Great Article from Realty Times

[wendy]

http://realtytimes.com/rtapages/20050930_flippers.htm
this is a great article, especially for individuals who keep hearing how easy it is to get rich and make a bunch of money from the late night hosts on tv.

[Lithix]

ok... so she was basically just saying that everything taught on these forums is wrong.

[JeffInCT]

It was a well put together article.. kind of a doomsday approach

Here are a few comments:

One: I don't recall the 'late night gurus' saying 'get rich quick' on real estate infomercials.

I may have heard:
get rich with real esate
get rich with other peoples money
get rich with no money down

... not get rich quick.

Th article listed the drawbacks of flipping in certain markets.  Even in booming markets there are people dying, relocationg or suffering hardship.  It may make things competetive but not impossible.

If REI was REAL EASY everyone would be doing it instead of talking about it.
 
I think the article is misleading to newbies and experienced REIs' who can read between those lines would not be deterred by it.

Here's the real deal..  After you've done a couple of flips..... THEN IT REALLY IS EASY!.

Jeff
 

[Propertygirl]

I did not really care for the artical. She made it seem like what we are trying to do is wrong.
I don't think that helping someones credit by stoping a foreclosure and taking all that burden off of someone and assuming the risk is necessarly a bad thing.

[oski]

As investors or investors to be, you owe it to yourselves to pay close attention to facts. Investing is a life long endeavor and will require the art of patience, resilience and sound judgment based on researched and well aticulated facts (data) and not hear say.
If you described George W. Mantor as a female writer, then this has identified your distaste for thorough reading and your taste for impatient browsing.

-- He who takes advice is sometimes better than he who gives it.

[4R Management]

That quite possibly has to be one of the most ill-informed moronic articles I have ever read. The author calls all investors, including Kiyosaki, Trump, Sheets, etc THEIVES.

I am sorry, but the reason I close the door when I use the restroom is that I know my crap stinks. I put my pants on, one leg at a time. Who died and made the author king?

Real Estate Investing is a BUSINESS, and just like any business you have to work at it and make it truly a business. If the author thinks Investors are cheats, how about that Mobil/Exxon just posted 10B in profits for the last 3 months?

REI is not about "screwing" people. If they wanted to save their equity they could. If they were smart about buying a house they could afford, they would have. We are saving people. Ever look at a 1003 form? This is the normal form used in lending. See the little box that asks, "have you ever been foreclosed on"? Well unless a person wants to lie the rest of their lives when getting a loan, it is smart not to be foreclosed on!

Just remember, REI is a business. Treat it as such, treat customers with respect and dignity and they will keep coming back. You can do the right thing, profit, and be successful, not only financially but morally.

I think the author is just upset they can't find any deals. Or it is a realtor upset that people aren't utlizing their services as much.

[ForeverInvestor]

That quite possibly has to be one of the most ill-informed moronic articles I have ever read. The author calls all investors, including Kiyosaki, Trump, Sheets, etc THEIVES.

I am sorry, but the reason I close the door when I use the restroom is that I know my crap stinks. I put my pants on, one leg at a time. Who died and made the author king?

Real Estate Investing is a BUSINESS, and just like any business you have to work at it and make it truly a business. If the author thinks Investors are cheats, how about that Mobil/Exxon just posted 10B in profits for the last 3 months?

REI is not about "screwing" people. If they wanted to save their equity they could. If they were smart about buying a house they could afford, they would have. We are saving people. Ever look at a 1003 form? This is the normal form used in lending. See the little box that asks, "have you ever been foreclosed on"? Well unless a person wants to lie the rest of their lives when getting a loan, it is smart not to be foreclosed on!

Just remember, REI is a business. Treat it as such, treat customers with respect and dignity and they will keep coming back. You can do the right thing, profit, and be successful, not only financially but morally.

I think the author is just upset they can't find any deals. Or it is a realtor upset that people aren't utlizing their services as much.

Very well said

[niravmd]

The author owns a real estate brokerage and mortgage company. He not only doesn't make any money from investors in the foreclosure business, being a realtor he's probably amongst the least knowledgable of people regarding real estate investing.
I know i'll catch a lot of flak from the realtors who are on this board, but the fact is most agents are not good investors. [and they don't visit this board either]

[propertymanager]

Parts of the article are just plain wrong.  It is absolutely obvious that you CAN buy property at a deep discount.  I have personally purchased properties that need no work for below 40% of market value.  In my opinion, if anything is wrong in an article then the entire article is suspect.

As for the issue of "helping people", that is the real urban myth spread by the gurus.  We aren't in the business of helping people.  If we were foolish enough to help people in foreclosure, we'd hand them a check so that they could save their house and we'd never see a dime of that money again.  I believe that the "helping people" myth is spread by the gurus to make newbies feel better about profiting from the troubles of others (expecially in the typical pre-foreclosure scenario).  I'm also quite certain that I wasn't helping people when I evicted those two tenants this week (one of them told the judge that he will probably end up in a homeless shelter).   I didn't feel sorry for him (not even a little)because he is a drug addict that spent the rent on drugs.

Having said all that, I certainly do not believe that there is anything wrong from profiting from these deals.  In a pre-foreclosure, the owner is going to lose the house regardless of what we do (or do not do).  They can be much worse off if the foreclosure goes all the way to the court house steps.  So, although we're not helping them, we certainly aren't hurting them.  We're just profiting from what is a no-win situation for the owner.  Also, try to keep in mind that most of the time, the owner's wounds are self-inflicted.

Good Luck,

Mike

[JWRealEstate]

Parts of the article are just plain wrong.  It is absolutely obvious that you CAN buy property at a deep discount.  I have personally purchased properties that need no work for below 40% of market value.  In my opinion, if anything is wrong in an article then the entire article is suspect.

Mike,

It is awesome to purchase properties for below 40% of market value and don't require any additional work.  Based on your experience, at what level of selling price is easier to get a discount like that? is that below 100k, 100k - 200k, above 200k, or the selling price does not really matter ?  What channels do you go through find the properties like that?

Any inputs will be appreciated.
JW

[Verdoclev]

Hi there,

Good article, really good,..., many topics to think about...
Ok, that s my old talk about speculating...
So, it seems that there are experts with the same opinion...

( i realized the most sad and costly manner that i have really been a speculator. Mea Culpa!)
And you only know that when the market drops to the bottom of the ocean,..., so you (flippers) can continue to be optimistics...

[propertymanager]

JW,

All of my properties cost less than 100K, but I'm in Ohio.  A $60,000 house in Ohio would cost $500,000 or more in California, so your mileage may vary.  No appreciation here, but if you can get 30% to 60% equity at closing, who needs appreciation?

Mike

[JWRealEstate]

Thanks Mike.  I live in dallas, and always love your post.

[Propertygirl]

Oh i'm sorry, did I say "she"?

[rhm76384]

Hey,
     Mike: I love your consistency in your cynicism. That is refreshing. However, I respectively disagree, to a certain extent, regarding whether or not rei's  actually being in business to help other people.
     I am a medical professional. I make my money because people have physical illnesses, some fatal. I have watched many people die and still recieved a check. I did not cure them. I might have eased their pain and suffering. I was compassionate to them. Some of their illnesses were the result of their own lifestyle choices - smoking, overeating (obesity), sedentary lifestyle (hey, that sounds like what led to my heart attack!). I still get paid the same. There are some caregivers (very few) that actually don't give a damn about the patient, give poor care and generally are lousy people anyway. They get paid the same as those of us who do care, are truly sorry when our efforts fail and often establish good relationships with our patients.
     How we percieve ourselves and what we do is a matter of the heart. I can't judge you because I don't know your heart. In the same token, those of us who believe we are helping people are doing so because we believe so in our heart. The cynic would call us self-delusional, but it works for us and allows us to be able to look at ourselves in the mirror and feel good about what we see.
     Sure, it is a business and we must turn a profit. Sure, we must turn out the deadbeat. Sure, people must ultimately face the consequences of their actions. But, in the end, working a "business" and "turning a profit" become pretty poor reasons for being.
     We each live the life we choose for ourselves and sometimes for reasons we don't know or understand. We each strive to have purpose and meaning for our life. How we choose to do that and how we believe we do that is to be found within. You can't see inside me, nor I you. Let us celebrate the good each of us does no matter what the motivation. We each must stand and look in the mirror every day. Let us hope each of us likes what he sees.

     "It is one of the most beautiful compensations of life, that no man can sincerely try to help another without helping himself."  -- Ralph Waldo Emerson

Peace,
Richard