# [2007 Thread] Any Real Estate investors out there?



## BocaBum99 (Oct 7, 2007)

Now that the housing bubble has burst, I believe that there will be tons of opportunities in all forms of real estate including Condo hotels and other types of property.  My personal interest is in Vacation properties and all forms of how they are offered. 

So, I wanted to find out what these get rich quick schemes were all about in Real Estate, so I signed up for a course.  I guess I figured it was all a scam based on half truths, but if you learn what was true vs. not, you could get some useful info.

I have a penchant for Robert Kiyosaki and his Rich Dad/Poor Dad concepts, so when I saw one of his free seminars, I couldn't resist attending it.  I actually met him.  He is quite a bit different in person than on TV.  That's for another discussion.

The first seminar was a 2 hour presentation just to get you to sign up for a $495 3-day course.  This guy was as good or better than any timeshare salesman I ever saw.  I knew exactly what he was doing, but I signed up anyway because I did want to learn more.  To me the $500 was just throwaway.  I think they got about 50% of the audience to sign up hoping ot get rich some day.

I am now in the 3rd day of the paid course.  I feel what I am getting is a good solid overview of the various categories of Real Estate investing and how broad and deep it actually is and some good ideas for getting creative financing and finding motivated sellers.  There are actually dozens of ways to make money in Real Estate.  I had no idea.  Of course, this 3-day course is laid out to show you why you want to get get rich, the financials behind getting rich, the various areas you need education in and a hard sell on signing up for the full monte of Real Estate education through them.

We just got the pricing last night and it makes timeshares look like chump change in comparison.

All of the courses are 3-days in length.  There are about 15-18 courses in everything from:

- Wholesale Buying
- Foreclosure Training
- Short sales and mortgages
- Lease Option
- Property Management and Cash Flow
- Keys to Creative Real Estate Financing
- Real Estate Sales and Negotiating Techniques
- Asset Protection and Tax relief
- Discount Notes and Mortgages
- Manufactured / Mobile Homes and RV Parks
- Rehabbing for Profit
- Tax Liens and Deeds
- Commercial Real Estate investing
- Mentor Filed training
- Land Investment and Development - domestic
- Land investment and Development - International

They wrap a really nice context around how to create a portfolio of real estate investments to help you achieve total financial independence.  This I agreed with.  It would take a long time to master all of these types of investment.

We played the Cash Flow game, which is Robert Kiyosaki's $200 board game that is basically an updated version of the Game of Life with real world people (Police Officer, Engineer, Janitor, Doctor, Nurse, etc).  With income statements and balance sheets.  The goal of the game is 2 fold.  First to get out of the "rat race" by investing in business and financial assets that produce enough passive income to cover all of your expenses.  Then, you get to phase 2 where you are building assets to attain your dreams.  The winner achieves $50k per month in passive income.  Very interesting game.  Not sure it is worth $200.  It opened my mind that the only way to get out of the rat race is to invest and use other people's money.  And, anyone can do it, if they know what they are doing.

The prices.  Wow.  1 foundation course any any of the above listed courses for about $9000.  By the way, they use the same first day incentive approach where they discount the full price heavily to get you to sign up today.

The one year plan is $24000.  That gets you 4 courses and a 3-day mentor who comes out to your house and tries to help you get your first deal.  $34000 to get 8 courses which is your 2 year plan to achieve financial independence.  If the mentor portion is $9000, then you are basically paying $1250 per day for a course.  That is very high for education.

I must admit, I was extremely intrigued by the initial paid course.  They use the same sales tactics that timeshare sales people use.  They use lots of emotion and tearful situations of people turning their lives around.

After seeing some of the very creative deals that they reviewed.  I believe that their system probably works.  They give you software, toll free hotline support on deals, mentoring and all the forms and stuff you need.  But, I do believe at the end of the day, the person either has "it" or they don't.  You either know how to construct and negotiate a creative finance deal at below market costs without competition or you don't.  Probably only a small percentage of people have what it takes.  But, that is just my guess.

We googled "Rich Dad Education Scam" last night and found lots of negative posts and not a single positive one.  I believe that's because out of every 100 people who sign up, maybe 5 actually have the talent and drive to pull it off.  So, that leaves a 95% failure rate (or something very high).  They claim to be seeing 25000 students per month.  My guess is that counts free seminars.

In any event, it was very intriguing.  I am not going to sign up although I am going to investigate the various options and alternatives that these ideas opens up for me.  The instructor said that 50-75% of people attending the seminar signed up.  He called for a show of hands.  About 10-15 people wanted to sign up last night.  About 25-30 said they would sign up first thing this morning.  Oh, by the way, they do not provide financing.  So, you put it on a credit card or write a check.  That is commitment.  At least a timeshare developer will finance you.  Most of the rest said that they wanted to sign up, but couldn't figure out how to pay.  It was about 50-75%, just like he said.  But, as I spoke to people who said they were signing up, there was tremendous buyer's remorse.  I would be surprised if 25% actually signed up out of 120 attendees.  My guess is 10-15 will actually sign up.  Maybe one of them will be a successful real estate investor. 

A lot of students are complaining that they didn't get anything out of the course.  I think they expect to be spoonfed the how-to's of getting rich in real estate.  I don't think that is what you are buying, even at the full price of $60k for all courses.  I think what you are buying is concepts, ideas, pre-made forms that helps you get there faster.  But, at the end of the day it's all you can create out of the knowledge they try to give you.

I must admit.  I really would like to go through the course.  It just seems so interesting.  But, the risk of scam is just so high, that it's not worth it to sign up on the spot.  I could probably network into an investment club and pay someone a $25k retainer to hand hold me through the process with better results.  I have a bunch of cards of people who said they are signing up.  I think I'll keep in touch with them to see how they make out to see if my theories hold true.

Are any of you out there Real Estate Investors who can comment on what I've said?  These are just my impressions.  I could be wrong about it, but I think I'm close.


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## Steamboat Bill (Oct 7, 2007)

I would estimate that $50,000 per month in "passive income" would require a "net worth" of about $12,000,000 in assetts....this is MUCH harder to achieve than winning at a $200 board game.


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## Kagehitokiri (Oct 7, 2007)

i definitely plan to do major RE investing down the road. maybe just things like REITs next, but im more interested in high end developments. the higher end you go, the less you feel the market, and with some things the margins are higher as well.

i am NOT interested in doing any management. just providing capital. partnering and whatnot drops profit margin considerably, but id rather have a lot less work, and simply allow people who know what theyre doing to do it. i also cant imagine having the kind of cash some people have to drop on something. like a guy on FT who was talking about a $100MM personal project, or like the billionaires who start DCs. dont know what their funding was like, but ciel for example launched with a portfolio worth $60MM. YCW was probably similar/more. blixseth's buying/selling is a great example of how you can make huge margins by buying big cheaply and then selling very high end.

i have some ideas for one mixed use RE development for example, and have a handful of friends who might be interested in different aspects of it. like one being more interested in fixed income like apartments/fractionals, and another being more interested in bars/clubs/lounges. add 1 or 2 hotel partners, sell a block of units to a DC, and it seems very doable.

other things i find intriguing are 
- luxury boutiques
- clubs / bars / lounges
- phone cards / disposable phones
- music / film production


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## Steamboat Bill (Oct 7, 2007)

BocaBum99 said:


> The one year plan is $24000.  That gets you 4 courses and a 3-day mentor who comes out to your house and tries to help you get your first deal.  $34000 to get 8 courses which is your 2 year plan to achieve financial independence.  If the mentor portion is $9000, then you are basically paying $1250 per day for a course.  That is very high for education.



Does this mean that the mentor is making $3,000 per day?


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## Kagehitokiri (Oct 7, 2007)

im sure their cut isnt very large.


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## vivalour (Oct 7, 2007)

Surprising they don't cover market risk, because that's a very big factor in real estate investing, esp. when you get into big bucks and other people's money. If I were you, I would go with your idea or some modification -- lots of books around and people's brains you could pick for a much lower fee. I have been there in a relatively small way, and frankly don't find it the most interesting way to make $$$.


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## LTTravel (Oct 7, 2007)

This reminds me of the saying:

Those who can; do

Those who can't: teach

Those who can't teach: teach you how to make millions in real estate

And if you believe these guys, I can sell you a cream that will grow a full head of hair on a bald guy and a pill that will make your "you know what" that you won't care that you lost all your money in real estate.

If I had a secret way of making tons of money in real estate, I would be doing it rather than teaching the secrets, unless there is more money in teaching than actually doing it, which is obviously the case here.


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## Kagehitokiri (Oct 7, 2007)

and those who cant teach - critique


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## NeilGoBlue (Oct 7, 2007)

*Hard Money Lending...*

Boca,

My entire networth is in the real estate business.  I have a Hard Money Lending business that lends money to people that you mention in your post..

Rehabbers, Tax lien buyers, shortsalers, etc.

I have over 1600 clients who've done everything under the sun.

If you want to talk, just let me know.


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## luvgoldns (Oct 7, 2007)

A friend of mine recently told me about www.REIforNewbies.com where the first report and bonuses is only $50.00...lots of basic "newbie" stuff but still very useable for those willing to take action...


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## hipslo (Oct 7, 2007)

In my legal practice I represent many very, very successful real estate developers and investors.  At the end of the day, frankly, its not really all that complicated.  What it takes, though, is a good eye, guts, determination, and appetite for (reasonable - and sometimes unreasonable, but always measured) risk, a good measure of fortuitous timing ad luck and, probably above all else, that "it" factor that Boca refers to.  I would venture to guess that none of them have ever taken a "how to make money in real estate" course, and in fact, it seems that formal education level is often inversely proportional to success.  These are people who, by and large, would be successful in most any business venture who just happen to have gotten into real estate.  This is not to say that these courses dont offer valuable information, but most likely not much that isnt in one of the myriad books out there on the nuts and bolts of investing in real estate.


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## Lawlar (Oct 7, 2007)

*RE get rich quick courses*

I did a lot of bankruptcy and business law work (lawyer, retired) in the 90s.  Many of my debtor-clients were good people who took these RE courses and ended up losing everything (one guy bought 12 homes using 36 credit cards for the downpayments - one of the hot ideas of the time - the whole house of cards came crashing down.)  If you want good advice on how to invest in RE, go to your library or Amazon.com, or take a course at your local community college.  There are some really good books that will give you all you need to know, at a reasonable cost.  Most of my business clients who made money in RE did so over a long period of time and with a good deal of work and smarts.  They difinitely did not take these types of get rich courses.  Be careful.


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## PerryM (Oct 7, 2007)

*What real estate bubble?*

Before we follow the talking heads on TV over the cliff, we might want to actually check into the “Real estate Bubble Bursting” of real estate.  Use www.Zillow.com and check the facts yourself.

On Friday the Stock Market (DJIA) closed near all time highs (During the day it made all time highs of 14,169) – I remember just a few days ago the talking heads were all worried about a 10% correction and that the United States was doomed.  The talking heads are always wrong.

Use Zillow and the US has corrected 5% from the highs of just 12 months ago.  This is the horrible bubble bursting?  I don’t think so.

Our house in Ballwin, MO is at all time highs this very second.   Missouri is at all time highs.

Hell, go inland from the ocean at Miami and you will see homes off 2% from the highs in May of this year!  Miami-Dade counties are off 5% from the highs in June.  Florida is off 8% from the highs 12 months ago.  This is a correction that saw homes increasing 100% in the previous 3 years.


*Somebody show me a real estate bursting on Zillow!*


Good grief we are talking about a 100% increase, doubling of real estate, an then a 5% or so correction.  Hello!!!!!!!!!!!!!!!

Do the opposite of what the talking heads say and you will do just fine; listen to those clowns and you will rue the day you did.

P.S.
Look at the US market.  5 years ago the average US home was $154k then went to a high of $270k and is now $265k.  (Unclick all the boxes and click US; then select 5 years)

Click FL, the Miami-Dade, then search around the county and try to find this bubble bursting event.


*There is NO real estate bubble to burst!*

At least I can't find one.  I guess there is a home or an area that has been devastated but that could easily be do to something in the neighbourhood.

P.P.S.
I put the real estate bubble bursting hoax in the same camp as man-made induced global warming.  Someone is pushing false ideas that benefit a few folks - namely folks selling real estate courses in this case.


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## johnmfaeth (Oct 7, 2007)

If you check with you local colleges and adult education programs, you will find that you can take the state exam prep real estate salesperson and broker's classes. They cover tons of material and pretty much every topis on your list. 

I took mine in 1981. At the local community college they were under $100 each with fees.

Plenty of books have also been published on the topic. Definitely not worth pending many thousands to get this info elsewhere IMHO.


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## Steamboat Bill (Oct 7, 2007)

Here is an interesting article debunking many of Kiyosaki's advice

http://www.johntreed.com/Kiyosaki.html


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## LTTravel (Oct 7, 2007)

PerryM said:


> .
> 
> Miami-Dade counties are off 5% from the highs in June.  Florida is off 8% from the highs 12 months ago.  .



I don't have all the facts but the Miami and north oceanfront is overbuilt and a buyers market. Prices are well off their highs, and certainly more than 8%. One for example; I have looked at the Bath Club because ER has several units there and I was curious at what their value is. They currently have a 4BR unit that they are asking $2.6 million and a 2Br they are asking $890,000 for(would be good for HCC). They have both been on the market for some time. These are down about 30% or more  from their highs and not moving. There are 36 units for sale. There are other 4 BR that they are asking over $3.5 million for but they are not going to move at all. I am not an expert on real estate in this area, this is just one that I was looking at to see what was going on and clearly, the prices are down. A friend of mine bought a condo at Canyon Ranch Living and the current value of the unit he bought has dropped more than the down payment he has placed so now he has to decide whether to dump the property and his down payment or buy it. Homes where I live have dropped at least 10% and now take five times longer to sell. So I think there is at least a bubble that is leaking.


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## Tedpilot (Oct 7, 2007)

Bocobum - I invest a significant portion of my porfolio in real estate which I have actively been involved in over the past 7-8 years.  It started with one residential rental that grew to six, sold them all off, did some flips along the way, bought another rental property and some raw land that I was able to fully develop into residential lots.  I didn't start with a lot - enough for 20% down on the first property, but the net worth has grown much faster than I could have ever imagined.  The posters here have all provided sage advice in one form or another.  I agree that there is really not a "bubble" going on now.  Market corrections in some locations sure, but that is always happening somewhere, not always in your hometown.

If you are apt to get in the game I have a few simple suggestions.  However, keep in mind that there is always someone out there that was able to bypass the basics by luck, by-golly, or exceptional risk.

1.  Start small and work your way up.  I'd recommend a house as a rental near a military base.  One of my friends has used this concept well, he is up to 12 rentals valued at $2.4mil and debt of $1.8mil...not bad considering he did it only making $60k/year at his day job.  It has taken him about 5 years to build this up.
2.  Keep it simple.  If you do not understand what you are paying, what income you are getting, what you'll make on teh sale, the exit strategy, or the tax ramifications figure it out before you sign the contract.
3.  Visit the library and read a few books, you'll retain more than listening to someone else tell you how they did it.  If you don't understand something you read, ask your mentor/realtor.
4.  Yes, OPM is extremely important (NeilGoBlue are you reading this?), but it still takes capital to make it work "correctly".  That is, unless you are fortunate enough to step into rare and extraneous circumstances which are the backbone of ever real estate get rich quick scheme including Kiyosaki (yes, I have read each of his books, motivational yes, but business 101 taught me most of the principles he teaches).  You will need a great relationship with a real bank and/or loan broker.  If you can't pick up the phone and speak with them directly then find someone you can.
5.  Get a mentor, likely your realtor of choice but only if they too invest in property otherwise they may not understand the real mechanics of it.  Pay for the professional services when warranted...they will save you thousands and make your life much easier.  BTW, use a full-time full-service realtor/broker, not Mommy making a few bucks on the side a few hours a day between shuffling Johnny to and from soccer practice.
6.  Protect yourself and you family.  I personally guarantee my loans but quick deed the property and transfer all liability to my LLC.  Each property is individually insured plus I have umbrella insurance wrapped around the whole package.
7.  MOST IMPORTANT:  Learn your investment market!!  Read the paper, watch the adds, scroll through zillow, walk open houses, and so forth.  This will tell you a ton about what is going or not going on aound your investment.
8.  Have fun...if you don't enjoy real estate investing find some venue that you do.


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## PerryM (Oct 7, 2007)

LTTravel said:


> I don't have all the facts but the Miami and north oceanfront is overbuilt and a buyers market. Prices are well off their highs, and certainly more than 8%. One for example; I have looked at the Bath Club because ER has several units there and I was curious at what their value is. They currently have a 4BR unit that they are asking $2.6 million and a 2Br they are asking $890,000 for(would be good for HCC). They have both been on the market for some time. These are down about 30% or more  from their highs and not moving. There are 36 units for sale. There are other 4 BR that they are asking over $3.5 million for but they are not going to move at all. I am not an expert on real estate in this area, this is just one that I was looking at to see what was going on and clearly, the prices are down. A friend of mine bought a condo at Canyon Ranch Living and the current value of the unit he bought has dropped more than the down payment he has placed so now he has to decide whether to dump the property and his down payment or buy it. Homes where I live have dropped at least 10% and now take five times longer to sell. So I think there is at least a bubble that is leaking.



Well, just use Zillow and check nearby units that have a 5+ year track record.  Zillow does not cover every piece of real estate in the US - about 70 M of them.

I have yet to see anything but a smear campaign by the drive-by media against the US - they seem to hate us.  They are so hell bent on doom and gloom and the vast majority of folks seem to want this negative news that much of what the average US citizen believes is totally false.  That goes from getting more miles per gallon in a car (which has resulted in 40,000 additional deaths due to flimsy cars) to the "oil shortage" to global warming.  Throw in the DDT scare that has resulted in millions of needles deaths due to mosquitos in the 3rd world.

It's all a bunch of crap - same with the real estate bubble.  Things can't go up forever and just a rest of the market has the talking heads going ballistic in convincing us that we are all doomed.


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## BocaBum99 (Oct 8, 2007)

NeilGoBlue said:


> Boca,
> 
> My entire networth is in the real estate business.  I have a Hard Money Lending business that lends money to people that you mention in your post..
> 
> ...



I love the business of Hard Money Lending based on what I've learned.  I'll definitely be contacting you soon.

That's what I would really like to be.  What a great deal making and high profit business.


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## BocaBum99 (Oct 8, 2007)

There was a post seminar meeting with all students who signed up for the course.  I didn't do a head count, but it looked like about 40% of the students signed up which is a total of about 40-50.   That is an incredible conversion rate.  This can work anywhere!

In talking to individuals, most people wanted the first level program that gave them a mentor.  That was $24k.   If they had 40 students at $24k, that would be about $1M in revenue.  The original seminar had 120 students at $500 each.  That was $60k.
This is a gold mine selling real estate education to people who have a dream of achieving financial independence.   

The original company offering these education services is known as Wealth Intelligence Academy.  A company nobody really knew anything about.  They did a really smart thing by doing a deal with Robert Kiyosaki to put the Rich Dad Brand on this suite of Real Estate courses.  There is a level of Trust that the Rich Dad brand has given the popularity of the book.

Where can I buy the stock?  I think it is a pink sheet stock under investigation by the SEC.  Surprise, surprise.


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## Tedpilot (Oct 8, 2007)

"I absolutely believe now that it is possible to buy lots of property for *no money down *and *without using your own credit*. It's all about finding motivated sellers, creating various financing scenarios to make the deal work for all parties, negotiating the deals and pulling money out of the them. You simply *have to know what you are doing*. And, if you do it right, you can do it in lots of diffferent types of markets."

I'd like to hear about the first deal that you are able to put together under these circumstances.


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## Dave M (Oct 8, 2007)

PerryM said:


> 5 years ago the average US home was $154k then went to a high of $270k and is now $265k.


Although Zillow has a great product, I don't think Zillow's average market value numbers are accurate. According to U.S. census info, the average selling price of homes in the U.S. was $246,300 in 2003, not $154,000. And that increased by 24% to $305,900 in 2006, not by 75% (!) to $270,000 in 2006. 

Those average prices per the U.S. are impacted to a significant degree by the mega-priced homes. Median prices get closer to your numbers, but still show only a 26% rise during that period.

Although average market value doesn't necessarily equate to average selling price, the factual Census data are probably more accurate than Zillow's estimates.


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## vineyarder (Oct 8, 2007)

> Although Zillow has a great product, I don't think Zillow's average market value numbers are accurate. According to U.S. census info, the average selling price of homes in the U.S. was $246,300 in 2003, not $154,000. And that increased by 24% to $305,900 in 2006, not by 75% (!) to $270,000 in 2006.
> 
> Although average market value doesn't necessarily equate to average selling price, the factual Census data are probably more accurate than Zillow's estimates.



I agree that Zillow can be quite inaccurate; I checked 5 homes that I currently or recently owned, and Zillow only had the correct info on 1 of them; the other 4 had significant errors in square footage, number of bedrooms, number of bathrooms, etc., which obviously throws the 'zestimate' way off...


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## BocaBum99 (Oct 8, 2007)

Tedpilot said:


> "I absolutely believe now that it is possible to buy lots of property for *no money down *and *without using your own credit*. It's all about finding motivated sellers, creating various financing scenarios to make the deal work for all parties, negotiating the deals and pulling money out of the them. You simply *have to know what you are doing*. And, if you do it right, you can do it in lots of diffferent types of markets."
> 
> I'd like to hear about the first deal that you are able to put together under these circumstances.



I just came up with an approach where this is possible without any real estate investing knowledge.  All I need is a couple of partners.  If it works, I'll let you know.  It may not work.  I am not in it for a single deal or two.  That would be too much work for too little money.

Here is one thing I feel pretty confident about now.  If you use your own money and credit for all of your deals, you will never get rich (lottery wins notwithstanding), even if you make $300,000 per year somewhere.  That's because you run out of money before you have enough deals to get you enough passive income so you don't need to work anymore.


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## PerryM (Oct 8, 2007)

All I know is that our two homes are within a few bucks of what I know they are worth.

I can only use the tools which are available and that I have some confidence in.  How accurate is Zillow?  I can't even guess.  Let's say it's 80% accurate - good enough for my estimates.

If there is something more accurate, I'm all ears.


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## pwrshift (Oct 8, 2007)

Interesting report on DR Horton:

http://www.bloomberg.com/apps/news?pid=20601109&sid=adFsGVxspArw&refer=home


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## Steamboat Bill (Oct 8, 2007)

This thread is starting to remind me of a quantum physics documentary I just saw "What the Bleep Do We Know"...this is an interesting movie that I reccomend renting from Blockbuster.com, but the title is "What the #$*! Do We Know?!"

http://movies.yahoo.com/movie/1808578904/details

Part narrative, part documentary, and part animation, What the #$*! Do We Know?! was filmed with the intent of expressing the neurological processes and so called "quantum uncertainty" of life.

With the help of a directorial triumvirate consisting of Betsy Chasse, William Arntz, and Mark Vicente, Marlee Matlin stars as Amanda, whose uninspired daily routine is abruptly altered into a chaotic, Alice in Wonderland-style reality, complete with quirky characters and wildly different perspectives on life. As Amanda falls deeper into the experience, she's forced to drastically reconsider her perceptions of interpersonal relationships, men, and the fundamental principles of life. 

What the #$*! Do We Know?! is supplemented by a host of mystics and scientists, who are interviewed intermittently throughout the film for their wisdom and knowledge concerning religion, science, the thin line between them, and the consequences of blurring that line.

I am the ONLY person I know who actually saw that movie as people in Boca are not interested in topics like this. But it does star Marlee Matlin and awesome computer graphics.


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## Tedpilot (Oct 8, 2007)

BB - Send me an email, I am more than curious now what you have up your sleeve.

The beauty of real estate is that you can leverage OPM and reap the rewards from it without depleting your basis all while your checkbook gets bigger and you write off more come tax time.

Ted


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## saluki (Oct 8, 2007)

Steamboat Bill said:


> I am the ONLY person I know who actually saw that movie as people in Boca are not interested in topics like this.



That's funny. They're too busy cocktailing @ the yacht shows, huh?


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## Steamboat Bill (Oct 8, 2007)

I actually met BocaBum99 for lunch at Houston's in Boca Raton a few weeks ago and he is a "very sharp guy" and I am interested in some of his ideas.

Here is an interesting article about the housing market in Detroit.

http://news.yahoo.com/s/nm/20071007/us_nm/detroit_housing_dc


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## PerryM (Oct 9, 2007)

LTTravel said:


> I think this forum is "Non-traditional interval ownership." Maybe you are confused? As far as I know, investment in the stock market is not a "non-traditional interval ownership", unless you consider buying into the stock market is non traditional and is only interval. But based on your posts, it is traditional and you take a buy and hold position, so not so on both counts. Maybe a new forum should be started?
> I just think that if a forum is started, the threads should be true to the forum, not go on tangents of who thinks that their investments are better than others. I think that your comments were rude.




Listen, BB has been bitten by the seminar bug - I've been there too.  Instead of getting into all kinds of real estate schemes I presented an alternative which requires NO decision making - just buy and hold and the results will probably equal or out surpass any real estate scheme in existence.

I simply answered your question you posed.

I see you have more questions but they don't have anything to do with this forum or thread - police yourself.


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## vivalour (Oct 9, 2007)

Hey everyone, 
I am looking for good reasons to buy both an all-season vacation condo (2 hours from our home) AND a lower-end HCC membership. This is not so such about the investment wisdom, but maybe balancing out potential risk in having a DC.  We are not interested in TS or fractionals, just would like to have additional real estate equity beyond our house, which is mortgage-free. 
Any tips/experience to share?


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## PerryM (Oct 9, 2007)

vivalour said:


> Hey everyone,
> I am looking for good reasons to buy both an all-season vacation condo (2 hours from our home) AND a lower-end HCC membership. This is not so such about the investment wisdom, but maybe balancing out potential risk in having a DC.  We are not interested in TS or fractionals, just would like to have additional real estate equity beyond our house, which is mortgage-free.
> Any tips/experience to share?




Diversification of ones net worth is a worthy goal.  However, many things get thrown into the mix:
1)	How long before retirement
2)	College educations to pay for
3)	Risk tolerance
4)	How long to hold an asset before selling it

Real estate is a semi-liquid asset that is subject to all kinds of outside forces – buy it to use it would be my advice.  If you can get rental income to help defray debt servicing and MFs that’s icing on the cake.

If folks believe that a real estate bubble has burst and hell is about to freeze over you could find some folks who believe this and want to dump their home/condo at a fire sale price.

It always gets down to the deal you can negotiate for yourself.

I don't like DCs and don't recommend them.  Condo-hotels are distressed in some areas and can offer a great deal - look at the management agreement and company very closely and call other owners and ask their opinion.

Good luck,


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## vivalour (Oct 9, 2007)

Thanks -- good points -- I definitely agree with you on the vacation real estate issue:   buy it, use it and rent it -- we're looking at that now. Prices still sky high around here (northeast) and I don't  think it's a bubble -- IMHO more people with more money. We have seen some flattening but sure no bargains. In the vacation property market, Asian and European investors are also pushing up prices.


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## short (Oct 9, 2007)

*25 years later.*

About 25 years ago my DH and I were thinking of buying forclosure property.  We bought at least a couple cassette tape programs about buying forclosures and buying real estate.  We tryed doing it for a while but eventually gave up because it was very competative which took out most of the profit and drove up the risk.

My step son who about 12 at the time listened to the tapes several times over the summer.  At 22 just after collage he bought his first duplex.  He now has 4 or 5 duplexes and at 36 has about 2,500 in positive cash flow.

Just like any investment program he has not gotten rich quick but is doing it slowly but surely.

Programs like Flip this House have made everyone think they can do that successfully.  My cousin is holding 2 planned on Flips because the market is not condusive to a quick sale.  He is planning to rent these out.

Short

PS I went to an intro of Rich Dad poor dad in Minneapolis this summer.  I did not sign up for the next program.  I might have if they had scheduled dates available in CA instead if MN.  I was very interested Bocas initial post because I was wondering when and how much the real programs were going to be.  This give me some reasonable knowledge about how expensive the end product will be.


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## Steamboat Bill (Oct 9, 2007)

short said:


> My step son who about 12 at the time listened to the tapes several times over the summer.  At 22 just after collage he bought his first duplex.  He now has 4 or 5 duplexes and at 36 has about 2,500 in positive cash flow.
> 
> Just like any investment program he has not gotten rich quick but is doing it slowly but surely.



You did a great job in helping raise such a smart investor....congrats.


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## pwrshift (Oct 9, 2007)

For some reason, the majority of this forum's participants have not seen any value in spending $15 to be a TUG member, yet feel they should have a say in the direction any thread should take.  It surely makes me take their comments about buying a DC membership with a grain of salt.  

Brian


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## BocaBum99 (Oct 9, 2007)

It's not the seminar bug that I've been hit with as Perry states.  What I've been hit with is the unending curiosity about Vacationing and various ways that people offer and create vacation products.  That is what I've been pre-occupied with over the past 3 or so years.  

When I first started timesharing, I initially thought it was just a fixed week you purchased to use or to trade.  What I didn't realize was that timesharing is just a very slow moving emerging market that exhibits all the characterstics of a new economy under development.  It's so inefficient that it's easy to travel for very low cost or for free.  Figuring out all those ways to arbitrage the system has been fun.

This forum, more than anything, got me interested in taking a look at the general real estate market.  I wondered what the alternatives were to create a DC.  Then, I heard Robert Kiyosaki talking about 1031 exchanges like trading in the green houses in the game Monopoly into hotels.  I thought it would be cool to use flipping and 1031 exchanges to constantly trade up to the point I had 20 of my own vacation properties that I owned without debt.  After all, that's what I do with timeshares.  Buy and flip them to the point that what you own is free.  

After taking a peek at Real Estate investing, I've learned that it is an amazing marketplace with very rich possibilities.  I have completely ruled out my original idea of trading up for 100% equity because I've learned that is not the optimal usage of the asset.  You pull the cash out and invest it in other projects.

I reviewed my idea with an expert in Real Estate investing yesterday and found that about 1/2 my ideas had merit.  In other words, it was only half baked.  So, I'm back to the drawing board.   There's just something really cool about the types of deals that can be made in Real Estate aside from buying a home to live in or to rehab.  What I find cool are the numbers of ways any investor can approach the market to add value to it.

I'm sure I'll do something.  Not sure what it is yet.  It will be fun trying to figure it out.  Just like it is to figure out timesharing.


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## thinze3 (Oct 9, 2007)

*Housing Bubble*

FYI

Here is a link about similarities in the housing market today to the housing bubble (that burst) of the eighties in Texas.


Quote:_
"The Texas template tells us we could be in for a 14 percent to 25 percent decline and an eight-year to 14-year wait for recovery."_


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## Steamboat Bill (Oct 9, 2007)

GOLFNBEACH said:


> Come on LT, don't let a opinionated bully keep you from posting.  I have enjoyed your contributions to this forum.
> 
> What I find interesting is that this thread has 68 replies and over 1000 views in 2 days...and the only other thread started yesterday has 2 replies.



I agree that LT should stick around....come on....PerryM has been much tougher on DCs than anyone else...yet I really enjoy his posts as it challenges my thinking.

I don't always agree with Perry or others, and that is fine. Just like many people don't agree with me.

These forums are a great LEARNING place and if we go off on a tangent...then as the moderator, I feel it is fine as long as it does not get personal.

I have been kicked off DISboards for starting an unpopular thread and I have received several warnings and several PMs from other TUGers from some of my unpopular posts on other TUG forums.....this forum is pretty tame compared to the others.

The Spice of life makes things interesting....


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## PerryM (Oct 9, 2007)

BocaBum99 said:


> It's not the seminar bug that I've been hit with as Perry states.  What I've been hit with is the unending curiosity about Vacationing and various ways that people offer and create vacation products.  That is what I've been pre-occupied with over the past 3 or so years.
> 
> When I first started timesharing, I initially thought it was just a fixed week you purchased to use or to trade.  What I didn't realize was that timesharing is just a very slow moving emerging market that exhibits all the characterstics of a new economy under development.  It's so inefficient that it's easy to travel for very low cost or for free.  Figuring out all those ways to arbitrage the system has been fun.
> 
> ...




My wife and I have been watching a series of seminars on TV - I don't know the name of the series but Rich Dad, Poor Dad is one of the 3 guest lecturers - the other guy reminds me of a blackjack dealer at Vegas and the third one a slick lawyer.

Robert is a great speaker but most of what he said I just didn't believe in or didn't happen.  My opinion of him is that I would not pay any money for his advice.  But that's just me.

They all said pay off your highest interest loans first and to never declare bankruptcy - good advice.  However much of what Robert then said I completely disagreed with.  He was basically pitching that the American dream of owning your home and a great paying job was all wrong - then tried to convince folks to chuck the job and use other peoples money to make yourself a great life.

Selling his courses, I believe, makes him a lot of money.

P.S.

I know the blackjack dealer guy has declared bankruptcy many times and I believe the slick lawyer guy too.  I can't remember if Robert did or not.


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## Steamboat Bill (Oct 9, 2007)

Ok back to the topic at hand...

It looks like they are having a RICH DAD seminar in my town on October 17th and I am SURE this place will be sold out.

http://www.myeducationnetwork.com/learn_to_be_rich/FL/west_palm_beach/15121/


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## travelguy (Oct 14, 2007)

*RE Investing!*

Apparently TUG became an investment oriented forum while I was off the board for a week while traveling!  Anyway, after missing the entire conversation, here is a very abridged set of guidelines for real estate investing that I live by:


Put all you cash into equities (investment strategy of your choice) with the financial advisor arm of a real estate oriented bank.  Then use the equities as collateral and finance all real estate at 100%+ at a great rate from that same bank.  Have the bank release the equities as collateral once the property has consistent cash flow and positive equity (notice I didn’t say “positive cash flow”).  Start this process again with a new property using the equities as collateral for the new property.
Invest only in high quality commercial properties, not residential.  Specialty office is the best for consistency (ex: Medical office) but retail is the best for hitting a “home run” but has a significantly higher risk.
Only invest in first tier locations with significant upside for a decade to come.  Go big or go home.
Old properties are a pain.  I’m an investor, not a redeveloper!
The best commercial properties never make it to the market.  They are purchased by insiders before they are ever listed.
Be a consistent networker (ugh!) in the business community OR have a great personal resource who is an insider.
Establish relationships with a GREAT real estate attorney.  If your attorney “costs” you more than he/she “makes” for you, get another one.  Real estate attorneys are some of the best insiders.
Establish relationships with multiple real estate bankers and with every top tier commercial real estate broker in your market area.  Commercial is every broker for themselves, not like the multi-list in residential.  Some of these individuals will also be great insiders.  Make sure that you’re associated with the smartest guys in the room.
Plan your exit strategy BEFORE you buy the property.  (ex: Sell at year 5 of a 7 year lease).  You must know this to do a proper purchase projection
Always have a detailed 20 year projection including income, expense and cash flow BEFORE you sign the Sales Agreement.  You can’t negotiate price unless you know where you are.
Never buy a property with a Cap Ratio lower than the current commercial lending rate plus 1% regardless of what the rest of the market is doing.  Sit it out for awhile if needed.
The current lending crunch is the best thing to happen to prime borrowers in a long time!  Make sure that you are a prime borrower and learn to demand MORE from your lenders.  They need to replace the lending business from all those amateur “flippers” that went bust.
Don’t buy just for the sake of buying!  Better to have an empty portfolio with cash assets than a losing portfolio and no cash!
Bonus Tip - Get long term, assignable lease-back Sales Agreements, that have easy opt out terms, with property owner/users looking for exit strategies.  These are typically owners who have limited depreciation left on the property but will sign long term leases.  Then shop those Sales Agreements to recent property sellers trying to complete a 1031 rollover.  1031 Clients will pay much more than market price because they are blinded by the prospect of not having to pay tax on the cash in their pockets.  Even though the current cap gains rates are the lowest they will be during our lifetime!


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## Kagehitokiri (Oct 15, 2007)

IMHO great stuff travelguy, especially 2>8

personally, i am also interested in high end residential as well. some of the same stuff applies.


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## T_R_Oglodyte (Apr 9, 2009)

Proof that free advice is generally worth what you pay for it.  I love the assurances in this thread from October 2007 that there was no real estate bubble that was about to burst.


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## travelguy (Apr 9, 2009)

I agree on the issue of the free advice being worth what it is.  Maybe the worst advice comes on the financial boards!

FWIW - I still live by my rules of real estate investing that I listed in post #43 in 2007.  The world has changed considerably for the worse but opportunities have become better.  At least I don't have to compete for properties anymore with foreign entities that have the advantage of a strong exchange rate to strengthen their cap ratios!  (Until the feds kill the $ again!)


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## thinze3 (Apr 9, 2009)

T_R_Oglodyte said:


> Proof that free advice is generally worth what you pay for it.  I love the assurances in this thread from October 2007 that there was no real estate bubble that was about to burst.



Steve, instead they should have listened to me.
Actually, I should have listened to me.


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## robertk1 (Apr 10, 2009)

I invested in small apartment buildings several years ago. 2 things I found that you can bank on:

1) Single female tenants want you to do everything for them (can you hang this picture?) but will stay as good tenants for years; single male tenants don't expect anything but will eventually move out to live with a girlfriend or something. Males are hassle free but short term. Females are work but stay.

2) If you find a good tenant charge them less rent than the going rate. They will cure the ulcers that are caused by bad tenants.

I've considered getting back in, I think in our area (Chicago) there is a definite market for seniors only buildings. Find a building near a grocery store and public transportation, kick the heater up a few degrees and you will have a waiting list of good tenants.

Good luck to everyone investing!


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