Daily Grind is SUCKING THE LIFE OUTTA ME!

[propertymanager]

REO,

UH-OH, we're dangerously close on agreeing again!!!  

We were close on our step by step I just

A. would find birddogs and others to help in the mix (not Realtors) NETWORK!!!

I agree with the bird-dogs and networking - that's why I suggested joining the REIA.  I like to use Realtors and think that you are losing many deals (REOs, for example) by not using them.  Additionally, I don't care what the realtor makes or the owner makes as long as I get a great deal.  I only care what I make!

B. With how low interest rates are I would not use my own cash

I agree 100% with this one and that's exactly what I said.  If you use a line of credit or your own cash to buy the deal and then immediately refinance as I suggested, you ARE using borrowed money.  

c. Save the book money to market and save the time reading and start doing!

Darn!  I thought we were going to have complete agreement!  Knowing that the majority of those that start any business fail, I think that it would be smart to get educated BEFORE doing a deal.  Many newbies only take one shot and when they fail on their first deal, they never go back.  I'm sure that both of us have purchased houses from down and out newbie landlords  -  they're so disgusted that they will give you the house and throw in some cash just to stop the pain!

HOW HARD IS THIS REALLY?  Everyone makes it harder then it needs to be!

I agree that REI isn't hard, not at all.  However, the majority still manage to fail.  How many people have you seen that buy a rental at retail and then lose their rear?  Also, you better have a plan to deal with tenants or they will EAT YOU ALIVE!

Mike

[allagash]

Also, you better have a plan to deal with tenants or they will EAT YOU ALIVE!

Hmmm....this is something I'd like to hear more about.

-Mike

[propertymanager]

Mike (allagash),

What I meant was that you need a plan for dealing with tenants.  I could type so much about this subject that the website would lock up.  However, until you become a landlord, you never know how many scumbags, liars, criminals, and losers there are in this country.  I have had a complete change of attitude regarding the poor as a result of this experience and now believe that it is a total waste of time and money trying to stop poverty.  It can NOT be stopped because most of the poor are simply LAZY, many are criminals, many abuse drugs and alcohol, and they have no desire to do better.  I think that the government should immediately stop spending money on the poor (except my section 8 payments, of course).  If you don't believe me? - BECOME A LANDLORD!

Anyway, you need to have a system to deal with these people.  How will you screen them and who will you accept?  What will your lease say?  VERY IMPORTANT!  How will you handle late pays?  When will you evict?  What will you do when a tenant trashes your house?  What will you do when your tenant doesn't mow the grass?  What do you do when a tenant moves out in the middle of the night and leaves their stuff?  What will you do when the tenant is arrested for drugs in your house?  What will you do when your tenant buys a vicous dog?  How will you handle the never-ending list of sob stories?  What will you do when the water is shut off for non-payment and the tenants are using the toilet in buckets in your house?  What are they doing with the contents of those buckets?  What will you do when the gas is shut off for non-payment during the middle of the winter?  What will you do when junk cars start to pile up in the front yard?  These are the issues that destroy newbies!  I've seen it time and time again!

In addition to the people, how will you own the properties?  In your name?  In an LLC?  Trust?  Do you hold rentals of differing risks in different entities?  How many properties do you hold in each entity - or do you hold all in one?

That's are just a few of the issues I was talking about.  You need to have some general plan for dealing with tenant issues before you jump in?

Mike

[jpstephens]

I read until 3 am last night through chapter 7 of the Sheets program.  It's great!  There are still questions that i'm mustering up but thats what you are all for. So now I did NOT waste a day, everyday I learn more and more and prepare myself for a purchase taht I want to ahve done by my birthday(november 13th) thats my SHORT TERM goal.

I just have to pick a location, and a sublocation. Which I believe to be New Haven, CT. And Sub location being the downtown area in and around Yale.

I need to get my financing straight, such as finding a good lender, etc. Any recommendations?

I am also gonna start trying to subscribe to papers up in the New Haven area so i can get FSBO's.

[cecsix]

However, I totally disagree with Cecix - I don't think that you are ready to buy a property, but you certainly are ready to get started.  Buying a property was step 9!  I suggest starting with step 1.  

i would hope if he's serious he's already done most of your steps 1-8.  your steps 1-8, in my book, don't qualify as "getting started".  any chump can do those things, and should have done them immediately.  i think jp has the knowledge he needs.  

i mostly agree with your steps, aside from the realtor thing.  i think realtors tend to slow down the process.  i am working with a few realtors, and they are doing OK, but the best deals i've found so far, i found entirely on my own.  

[propertymanager]

Cecix,

Everyone must start sometime.  It sounds like JP started yesterday and I applaud him for that. He's already gotten farther than most wannabes.  However, most people never get the basic education they need in REI and therefore fail.  It's just that simple.

As you see on this site and will see at just about every REIA meeting or REI seminar that you attend, the majority are newbies and there are a different group of newbies every time.  Many people WANT to be RE investors but very few will succeed.  Seminar presenters know this.  They give their presentations and get people to line up to buy their $1,000+ packages, but many will never open them; even fewer will complete them; and only perhaps 5% will ever do a single deal.  Of those that do a deal, only a small percentage ever do more than 5 deals.  Then, only a few of these people will ever be able to go "full time".  That's probably 1% of wannabes that ever make it.

Just look at this board.  Besides the site moderators, how many people here are full-time?

Mike

[kdhastedt]

Not all of the Moderators are fulltime -- it just feels that way!!!

:

Keith

[jpstephens]

Oh I won't back down, I will succeed and I will be a millionaire by the age of 30. 9 years from now, 9 years is a lot of time I feel to get there, hopefully I can do it sooner.  

I do agree though, I have to just jump in soon. No better way to learn then actually work hands on with a home. Kind of like interning or apprenticing, the only thing different is ITS FOR REAL. I just hope I dont jump in the wrong way.

My next stage I feel is going to be screening homes.  

Question: Does it matter how much my first home is? Should it be 100-200k? 200-300k? 300-400k? 400k+?

Thanks again

[Baloo]

There ya go thinking inside the box again JP!  The amount of the house only matters when considering the market and how much below retail your paying for the property.

the best place to start is probably your lower middle class houses.  If you go too low it may be hard to sell or rent due to competion and saturation of the market.  Go to high and you risk running into a very limmited and very picky market.

As to the actual amounts that will be determined by your market and what you can be aproved for.

Good Luck!