesaling companies began popping up in places like Pittsburg Pa, Buffalo, Syracuse, Rochester NY, and many of the Ohio Markets.

I could expand on all of them, but then this post might be taken as Course on What not to do in Real Estate.

What I will expand on is a company in the Pittsburgh area called Penny Foreclosure. With money from California Investors this company began purchasing large blocks of property that had been boarded up for 20 + years due to the steel industry going belly up. They began marketing this crap using bogus Market Analysis's created by an obviously novice Realtor in the area. They pushed the idea of the would be investor purchasing the property and paying cash for it and the repairs, hiring their company to do the remodel, and their company to manage the property. They were buying property for $2000.00, selling to people on the list they were building for $15,000 to $20,000, adding repairs of $6000 -$10,000 and did it with a bogus market analysis that showed comps in the $45,000 range, but always suggesting that the investor should plan to hold the property as a rental for 3-5 years.

It is my opinion that they always pushed cash purchasing because they knew no bank would finance the property and they pushed holding for 3-5 years because they knew there was no market for the property.

How was that for a tangent? :mrgreen:

Now, today, I see every imaginable scheme under the sun coming accross my desk top. From more shortsale courses, to tieing property up with subject too's, while applying to the bank for Mortgage rate and Balance adjustments, to more foreclosure courses, to Tax lien Certificates, Probate courses, etc.

The Banner ad at the top of this page comes to mind as I write this. The advertiser has taught "hundreds of students How To Grow" a 6 figure real estate business in under 6 months without using any of their own money or credit. Oh please, will somebody please give me some boots.

So, I am simply trying to:

1. Find out what courses have been
purchased, hopefully used and that
actually work or don't work so
that....

2. I might raise awareness that much of
what is available may be BS, and

3. Enlighten wanna-be's as to how to tell
the difference between the sand and
the water.

Like I said, I hadn't really considered creating my own course, but if I ever do, I will send all of you folks a free copy to you can critique it for me and tell me when I have run off on a tangent :)

JM

The mentality of most of the people I speak with who like courses is that they are looking for one or both of the following:

1. A low-risk way to make a lot of money;
2. A low-effort way to make a lot of money.

For some reason, they believe that it's possible to make a lot of money in real estate either/both easily or risk-free and they are looking for someone to tell them how.