All Forum Posts by: Tom Goans

No. In Colorado, it could be considered against the law.

The old adage is correct; A picture is worth a thousands words. Moreover, you know better what you seek and will accept. A photo can go provide you with the answers. Quality photos are like quality art, they speak to you.

Dan,

I appreciate you seeking more knowledge from this blog. However, it is not enough. This is not only your hard earned money, it is your retirement money. I imagine you are already familiar with the laws concerning self-directed retirement funds concerning investments.

My concern is your protection. Plus, there are so many options to consider to protect your investment.

I know other investors such as myself who are the originators of notes and sell notes to self-directed retirement funds. They not only have a very long successful history, they guarantee the loans and payments. The investor or investment fund will not miss a single payment or not collect a single penny.

Even then, I still will not recommend you doing any business with them or any other person or company until you have a better understanding of the note investment world. I am thinking of you, your money, your future, and the future of your children.

A telephone conversation with me or some emails is not enough, in my opinion.

I will offer two suggestions. Diversify. Invest in several small notes to spread the risk. Should one go bad, it is not a big deal. Secondly, acquire a cash flow stream secured by a note or notes of equal or greater value.

Again, I have been buying, selling, and originating notes since the 1960s. My father has been doing it much longer, and my grandfather before him.

I agree that the numbers do not work.

I also recommend much more preparation and research without assumptions. Become the Best Prepared and Informed Person in the Room. Then you will be able to make a decision based upon your research and comfort level, not others.

You MUST educate yourself about all the ins and outs of this part of the real estate business prior to making any purchases. MUST. There are a huge list of problems and information you must obtain prior to any purchase.

Secondly, why would a prominent investor want to sell the note? Huge red flag to me. There are so many other ways to pull the money out, especially if the investor has an established successful history. The only thing I can think of is the investor is fishing for someone with no experience or knowledge to buy the loans.

I have bought and sold loans since the 1960s.

Victor,

Why hire a “birddog”? If you are a true investor who can qualify and quickly close good investment deals, birddogs (real estate agents) will hunt you down. The more qualified you are, the more calls you will get daily. Define your investment goals and have the ready cash and financing on hand. The best way to get the attention of real estate agents is realistically close as fast as the title and closing company can close. In my case, this has been as little as 2 weeks.

Save your money for the investments. Birddogs will hound you to death if you are genuine.

Education and experience are critical to enduring success in any profession. Begin reading, taking classes, especially real estate law, and consider working for an investor with a long and successful history to get on the job education. On the job education will prove to be the most valuable, but all is necessary.

Finish each day a little smarter than you began the day.

He who has the gold rules.

The one with the gold dictates the rules of the game, including the split of profits, return on investment, and ownership.

Consider this investment arrangement.

Find a very good investment. Have the investor buy the investment opportunity, and then sell it to you with owner financing. This gives the investor 100 percent of the collateral to guarantee his investment. The terms of the sale to you provides the investor with a predictable yield and investment. I do not recommend trying to ask for 100 percent financing. Doing so may alarm or even scare off the investor.

Your primary benefit is you do not have a partner looking over your shoulder all the time questioning what you are doing.

Every time you bring an investment opportunity to present to an investor, I highly recommend you include a very detailed business plan spanning at least 5 years, just as you would to a bank. You will appear to be more professional than all others, especially is you do not have any “blue-sky” assumptions. Note: I figure occupancy assumptions over 80 percent wishful and unrealistic assumptions.

Make timely payments, offer no excuses, perform better than you predicted, and you will have a financial partner for life. It will move to where you find an opportunity, make a call, and have the property under contract in a day.

Studies have shown the majority of buyers do not buy based upon the sales price or interest rate, they buy based upon the monthly payment.

If the monthly payment and down payment is more than they can afford, they move down to what they can afford.

John, on this point I disagree. The U.S. government has very aggressively in numerous forced interest rates to be low and remain low.

When interest rates rise to more realistic market levels, and interest rates may be very high due to the 3 Trillion the US government is holding in bonds (recall the Jimmy Carter days), there will be more buyers for more moderately priced real estate with good finance terms. Seller financing may have a strong comeback. On the other hand, I continue to believe the rental market will remain very strong. I have not read any reports that cash-on-hand is getting any better, In fact, buying power has been on the decline for many years.

I did see a report back in April of 2013 that the present US workforce is at 1992 levels and not improving. Forget the weekly unemployment numbers, the actual number of people employed is dropping. This too could greatly affect prices and the number of people in the buying market.