Real estate gurus...their books and some untimely advice.

Wendy, that's classic! For all of the 17+ years I sold RE Finance/mortgages, I could always tell (pretty quickly), that the person on the other end of the phone had a "system" in mind that they wanted to try to work.

I would like you said break the news, then tell them some reasonable strategies that would work, and sometimes, but not usually, land a new client. Mostly they were looking for the quick buck...

Very well written article and good information for would be investors.

www.CoolRealEstate.com   Cool, CA 95614

I did a search this morning on my mls here in Fort Wayne and saw that there were 400 REOs listed right now.  I agree 100% that the deals are there already! 

Wendy you wrote this:  But short term investing in real estate is best done in an appreciating market...not a declining market.

I completely disagree with you. 

If you could, please send them my way.   Thank you!

Wendy,  I wholesaled a deal that took me only a week to get paid on, so it can be done.  :)

Your comments are excellent and I think are aimed at a first time investor (who has yet to invest in their own home) who reads a book or buys a course form a "real estate guru" ( the team drives me crazy) and have not taken the time to figure out the reality on the ground.  Investing can absolutely be done and there are literally hundreds of ways for investors to make money including wholesaling great deals to other investors.  But it's not as easy as walking into your office and saying "here we are - show us the deals and we will flip this bad boy and walk away with a fistful of cash".  Unfortunately, most gurus teach catch phrases and key words and not much else unless you are willing to pay big bucks - and at times - even what they teach after collecting isn't wroth the paper you write it down on.

Just so you know - I am an investor in Memphis, TN who owns 48 properties and I work with investors from all over the country to build investment portfolios in Memphis, TN.

i don't know about other parts of the country, but out here, I don't know that investors can even buy anything no money down!  My lender told me for first time investors, with no history of collecting rents, lender want 50% down!!  No money down was a couple of years ago- and they are today's short sales.

Wendy:  I work heavily with investors and can guarantee one thing - Speculating is not investing, nor the other way around.  It never ceases to amaze me how people with spend THOUSANDS of dollars to "work a system" (really these are simply get rich quick schemes), and then are disappointed when they find that it is MUCH harder, if not impossible to really make fast money in real estate.  The charletons in the business try to sell these ponzi schemes in real estate, in stock investing, etc. etc.  The more amazing thing again is that people will buy it!

My wife and I started a local real estate investors association for just this purpose - to re-educate people in real investing techniques.  I am not very popular with the ones trying to sell courses. but I have managed to create a solid core of people who work together to help all of us meet our investing goals.  This has been very rewarding for my wife and I and good for our business as well.

Oh, yeah!  The old "lock and re-assign" deal!  I know of one real estate agent in our area who does these and quite frankly it sounds like a real pain to get a deal closed.  One of my buddies got an offer from him and it took months to close it up because the buyer kept changing!

As an investor, I think it's good to have a number of "arrows in your quiver" because sometimes you can find a way to make a deal work that others overlook.  I've been successful in using loan assumptinos (yes, a "non-assumable" loan can be assumed...in a distressed situation, you can sometimes negotiate things that they wouldn't normally do!), owner financing, wrap arounds, etc, but these each require special circumstances and it's hard to take any one of these and make a good living by specalising in any one of them.

A place for everything, and everything in it's place.  The "lock and re-assign" (although I've not done one) might be appropriate if the buyer is planning to buy a property, gets his offer accepted, then finds that someone else is willing to pay more.  You might make a case that the buyer could sell the rights to the contract to the new buyer (assign). 

But while I've heard some of the gurus talk about how this type of wholesaling can be profitable, what happens if the buyer can't sell the contract to someone else?  He'd better be prepared to take title to the property himself or suffer the seller's wrath!

So, again, I can see where this is a valid technique to be used under the right circumstances, but I believe there are better/easier ways to build a business!  (for example, I buy a most of my investment properties through Realtors and the MLS.  I can only think of a few times I've bought fsbo's....time is money and they need to remember that they need to get the job done before they'll realize any profits!)

No money down loans for investors are out the window.  Lenders are asking for 30% minimum now.  The only investors buying have the cash or are paying 12% - 15% for hard money.