Get Rich Quick...

[HollaGeo]

Do you guys ever watch T.V. at like 3am and see those infomercials for get rich quick schemes. There are a bunch of real estate ones, etc. Do they work?

[onesubdrvr]

Do you guys ever watch T.V. at like 3am and see those infomercials for get rich quick schemes. There are a bunch of real estate ones, etc. Do they work?
I have 2 things to say
1) Real estate is USUALLY a good investment, sometimes short term (fix and flip), and long term (prospecting)

But as far as Get-Rich-Quick,...
if something sounds too good to be true, it usually is

Wayne

[Patti]

I have 2 things to say
1) Real estate is USUALLY a good investment, sometimes short term (fix and flip), and long term (prospecting)

But as far as Get-Rich-Quick,...
if something sounds too good to be true, it usually is

Wayne

Wayne, I agree :yes:

There really is no such thing as "get rich quick"..if there was..we'd all be rich http://www.donzi.net/ubb/rolleyes.gif http://www.donzi.net/ubb/graemlins/biggrin.gif

Ah, but if it WERE that easy http://www.donzi.net/ubb/smile.gif

[Zudnic]

Think most of those guys run those ads for awhile and end up in jail!!!!

[Walt. H.]

The only ones that get rich are those that sell the books and or tapes on how to make a million with no money down. :rolleyes:

[Formula Jr]

Absolutely none of these schemes work in real life.
The way they are pitched, the speaker first creates
a real estate scenario that can happen in theory, but it is extremely
rare in reality. I've listened though a bunch of them and they just use words
like "forecloser," "Equity," "distressed property," "First Option," "quit claim deed," "Tax Lot Sales," etc, completely out of context. Real Estate can be a very, very complicated study. You are better off, just getting a used text book for the realitor's exam and going through it. Then you can see how their rap just falls apart and how they use these terms incorrectly. There are cheap houses everywhere, they are just in horrible locations. If you really want to make money on real estate, here is more simple, fool proof stratagy.
Find out what the metro plan is for your area. That is public info and free. Then buy raw buildable land on the borders of that municipality. Taxes are based on "improvements." The boarders will eventually expand, be annexed - that is a given. And then the zoning will change, and that is where you will make money selling that parcel to a developer. And you don't have to pay anyone $250 to figure it out.

[boxy]

FJ, that works, but it is a long term strategy, you need to be 30+ years ahead of the curve to make it work.

[Formula Jr]

Its about five to ten years, where I live.

[boxy]

Nice, that makes it a little more reasonable, investment wise.

[synack]

Maybe Alpacas are a better way to go... :rlol:

If it sounds too good to be true, it ALWAYS is!

The info that these people peddle is usually outdated and doesn't really apply to current market conditions. Heck, I've seen some of these schemes talk about how you can find distressed property and easily make a huge profit with no money down. The hard part is the important part...finding the distressed properties. In most cases, it's near impossible unless you know someone to "bird-dog" and feed you leeds.

www.ripoffreport.com (http://www.ripoffreport.com) has some interesting reading on this such as:

"To everyone who claims to have walked away with cash at closing or flipped properties and made $10,000s, here is the way traditional mortgage lending works.

No retail or wholesale bank will ever allow any seller to sell a property for more than 10% over its original purchase price IF it has been owned for less than 90 days. If the property is to be sold before 90 days of seasoning, the original purchase price is used.

No retail or wholesale bank will allow any property to be sold for more than its purchase price or appraised value – whichever number is the lowest. So, no retail or wholesale bank will allow you to buy a property for $100,000, get it appraised for $120,000 and walk away from the closing with $20,000!

The only way buyers get “cash at closing” is by cutting an under-the-table deal with the sellers. For instance, the buyer agrees to purchase a property for $100,000 IF the seller agrees to give the buyer $10,000 in cash “outside of closing.” With such a deal, the buyer pushes an appraiser to get a fair market value of $110,000 and then changes the purchase contract to “buy” the same property from the seller for $110,000 instead of $100,000. The real question is why would the seller give the buyer $10,000 when they could sell the property for the full fair market value and keep the $10,000?

Such “under-the-table” deals are now being investigated by many state tax auditors. The $10,000 that changes hands is called “unreported financial concessions” and is 100% illegal. Realtors, mortgage brokers, and closing services companies are being indicted. But, don't believe me, visit:
http://news.wra.org/2004/August and read the article on “Artificially inflated property values” under “Top Stories.”

If you still think you can do what the real estate gurus claim, then go talk to a real estate attorney and a bank loan officer first. For everyone who claims to be making $$$$ flipping properties and getting cash back at closing – show me a HUD Settlement Statement. I have seen many other folks ask to see them and not one of you “successful real estate investors” has ever provided one.

I have asked the very same of Carleton Sheets, Wade Cooke, Russ Whitney, John Reed, John Beck, Robert Allen, and the Rice brothers and have never gotten one single HUD Settlement Statement for any property they claim to have bought or sold! Point proven.

None of the more than 3000 mortgage brokers and realtors I have dealt with over the last 22 years has ever agreed to give up their commissions for “future payments” from any real estate guru student. No underwriter I have ever known has ever approved a mortgage purchase where the buyer got cash at the closing. Period. Wake up – there is not one real estate guru that does not have at least one state attorney general after them for fraud. Wade Cooke is in federal prison, Russ Whitney and Robert Allen have bankruptcies and multiple civil judgments against them, Carleton Sheets is being investigated by 3 different state attorney generals as you read this. "

[boldts]

Wow is this stuff way over my head. So, your saying if I bought my house less than 90 days ago for lets say 85,000, got divorced so I no longer need the house, I can't sell it for an appraised value of say 130,000 after making updates in those 90 days?

[TuxedoPk]

Wow is this stuff way over my head. So, your saying if I bought my house less than 90 days ago for lets say 85,000, got divorced so I no longer need the house, I can't sell it for an appraised value of say 130,000 after making updates in those 90 days?


That information is inaccurate.

[TMANN]

No retail or wholesale bank will ever allow any seller to sell a property for more than 10% over its original purchase price IF it has been owned for less than 90 days. If the property is to be sold before 90 days of seasoning, the original purchase price is used.

The bank decides what I sell my house for?????? :confused:

[Formula Jr]

It isn't "your" house until all the mortgages, or notes are paid, and if there are liens, or deed restrictions, land use laws, mineral rights etc, it might never be completely "your" house.
And since the State has eminent domain anyway, you never completely own real estate. Your are not technically selling the house if the bank or other lender or contract holder still has an interest. You are assigning a contract to another party.

These get rich quick, "crash course" real estate seminars do "crash" alot of people. They don't tell you about the thousands of people that tried to apply their crazy scheme and ended up in contracts on worthless property.

I've seen lots of properties, that I would not take title on, even if someone paid me to do so.

[BUIZILLA]

No retail or wholesale bank will ever allow any seller to sell a property for more than 10% over its original purchase price IF it has been owned for less than 90 days. If the property is to be sold before 90 days of seasoning, the original purchase price is used.

That is absolutely not true. I have done it the same day, very profitably... and I'm gonna try and do it again in the near future, with a spec townhouse i'm building right now. In fact over 20 speculators in my daughter's new development where she lives, did it last year.

JH

[Lenny]

.. I have a get rich quick scheme...

Only thing is it is in Klingon years and I might not be alive to reap the rewards.

There are definately BETTER ways than mine.

...back to the saw... :(

As for "flipping Real-Estate here," there are no boundaries. By it for 300K, sell it the next day for 500K... no worries. BUT, keep in mind, in Canada, the mortgages are NOT tax deductible, be it recreation (second) property or primary residence. Then, to top it off, on ANY money made on a secondary investment residence over and above the purchase price, you HAVE to pay 25% tax (Capital Gains) on 50% of the portion over the purchase price.

So, example, buy a home for 300K$, sit on it for one week, sell it for 500K$. The two hundred thou profit (Capital Gains) has 50% applicable to tax at 25%. So the $200K you made, has 100K$ taxable at 25%, so you get 75K$ of that, so you end up with $175K in your pocket outside of real estate fees.

To make matters worse, a Capital LOSS is NOT deductable on your year end income. It is only deductable against a Capital Gain in the year you had one. So if you lose your a$$ on something, the loss is a carry forward that has to wait until sometime in the future that you ever have another Capital Gain in the year. :rolleyes: Soooo, long story short, make money on something, pay TAXES NOW !!!, take a chance, lose your shirt, then you can carry that as baggage through life until such time as your "risk taking" pays off again and then you can write it down. If I lived 5 miles South of where I do, (South of the 49th) I would have half a dozen DONZI's by now given your tax and income laws. Plus I could put gas in them 24/7 and think it was cheap...

You ever wonder why we (I) never get ahead???... :( or buy Criterions :D

[pmreed]

A point here. It's not so much the seller's mortgage holder who objects to the flip. The buyer's moneylender is the one who looks askance at the transaction. Their logic (quite correctly) is: If Jim paid 100 K for condo A in January, what the hell happened over the following 90 days that suddenly made condo A worth 110 K in March. That equates to a rise of over 46 % annualized. Now, if we're talking pre-construction, that's a different story. You just became a silent partner of the developer when you plopped down your money. If you're lucky, you may even turn it for a profit before it's finished. Sort of like buying futures :wink:, except the risk is lower but the commissions higher.

Phil

[Ed Donnelly]

Lenny; You forgot the other lovely little money grabber of the government

LAND TRANSFER TAX

So the Gov. puts the land in your name. Cost me $8,300 for that priviledge..Ed

[Formula Jr]

Lenny you do point out another aspect, that of capital gains, and taxes. I'm not familiar with what ever new rules are out there, I haven't "flipped property" recently. But when i was interested in buying some waterfront in the gulf islands, as a secondary residence, the rules became overwhelming and very complex and then changed as to residency laws. Its my understanding that no one got grandfathered, no matter how long they owned property. So, I then looked at the San Juans and found even more oddness.
"Here's a nice 2 acre piece of property here, low bank, buy it for $270K. Oh, and by the way, you can't put a house on it, Yet.....well,....maybe you can....nope....not today, but maybe you can later. We don't really know about the communty well's capacity or if above ground septic will be appoved. Oh, and by the way, it will still be appraised at 270K and you are still responsible for the taxes, if you want to hang on to it." So you got another 20k in making it work with compost toilets and rainwater cisterns with filters. All of which will need approval from the local politic that hate you for introducing ideas that get around the rules they thought would keep you and everyone else out.