All Forum Posts by: Todd Gustafson

Gotcha. Thanks, Mark!

Anyone know the restrictions for marketing a home purchased by HUD on Craigslist (I'm wholesaling it)? Curious what I can and can't get away with.

TIA

Yes, as aforementioned, I've reviewed many of the Guru's courses and got this impression. Which is fine if you are willing to pay and get enough value from it. However, most give just enough to keep you wanting more and keep your ink pen pressed against the checkbook.

My father signed up for a course in south Florida. He and my mother made a mini vacation out of the seminar. Although they reviewed a ton of information, the guru and team asked the audience to literally max our their credit cards and invest in one of their projects at a $25,000 minimum. Are you kidding me? Everything was building up to that final sales pitch.

Speaking of sales pitches, I went to my first REI meeting. My current real estate agent is president of the local Chapter, and she invited me. I had a great time, networked with interesting people and learned a lot.

The speaker seemed legit, selling self directed IRA's. I think he's selling a great product and once I get the ball rolling will look into it. However, he is at the meeting for one reason, to sell as many SDIRA's as possible. He's a salesman just as every other guru. In his defense, I could see the value in his product but do not in many of the guru's products; I'm not a sucker.

Last, in Mr. Terry's defense, as the last poster explains, I've learned more from his ebook and podcasts which are free than the wholesaling course I spent a few hundred bucks to acquire.

I expect anyone who acts as a mentor to offer his or her service at a premium. It's what you get for the premium that makes the difference.

Thanks for the input, Cory. Much appreciated.

To everyone following this thread, I agree that some gurus are out for a buck more than good training, always attempting to upsell. I've seen it and know people who have attended seminars where this was exploited to its fullest. "Max out your credit crad and buy our timeshare in the Bahamas". So, I commend the BPers for looking out for new members. It shows they care.

So far, from the material I've read and what others are saying, Sean Terry's group seems legit. I'll join for my own reasons and that's how it should be. I'm interested because of the motivational and inspirational factor. And he does have a solid step by step plan. Each investor should choose courses and mentors that suit his or her goals.

I've been reading BP forums off and on for awhile now. It is a remarkable tool. I've listened to audio courses and read books by different gurus and learned something each time. Here is the bottom line in my opinion:

There is enough info online where a new investor DO NOT need a coach.

However, some do better and benefit having one. My personality would probably benefit having someone walk me through a few deals. In summary, having a coach is another resource just as BP or books and audio seminars. Pick your posion; it's all good! No need to defend either is how I see it.

@Joel -
I see your point on maintaining the property and watching your pennies. But with the realistic numbers provided thus far, it seems one would have to own a lot of properties to cashflow a decent annual income. I'm ignorant to the cashflow of an apartment complex or other multi-family properties.

@Jeff -
This is great! Thanks, it gives me something to research.

So, do most long term investors go for more cashflow now instead of paying the loan off faster, giving even more cashflow once the mortgage or loan is paid off? I wondered what the popular mentality is for cashflow. Also, Is private funds the best to acquire rentals? I can see where funding is the issue once personal credit is consumed or better, to avoid using one's credit.

Jon, I wrote out 2 very lengthy replies and was timed out both time. LOL! In short, I think I have a good grasp of this.

Checking out the property tomorrow or Friday. Confident he'll come down to $35k or less. Also, good chance it will be a USDA loan with nothing down. I'm going to rework the numbers. Please check for me, make sure I understand correctly. This is helping me a lot!

Price: $35,000
Down: $0
Costs: $1,600
Rehab: $0
Cash invested: $1,600
Loan: $35,000
Payment: $276.78 (P&I only)

Rent: $625
Expenses, vacancy, capital: $312.50 (50% rule)
NOI: $312.50
Cash flow: $35.72 ($312.50 - $276.78)
Annual cash flow: $428.64
Cash on cash return: 26.8% ($428.64 / $1,600)

Rent/2 (50% rule)- P&I = cashflow

Does it look right to you?

Thanks again, Jon. I've been sneaking this in at work so can't comment. Will reply tonight when I have more time.

Exactly what I was after!!!

Thanks, Jon. I always enjoy your responses.

Your 2, 3, and 5 responses I understand; however, 1 and 4 I do not fully understand. I think I need to see some examples laid out. We'll use this hypothetically as a learning tool.

The last FSBO I looked at, he was asking $45,000. Retail rates for the home are about $48,000(ARV). He easily came down to $41,000 on the phone. Let's assume we paid an even $40,000 for the simple 2/1, 680 sqft home in the heart of town.

He currently has it rented out for $625. Assuming a bank loan at 5% interest for 15 years, the virtual calculator I used spit out $358 which approximated tax and insurance.

Make up the numbers where needed, but anyone who can give me an analytical break down would be great. I enjoy reading the different approaches as well.

Have at it!

I've been reading some on landlord mentality. It's led me to a few things I need to clear up. I'm a newb and still in the absorbing information phase.

This may be easier as three seperate questions. Here it goes:

1) Tell me if this is correct regarding the 50% rule. If I conclude a property will produce $1,000 per month rent then $500 per month will be consumed in expenses over time. This does NOT include a mortgage or note owed on the property. Am I correct or missing something?

2) Is there an industry standard checklist for expenses? I've seen a few personal lists and would like to see what I'm getting into - LOL.

3) If question 1 is true, how in the heck do you cashflow? Do most properties not produce income until paid off? It seems most any note owed would put you in the red, unless you got it for next to nothing.

I'm sure this has been addressed before. Guiding me in the right direction is most appreciated, especially when it comes to screening and business organization.

TIA