Beginners guide to becoming WEALTHY
- Thread starter STR8UP
- Start date
Sire
Senior Don Juan
Hey STR8UP,
I have a couple of quick questions for you. Do you think the best way for me to get my foot in the door of real estate investing would be to purchase my own home first? Will that help me in aquiring other properties in any way?
I also just got Russ Whitney's, Building Wealth, Do you recommend any books for after I finish this one. Thanks for all your help. I'm hooked on this business now, and it's all your fault..lol
Sire
I have a couple of quick questions for you. Do you think the best way for me to get my foot in the door of real estate investing would be to purchase my own home first? Will that help me in aquiring other properties in any way?
I also just got Russ Whitney's, Building Wealth, Do you recommend any books for after I finish this one. Thanks for all your help. I'm hooked on this business now, and it's all your fault..lol
Sire
Labayu
Banned
Brad 23-
“land prices with planning permission in the UK are sky-rocketing,”
But I reckon within 3 years there going to slump again- mostly because everyone’s saying there will NEVER be negative equity again.
I’m about to come out of uni and am considering getting a job with an estate agency to learn the technicalities of the things involved, and get in after the crash, not at the peak of prices. But I’m sure there are a few deals out there {especially outside the SE & London}.
“I'm from the UK and pretty much everywhere in this country the rental income you can expect to receive will rarely cover any buy to let mortgage you are granted”
While I don’t have hard figures I’m pretty sure this just isn’t true everywhere here. If you buy just any house in the SE today, then the mortgage is going to be phenomenal, however in a half decent market, it should be more expensive to rent.
In one of Robert Kiyosaki’s books he tells about how he advised someone to get into a particular real estate market, they did but something like 5 years later, didn’t check other properties, didn’t check the cash flow, and overpaid. If the market is too hot, either look out for the real bargains {like one out of 1000!}, or purely concentrate on learning what you need to know.
“Because I get the feeling that the potential return on such projects would be phenomenally impressive, it's a big commitment to take on, but who cares when you consider the profits?”
It takes a long time to complete, the biggest problem is cash flow- if you’ve got the capital or skills fine.
“land prices with planning permission in the UK are sky-rocketing,”
But I reckon within 3 years there going to slump again- mostly because everyone’s saying there will NEVER be negative equity again.
I’m about to come out of uni and am considering getting a job with an estate agency to learn the technicalities of the things involved, and get in after the crash, not at the peak of prices. But I’m sure there are a few deals out there {especially outside the SE & London}.
“I'm from the UK and pretty much everywhere in this country the rental income you can expect to receive will rarely cover any buy to let mortgage you are granted”
While I don’t have hard figures I’m pretty sure this just isn’t true everywhere here. If you buy just any house in the SE today, then the mortgage is going to be phenomenal, however in a half decent market, it should be more expensive to rent.
In one of Robert Kiyosaki’s books he tells about how he advised someone to get into a particular real estate market, they did but something like 5 years later, didn’t check other properties, didn’t check the cash flow, and overpaid. If the market is too hot, either look out for the real bargains {like one out of 1000!}, or purely concentrate on learning what you need to know.
“Because I get the feeling that the potential return on such projects would be phenomenally impressive, it's a big commitment to take on, but who cares when you consider the profits?”
It takes a long time to complete, the biggest problem is cash flow- if you’ve got the capital or skills fine.
Absolutely. I lived in my first purchase. In addition, a bank gives you much better terms on an owner occupied property. You're gonna pay rent anyways...
The BIGGEST roadblock to investing in real estate is conquering your fear. Buying something you are going to live in will help get rid of some of the boogeymen.
I would highly recommend using some of the creative techniques you learn to make your first purchase. I put down a down payment on my first, but that's neither necessary nor beneficial.
Good for you!I also just got Russ Whitney's, Building Wealth, Do you recommend any books for after I finish this one. Thanks for all your help. I'm hooked on this business now, and it's all your fault..lol
Sire
Read Robert Allen's materials, and Kiyosaki has other books that I'm SURE are a wealth of info.
Just make sure you put your knowledge to work. If you are TRULY serious about making this work I can tell you that there's a pot of gold wating for you and it's closer than you think.
If you currently have too many women chasing you, calling you, harassing you, knocking on your door at 2 o'clock in the morning... then I have the simple solution for you.
Just read my free ebook 22 Rules for Massive Success With Women and do the opposite of what I recommend.
This will quickly drive all women away from you.
And you will be able to relax and to live your life in peace and quiet.
Cheers Labayu.
Good to see other UK users on this forum.
I was considering timber frame self-build because the company can erect the frame to a water-tight and wind-tight condition in about 8 days.
All you need to do then is get a brickie, electrician and plumber and then you can sort out the rest. It might not take that much time to complete with timber frame, but of course, as we have both seen, it's just the land-prices.
Str8up, what's the situation with planning permission in your state, is it easy to get permission to build from the authorities?
Surely it must have crossed your mind to self-build considering the instant profit once the house has changed hands? Or are there hefty capital gains taxes?
One thing is, how many properties have you actually sold on at a profit so far?
I mean house prices do go down as well as up, but I take it things have been going well in your neck of the woods recently?
Str8up, do you insure yourself against bad tenants? And do you use an agency to collect rent, carry out repairs etc.?
So your rental income really is enough to cover mortgage repayments AND the interest on the mortgage?
Cos I am sure in the UK that rental income received would be enough to pay the mortgage, but not enough to pay the interest on the mortgage as well, which would still be a hefty sum out your account each month.
Good to see other UK users on this forum.
I was considering timber frame self-build because the company can erect the frame to a water-tight and wind-tight condition in about 8 days.
All you need to do then is get a brickie, electrician and plumber and then you can sort out the rest. It might not take that much time to complete with timber frame, but of course, as we have both seen, it's just the land-prices.
Str8up, what's the situation with planning permission in your state, is it easy to get permission to build from the authorities?
Surely it must have crossed your mind to self-build considering the instant profit once the house has changed hands? Or are there hefty capital gains taxes?
One thing is, how many properties have you actually sold on at a profit so far?
I mean house prices do go down as well as up, but I take it things have been going well in your neck of the woods recently?
Str8up, do you insure yourself against bad tenants? And do you use an agency to collect rent, carry out repairs etc.?
So your rental income really is enough to cover mortgage repayments AND the interest on the mortgage?
Cos I am sure in the UK that rental income received would be enough to pay the mortgage, but not enough to pay the interest on the mortgage as well, which would still be a hefty sum out your account each month.
My net worth is hard to say because I don't know how much my business is worth. I have about $90k in real estate equity ($72k of that will be turned into cash as soon as my refi's close). $50k of the refi money is going into a business overseas. Once the new biz is up and running it will further complicate an estimation of my net worth.
I take a $2k per month salary from my business (any leftover profits are going to paying down loans at this point) and the net positive cash flows on my real estate add up to be several thousand per year, but the overseas biz is projected to net me around $7k per month (we'll cross our fingers on that one). In addition my business pays for all of my travel, high end meals several times per week, health insurance, and other owner benefit such as hookups at other businesses and whatnot. I'm still dumping any extra cash back into my projects, as much as I salivate for the Viper
As a bartender I was doing ok, but only because I was smart and didn't get too deep into debt. At the high point I was making around $30k per year pouring drinks.
All in all there is no comparison between my life seven years ago and my life today. Only having to work fifteen or so hours per week and vacation every couple of months is incredible. At this point I could never go back.
Yes, I have thought about contracting, but like I said, building isn't my thing. It's MUCH easier to make money buying an existing structure from a motivated seller.
I buy and hold, I don't sell.
I don't get involved in anything but bread and butter properties. You usually can't go wrong there, especially if you hold onto them for awhile. Our local paper projected values here to increase by over 70% by 2010.
I'm not aware of insurance against bad tenants. I manage all of my own properties currently. Not too big of a deal.
Yes. Today's market seems to be tighter, but I could easily find numerous properties tomorrow that would support all of the payments and expenses.
You will have to do your own research specific to your area. I can tell you that where there's a will, there's a way; so even if one method doesn't work for your area or situation you can always find another that will.
diplomatic_lies
Master Don Juan
- Joined
- Aug 4, 2002
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Despite a lot of warnings, I'm going to be heading into daytrading.
My advantage is that unlike regular daytraders, I am only aiming to earn around $20 in a single day's trade. As I study at my desk, I am able to look over at my computer to check the stock prices. So basically $20 is more than enough to cover my time spent on research and the few seconds of looking over my schoolwork at the prices.
Right now I've just been to a Australia Stock Exchange seminier on basic trading, and found a few cheap online brokers who offer good enough service for the price ($17 per trade), and read a lot of books on both the technical side of trading, and the psychological (Borsellino's book). After a few more weeks of preparation, I'll be throwing in my first $5K to try things out, and an additional $10K if it works out.
Would you have any advice for this?
I know its pretty psychologically demanding, and very hard to suceed, but somehow I feel it can be worth it. If not, the most money I'll lose is $100-$200 after a few weeks, which isn't much.
My advantage is that unlike regular daytraders, I am only aiming to earn around $20 in a single day's trade. As I study at my desk, I am able to look over at my computer to check the stock prices. So basically $20 is more than enough to cover my time spent on research and the few seconds of looking over my schoolwork at the prices.
Right now I've just been to a Australia Stock Exchange seminier on basic trading, and found a few cheap online brokers who offer good enough service for the price ($17 per trade), and read a lot of books on both the technical side of trading, and the psychological (Borsellino's book). After a few more weeks of preparation, I'll be throwing in my first $5K to try things out, and an additional $10K if it works out.
Would you have any advice for this?
I know its pretty psychologically demanding, and very hard to suceed, but somehow I feel it can be worth it. If not, the most money I'll lose is $100-$200 after a few weeks, which isn't much.
Aztec
Master Don Juan
It's hard to start without a live mentor who will work with you through REI. I'm wondering if Real Estate 101 http://www.creonline.com/catalog/c-201.html
is the next best thing to having a mentor. What's your take on it?
is the next best thing to having a mentor. What's your take on it?
It really isnt worth getting into if you tell yourself you only want to make 20 bucks. Why not just get a job and make that 20 bucks a day with no risk involved? Anyways, each trade is gonna cost you atleast 20 bucks and when you have a small amount of money invested that can hurt after a while
diplomatic_lies
Master Don Juan
- Joined
- Aug 4, 2002
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- 4,368
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- 8
Problem with a stable job is that it affects my university study. Mentally I can cope, but my boss can't cope with the fact that my university schedule is as violatile as the stock market (i often have additional tutorials/lectures I attend, or added interviews, or extra-curricular activities). Most youth jobs work you like a slave, requiring you to have free days, etc. Very inflexible.
Get some more money to use in the market, and aim higher than just 20 bucks a day. In theory it works good, making a little money each day, but its pointless because you cant spend it... 20 bucks to buy it, 20 bucks to sell it, and the taxes you have to pay when you take it out kind of eliminate any small gains you had. Just get get some more money in there and think a little more long term. Day trading is for when you got a lot of money where you can get rich in a day with a stock going up or down a point
I'm not going to endorse something I haven't reviewed.
For beginners I would recommend spending an afternoon at Barnes and Noble thumbing through real estate books by various authors and purchase the ones that teach methods that interest you.
You sound like you are sitting on the fence and you need someone to push you off because you are afraid to get started. JUST DO IT! It really isn't that bad. Start small. You'll see what I mean after you have one under your belt.
STR8UP,
Hey, I already read Rich Dad, poor dad, very interesting and very different than what people have told me all my life, aka get good grades to get into a good college to get a good job and then having to work for someone else your whole life and get them rich(by the way, if you are thinking about buying it, when you read it, keep on open mind). Anyways, I'm about 3/4 into Building Wealth I have a couple of Q's(so many excellent tips in that I will have to read it again to understand it). He recommends investing 1000 in a savings account and taking out a loan, invest it in another savings account, etc. My question is, will bank's be willing to give me a loan even though I don't have a job(in college F/T) and I don't have credit(don't have credit cards) and I'm 19? Should I get a credit card to help establish some credit? Or should I invest money in a IRA, savings account, etc? What do you suggest for aspiring entrepreneur?
Thanks
JW
Hey, I already read Rich Dad, poor dad, very interesting and very different than what people have told me all my life, aka get good grades to get into a good college to get a good job and then having to work for someone else your whole life and get them rich(by the way, if you are thinking about buying it, when you read it, keep on open mind). Anyways, I'm about 3/4 into Building Wealth I have a couple of Q's(so many excellent tips in that I will have to read it again to understand it). He recommends investing 1000 in a savings account and taking out a loan, invest it in another savings account, etc. My question is, will bank's be willing to give me a loan even though I don't have a job(in college F/T) and I don't have credit(don't have credit cards) and I'm 19? Should I get a credit card to help establish some credit? Or should I invest money in a IRA, savings account, etc? What do you suggest for aspiring entrepreneur?
Thanks
JW
Aztec
Master Don Juan
I'm sure you can understand why I'm hesitant to jump in to this kind of venture. It's not like we are trading baseball cards here, it involves buying and selling tens to hundreds of thousands of dollars worth of properties. I don't have have any business experience.
But since it makes me excited just to think of what my future and my future family's future, I'm going to take your advice and tackle it.
Good advice. The most difficult step aside from taking action is actually reversing your mindset. The same way you did when you stumbled upon this site as a hopeless loser with women.
That is the whole idea behind using the $1000 as collateral. The bank is risking nothing. If you default on the loan, they repo the funds in your account.
Let me explain just how powerful this idea is.
A friend of mine deals cars. He needs short term capital to purchase Porsches and such to sell. He started out bankrupt, and over the course of a few years built a banking relationship that allows him to borrow $150,000 with only his sig.
I sat down the other day with his banker, and was basically told that they place heavy weight on a prior lending relationship when weighing out a new loan. Start small. Pay the loan back and thank the banker. Ask for a BIGGER loan next time. Repeat.
Being able to borrow $100,000 on your signature will be instrumental on your road to success. Start building TODAY.
Fukk the savings account. Only use one to stash your cash for a very short time until you are ready to do something productive with it.
ABSOLUTELY, POSITIVELY get a credit card. Get TEN credit cards. But whatever you do, only use them to buy ASSETS, not LIABILITIES.
I wouldn't be where I am today without good ole' Visa and Mastercard. I have used them to 1) Buy real estate 2) Remodel real estate 3) Start businesses 4) Fund short term capital requirements to operate businesses 5) Support myself until the businesses got off the ground 6) Buy stocks 7) Buy cars 8) You name it.
Here's a good example of a cool way to use a credit card. I once wrote a convenience check to buy a car. I paid about $17,000. A couple of weeks later I went into my bank with the title in hand. I asked for a loan. They said, "Well Mr. STR8UP, let's see here. It looks like loan value on this vehicle is $21,000. How much would you like to borrow?" I took enough to pay off EVERYTHING I had into it, so the car was a no money down deal. Banks will give you infinitely more on something you already own. That's a fact. And you can do the exact same thing with real estate. I have.
Credit cards have a very bad reputation due to the fact that MOST people use them incorrectly and sink into the pool of quicksand that is consumer debt. They can either be your best friend or your worst enemy, it's your choice.
Undoubtably you will have to use the credit cards to buy incidentals to begin establishing credit. Just DON'T go overboard! Use the cards for stuff you NEED, not stuff you WANT. Until you understand how to use them they can be dangerous.
Build and protect that credit everyone, you won't get rich without it!
Hesitation will cause you to ultimately fail, turning a bad deal and losing a few thousand dollars WON'T. If you are planning to inflict a painful death upon me the first time you lose some money, don't bother even trying. It's gonna happen. And you won't like it when it does. But LOSING is a necessary component to WINNING, contrary to popular belief.
Studies have shown that people are risk averse creatures. The reason for this is simple. It has been ingrained in us over thousands of years of evolution. In ancient times risk might have meant starvation and death. In America in 2003 you aren't going to starve even if you lose EVERYTHING. If you can overcome your genetic urge to hold on for dear life, you can be wealthy. If you can't, you won't.
Start small. Buy a fixer-upper duplex. Make the necessary repairs, rent out one side, and move into the other. Get a roommate and live for FREE. How much could you do if you didn't have rent or mortgage to pay? Would you be tempted to buy a few more? See where I'm going here?
What exactly is a convenience check?
Anyway, I have an interest in reading financial books. Its funny how my friends at school give me a hard time, as theyd rather be reading popular teen magazines, instead of asking me what im reading and what its all about. "How I made 2 million dollars in the stock market," "How to Wake up the financial genius inside you" (older books), "Rich Dad Poor Dad", A Donald Trump biography, "48 Laws of Power" are a few of them I've been reading. Are these going to get me anywhere or could my time be just as well spent reading comic books? I'm hoping everything I read is somehow unconciously sinking in somewhere so in the future I can recall it and put it to good use...
Anyway, I have an interest in reading financial books. Its funny how my friends at school give me a hard time, as theyd rather be reading popular teen magazines, instead of asking me what im reading and what its all about. "How I made 2 million dollars in the stock market," "How to Wake up the financial genius inside you" (older books), "Rich Dad Poor Dad", A Donald Trump biography, "48 Laws of Power" are a few of them I've been reading. Are these going to get me anywhere or could my time be just as well spent reading comic books? I'm hoping everything I read is somehow unconciously sinking in somewhere so in the future I can recall it and put it to good use...
