What Am I Doing Wrong?
I tried doing REI. I am an insurance agent so I have more flexibility with my schedule. I was spending 2-3 days a week on nothiong but REI. I bought the Carlton Sheets program and went through it and studied it. I even got a mentor. I started finding properties through TCI, e-bay, the newspaper, but I didn't have much luck from banks or real estate agents. Basically, the banks would say they don't do that or they would just keep sending me to someone else. The real estate agents would give me their card and alot of lip service.
So I called one of my clients who had his own mortgage company and I asked him all the questions about the types of loans and everything else. My FICO score was about 610 at the time and he said he could do lending just on appraisal value and he would do a NINA ( No Income No Asset) loan for me. Well I was very excited and I thought I hit the jackpot right away. Well, I got several deals, had the letter of intent signed with them and then my client never got me the loan. It was ALWAYS in the works. I then knew I couldn't do any loans through him because it was all lip service.
I started looking for other lenders but the most I could find was a lender who would lend 60% of appraisal value up to a maximum of 100% of purchase value. But where am I going to find a home thats selling at 60% or under it's appraisal? also, with these loans I had to pay all sorts of additional costs for closing and things like that.
I basically stopped with REI for a while because I was disappointed and I couldn't find what I was doing wrong other then getting lip service from people and then depending on them and being let down. I wish I could do my own loan but I can't. I know other Investors have dealt with lenders like this because I have read it on the boards.
Anyways, long story short, I live in Columbu OH and got married there, we joined our credit and closed some accounts and spent alot on the wedding and moving across country to San Jose CA which is where we live right now (and hopefully forever, I hate moving) and my credit score has dropped down to 580-590 and I have no clue what I should do.
I really want to be a success at REI and I know some people that are but when I ask them for help they just tell me to go to a Seminar/Workshop on REI. What should I do? Any advice would help.
My wife and I are planning on paying off our debt, saving up 20% Down Payment for a home out here (Home's are EXPENSIVE in CA compared to OH) and just trying to do REI with my own money instead of lenders. I know there must be a easier way then this.
If any of you can help me please let me know. You can also send me a e-mail to the e-mail at my profile.
Thank you,
James
I also live in San Jose, and my suggestion would be to invest in your own personal residence first. The advantages are many: You don't need 20% down to get your personal residence, if it's your first home there are many programs available to help with low down payments. Also there are a lot of 80/10/10 programs from most conventional lenders. If you start with a undervalued/fixer type property and make improvements, you would be in a position to refi the proerty and pull out the equity for other investments, or wait the 2 years and sell without any tax consequences on built up equity, up to $500K for married. My personal suggestion is that after that there are many outlying areas of California that are better for investment properties; Modesto, Fesno, sacramento, than in the bay area. Small investors are getting killed with rental units right now, due to the locakl economey, oversupply of large apartment complexes and the continuing decline of rents.
Ever tried Subject To deals or know what they are. Check the Sub To forum and look into purchasing John Locke's Sub To Manual. I know, another course. but this one is really good. check it out and maybe you can go from there.
What type of real estate are you trying to get into? Just in case Sub To isn't for you, study heavily one area, and attack. I recommend sub to cause no banks are needed.
REI – Newbie
My only advice is to study lease options, Subject To, and Purchase options in depth. For any one of those can be done without any money out of pocket. With the exception of the $10 option consideration or the monthly payment on the Sub. To.
I was once told that “If you will do what others won’t for 5 years, you will be able to do what other can’t for the rest of your life”
Nobody ever said it was easy and it will most likely get worse before it gets better. But it will get better. I like to think that the difficulties I encounter are just my competition being weeded out, because no matter what happens I will keep pressing on.
I don’t know if I answered your question, but I felt like you needed some encouragement to hang in there. Keep in mind 90% of new real estate investors quit when victory was just a couple feet ahead.
Knowledge is power, learn then apply. You know that you cannot use the bank so gather all your options and make your decision once you have evaluated each.
I live in an apartment.....I own 2 houses right now and none of the debt is in my name. Many people told me to do the, "own your own home thing", but I needed money, not a house to live in. Many would disagree with me but everyone does things differently. Those 2 houses will net me over 80K and I need that money more so than the house. I'll pick up a condo or townhouse to live in somewhere down the road, but it's about taking care of your needs first. If you need a house, then look for one. If you need cash flow, look for houses to invest in. "Sub To, That's what I do"
[addsig]
"Subject To" Learn it, Live it. Cheapest way to get started in REI. There is a great deal to learn though. Learn it and learn it right. Ask someone who has done it before and ask if you can barter some work for knowledge.
Rick
don't give up. keep plugging away.
find another lender.
talk to banks,
don't give up. keep plugging away
talk to another bank.
etc.
good luck,
I from fremont area.
garcia
Thanks guys, you've really been alot of help. I have a question though, I checked out the Subject to and the pamphlet is 150 and the course is 1500. I don't want to spend any more money on this stuff because I have allready spent a fortune on books and REI stuff and I havn't made anything..... yet. I also checked on the Creative Investor for Investing groups and they all seem to cost money, especially the one closest to me. Would any of you that are good at "Subject to" be willing to help me out or teach me how that works. I still havn't decided on the path I want to take. Whether I should save and build credit and do REI in a few years or whether I should put energy towards this now.
Thanks,
James
James,
I understand your frustration about spending more money, especially since you've likely spent alot of money on other REI courses that haven't delivered. However, no one who actually knows what they are doing is going to "teach" you for free (hey, even if they don't know what they're doing, they're going to charge you).
If you're truly interested in REI, then John Locke's sub2 book is one of the best places to start. For that $150, you get a detailed manual, a private subto website to ask questions/get answers, Mr. Locke's email and cell phone number. I seriously doubt any "mentor" will offer you more for less.
Before you spend more, though, try visiting the local library first and reading some books on REI and financing techniques. Decide what type of investing you want to pursue.
Most REI groups will cost something to join. However, practically all have a "cover charge'" for nonmembers, so you could go to a few meetings for probably $10 a pop, not even the price of a good meal. At them, you can talk to actual active investors, and maybe most important to you, good mortgage brokers. Ask the investors for referrals.
Again, I understand the money issue, but REI is a money business. IF you get into investing, you'll spend it anyway. The difference is spending it on properly educating yourself to limit your mistakes or spending it on fixing the mistakes you didn't need to make.
Roger
Sites like TCI, creo, and others offer great how to advice...and it's FREE!!! Do a lookup on google and you're gonna get alot of information.
The SF Bay area can be pretty hard but hang in there, mingle and you'll find your niche. You took your first step and failed, so what? Step again.
I don't know too much about sub2, or John Lockes book either, but I can at least tell you this about John. A few weeks ago I had a problem unrelated to anything sub2, and John invited me to telephone him for some advice, which I did. He answered, had nothing to gain but a new friend, and gave me some good advice. My point? Try calling Carlton Sheets on his cell. No answer? Oh, you don't have his number? The next book I buy about investing will be from John. From what I read arount this board, if you have an interest in sub2, I doubt you could do better.Zach[ Edited by Zach on Date 11/21/2003 ]
Thanks everyone.
I have followed John Locke's messages and his articles since I started on TCI. I have heard nothing but good things about him. My plan is to redo the Carlton Sheets program looking over everything and studying it carefully and also reading some books I bought. I bought a book on how to invest in foreclosure properties and I also bought a book on "Flipping properties". Thanks for all the help. After I check all those out I will research "Subject to" on the internet to find out what it's all about. I had one question though, I know John is great with REI but I would like to hear from anyone who has taken is course for $1.5k and see how they have done since then and how they have used it. I am also planning on getting a house for my wife and I first. We were thinking of getting a pretty good house now for the next 5 or more years and then buy some land and have our dream home built. If anyone who has done "subject to" investing would like to help me out please let me know. I am willing to make you money until I feel ready to do it myself. Meaning, I will birddog in exchange for advice.
Thanks,
James
REMEMBER....You're not looking for properties as much as you're looking for sellers! If you're looking for properties, you'll look at 1000 of them before you find one that you can buy at 70% ARV. If you're looking for sellers, it's more like 20 (and that may be high).
Secondly...everything you're doing is CONVENTIONAL investing, not CREATIVE investing. Realtors like to sell pretty houses, Lenders like secure deals, title companies like traditional closes. You're asking the wrong people to help you out.
Third.....It's like a puzzle. Figure out the things you're doing right and the things that you haven't quite figured out yet. Isolate them and work on them one at a time. You'll fill in the missing pieces and one day you'll have everything figured out.
Look for local RE groups. Find/Make friends that want to learn together so you can share info with each other. Buying Locke's book is a great idea. Few programs are that focused and complete. Most are too broad and too generaized.
REI is a hard business. Especially if you don't have any idea what area of REI you are going to focus on. I've been at this since 2000. I took the 1st year to learn as much as I could and I did go to alot of seminars and also had a mentor. He actually had only been in the business a couple years earlier than me. I did all the grunt work. I knocked on doors and did alot of the research on the property. I talked to homeowners and got doors slammed in my face. But, it all was worth it! I learned alot. I still have alot to learn. This is the end of the third year and all the mailings I've done are just now starting to finally net me some good deals. I've made money in this business and I've been swindled out of deals. All because I did not know how to properly structure my deals. I use contracts now and am alot more leary of who I do deals with. The bottom line is I haven't "arrived" yet! But, I just keep plugging away at it and try to learn all I can. I actually have people calling me to do deals. You have to weed out the good from the bad. I live here in the Bay Area and this is a very hard market to work. Alot of competition. There is an investor group that I will be attending this coming Tuesday. The fee is $20 a pop if you don't buy the membership. This coming week Jack Reed will be there and I have a deal that I need to put some feelers out on - so I'm planning on going. It's all a learning process. Don't get frustrated. When you don't have any of your own cash to put into a deal you have to crawl before you walk. If you want to know about foreclosures I'll tell you this - you better be ready for the long haul! I find that foreclosure deals leads mostly to other areas of investing for me, rather than actually closing a foreclosure.
[addsig]
Perhaps a little more time in the field would be helpful. Not always in your specialty.
Check the forclosures run on the Preforeclosures and talk to the people. Might pick up a property.
Go to the Trustee Sales, get to know some of the people. They are doing they are there, they are current.
At the larger sales, watch you will see a group go for coffee, so go join them. tell them you are from IRS. Oh god don't do that you will be killed in the rush as they all depart. But ask questions. Old people like me like to spout off. You can learn alot. You might go to the library and read general business history, like take the US forward from end of Civil War, observe the great depressions and how things were handled. Observe also the high hills of good times and how things changed. Introduction of Credit card. Soon after all this reading some rules will evolve and by application of those rules 9/10's of your present time reality problems will be solved.
Enjoy it, lots of fun. Lucius
Val,
I was just in Pleasonton the other day and it's a really nice area. Where is this real estate investing group? which one is it? I live in the South-Eastern part of San Jose and I havn't even tried looking for homes out here yet. I don't know what the other guy is talking about with "I am doing CONVENTIONAL Investing instead of CREATIVE but i'm just trying to get out there and make things happen. I know that there are several different approaches but what i've learned in sales is to watch someone else do a deal. I know that you still arn't fully into this yet Val but if you could just show me how you do a deal that would be great. My e-mail is in my profile. Thank you guys for the help.
Always,
James
I also live near you. I do not invest in the Bay Area anymore. There may be some who can find stuff here but my time is very limited. Almost everything I have has been acquired using a good realtor. It sounds like you may have time to search yourself. You might try more inland. Your chances of negotiating a positive cashflow transaction are higher.