Rich Dad, Poor Dad

[rickboone1]

Has anyone ever attended any other their classes or workshops? They usually have a free "class" which really teaches you nothing, just attempts to sell a workshop. It is about how to invest in real estate. There are many techniques they cover. No doubt you could do this and in fact, you would make money. Get rich? Depends on you. I personally have no interest in real estate. It seems the only way to really do well is to treat it as a business and a full-time job. I can see where it will become very time consuming.

Buy with no money down. You see all the infomercials every night advertising those very same words. Easy? Sounds like. Maybe.

Here's the deal.

You find a home. Make a cash offer. Suggested to look at foreclosures. You'll want something about 30% MV. So, you found a property. The seller is asking 110,000. FMV is 149,000. You pass the 30% test. You offer the seller say, 95,000 cash. You then find an investor that will give you 90,000 cash. This is typically a high interest loan. 15-20% even. As collateral, the investor has to look at the house and decipher should you default on your loan, would owning this property prove profitable. Hence, the 30% rule. Additionally, for both parties, buying below FMV helps to increase your chances of a profit at resale. In theory.

You get the loan, you get the home. Everyone is happy. You can rent the home out. Provided you rent it for a fair enough amount that your cashflow is positive factoring in your high interest payment.

Ideally, you will want to do some renovations and repairs and prep the property for resale.

So, you borrowed:

90,000 which actually, with interest were...120,000

Repairs were, say 8,000

You sold the home for $155,000

155-128 yields a profit of: 27,000.

Sounds like fun. SOUNDS easy. My question is: where are you going to find an investor in their right mind that wants to invest in someone they do not know? With no credit checks, no money down, you're supposed to get someone to give you 90 thousand dollars? I don't know if there are that many people out there willing to invest like that. Perhaps they are.

Now, to avoid any type of capital gains tax you have I think 45 days to spot your new property in which to sink your profits. Then 180 days to actually purchase the new property to avoid any tax.

I do not know which percentage you must invest back into a new property though. I would assume not 100%, as you'd never make any real money simply reinvesting and reinvesting.

Anyone else do real estate investing? How far off am I with these statements?

For those that don't know, now you don't have to spend $100 on that infomercial. I told you how it is done for free. Woo hoo!

 

[The Knize]

I think folks have determined that there is more money in giving classes on how to get rich quick in real estate, than there is in actually trying to do what they are supposedly teaching.

Sure, if I could consistently buy real estate or anything else priced well below fair market value, nearly by definition I could make money. It could rent a house out at rents that create a positive cash flow, I could eliminate my risk and make money. And it would be useful if I could find someone smart enough to have the money necessary to fund this kind of thing, but at the same time dumb enough to lend it to me. I do not see any of this happening very darn often.

 

[mmack66]

See Carlton Sheets

 

[Sodapopjones]

I would like to see the word "Investor" and "Profit" in real-estate out here in the South West

Also flipping homes died awhile ago out here...

 

[BlueBloodKiller]

I like the Robert Kiyosaki book if that''s what you mean. If you havent read it, you're in for a epiphany. It should read as a "money-management philosophy guide" and not the Holy Bible or a sure-fire way to instant rich-ness. Often people buy books and expect authors to take you by the hand, and walk you every step, spoon-feeding you from Point Zero to Hero. The Kiyosaki "Rich Dad, Poor Dad" franchise has now extended widely to include many other agendas. I cannot speak for anything else but the original book.

I never believe in successful people divulging their trade secret in any form. It just doesn't make any sense. (The only reason why anyone will reveal is when that "trade secret" itself is rampant {and hence currently not effective!} in the industry and by revealing it would make the author a "hero") Selling a book is no different from selling a seminar.

That's just my opinion. And I was and am still a sales person and that's how i think about things. Ask an economist, and he'll tell you as well to follow the path of incentivising if you want to know the truth.

 

[airplanedoc]

I liked the rich dad series.

The philosophy is kind of like monopoly buy three houses then trade them for one hotel then trade 3 hotels for a shopping mall, etc.

The principals can be applied to any business, he just happened to do it in real estate.

 

[rickboone1]

Some good points.

I do think that with this, Carleton Sheets, or any of the other gurus begging for your dollars that you CAN make money. Will you get rich overnight? Nope.

In fact, at this class I attended, that much was told to everyone. I give credit where it is due and I respect that. Don't give people a false hope. But, the reality is, is you CAN make money. The "instructor", also an investor, stated that he has lost a lot too. I respect that as well.

Now, would someone give away their trade secrets. No, they'd charge $495 for them. LOL. And, the truth of the matter is they would. Why? For starters, many things....

- A wealthy person benefits even more by helping others obtain wealth. Paying if Forward so to speak.

- There is plenty of money in the US to go around, should you want a piece of the pie.

- Good teachers learn from their students. As they teach you how to invest, they learn from you, the student.


And, yes, the book is a great read. I would also suggest reading, "The Millionaire Mind" by T. Harv Ecker. It is a great eye-opener.

Personally, in time (not now by any means), I may try my hand at this real estate investing.

 

[BlueBloodKiller]

Now, would someone give away their trade secrets. No, they'd charge $495 for them. LOL. And, the truth of the matter is they would. Why? For starters, many things....

The question has always been: WHY WOULD THEY (FOR ANY AMOUNT OF $, UNLESS IT MAKES MORE $$$$ from the seminar than the primary purpose- the actual investing of real estate)?

Without digressing into the debate of whether true altruism exist* (no, it does not), i'm not sold on the idea that a commerical venture in any form (seminar) not yielding any "profit" for the perpetrators.

- A wealthy person benefits even more by helping others obtain wealth. Paying if Forward so to speak.

- There is plenty of money in the US to go around, should you want a piece of the pie.

I heard that pitch before. I like the idea of "paying it forward". Exactly how a wealthy person can benefit himself by encouraging more fellow competitors in the same real estate pie enroaching into his own pie that will result in him having a smaller slice, I have yet to be logically convinced.

The "plenty of money to go around for all of us!" idea is to allay my above question. It doesn't answer it.

- Good teachers learn from their students. As they teach you how to invest, they learn from you, the student.

Remember the good old adage: Those who can't do, teach. More income from "throwing seminars" than real investing? Or real estate investing basics 101 masquerading as "industry secrets"?

Exactly how would they learn from their students, i have yet to be convinced too. Unless it's argued that they learn the "newbie investor herd instinct mentality" and play around it to their advantage.


Please, these are just my candid thoughts and hey, i may be wrong!

PS: I'm in real estate sales too.


*Altruism: good short definition

If one performs an act beneficial to others with a view to gaining some personal benefit, then it isn't an altruistically motivated act. There are several different perspectives on how "benefit" (or "interest") should be defined. A material gain (for example, money, a physical reward, etc.) is clearly a form of benefit, while others identify and include both material and immaterial gains (affection, respect, happiness, satisfaction etc.) as being philosophically identical benefits.

Eg. When you donating $, you are really doing it to make yourself feel good.

 

[The Knize]

Yikes! I am not saying that real estate is a bad investment. I own investment property. I am not saying that in theory using other people's money to leverage is a bad idea.

What I am sayiing is that I do not see the kinds of opportunities promoted in these seminars available, and the whole approach is a get rich quick one. For instance borrowing money at very high rates of iinterest to fund the project. And any expectation that renters are going to carry the full annual cost of owning a peice of property. Real estate can go down in value as well as up. There can be tremendous delays involving any real estate. It can be hugely illiquid.

Overtime, real estate generally goes up and thus can be a good investment. But the idea that there is all of this money just sitting out there to be made in real estate is silly. There are lots of folks that are involved in real estate already. I do not think they are letting great opportunities slide by.

 

[rickboone1]

Wow, great points. I can't figure out how to break down the quotes as you have and address certain topics, so bear with me.

I would not fear being right or wrong, this is strictly opinions and perceptions.

Yes, they are making money off the seminars and products sold. They (the company) is making a very large portion of their income off of this. Why? It's effective. Is that to say that the participants aren't making money with the use of the product or education? No. However, that percentage is rather small. Not attempting to deny they are making money and piles of it.


Okay, you've heard that pitch before. That's really my own philosophy. I've stood by it for years. Just my belief. To elaborate a little. At one time I was a professional photographer by trade. Where did I obtain the majority of my training? From other successful photographers. I went on to return the favor and have trained newcomers to the field. Yes, I learned from my students. From their mistakes, for one. Each time I taught, I had to "re-learn" and take myself back to the basics. The foundation of which we should never shy, but often do. Teaching this to another is forcing yourself to revisit some hard, fast rules of the trade. And, to re-evaluate yourself and your techniques, etc.

Plenty to go around. Yes. I was obviously not the only photographer in my area. To this day, I still have clients. Likewise, you are not the only real estate salesperson in your area.

I would also imagine that you were trained by someone that had gone before you and done seemingly well. Chances are, you probably paid for a portion, if not all of your real estate education. At least for licensing and such.

Interesting conversation. I appreciate your participation and look forward to more. Thanks for the definition too! lol

Will be enticing to view others' comments as well as experiences. Not only about what's advertised on TV, but about real estate investing as a whole.

Personally, I'm a tad bit envious of those that are able to sweep up properties for pennies on the dollar foreclosures in this period in time. That, I personally find, a smart strategy. Truly, it baffles me, as it has for about a year and a half, why people aren't buying second homes now. With so many foreclosures out there it would be a wise choice. And, perhaps people are. Media tends to only report the negative and the larger percentages of persons losing their homes, not those that are getting a second one.

 

[rickboone1]

Yikes! I am not saying that real estate is a bad investment. I own investment property. I am not saying that in theory using other people's money to leverage is a bad idea.

What I am sayiing is that I do not see the kinds of opportunities promoted in these seminars available, and the whole approach is a get rich quick one. For instance borrowing money at very high rates of iinterest to fund the project. And any expectation that renters are going to carry the full annual cost of owning a peice of property. Real estate can go down in value as well as up. There can be tremendous delays involving any real estate. It can be hugely illiquid.

Overtime, real estate generally goes up and thus can be a good investment. But the idea that there is all of this money just sitting out there to be made in real estate is silly. There are lots of folks that are involved in real estate already. I do not think they are letting great opportunities slide by.

Very well said. As I stated in my opening post, these taught ideas in theory seem nice. And, given the right circumstances, may work. Problem is, finding the avenues and solutions and formulas to make them work. I don't know anyone sitting around waiting to hand me any amount of money.

 

[BlueBloodKiller]

Yikes! I am not saying that real estate is a bad investment. I own investment property. I am not saying that in theory using other people's money to leverage is a bad idea.

What I am sayiing is that I do not see the kinds of opportunities promoted in these seminars available, and the whole approach is a get rich quick one. For instance borrowing money at very high rates of iinterest to fund the project. And any expectation that renters are going to carry the full annual cost of owning a peice of property. Real estate can go down in value as well as up. There can be tremendous delays involving any real estate. It can be hugely illiquid.

Overtime, real estate generally goes up and thus can be a good investment. But the idea that there is all of this money just sitting out there to be made in real estate is silly. There are lots of folks that are involved in real estate already. I do not think they are letting great opportunities slide by.

Ditto sentiments. Firing on all cylinders, cstrother!

 

[BlueBloodKiller]

That's really my own philosophy. I've stood by it for years. Just my belief. To elaborate a little. At one time I was a professional photographer by trade. Where did I obtain the majority of my training? From other successful photographers. I went on to return the favor and have trained newcomers to the field. Yes, I learned from my students. From their mistakes, for one. Each time I taught, I had to "re-learn" and take myself back to the basics. The foundation of which we should never shy, but often do. Teaching this to another is forcing yourself to revisit some hard, fast rules of the trade. And, to re-evaluate yourself and your techniques, etc.

AhhhhH! You are in the arts field! Just as i was! I was once a student of the arts, dabbled in photography (Albert Watson!) and am still a massive film fan (David Lynch!) before dropping all that to be a banker and now in real estate. Sometimes, i wonder how life would be if i had chosen to stick with my film school studies..... Hmmmm.... My life could be simpler, maybe?

If you are coming from that angle, i totally understand. The apprentice-mentorship, sharing of skills to better the medium, the selfless unified cultivation of ideas.... i don't know how to put this in words but the financial field is a very much different beast. People are well, not as giving and more conniving. As cliche as it sounds, the industry thrives on knowledge, fear and greed.

Anyways, i question the integrity of such seminars. Real estate investing is a powerful tool to cultivate wealth if understood correctly. And patiently.

Bonne Chance!

 

[Obsessed]

I think folks have determined that there is more money in giving classes on how to get rich quick in real estate, than there is in actually trying to do what they are supposedly teaching.

Sure, if I could consistently buy real estate or anything else priced well below fair market value, nearly by definition I could make money. It could rent a house out at rents that create a positive cash flow, I could eliminate my risk and make money. And it would be useful if I could find someone smart enough to have the money necessary to fund this kind of thing, but at the same time dumb enough to lend it to me. I do not see any of this happening very darn often.

Yikes! I am not saying that real estate is a bad investment. I own investment property. I am not saying that in theory using other people's money to leverage is a bad idea.

What I am sayiing is that I do not see the kinds of opportunities promoted in these seminars available, and the whole approach is a get rich quick one. For instance borrowing money at very high rates of iinterest to fund the project. And any expectation that renters are going to carry the full annual cost of owning a peice of property. Real estate can go down in value as well as up. There can be tremendous delays involving any real estate. It can be hugely illiquid.

Overtime, real estate generally goes up and thus can be a good investment. But the idea that there is all of this money just sitting out there to be made in real estate is silly. There are lots of folks that are involved in real estate already. I do not think they are letting great opportunities slide by.

Bingo. Cstrother is a wise man.

I guarantee you that Carlton Sheets and the "Rich Dad" guy made more money selling books and seminars than they ever did in real estate.

 

[chainfire]

You should check out John Reed's Guide to Real-Estate Gurus. He's got a lot of interesting info not only on the schemes these guys use, but individual gurus as well.

 

[The Knize]

More later, but I want to be clear that I am not discouraging entreprenureal (sp?), proactive action! "Talking" about this stuff on this forum should be considered part of that, really. Business is risky, but business generally rewards those that do their homework, accumulate wisdom, etc. But these days holding a job is no long term guarantee of anything. I have no doubt that there is money to be made in the world.

 

[rickboone1]

AhhhhH! You are in the arts field! Just as i was! I was once a student of the arts, dabbled in photography (Albert Watson!) and am still a massive film fan (David Lynch!) before dropping all that to be a banker and now in real estate. Sometimes, i wonder how life would be if i had chosen to stick with my film school studies..... Hmmmm.... My life could be simpler, maybe?

If you are coming from that angle, i totally understand. The apprentice-mentorship, sharing of skills to better the medium, the selfless unified cultivation of ideas.... i don't know how to put this in words but the financial field is a very much different beast. People are well, not as giving and more conniving. As cliche as it sounds, the industry thrives on knowledge, fear and greed.

Anyways, i question the integrity of such seminars. Real estate investing is a powerful tool to cultivate wealth if understood correctly. And patiently.

Bonne Chance!

I went backwards. Well, actually full circle. I started in sales, then went to finance. Then went into arts/ photography. I realized all I really liked was the sales, aside from creating art for ME, not them. So, now, I am back in sales. Truly I've never left. Just added art to the mix.

 

[rickboone1]

Bingo. Cstrother is a wise man.

I guarantee you that Carlton Sheets and the "Rich Dad" guy made more money selling books and seminars than they ever did in real estate.

This is probably true. Who knows without looking at their financial statements. And, if anyone truly has any accumulation of wealth, they've learned to keep their business out of public record.

I don't think they're (TV gurus) are attempting to give the impression you're going to make a TON of money and get super-rich overnight with their systems. Granted, their "systems" or "secrets" can be found a multitude of places. They've broken it down, added a ton of hype to get someone excited and put a price tag on it. Genius if you ask me.

I don't endorse one way or the other. Just general question and conversation really. And, despite what anyone thinks of these people, they are making money. Yes, off of their "how-to" products. And, while I do not have any personal nor first hand knowledge, it is my personal opinion that you could make a little money doing this. But, you do not need their methods to do so. You can learn them other places.

 

[rickboone1]

You should check out John Reed's Guide to Real-Estate Gurus. He's got a lot of interesting info not only on the schemes these guys use, but individual gurus as well.

One of the TV shows: Dateline or something, reported on John Beck's system. It had to do with the houses used saying they weren't actually foreclosed properties people obtained with their system. And, further revealed all the houses in the infomercial were in the same neighborhood. Maybe only one or two was actually a tax-sale.

Anyway, their (John Beck) defense was budget or commercial production. Keep costs down, do all filming same location.

And, I suppose it makes sense. There's really no need to fly all around to do a short filming on one house here, two houses there, that sort of thing. So, I can't really consider THAT a scam.

I'm not referring to your posted link, only what I saw on TV.


* Quite an interesting link BTW. Thanks for sharing.

 

[AndrewWiggin]

Think about it this way: if flipping real estate was such a huge moneymaker, why are the seminar trainers doing seminars when they could be flipping houses?

I can't see this working very far past the first few investors, which is why they're grooming you. Who would invest with someone they don't know? A person who has been told that this system works, and is thus willing to "spend money to make money."