Real Estate Bubble In Full Effect!..This is not the time to buy. Flippers be warned!

[Pharaoh]

Re: Real Estate Bubble In Full Effect!..This is not the time to buy. Flippers be warn

I receive these links everyday... Some are good, some you have to work out the issues and some you just don't mess with. But then there are some that you can get with a samll amount of cash and you go to work on it.

The mapping part of this never seems to work for me. However, I live out here and know the area. After playing with it a bit I can always get a good idea before I drive out and look at it. So check this... It all good and I do wish everyone the best;
http://www.arasells.com/idxdetails....searchId=3f0c23c2-8df1-40c5-a81e-3f2387b5b4fb
and
http://www.arasells.com/idxdetails....searchId=3f0c23c2-8df1-40c5-a81e-3f2387b5b4fb
For less than 40K you can own a bit more than 2 acres... You have the links... Play with it and you be the judge... "LICK"

Yeah, the cheapest I've seen land is about 6k per acre, but it was a big piece of land, the guy was desperate to move, but he'd done something special with the layout and wanted you to pay extra for the trees so he could get return on what he'd done to improve the landscape.

 

[SpiritualPorn]

Re: Real Estate Bubble In Full Effect!..This is not the time to buy. Flippers be warn

If you don't get the point, then that explains a lot about your response... make no mistake, cash is king. If you don't have enough to support you and your kids and their kids, then you have a problem. That's wealth; if you can't generate revenue then you are a consumer. Most blacks are born consumers and die consumers, which is why I do what I do and say what I say.

At the end of the day it's all about disaster recovery... if you loose your investment homes to eminent domain and the stock market crashes, and international trade takes a nose dive, where will you be? Investments are made to secure power/positioning or to expand the living you've already secured. How does the other side invest so freely and easily? The've had money in their family for hundreds of years and they've got plenty of discretionary funds.

This is some real truth here!!!!


Cash.... We recently had hurricane Wilma down here. There was no power for three weeks in some places. Everybody gouging. ATM"S WERE NOT WORKING!!!!. Kash was not king...it was fucking GOD in those times.

What you said about the markets is right also. Its a big fucking game to keep the masses and sheepole playing and to give them hope out of misery. There is a way to gain from it, you just have to be in the right circles and take care of people when you get paid.

Money in the bank can disappear as a result of idenity theft,IRS, pissed off wife or girlfriend, bad business partners,etc.........a real player should always have at least 50g in a safe somewhere.

You must have capital reserves.

 

[afroyale]

Re: Real Estate Bubble In Full Effect!..This is not the time to buy. Flippers be warn

LOL! Man... You a funny MOFO! Ya had me on the floor with that one pic of that cat back window with that "Network marketing shit"
Dawg... You are right the market has slowed down in most of the US… Not so in L.A., CA we only toped off a bit… That is it my brother… However, I got a hell of a kick out that post…
I going through almost hell trying to help a Dawg in Georgia because they are in a new development and it has two foreclosures that is fucking with the numbers. So it is true in some areas… But not in L.A.! Ya brother! “LICK”

Hah? Which pic are you referring to? A good number of those pics were taken in CALIFORNIA (or the west). Any way I hope you're prepared for an ass raping by this RE Bust. Did anyone remember the dotcom bust? Well, this is gonna be worse.

And about your friend in GA, it's not those two foreclosures fucking up the market. Dude, you're a businessman so you gotta think deeper on money issues. Why are there foreclosures at all in that development, and during a time that most claim is a strong RE bull market?

The bottom line is, the party is OVER! Buyers have stopped buying; sales are down; properties are overpriced; the number of houses for sale on the market is high and increasing; those who bought can't afford it; those who bought within the past 18 months over paid; gas cost a bunch; the economy is weak; we still ain't catch Osama yet; the dollar is limp, and interest rates are up (raised again yesterday).

It doesn't matter what an appraiser says a property is worth today because if nobody wants it, then it aint worth the appraised value. If you pull out equity and wait, and then sell at a later date, you'd end up writing a fat juicy check to the bank at closing.

 

[Real1]

Re: Real Estate Bubble In Full Effect!..This is not the time to buy. Flippers be warn

I've learned over the years is that those of us with money can always spot those without money about a mile away - mostly just by what they say and write. Here's a good example - someone without money may think someone with money would put his money in a home... that's just silly; or maybe go to home depot to get a safe... your uselessness is showing.

It doesn't matter if you are an international man of mystery or where you get the safe from. That's a weak investment strategy. Cash reserves are ok. Those of us that have money, know a secret that is hidden in plain view for all to see, and this is the secret: When you are at the top of food chain you make money two ways: 1)Make money off of money. 2)You make money out of thin air. Did you make money to collect it and admire it or did you make money so that each dollar could act like a good soldier and go and rescue some of his buddies and bring them back to you?

I have to carry Executive Risk & KR ins., I'm full aware of security challenges and understand the value of having cash depots far more than you seem to... I think it would've been smarter for you to ask what I did for a living before you made some of the above comments and of course showed your cash depleted investment ass.

It doesn't matter if you are dictator of a small country or a janitor. Putting cash into a safe has never been an investment strategy. Isn't that what we are talking about?? You need to have cash around, but if you waiting for doomsday, then good luck with your safe and raw land.

The point is simple, this white European man driven USA was designed to benefit, guess who??? the white European man. He controls the market, he controls investment potential, and by the time your blackass finally saves up enough chips, thinking you're going to hit it big and have chips & dip, he changes the game.

Yeah, some dude in the barbershop was saying the same thing about the man. He was talking about the man this and the man that and what the man was doing to the neighborhood. I didn't want to stop his rant and tell him that I owned a couple of properties in his zip code and held paper on two more properties in the same zip. Who the fuck waits to save up chips (except you, based on your own admission). Remember this little jewel of advice....It's easier to borrow your way to a million or billion than to earn it.

Let me add a little perspective. I roll out to a meeting with this guy. We walk into the meeting full of people we don't know. I'm well dressed, but he's a heavier hitter than me. He looks around the room and motions for a few folks to come over... they do. He says, "See this jacket? $5000" We're not talking about a watch, but a sports jacket. Some of those people at that company had cars worth less than his jacket. They promptly smiled, shut up, sat down and listened to every recommendation he had without question.

Later that evening, I bought a few folks drinks... he didn't think that was good enough though, so he proceeded to spend about 15K cash at the bar buying the rest of the folks drinks; never blinked an eye. Needless to say, we won the case, but not because I was so clever, which by the way I was, but instead because they were so impressed with the rich white man! That's how they win jobs; black folks have to compete hard and prove beyond doubt that we are capable to do the job and non related jobs before they'll even give us a try.

Yes, it's about perception. Did you know that you need to "dumb it down" at times. Some people will give you whatever YOU want as long as they think THEY are in control or are the smarter person at the negotiation table. Here is an example:Yes Pharoh, buying raw land makes and hidding my cash makes the most sense . Just playing with you Pharoah.

If you don't get the point, then that explains a lot about your response... make no mistake, cash is king. If you don't have enough to support you and your kids and their kids, then you have a problem. That's wealth; if you can't generate revenue then you are a consumer. Most blacks are born consumers and die consumers, which is why I do what I do and say what I say.

I clearly understood (better yet overstood) your "school of thought". Every fiber in my body says it not smart and not effective.That's my opinion and I stand by it.

At the end of the day it's all about disaster recovery

Is that what it's ALL about at the end of the day? What was the ROI or cost savings on your Y2K contingency plan? Are you telling me that an average investor that is trying to build wealth should concentrate on wealth preservation instead of wealth creation. This is what you are telling BGOL'ers. And BGOL doesn't stand for Billionaires Group On Line.

... if you loose your investment homes to eminent domain

Stop contridicting yourself or maybe it is just that you have a false sense of security if you think that raw land (undeveloped, unimproved) land is out of the reach or less likely for eminent domain. A smart investor buys land that is at least in the path of growth or development. Land in the path or growth and development will have a higher risk of being subject to eminent domain...because it is in the path or growth and development. Make no mistake, there will be NO public outcry over a citizen or private owner that loses a large parcel of raw land unless it has some conservation purpose or historic significance.

and the stock market crashes, and international trade takes a nose dive, where will you be? Investments are made to secure power/positioning or to expand the living you've already secured. How does the other side invest so freely and easily? The've had money in their family for hundreds of years and they've got plenty of discretionary funds.

The other side didn't become able to invest freely by putting cash under a mattress or in a safe or not doing anything with their money waiting for stock market crashes or internation trade to nosedive. Please give me the profile of a billionaire that used this as a strategy. Don't give me someone that because of money generated either by a business or by investments. Who choose to concentrate of wealth preservation before focusing on wealth building and actually has wealth to show for their efforts? I invest freely and it's not because I stashed my dollars, nickles, and pennies. It's because I reinvested and/or leveraged debt. Let someone else pay the debt service for my asset.

By the way, I don't know where you're from, but $100 per acre? WTF is that? Let's count, wow if you buy 1000 of those, that's only $100,000... yeah right; I've never seen an acre that only cost $100, but it sounds like a good stretch of bullshit to me! Was that one of your sound investments?

Oh no. I'm much to smart to buy raw land when I can buy valuable land today and sell today. Why wait 5 years, 10 years, 20 years? The point I made was that you can purchase very large parcels in middle america (the mid-west, the dust bowl)for $100,000 or close to it.......and you still overpaid for it.


Just to close this out. If you have the ability to invest and get 50%, 60%, 100%, 100%+ ROI and instead you let your money sit and earn 0% ROI because you are waiting for the sky to fall, where is the strength or intelligence in that? Some (1 person) may say, "But I can save my cash and invest freely one day". Why invest freely one day when you can invest freely every day from now until infinity.


Pharoah,

I guess we can agree not to agree. Thanks for the spar.

 

[TENT]

Yo Lick

I would appericate if you would elborate on your strategies. I own one property right now and I rent it out to sec 8 as well.

Can you tell me the terms of the ARM? What happens to your note if rates go up? Are you able to handle it if the rates go up more than the money sec 8 is paying?

Are all your properties under their OWN LLC? Do you buy them in your name first and then transfer over to the LLC?

Do you have a property manager or do you manage yourself?

What did you do with the 100k equity?

How much do you keep in a fund for repairs and incidentals?

You can PM me if you want.

Thanks in advance.

Funny... I just picked up something for 390K and I ReFi it at 640K. I pulled out of that 100K of tax free funds cause borrowed money is tax free and the interest I pay is a write off ( got one of the ARM loans)... I have a tenet in the home paying rent ($1800) and my note is $1398.00 from Sec8! Maybe it is this way where you live and if so BUY! Man Buy as much as you can! But it is not this way in L.A., CA!
Let say the market change for me... I will buy as many as I can and wait for the market to change again!
There is never a bad time to buy!
"LICK"

 

[afroyale]

Re: Real Estate Bubble In Full Effect!..This is not the time to buy. Flippers be warn

All those who financed with ARMs are gonna be extra fckd. Better believe it, we are in uncharted territory. Previous RE booms and busts can't even be compared to what's brewing right now.

An analysis from a blogger:

"... with rising inventory and falling volume, we have a classic supply/demand [imbalance] scenario. Sellers want to sell at the inflated price but buyers don’t want to buy, so a surplus develops...

Eventually prices must fall for the surplus to clear the market... you’d expect it to be worse, given the extent of exotic-loan use. I believe that what’s happening is this: many sellers are relatively recent buyers who can’t afford to drop their asking price below a certain point - they simply don’t have the cash to make up the difference at closing. So they’re stuck.

They’ll hold out for as long as they can, bleeding cash each month and praying for a miracle. When they’re broke or simply decide to sacrifice their credit rating to save what cash they have left and bail out, they’ll capitulate and the lien holder will take over. They’ll sell it at a loss to get it off the books and that’s when we’ll really see a downward price trajectory."

If you wanna know how we got here, watch Chris Thornberg’s presentation at UCSD in Feb 2006.


http://video.google.com/videoplay?docid=-2640239019877885520&q=housing+bubble

It's long (1hr) but makes the case pretty tightly. Just watch it even if you don't understand everything he's saying. Some parts are very easy to understand.

Key sections: 8 mins, 17, 30, 36, and 48 mins (into the vid). It's just best to watch and listen to the whole thing.

 

[Pharaoh]

Re: Real Estate Bubble In Full Effect!..This is not the time to buy. Flippers be warn

Pharoah,

I guess we can agree not to agree. Thanks for the spar.

I don't think so my friend - as I expected, you missed the point - by the way, I refuse to spar with you because I value my back and it's too difficult to reach that low!

Does Real1 stand for Real Estate 1? I'm sorry you feel the need to defend the RE game with such passion and fury as if you control it...Very sad.

Listen, if my response was too cryptic; let me be specific.... IF YOU CAN'T COLLECT MONEY FOR SOMETHING YOU PRODUCE, THEN YOU ARE A CONSUMER. I'd like to see my peope, your simple ass included, to break a vicious cycle of generations of consumers. See, you tried to pick my message apart, but were unsuccessful - here's why... I gave you a specific example of how a man with wealth, with hundreds of years of wealth can out spend, out buy, out invest you. He has the stability you lack. It is in his years of collected and preserved liquid assets. My message to black folks is simple - investments are great, if you can afford to invest.

The investment game isn't the lottery you describe it to be Real1; I'll quote you:

I invest freely and it's not because I stashed my dollars, nickles, and pennies. It's because I reinvested and/or leveraged debt. Let someone else pay the debt service for my asset.

Guess it's hard out there for a pimp?

Who the fuck waits to save up chips (except you, based on your own admission). Remember this little jewel of advice.... It's easier to borrow your way to a million or billion than to earn it.

Don't save fam, it's easier to get your blackass into a whole lot of debt; borrow, yes that's the way to become a millionaire BORROW!! Last time I checked, bank won't loan you shit if you don't have at least 30 - 100% of what you're attempting to borrow... banks loan money to people with money, so you're either full of imaginiation or shit, or both. I know the worst vice in the world is advice, but let me try to give you a little... realistic BUSINESS experience beats the comic books every time. Make no mistake about it, my parents weren't rich, so YES, STUPID, I DID HAVE TO SAVE UP BEFORE I INVESTED. Thank God I did, cause I don't have to flip this property and flip that property to eat.

Cash reserves are ok. Those of us that have money, know a secret that is hidden in plain view for all to see, and this is the secret: When you are at the top of food chain you make money two ways: 1)Make money off of money. 2)You make money out of thin air. Did you make money to collect it and admire it or did you make money so that each dollar could act like a good soldier and go and rescue some of his buddies and bring them back to you?"

What exactly is this mysterious secret that's in plain view you preach of? Dollars make dollars for you? Make money out of thin air? Are you a magician now? Never heard such a dubious claim before in my life. Another good sign that you lack even the lowest level of real-life experience and resources. But this is to be expected from you, remember, you wrote "It doesn't matter if you are an international man of mystery", suggesting it doesn't matter that I have built a company and am currently doing business domestically and internationally - all because you can make money "out of thin air" and your little soldiers make money and other people pay your debt. You're a great teacher... just joking with you Real1.

Why invest freely one day when you can invest freely every day from now until infinity."

Yes, invest freely BGOL, forget about the fact that you may be just out of college or having trouble paying the rent; forget about the fact that you may not even have 10k sitting in the bank; use your debt to get rich - that's how the billionaires do it... Real1 knows all the rich people from watching thier E hollywood story. Don't worry about building an honorable name for yourself and your family and establishing a foundation for generations to come... play the Euro investment game first - hell maybe you could even mortgage your house to get a little money to go buy another and rent it out. Don't worry about making money in 10 years, just use your debt to make some petty cash now!!! It's the way of the future.

Listen, get some real business and investment experience, then come back and share your realistic, legitimate positive experiences. If you need a mentor, please let me know and I'll see what I can do.

One love BGOL.

Peace!

 

[Pharaoh]

Re: Real Estate Bubble In Full Effect!..This is not the time to buy. Flippers be warn

This is some real truth here!!!!


Cash.... We recently had hurricane Wilma down here. There was no power for three weeks in some places. Everybody gouging. ATM"S WERE NOT WORKING!!!!. Kash was not king...it was fucking GOD in those times.

What you said about the markets is right also. Its a big fucking game to keep the masses and sheepole playing and to give them hope out of misery. There is a way to gain from it, you just have to be in the right circles and take care of people when you get paid.

Money in the bank can disappear as a result of idenity theft,IRS, pissed off wife or girlfriend, bad business partners,etc.........a real player should always have at least 50g in a safe somewhere.

You must have capital reserves.

Another very good point. The end of the world is relative... been a lot closer to some than others as they've literaly seen the end of their world (house, car, loved ones, bank account, etc); I'm pretty sure their real estate investments didn't help very much during these natural disasters. I wonder why Real1's not challenging you the way he's jumped all over Pharaoh. I trust it's not personal Real1... I got love for you man, you just don't appear to be the genuine article.

 

[Pharaoh]

Re: Real Estate Bubble In Full Effect!..This is not the time to buy. Flippers be warn

Afroyale, you've also made significant good realistic points, careful now though the Master of investments may turn his focus on you and spar you down!!!

 

[TENT]

Re: Real Estate Bubble In Full Effect!..This is not the time to buy. Flippers be warn

I dont like ARM... to me the mess up the game.

Interest only fixed rates arent that bad if you know what you are doing.


But anything that is adjustible is very risky.

 

[afroyale]

Re: Real Estate Bubble In Full Effect!..This is not the time to buy. Flippers be warn

I praised Real1 for his business decision in the BMW thread. At this point, I'm a little bit lost as to where he stands on the current RE fiasco.

 

[afroyale]

Re: Real Estate Bubble In Full Effect!..This is not the time to buy. Flippers be warn

I dont like ARM... to me the mess up the game.

Interest only fixed rates arent that bad if you know what you are doing.


But anything that is adjustible is very risky.

ARMs are a good bet if there's a high chance that interest rates would go down. One important lesson that I've learned is, you can always refinance to a lower interest rate (with a conventional loan), but you can't change the price of a house. Untorunately, most people, within the past 3 years, have bought properties at unrealistic high prices, at a time interest rates are shooting up, and with ARMs. Ouch!... double whammy!

 

[TENT]

Re: Real Estate Bubble In Full Effect!..This is not the time to buy. Flippers be warn

Ok. I am not well versed in all these terms.

What do you consider the best strategy for times like this... the end is near?

Should and INVESTOR wait.. and save up their money.. or should they buy now but be more conservative when it comes to certain types of loans.

What drives me crazy are the people who max out the equity on a house and then still try to sell it for more than it is worth... that is being greedy and it messes up the game.

The goal is to make money on the "buy" and allow for a postive cash flow if you choose to rent it out.

ARMs are a good bet if there's a high chance that interest rates would go down. One important lesson that I've learned is, you can always refinance to a lower interest rate (with a conventional loan), but you can't change the price of a house. Untorunately, most people, within the past 3 years, have bought properties at unrealistic high prices, at a time interest rates are shooting up, and with ARMs. Ouch!... double whammy!

 

[afroyale]

Re: Real Estate Bubble In Full Effect!..This is not the time to buy. Flippers be warn

Ok. I am not well versed in all these terms.

What do you consider the best strategy for times like this... the end is near?

Should and INVESTOR wait.. and save up their money.. or should they buy now but be more conservative when it comes to certain types of loans.

What drives me crazy are the people who max out the equity on a house and then still try to sell it for more than it is worth... that is being greedy and it messes up the game.

The goal is to make money on the "buy" and allow for a postive cash flow if you choose to rent it out.

Strategy for sellers right now.

Reduce the price to sell fast. If that means breaking even, then so be it. Your primary goal should be to get out now without going broke. RE is not like stocks that you can click a mouse, liquidate and have the cash in your bank account the next day. The cost of RE transactions are high -- from paying property taxes, to sales commissions, to maintenance, and monthly mortgage, etc. The market is not gonna turn around anytime soon, so don't hang your hat on false hopes.

Strategy for buyers.

Wait. Patience. Wait. Don't buy the dips. Look for other investments (I hear gold and silver are trading well). It's foolish to buy real estate as investments, while prices are still falling. I think prices would go down 40% before things level off, then you can buy. But when? In 1 year? 2 years?... I dunno.

It is still not a buyers market yet. It is a fools market, so don't be fooled.


http://www.signonsandiego.com/news/metro/20060515-9999-1n15default.html

 

[Real1]

Re: Real Estate Bubble In Full Effect!..This is not the time to buy. Flippers be warn

I don't think so my friend - as I expected, you missed the point - by the way, I refuse to spar with you because I value my back and it's too difficult to reach that low!

Make sure the first book your write is a corny joke book and not a business book. Your point was understood. It's weak. Plain and simple. I didn't mean to offend you, so don't take it that way.

Does Real1 stand for Real Estate 1? I'm sorry you feel the need to defend the RE game with such passion and fury as if you control it...Very sad.

I don't need to defend the RE game...the profits have vaidated the "game". Where is the fury that you speak of? I do have to call "bullshit" when I see it. And I've seen it in your posts.

Listen, if my response was too cryptic; let me be specific.... IF YOU CAN'T COLLECT MONEY FOR SOMETHING YOU PRODUCE, THEN YOU ARE A CONSUMER. I'd like to see my peope, your simple ass included, to break a vicious cycle of generations of consumers. See, you tried to pick my message apart, but were unsuccessful - here's why... I gave you a specific example of how a man with wealth, with hundreds of years of wealth can out spend, out buy, out invest you. He has the stability you lack. It is in his

My message to black folks is simple - investments are great, if you can afford to invest.

According to you, you don't even invest. Your only investment vehicles are cash and raw land. You don't even know what your message is. You are either a producer or a consumer...I learned that when I was 13 or 14..nothing new there. I own a services company and invest in real estate...so I've long ago leared the lesson of being a producer. I'm not building wealth for one generation, I'm building wealth for many generations. In life, the basic thing that you must have before you can worry about anything else is, Food & Shelter. I'm meeting the needs of those that need Shelter.

The investment game isn't the lottery you describe it to be Real1; I'll quote you:

It's not a lotto. I'm not even sure how an intelligent person reads my post and that is the conclusion that they come to. If you are the business man that say you are, then why don't you understand the principles of using OPM (other people's money). Cash is King...someone elses cash. I'm not saying don't have cash. But don't leave it sitting around doing nothing and waiting, and don't use all of your cash to control a single asset when you can use smaller amounts of cash to control many assets that are just as big as the single asset.

Don't save fam, it's easier to get your blackass into a whole lot of debt; borrow, yes that's the way to become a millionaire BORROW!! Last time I checked, bank won't loan you shit if you don't have at least 30 - 100% of what you're attempting to borrow... banks loan money to people with money, so you're either full of imaginiation or shit, or both. I know the worst vice in the world is advice, but let me try to give you a little... realistic BUSINESS experience beats the comic books every time. Make no mistake about it, my parents weren't rich, so YES, STUPID, I DID HAVE TO SAVE UP BEFORE I INVESTED. Thank God I did, cause I don't have to flip this property and flip that property to eat.

Pharoah, you are truly showing your LIMITED business knowledge. When one company acquires another company, is it always or even mostly an all cash deal? No! If a bank requires you have 100% of what you are looking to borrow, then why are you looking to borrow. This statment alone, shows that you don't know what you are speaking of. I'm based in North America and most of other BGOl'ers are also. If ANYONE agrees with that statment that he made, please say so. Yes, banks like to see that you can afford to pay for the asset, but even when borrowing for the most risky or real estate, which is commercial or land, and bank wants a max. of 20%. I flip houses that I don't care to own or control. Passive cash flow and other business interests let's me eat. I don't tap into my equity to acquire more property or depend on it to live.

What exactly is this mysterious secret that's in plain view you preach of? Dollars make dollars for you? Make money out of thin air? Are you a magician now? Never heard such a dubious claim before in my life. Another good sign that you lack even the lowest level of real-life experience and resources. But this is to be expected from you, remember, you wrote "It doesn't matter if you are an international man of mystery", suggesting it doesn't matter that I have built a company and am currently doing business domestically and internationally - all because you can make money "out of thin air" and your little soldiers make money and other people pay your debt. You're a great teacher... just joking with you Real1.

Let me show you how to make money out of "thin air". You wouldn't appreciate or be able to grasp it, so it's not really for you. When you make money out of thin air, there is no product or inventory to stock. No supply chain issues. And your return on investment is INFINITE.

1)Because your market your services and have a track record, a landowner calls you to sale a property.

2)You are able to determine the property is worth $400,000 and the owner would like a quick sale at $350,000. You quickly see that property wouldn't cashflow if you placed a renter into the property. You have decided you don't want to own this property at $350,000.

3)However, you sign a contract to purchase (with contingencies) at $350,000 and the same day you market the property at $380,000

4)Because you market your services and have "inventory",( I use the word inventory with sarcasm because you don't even own it, even better ,you control it) retail or wholesale buyers are consistently checking on your latest inventory. In this case a retail buyer is excited about being able to acquire a property with $20,000 in instant equity.

5) Your profit for the extremely difficult "job" or stocking this "inventory" is $30,000.

What product did I sell? A house? Nope, I never even owned it. Some would call it a service that I provided. The real fact is the money was generated using acquired knowledge. This is a real world example. As the housing market slows down, these deals become more available. If you can do this in a sellers market (when sellers want the most money), you are gonna love a buyers market.

Yes, invest freely BGOL, forget about the fact that you may be just out of college or having trouble paying the rent; forget about the fact that you may not even have 10k sitting in the bank; use your debt to get rich - that's how the billionaires do it... Real1 knows all the rich people from watching thier E hollywood story. Don't worry about building an honorable name for yourself and your family and establishing a foundation for generations to come... play the Euro investment game first - hell maybe you could even mortgage your house to get a little money to go buy another and rent it out. Don't worry about making money in 10 years, just use your debt to make some petty cash now!!! It's the way of the future.

BGOL, you tell me what make more sense:

Wait to save $200k or Save $10k (5%) and borrow the rest to purchase an asset that produces an annual NET INCOME of $10,740 annually. By the way, by the time you save $200k, the asset would then costs you $400,000 or $500,000 to acquire....I guess Pharoah will have to save a bit longer. Once again, this is an actual case for a property that I own.

Listen, get some real business and investment experience, then come back and share your realistic, legitimate positive experiences. If you need a mentor, please let me know and I'll see what I can do.

I guess those two examples were not good enough for you. Of course not!! You let me know when YOU can make some real sense.

Pharoah, thanks for you offer of mentorship or to locate a mentor. No thanks. I've got 4 mentors that are great people to know and are worth their weight in gold. One is Sherman Ragland based out of the Washington, DC Metro area.


I'm able to generate a six-figure income AND increase my net worth by six figures each year. I don't have to defend that. It's not a tall tale or duck tail. It is what it is. I'm not some genius that has the secret to life. There is a lot of knowledge that hidden in plain view. There are no attacks on Pharoah. I just voiced my opinion..he saw it as an attack on him.

 

[Real1]

Re: Real Estate Bubble In Full Effect!..This is not the time to buy. Flippers be warn

I praised Real1 for his business decision in the BMW thread. At this point, I'm a little bit lost as to where he stands on the current RE fiasco.

Afro,

Investors are not scarred about a buyer's market. Speculators are shitting their pants. Real Estate is a cyclical industry. There are strategies that work no matter where the market is.


Here is the way that Speculators made money in real estate:

Buy a pre-construction or existing property at retail. Wait 1.5 - 2 years for it to be built (or rent out at a break even or more likely small loss every month) and sale based on 20 - 30% appreciation per year. Specualtors made TONS of money from 2002 - 2005. I was tempted and have the cash to risk $20k per contract. I knew that this violated the fundamentals that you learn in the business. The first thing that you learn is that you purchase a property for a MAXIMUM of only 70% of what it is worth. So purchasing a property at 100% or 105% of what it's worth is suicide. Remember, the builder can sale you a house today at $400k and drop his price to $380 the next day....it's not shit you can do about.


Here is a couple of ways that Investors make money in real estate :


We buy a house at a discounted price, make improvements (if needed) and sell at retail. If the market is slowing down, we buy at a deeper discount and sell slighty below retail. We NEVER, NEVER buy at retail and depend on appreciation to make a profit.


We buy rental properties (still at a discounted price) and make improvement if needed and rent for passive cash flow. This really works in a buyer's market, because some people are scared to buy, so they contine to rent. In the most recent seller's market, it was hard to justify renting when anyone with a heartbeat and social security number could buy a condo or townhouse with 0% down. Some landlords had a tough time finding/keeping renters because EVERYONE wanted to be a homeowner. Some homeowners that really couldn't afford it, but were told that they can't afford to NOT be homeowners, will get burned by slow market or slow appreciation and decide to go back to being a renter.


Here is where money will made in a sloooww real estate market.

1)Foreclosures: They are going to spike up and banks will be willing to deal. In the last 5 years, banks where almost happy to foreclose and let it go to auction. Banks will now be more open to short sales. A short sale is when the bank agrees to let a $150k debt on a $140k go for $90k, before the auction.

2)Rental Properties: In the hot market, turning a 4 unit building into condos was the way to go. Tired landlords didn't have to sell thei multi-unit in order to cash out. They turned them into condos. Instead of selling a 4 unit building for $400k, they sold 4 $200k condos and made $800k. Now, if they want out of the landlord business, they have to sale for $400k.

3)Lease Options (assuming the mortgage payment) or Seller Finacing. People are going to forget about the equity that they have (or had). Sellers are going to flexible on not only price, but also terms. In the past, a seller MAY discount the price, but they wanted ALL of the money now. In this market, the seller just wants to have someone cover the mortage payment or a portion of it, so they can relocate to another state because of family or a job. In the past they would have been able to sell the house in a matter or weeks, so a short notice re-assignment or new job offer wasn't a big deal. If it takes 6 months to sell a house a break even, that is a huge problem for sellers. They will likely have to pay rent or mortgage at the new house, so they will be strapped for cash.



Because I never became a speculator, I don't stand to lose any money or crash in slow market. ALL of the property that I own has at least 40% equity AND cash flows.



Hope I answered your question.

 

[afroyale]

Re: Real Estate Bubble In Full Effect!..This is not the time to buy. Flippers be warn

Hope I answered your question.

You sure did.

 

[Pharaoh]

Re: Real Estate Bubble In Full Effect!..This is not the time to buy. Flippers be warn

Pharoah, you are truly showing your LIMITED business knowledge. When one company acquires another company, is it always or even mostly an all cash deal? No! If a bank requires you have 100% of what you are looking to borrow, then why are you looking to borrow. This statment alone, shows that you don't know what you are speaking of. I'm based in North America and most of other BGOl'ers are also. If ANYONE agrees with that statment that he made, please say so. Yes, banks like to see that you can afford to pay for the asset, but even when borrowing for the most risky or real estate, which is commercial or land, and bank wants a max. of 20%. I flip houses that I don't care to own or control.

Once again... you're a flipper, not a business man, so stick to truthful statements... 20% down? Company acquiring another company with cash mostly? What about non-liquid assets, stock, control or serviceability? Maybe the acquired company has a network that allows the acquisitioner to expand globally. Maybe it's just a plain old fashion partnership... are you familiar with partnering? Sounds like you've never closed or even been privy to a deal over 1 Million dollars. Yes, if you want to close on a house that you don't want to dwell in that's barely worth the foundation it's built on, you can get a little conventional loan for only 20% down, if you want to do business and generate revenue, it's a totally different story. Now. I do invest, but not like you. Unfortunately, people like you who got their business direction from the back of a matchbox, someone stupid enough to violate a mentor's privacy by posting their name, famous or not, on a porn board, you're focused on pennies. "If you think pennies, you get pennies. If you think dollars, you get dollars." If a law were passed today that made it illegal to flip houses, what would you do? Do you have 13 years of real investment strategies under your belt?

Let me make one last attempt to put resource availability into perspective for you... I employ developers who make six figures a year and my payroll is over $200K per month. This sounds big, right? Wrong! Our NAICS code caps small business at about 23M / year and small biz (meaning me) is the minority in this country, so imagine the resources a normal business concern has in place, or can you? You think they're making 23M+ / year out of "thin air"?

Very simply, no one agreed with you... Afroyle has posted a number of articles to counter your claim and yet you still try to cut into my posts... obviously it is personal. Incidentally, banks require you to have enough existing assets (with a high percentage of liquid assets) in order for you to borrow an excessive amount of money... banks in North America believe as I do that you can't payback a loan out of "thin air" - again your claim of "thin air business" is dubious, without merit and reckless. This is a board to assist young black men on how to become GOOD business men, not to cut a bunch of corners to get a few pennies. I believe Afroyale created this thread to warn less seasoned brothers on the upcoming risks associated with the RE game. Your last response to his questioning your position didn't explain anything - spectators and retail vs. discounted - give me a break you just embarrased yourself further. Most importantly, you haven't provided any fact-based advice, you've merely attempted to justify your chosen path and suggested I, Afroyale and others who don't agree with you have no clue what we're talking about. Check all the posts and you'll see where no one agreed with you - I mean no one! Both Lick and Spiratual Porn talk about the market in respect to location specifics, individual investment capacity and circumstance... they don't just recklessly advise to "go ye forth and flip like you ain't ever flipped before because you make lots of thin air money"; or did you mean Virtual Money? Still, you made it a point to focus in on Pharaoh from my very first post, and you trying to tell me it's not personal???

I think you're right, we do agree to disagree. I'm done.


Please post responsibly.

 

[deputy dawg]

Re: Real Estate Bubble In Full Effect!..This is not the time to buy. Flippers be warn

flipping is not investing, it's just one way to handle a property.
just like the stock market, R.E. invesators are in it for the long run.
I agree with Real1. As a R.E. investor and a media consultant I'm telling you that you can't just follow news headlines and believe you have the whole picture. I'm not saying Pharoah is wrong; I'm saying the things Real1 said are the irrefutable basics of R.E. investing.

 

[Pharaoh]

Re: Real Estate Bubble In Full Effect!..This is not the time to buy. Flippers be warn

flipping is not investing, it's just one way to handle a property.
just like the stock market, R.E. invesators are in it for the long run.
I agree with Real1. As a R.E. investor and a media consultant I'm telling you that you can't just follow news headlines and believe you have the whole picture. I'm not saying Pharoah is wrong; I'm saying the things Real1 said are the irrefutable basics of R.E. investing.

Thanks Dawg, I needed that... perhaps I get a little trigger happy when I see young black aspiring biz folks asking, "how do I make it happen" and someone replies, "flipping's great!" I think the only contradiction I've made so far is saying I want to help as many folks as I can and then going back and forth with our Brother Real1. Got no problem with anyone flipping anything, cars, houses whatever, but this is a post about flippers, so I think those of us who do have different types of good biz experiences shoud be responsible and honest about the topic - not confuse less seasoned biz folks by speaking about flipping in terms of good business development practices. At the end of the day, it's just flipping!

By the way Real1, I'm just giving you a hard time when I say you don't have resources - that shit is truly relative! If you got enough resources for where you want to be, you're in good shape. Trust me, when you work in my field sometimes a good 3 day back and forth post is better than therapy. Be good man.

One Love BGOL,

Peace.

 

[afroyale]

Re: Real Estate Bubble In Full Effect!..This is not the time to buy. Flippers be warn

flipping is not investing, it's just one way to handle a property.
just like the stock market, R.E. invesators are in it for the long run.
I agree with Real1. As a R.E. investor and a media consultant I'm telling you that you can't just follow news headlines and believe you have the whole picture. I'm not saying Pharoah is wrong; I'm saying the things Real1 said are the irrefutable basics of R.E. investing.

Excuse me deputydawg, but this is not about following "news headlines". It's about following the fundamentals and using common sense. This whole RE boom was fueled by one false pressumption, which is, properties never depreciate. Even my dog knows that whatever goes up must come down.

And yet that simple concept seemed to have been lost to the average person. Please explain why the cost of a house, built with sticks and stones should increase 300% to 400% in 2-3 years? That's irrational!

 

[Lick]

Ya know fellas… A lot has been said in this post.
Some I agree and some I wonder what are they reading (If they are reading anything).
I read as much as I can get my hands on. But more importantly, I talk to the people I know that is in the game and I know what is working for them. You have to figure out what part of this game that will work for you and if that is what you want to do. The same goes for the mortgage on the home and all of mine I have loans on them!
You may or may not like the ARM’s, one thing remains true. It is the interest you get the write off on and not the principle. They have ARM’s that are locked for ten years and if you cannot make your money make money in ten years then you don’t know what you are doing in the first place. For me, I give the banks as little as possible and place funds in other investments for any short comings that may take place in the market. Everything has it’s cycles.
I don’t care what you do… Just do it! You can read books by John R. Talbott, Ric Edelman, Douglas R. Andrew and or Robert T. Kiyosaki. All of these guys make very good points in their books (Some better that others) yet at the end of the day you have to figure out what will work better for you and the area you are investing in. You must do the same in the loan process.
In closing, out of all of the threads I have read and posted to, I love this one!
Ya brother, “LICK”

 

[Lick]

Re: Real Estate Bubble In Full Effect!..This is not the time to buy. Flippers be warn

Excuse me deputydawg, but this is not about following "news headlines". It's about following the fundamentals and using common sense. This whole RE boom was fueled by one false pressumption, which is, properties never depreciate. Even my dog knows that whatever goes up must come down.

And yet that simple concept seemed to have been lost to the average person. Please explain why the cost of a house, built with sticks and stones should increase 300% to 400% in 2-3 years? That's irrational!

Hey bro.,
I just want to add some though in this… I know an owner that got a home in 1962 for $12,500.00 (L. A., CA) and today that same home is $570,520.00 However, back in 2000 it was at $220,000.00. I got on in 02/01 for 119K and now it is at 500K.
One thing that is going on in L.A. is the number of people coming into the City everyday looking for a place to live.
Here, it is supply and demand and the demand is much higher than the supply.
Do I think the price will drop? I think it will. When and how much will remain to be seen. Ether way I am ready. I would suggest that everyone else get ready as well! “LICK”

 

[Pharaoh]

Re: Real Estate Bubble In Full Effect!..This is not the time to buy. Flippers be warn

Hey bro.,
I just want to add some though in this… I know an owner that got a home in 1962 for $12,500.00 (L. A., CA) and today that same home is $570,520.00 However, back in 2000 it was at $220,000.00. I got on in 02/01 for 119K and now it is at 500K.
One thing that is going on in L.A. is the number of people coming into the City everyday looking for a place to live.
Here, it is supply and demand and the demand is much higher than the supply.
Do I think the price will drop? I think it will. When and how much will remain to be seen. Ether way I am ready. I would suggest that everyone else get ready as well! “LICK”

I've spent quite a bit of time in Oxnard, CA it's up the 101N between the 405 and Santa Barbara... I don't consider Oxnard to be the cream of the crop in terms of cities, but I had to purchase something out there since I was here one month and there the next. It was outrageous... 300K for a tiny little home - amazingly it did sell for much more at the end of the day. The CA RE market is unique to me in that respect as I don't see that in other territorries. Do you think that it's because CA accounts for a major piece of the nations economy on a state-to-state comparison... perhaps overall they just have more purchasing power?

Gotta go to a briefing gentlemen... may have time to check for a response later today Lick, if not I'll check back in the next time I've got a few days off... been fun.

Peace

 

[Lick]

Re: Real Estate Bubble In Full Effect!..This is not the time to buy. Flippers be warn

I've spent quite a bit of time in Oxnard, CA it's up the 101N between the 405 and Santa Barbara... I don't consider Oxnard to be the cream of the crop in terms of cities, but I had to purchase something out there since I was here one month and there the next. It was outrageous... 300K for a tiny little home - amazingly it did sell for much more at the end of the day. The CA RE market is unique to me in that respect as I don't see that in other territorries. Do you think that it's because CA accounts for a major piece of the nations economy on a state-to-state comparison... perhaps overall they just have more purchasing power?

Gotta go to a briefing gentlemen... may have time to check for a response later today Lick, if not I'll check back in the next time I've got a few days off... been fun.

Peace

I feel ya my brother and it may very well be just that. California is the fifth largest economy in the World and Real Estate has always cost more than most places. I know what you are saying about Oxnard. My late Uncle had a avocado orchard there and because of the development of homes there, farmers and farm land is going away.
My uncle Estate is said to be valued at 12Million. Go figure.
There are some areas in that City I know I am not safe at anytime and as you get closer to Camarillo the better off you are. However, prices adjust to the area as well. Ventura County Dawg… Not cheap in any way! “LICK”

 

[TENT]

Re: Real Estate Bubble In Full Effect!..This is not the time to buy. Flippers be warn

So basically it depends on the market you are investing in.

ARMs and buying and selling "paper" can make you rich in one city and poor in another.

I think because we are all in different cities we have different views...

 

[afroyale]

Re: Real Estate Bubble In Full Effect!..This is not the time to buy. Flippers be warn

How Low Will It Go?

[FRAME]http://www.oftwominds.com/blogmay06/shiller-housing.html[/FRAME]

 

[Real1]

Re: Real Estate Bubble In Full Effect!..This is not the time to buy. Flippers be warn

Pharoh is right about being done. Stick a fork in him if he can't comprehend BASIC concepts that I told Afroyale. I called out his b.s. "investment" advice. This post was about the real estate bubble popping. He suggested everyone run and invest in 1)Raw Land and 2)Cash. I'm not going to try hard to convince anyone to make well into the 6 figures and build an asset base. I set the facts out there. It was time the RE business was shaken up. There where too many people that going through weekend get rich seminars and thought buying at retail was a good thing. It killed the rental market in many places because investors could buy property at the inflated prices and rent for positive cash flow. I've been learning this business since 2001 and come a very long way in a very short amount of time.

My advice to anyone that wants to get into real estate investing has never changed. Before you pull a dollar out of your pocket to invest in a property, first invest in learning the fundamentals. In the end I am happy that I wasn't putting down $20k and contract on 20 houses in one development in Northern Virginia. The cash was there and the developer gave me the opportunity. I would have made about $115k per house in a 11 month period and taxes would have been deffered. Guess what else would have happened? I would have have put down $45k on 30 houses with the same developer on the next project once I exited the original deal. Except this time, he finished construction in 7 months and I would have closed on each house and attempted to sale. As of now the developer is having a hard time selling these $885k houses and has cut prices to $830k and will likely cut prices again to $780k. My purchase price would have been $700k per house and I would be stuck with the $6k/monthly mortgage on 30 houses and would have to pick between putting out 180k a month for debt service or letting the builder's bank take them back.


Buying houses at retail has never been part of the business. Many homeowners made money that way and thought that real estate investing is easy. I'm not sure what Pharoah's notion of a businessman is, but making money is making money. If you think flipping is the end all/be all of real esta
te investing, then there is wholelot to be learned. Flipping is good for property that you don't want any parts of. Your reward for declining to own these properties is $5 to $30k for re-assigning a contract. I happen to come across alot more properties that I don't want to own than properties that I do want to own. The ratio is about 12:1.


P.S. A $1 mil+ dollar Real Estate deal is purchasing 7 acres in the suburban Maryland for $600,000, subdividing and building nine 3,500 sqft modular homes at a construction cost of $280,000 per home and selling each home for $550,000 to $575,000 each. The owner took back 6 month financing while the subdivision process was being done and upon subdivision being complete and permits being pulled, the bank financed 80% of land acquisition and construction costs. The entire loan was paid of in 8 months.

1 million gets me even less further in Washington,DC. That is a 2 or 3 unit condo conversion in Northwest DC.

 

[Lick]

Re: Real Estate Bubble In Full Effect!..This is not the time to buy. Flippers be warn

So basically it depends on the market you are investing in.

ARMs and buying and selling "paper" can make you rich in one city and poor in another.

I think because we are all in different cities we have different views...

Supply and demand plays a role as well as the area. The housing market has been crazy. However, as an investor you have to play the game smart. I am not in the paper game. I can not tell you anything about it. I buy and hold. People will always need a place to live. That side of the game I know. “LICK”

 

[deputy dawg]

Re: Real Estate Bubble In Full Effect!..This is not the time to buy. Flippers be warn

Excuse me deputydawg, but this is not about following "news headlines". It's about following the fundamentals and using common sense. This whole RE boom was fueled by one false pressumption, which is, properties never depreciate. Even my dog knows that whatever goes up must come down.

It's EXACTLY about following headlines. If you were investing before the media made "housing bubble" a common household term you were already "following the fundamentals and using common sense." If you study trends over decades, R.E. pricing cycles are clearly evident, and the downturn we're currently seeing in many markets is expected. Investors make money if the market is heading up or down. Market factors determine if you buy, sell or hold (rent for residual income). Now, foreclosures are up and expected to go way up over the next year or more. For a large part this is due to ARMs that put people in houses they really couldn't afford, but also the current/future massive layoffs by the auto industry/airlines/financial firms. (AYL - y'all ready fir this? Delta -Ford layoffs & closings) Opportunity for knowledgable investors is knocking. It's a soft knock now and may not be in your area so many don't hear it, but listen closely...

The Buy low[/b],..." part of buy low, sell high is being fed by these foreclosures.

And yet that simple concept seemed to have been lost to the average person.

I can't relate; since I was 5 years old I've strived to be above average and at this old age I can confidently say I'm there. The price of gold is at rtecord highs; why are people buying now?

Please explain why the cost of a house, built with sticks and stones should increase 300% to 400% in 2-3 years? That's irrational!

It's not irrational - it's basic supply & demand. The worth of something is set by those wiling to pay the price. (How did those Beenie Baby animals get more than the 55 cents they cost to make?) The value of a house is what you're referreing to. Value is set by something different.

I'm telling you, articles like those posted reflect only surface facts. Those who don't delve deeper don't see the truth of the matter.

 

[Pharaoh]

Re: Real Estate Bubble In Full Effect!..This is not the time to buy. Flippers be warn

Pharoh is right about being done. Stick a fork in him if he can't comprehend BASIC concepts that I told Afroyale. I called out his b.s. "investment" advice. This post was about the real estate bubble popping. He suggested everyone run and invest in 1)Raw Land and 2)Cash. I'm not going to try hard to convince anyone to make well into the 6 figures and build an asset base. I set the facts out there. It was time the RE business was shaken up. There where too many people that going through weekend get rich seminars and thought buying at retail was a good thing. It killed the rental market in many places because investors could buy property at the inflated prices and rent for positive cash flow. I've been learning this business since 2001 and come a very long way in a very short amount of time.

My advice to anyone that wants to get into real estate investing has never changed. Before you pull a dollar out of your pocket to invest in a property, first invest in learning the fundamentals. In the end I am happy that I wasn't putting down $20k and contract on 20 houses in one development in Northern Virginia. The cash was there and the developer gave me the opportunity. I would have made about $115k per house in a 11 month period and taxes would have been deffered. Guess what else would have happened? I would have have put down $45k on 30 houses with the same developer on the next project once I exited the original deal. Except this time, he finished construction in 7 months and I would have closed on each house and attempted to sale. As of now the developer is having a hard time selling these $885k houses and has cut prices to $830k and will likely cut prices again to $780k. My purchase price would have been $700k per house and I would be stuck with the $6k/monthly mortgage on 30 houses and would have to pick between putting out 180k a month for debt service or letting the builder's bank take them back.


Buying houses at retail has never been part of the business. Many homeowners made money that way and thought that real estate investing is easy. I'm not sure what Pharoah's notion of a businessman is, but making money is making money. If you think flipping is the end all/be all of real esta
te investing, then there is wholelot to be learned. Flipping is good for property that you don't want any parts of. Your reward for declining to own these properties is $5 to $30k for re-assigning a contract. I happen to come across alot more properties that I don't want to own than properties that I do want to own. The ratio is about 12:1.


P.S. A $1 mil+ dollar Real Estate deal is purchasing 7 acres in the suburban Maryland for $600,000, subdividing and building nine 3,500 sqft modular homes at a construction cost of $280,000 per home and selling each home for $550,000 to $575,000 each. The owner took back 6 month financing while the subdivision process was being done and upon subdivision being complete and permits being pulled, the bank financed 80% of land acquisition and construction costs. The entire loan was paid of in 8 months.

1 million gets me even less further in Washington,DC. That is a 2 or 3 unit condo conversion in Northwest DC.

Ok I got a few minutes before I'm due back in this damn meeting, so let's see here, 2006 Market reports for the DC area:

Average home prices: down
Asking prices: down
Greatest activity: Condos/Townhomes
Reasons for reported activity: Job Growth (not flipping by the way)

Now. I guess we shouldn't believe this report either, huh? You're soo smart Real1. Where you privy to that 7 acre deal in Maryland, or are you talking out the wrong end again. Since you like to give out names, how bout you give us the name of the development or the builder so we can fact check yo shit.

See, I was being nice to you, but here you go again, trying to reach way up at Pharaoh to make your silly little points about flipping and hoping someone will mistake them for business strategies... you are a baseball card trader to me. Have you ever built a business before? What did you market? Did you build your offering(s) up from ground zero? How did you penetrate your target market? How bout fund raising? Where did you locate and why? Challenges? Employees? How did you deal with workforce issues? Where you able to increase revenue significatly? Have you ever even held a position as a senior level manager in a company?

See, I haven't even talked about how I invest, but you continue to show your ass about what you think you know. You claim land is a bad investment, but you don't qualify that with quantitave facts on zoning - fam, land is worth what the fuck you can do with it and if you are stupid enough to chase down land that's zoned for a couple of single home developments instead of commercial structures then that's your problem Real1. Land subdivision, though profitable, is the ground floor in RE and by far requires the least amount of skill level to execute.... it's where most people start in RE. No wait, I forgot, you're a magician, you can pull things out of thin air or your ass, so I guess you'll just pull your magical strings and rezone all the land to your benefit, or maybe you'll control the demand for housing block sizes oh master of the universe so you can make a little more of that thin air money. 4-5 years of experience really puts you on the map!

Few recent investments include gold (as always), a service provider with a multi-state digital network, which by the way I'm partnered with, and the technical infrastructure for a large resort - this one gets me ROI + free advertising. Tip of the iceberg, and please don't try to pretend as if you know everything about this too. Nope, I don't play deep in the RE game, I choose not to, but many of my clients do - I have a benchmark for their success because we bill some of them $400 / hour on a continuous basis and they pay - many in advance... they love to share their market experiences and knowledge with me about RE and none of it to date matches yours... maybe it's a geographical issue or maybe you're full of shit and Google too much.

I've never seen a Real Estate Firm advertise, "We Flip For You", so I'm assuming you never established a flipping business. No one needs a huge manual on flipping, which is why there's been so much RE activity in the past few years... it's quite simple, which I guess is why you're trying to champion it.... let me break it down - you have $5, you buy a baseball card for $3, now you're down to $2, so you hold it until someone comes along who's willing to pay you $8 for the card even though it's market value is only $6, now you got $10 in your hand and your ROI is $5 less expenses... wow that was easy! Now, do you think the negative equity the new owner has in the card will drive prices up... truth is, probably not, the new owner has to either keep it or take a loss. Your RE activity is on the same small level as your BMW effort in which you came out at a loss... that was definitely not a good deal and there are about 50 reason why. Who was your client, your next door neighbor? Guess that was another victory from a great life of flippin!

There's little difference between the BMW loss and a house for an inexperienced individual. Now suddenly you try to pretend as if you've been advising for people to learn about investing, but your earlier posts don't support this either... have you been Googling again? Listen, this post was to warn Flippers like yourself and you still haven't even posted a single response on the vast amounts of information the original poster has continued to post saying the exact opposite of what you claim to be the truth. Once again, FLIPPING IS NOT INVESTING!!!!!!!!!!!!!

Now, please try again, post responsibly and try not to embarrass your discounted ass any more than you have to, idiot. Go challenge Afroyale or somebody else and stay off my dick!

 

[afroyale]

Re: Real Estate Bubble In Full Effect!..This is not the time to buy. Flippers be warn

Real1 and Pharaoh's little match is actually entertaining and educational.

I wouldn't call myself a RE expert at all, just a small time investor. I survived the dotcom era and came out $250K ahead by day trading (pulled out one month before she busted). Then I bought a SFH in Texas for $220K cash for my old man. He passed away 2 years later and I sold it in mid 2004 and made $150K profit. That was when I figured something was terribly wrong in the RE market. Since then, I shunned it and just did small hustles and worked full time. Oh, I also got in with google stock but sold too early.. darn!

 

[Pharaoh]

Re: Real Estate Bubble In Full Effect!..This is not the time to buy. Flippers be warn

Real1 and Pharaoh's little match is actually entertaining and educational.

I wouldn't call myself a RE expert at all, just a small time investor. I survived the dotcom era and came out $250K ahead by day trading (pulled out one month before she busted). Then I bought a SFH in Texas for $220K cash for my old man. He passed away 2 years later and I sold it in mid 2004 and made $150K profit. That was when I figured something was terribly wrong in the RE market. Since then, I shunned it and just did small hustles and worked full time. Oh, I also got in with google stock but sold too early.. darn!

Most 5 year old RE cats like Real1 automatically assume others are ignorant of the game when they're really just learning it themselves. I'm 29, dad's owned a successful Real Estate company for over 2 decades - been exposed to RE since the tender age of 8. I've seen the ups and downs, seen market trends surprise even the saviest of mothafuckas, so I'm not new to the RE game and certainly not new to small biz - still, I definitely do not consider myself an expert. I graduated early from school, went to AT&T... while I was at AT&T I became a manager and started working my IT biz on the side at 19. Yep, that's 10 years in ITS. I left AT&T, doubled my salary and moved to a consulting firm, left there and tripled my salary at another firm where I was OM for the entire southeast region, all the while building my biz on the side. Then, I went full time on my biz and haven't looked back since. I've gone from being hungry to buying exotics of ebay and back again. I've transitioned my biz from IT into the Intelligence community which has been an experience, but is extremely rewarding. I've given thousands of dollars away to folks young and old who claim to want to start and do well in business. Only 1 person took my and others advice and buit a real business. The others "invested" or tried to "flip" shit with the money and lost it all plus more. That guy is still in biz today and I'm getting return. I had to write the others off as bad debt.

The biggest challenge I experienced in my path was folks who painted a rose colored picture of where they were, but never really told anyone how they allegedly did it. Instead they'll throw a bunch of useless remotely related facts out to try and demonstrate their knowledge. That's reckless behavior to me man. I see flippin just like stocks, it's ok to play and it can be profitable, but don't just listen to the first asshole who says, "this is great". See it, learn it, practice it, do it, then help the next young chap.

By the way, for those of you who will read Dawg's post and then mine and say, see "Pharaoh's full of shit or stupid or something, he buys gold".... I said I was a good businessman and a moderate investor, I never said I didn't make some dumbass purchases just because I had the money and then justify the dumbassity with "hey, it's my fuckin money". So please don't rush out and start spending hard earned paper on gold, there are better opportunties out there.

This time, unfortunately I really do have to sign off. Can't play anymore, which is unforatunate as Real1 will take this opportunity to try and get the last googled, discounted word in, but that's life. Have fun man!!!

Peace!

 

[Temujin]

Re: Real Estate Bubble In Full Effect!..This is not the time to buy. Flippers be warn

The biggest challenge I experienced in my path was folks who painted a rose colored picture of where they were, but never really told anyone how they allegedly did it. Instead they'll throw a bunch of useless remotely related facts out to try and demonstrate their knowledge. That's reckless behavior to me man. I see flippin just like stocks, it's ok to play and it can be profitable, but don't just listen to the first asshole who says, "this is great". See it, learn it, practice it, do it, then help the next young chap.

Damn pharoh glad to see you are back your posts are always informative.

One thing I can cosign is unrealistic optimism. When I first went into business for myself I was mentored by an individual who had been a CPA for 25 years. I would run my business ideas by him he would give me feedback and advice. Sometimes I would follow the advice sometimes I wouldn't when I wouldn't I would always say "he's to conservative" or "he's too old he doesn't know what it's like now". But everytime I would be wrong. And he explained to me why one day.

He told me that the greatest strength of entrepeneurs is also their greatest weakness and that is confidence. Entrepeneurs are often so confident in the strength of their ideas that the ignore the potential for failure. They ignore the stumbling blocks that ultimately hold them up.

Because of this I would go into business transactions not fully prepared. I would think like Real1 that I didn't need any money down or the strength of my plan was all I needed. My CPA would explain it to me like this that yes you might be succesful this time you might be sucessful next time but in the long run you are battling losing odds. Because I am in business for the long run every time I go up to bat I am trying to hit a home run. I prepare, prepare, prepare.

So not to shit on you Real1 but it would be helpful to people if you gave the good with the bad. If you acknowledge that in a down market flipping houses becomes increasingly risky then it would add credibility to your advice. If you gave people the pitfalls to avoid in flipping houses in a down market it would be helpful to those that flip houses.

Me personally I've always looked at real estate as a long term investment I personally have no interest in flipping houses but I am always looking to acquire real property as a long term investment. My father never sold a piece of property. He set a slow pace of buying a piece of property every year and paying off the mortgages in 10years. He's been living off the rental income since he retired and is sitting on equity that he plans on just passing down to the kids.

But I love hearing these debates keep it up guys. Even though it gets emotional there is good information coming from both sides keep sharing the real wealth brothers.

 

[Real1]

Temujin,

I don't want you or anyone else to think that you can't lose in the real estate business. Many investors and speculators have lost money, damaged credit, and ruined their name because of bad investments. Sticking to fundamentals help you to stay out of trouble. Using a formula called MAO (Maximum Allowable Offer)keeps you from overpaying for property which is the #1 mistake that investors make, the #2 mistake is underestimating repairs/renovation/construction costs.

(.70 * ARV) - Repairs = MAO

ARV - that means after repair value. What is the house worth in standard condition (i.e. everthing in working order).

It's up to you to decide what your criteria is going to be. You can choose to only pay up to .50 or go as high as .80. Right now, I am at .60 - .65. In a market where sales are slow and your holding costs are bound to be higher. You make your offer based on a re-sale price that is going to be priced below other houses on the market. You want to create the best VALUE possible. That makes it a lot easier for buyers to choose your property over the others.


Every type of business or investment activity has a risk. Let me repeat it. EVERY TYPE OF BUSINESS OR INVESTMENT ACTIVITY HAS A RISK. Wholeselling (flipping) has the least amount of risk. You do understand that you are not buying or going to closing on the home, don't you? You are placing the property under contract and re-assigning your contract. In a standard contract, you will have two clauses that let you out of the contract if you are unable to locate an assignee. Usually, you will have a financing contingency and an inspection contingency. However, as a general rule, you should only sign a contract on properties that you have the ability to close on if you need to.

I could dedicate a whole post to stories of investors who have lost BIG! There are a lot of people that came into investing right around the time that I did and have lost some serious money because they lost sight of investing basics. BUYING AT RETAIL ISN'T PART OF INVESTING.





Pharoah,



Yes, I've started a business before. I founded a services company in 2000. Employees? Got 'em. Workforce Issues? TONS of them and it's getting more complicated day by day. I'm in an industry with a high turnover rate. Funding? Nope, we funded ourselves. Increasing Revenues? Went from 102 customers in year 1 to over 2700 customers. My biggest customer is the Federal Government.

You asked me about my privy to a 1 million deal and then when you hear the answer you basically say "well a residential subdivision in easy, commercial is where it is at. What is the name of the subdivision?" Every project that I have done, property that I have owned, or partnership that I have formed since 2004 has been in the name of an LLC or Land Trust. A little over a year ago I put out a decent amount of money in transfer taxes and doc prep fees to transfer property that was in my name, into the name of an LLC. Why?America is lawsuit happy and even if you win in court you lose. While you can't guarantee that no one will ever sue you, you can attempt to make yourself as unattractive as possible to lawyers looking for a big payday by taking your plantiffs case. So realize that I would never discuss details of ownership of any specific property with those not directly involved.

I don't position myself or represent myself as an advisor. I told you and others how I'M doing MY real estate business. Real Estate Firms (Real Estate Brokers) don't advertise "We flip homes for you". They want to earn a commision from the sale of the property and can't act in the capacity of an agent and an investor in the same transaction (unless it's their property). It must be one or the other. Real Estate Investors advertise "We Buy Homes". Most of our deals come directly from the owners. I advertise in regional print, television, and radio...as well as a strong grassroots presence. Realtors are looking to earn a commission from a listing. Investors are looking to earn a profit or cash flow. Being a Realtor and an Investor are two different things. You don't have to be one to be the other. Your whole baseball card example of flipping lets me know that. If you have an re-assignable option contract to purchase a $6 card at $3, then why would you hold and ask for $8? Is that your understanding? You've said flipping isn't investing, it isn't business. I'll end it by saying it's profitable. Did a flipper touch in a wrong way as a child? You sound angry.

I used to turn my nose up when I was looking for rehabs and rentals in Baltimore City and Washington,DC. I turned down a lot of property that didn't fit MY criteria. However, there were guys doing very well in those areas that I thought I was too good for. I still won't own in those areas, but I will take an hour out of my "busy" schedule to sign a contract on a property when I know that it fits the criteria of other investors. If my reward is $30k for doing that, then where is the down side. The seller is informed if I can't locate a buyer in a timely matter. Their request is granted if they ask out of the contract. Take you head of your ass long enough to smell fresh air if you have a problem with this being one of the 3 ways that I make money in the real estate business. It doesn't bother me about how you make money in IT. More power to you.

While your father may have a real estate backround, your exposure is limited. You made that clear from what you said in your earlier response, you assumed that the bank wanted you to have 70% - 100% in the bank before they would lend you money to buy.



I've got to hit the road, but I'll be back