For SERIOUS investors only

[STR8UP]

Originally posted by Egoist
i still think this is a sh!tty place to discuss business.

And where is a good place to discuss this?

The problem is, money is considered by many to be a taboo subject. It shouldn't be treated that way. That's why so many myths are perpetuated and people go about fumbling around with their financial futures.

Originally posted by SamMalone

Any good books to read up on real estate investment/investing in general?

See my books thread

 

[Egoist]

Originally posted by STR8UP


The problem is, money is considered by many to be a taboo subject. It shouldn't be treated that way. That's why so many myths are perpetuated and people go about fumbling around with their financial futures.

giving advice on a stupid internet board is only going to make most of the geniuses here more confused.

who cares about teaching them anyway? you're making money? good, keep making more

 

[Cesare Cardinali]

I don't know if things are different in the US. But in Canada, banks are quite reluctant and will not lend money for nothing down or close to that; unless it is for your primary residence. Does anyone here have any information to the contrary or ways to get around this?

Cesare Cardinali

 

[STR8UP]

Originally posted by Cesare Cardinali
I don't know if things are different in the US. But in Canada, banks are quite reluctant and will not lend money for nothing down or close to that; unless it is for your primary residence. Does anyone here have any information to the contrary or ways to get around this?

Cesare Cardinali

Banks here will generally lend 100% on owner occupied property with good credit.

If it is an investment property they pretty much always want at least 5% down. If you have 10% it's no problem getting a loan.

The thing is, if you get creative there are lots of ways to reduce the down payment even further. On the condo that I live in now (temprarily renting), I am scheduled to close the purchase early next week. I have $30k down on the property right now. I should be getting a check for $30k back at the closing table and another $5k from the seller because I wrote the contract to wrap in the closing costs, which were actually less than expected, hence the $5,000 overage. I am buying two more condos next week and I will use this overage as a downpayment to hopefully make even more money.

So I basically walzed into a $550,000 condo for nothing out of pocket, and on top of that the seller is paying the down payment on two more condos I am buying. Amazing, isn't it?

 

[backbreaker]

I just found a 4 month CD with 4.41% Interest

:rockon:

 

[backbreaker]

i haven't read one thread on this topic, but I think it has to do something with rasing money and banks.

I can tell you from experience... forget banks, for more than one reason.

first of all, banks aren't anywhere near what you would call.. investors. They are a Bank. Their idea is to make money as safely as possible. Business startups aren't the safest thing int he world.. now business expansion is a different story.

Most banks give out 10,000 SBA loans like Candy, but anything else you are going to have to have spotless credit and personally guarantee everything.

The best way, to raise money quick, is to find a venture capital firm that can help you out. not only becuse of the money, but

a) You won't have to personally guarantee anything. If you don't succeed you don't have to worry about your house getting taken from you

b) You will be dealing with successful business people on a daily basis. Paul Allen heads Vulcan Ventures out of either OR or CA, I think CA. These people know what you are going though, and are there to help

And

c) They aren't looking for short term success.. they want the big score, like you do. So if you don't hit your projections like you think you were, as long as you are showing progress and can justify this or that, it's not the end of the world.

The downside of it is, you are going to have to give up a chunk a huge chunk of your company to the VC firm, have someone sit on the B.O.D and sometimes, which happens alot, is have someone else actually RUN the company, who they feel has the necessary experience.

 

[Egoist]

Originally posted by backbreaker


The best way, to raise money quick, is to find a venture capital firm that can help you out.

:crackup: thats pretty funny dude.

 

[backbreaker]

It's the truth... I didn't mention that the odds are pretty slim, but hey, it is the best way if you can go that rougte and you don't mind giving up some of your shares.

I'm just experienced in that field. I've done alot of reading on Angel Investors, but I don't know that much about them. However, I do know that banks are going to want you to sign over your kids if you aren't a company with a solid background asking for even a drop over 10k, and that's with great credit.

I will say this.. ever since the IT buble burst, which ironicaly was about 6 months after I started my company, they because about 10x harder to get money from. They are alot more picky about who and how much money they though money to. We had more than one, actually two different firms tell us "if you were only a year earlier, there wouldn't be a question of if, it would be how much"

Then again, I'm thankful we didn't get a boatload of cash, like 20-30 million to start our company.. becausei know me, and I know my business partner... it would have been the "race to living on the streets"... Having to do everything myself has humbled me in alot of ways, I don't take money or anything for that matter for granted.

 

[Egoist]

Originally posted by backbreaker
It's the truth... I didn't mention that the odds are pretty slim, but hey, it is the best way if you can go that rougte and you don't mind giving up some of your shares.

I'm just experienced in that field. I've done alot of reading on Angel Investors, but I don't know that much about them. However, I do know that banks are going to want you to sign over your kids if you aren't a company with a solid background asking for even a drop over 10k, and that's with great credit.

I will say this.. ever since the IT buble burst, which ironicaly was about 6 months after I started my company, they because about 10x harder to get money from. They are alot more picky about who and how much money they though money to. We had more than one, actually two different firms tell us "if you were only a year earlier, there wouldn't be a question of if, it would be how much"

Then again, I'm thankful we didn't get a boatload of cash, like 20-30 million to start our company.. becausei know me, and I know my business partner... it would have been the "race to living on the streets"... Having to do everything myself has humbled me in alot of ways, I don't take money or anything for that matter for granted.

bottom line:

venture capital is great for very specific, very very tiny percentage of startups, maybe like 1% or less. Those are the companies with huge scaling potential, established management teams, etc, etc, etc.

Real life business startups have to do with own money, family money, credit (not necessarily bank loans as much as credit cards, home equity, etc), and finally, small groups of regular investors or angel investors.

Trying to finance a typical business with venture capital would be akin to using a a screwdriver to get get a nail in - neither effective nor efficient.

 

[CLOONEY]

I dont get the point of this post..........? You are telling people to look for high returns on their investments? Higher than, 5-8%? There are many funds you can invest in that diversify internationally that offer a far higher return than that, up near 12-15%. I invest in one currently, and so does my brother, we made around 15%P.A on our money. (this however, is high risk portfolios, but are definately the portfolio to invest in if you are investing long-term. Other than that, as far as I am aware, guys like Warren Buffet simply invest in large blue chip companies for long periods of time, i.e. Coca Cola, that is how he made his money!

Other than that, you have to have money to make money most of the time. You cant negative gear on nothing!

My brother owns his own corporation, does very very well, owns property, and many internationally diversified portfolios, yet he still rents a room out of one of his mates houses to live in. lol, go figure!

STR8UP, can you please be more clear on your investments, details?

My girlfriends brother also owns multiple cutting edge skincare product lines, modelling agencies, beauty salons and some other form of business (not sure), but he made his money out of loan sharking, and other illegal forms of making initial capital. Not highly recommended to guys on this site!

 

[Create Reality]

whats up with the book, sr8tup?

Could anyone refresh my memory to what a CD bond is, please? Is that a federal reserve bond?

 

[Create Reality]

fo get about the bond question i looked it up myself.

 

[Bible_Belt]

Oil just hit a 3-month high. It just won't go down.

str8up, I admire and congratulate you on your amazing real estate gains, and for being so open about it. imho, this might be the time for you to spread some of that money around. Paper money that is created that quickly can go away quickly, too. A real estate bust or a big natural disaster could wipe out your gains. Even if you have insurance, a big hurricane or tsunami could cause insurance companies to default. Many, I think most, owners of destroyed homes in New Orleans are yet to be paid by their insurance companies. These recent hurricanes have been unreal. Even if you continue to invest in real estate only, you could diversify somewhat and protect against natural disaster risk by owning property in different areas of the country.

 

[STR8UP]

Originally posted by Bible_Belt
Oil just hit a 3-month high. It just won't go down.

str8up, I admire and congratulate you on your amazing real estate gains, and for being so open about it. imho, this might be the time for you to spread some of that money around. Paper money that is created that quickly can go away quickly, too. A real estate bust or a big natural disaster could wipe out your gains. Even if you have insurance, a big hurricane or tsunami could cause insurance companies to default. Many, I think most, owners of destroyed homes in New Orleans are yet to be paid by their insurance companies. These recent hurricanes have been unreal. Even if you continue to invest in real estate only, you could diversify somewhat and protect against natural disaster risk by owning property in different areas of the country.

I appreciate the input, but I don't believe in diversification. That's the word that Suze Orman and all of those other investment "experts" preach. All it serves to do for someone like me is to shift focus and energy away from what I am good at. It's more a tool for a "hand-off" type investor as a substitute for getting deeply involved and keeping your eyes open.

That said, the plan is to ride out the gains on residential RE then roll it into some prime commercial strip plazas for cash flow. I have plenty of equity in everything so a market correction (I seriously doubt we will see anythng that resembles a crash) won't sink me.

Incidentally, we just turned down an offer for $1.1mil on a restaurant that we paid $735k for a few months ago. That's an amazing feeling! That Ferrari is right around the corner....

 

[Egoist]

Originally posted by STR8UP
I appreciate the input, but I don't believe in diversification. That's the word that Suze Orman and all of those other investment "experts" preach. All it serves to do for someone like me is to shift focus and energy away from what I am good at. It's more a tool for a "hand-off" type investor as a substitute for getting deeply involved and keeping your eyes open.

That said, the plan is to ride out the gains on residential RE then roll it into some prime commercial strip plazas for cash flow. I have plenty of equity in everything so a market correction (I seriously doubt we will see anythng that resembles a crash) won't sink me.

Incidentally, we just turned down an offer for $1.1mil on a restaurant that we paid $735k for a few months ago. That's an amazing feeling! That Ferrari is right around the corner....

strips rock for investment purposes.

im not sure about recent figures, but in the 90s, strips had the highest returns of any type of investment real estate in the US.

 

[Bible_Belt]

I don't believe in diversification

Those sound like famous last words. The real estate market will not keep booming forever. In the late 90's, every stock milionaire thought that his gains would last forever. If those people had diversified, they would still have something left today. But they made all of their money with tech stocks and it seemed silly to put money into anything else. When an investment keeps going up and up, it's great to be along for the ride, but nothing goes straight up forever.

With one big hurricane and an insurance company default, all of your money could disappear. Why take the unnecessary risk of losing it all? I have seen so many stock traders lose all of their money. This country probably has more former millionaires than millionaires. Easy come, easy go. Don't let that be your story, too.

 

[STR8UP]

Originally posted by Bible_Belt
I don't believe in diversification

Those sound like famous last words. The real estate market will not keep booming forever. In the late 90's, every stock milionaire thought that his gains would last forever. If those people had diversified, they would still have something left today. But they made all of their money with tech stocks and it seemed silly to put money into anything else. When an investment keeps going up and up, it's great to be along for the ride, but nothing goes straight up forever.

With one big hurricane and an insurance company default, all of your money could disappear. Why take the unnecessary risk of losing it all? I have seen so many stock traders lose all of their money. This country probably has more former millionaires than millionaires. Easy come, easy go. Don't let that be your story, too.

The real estate market doesn't have to keep booming forever. Like I said, I have lots of equity in everything. Some have as much as $100k or more. The other thing is the area that I am in. It isn't your standard run-of-the-mill subdivision in BFE. I am focused in the richest area of downtown that is in the beginning stages of undergoing a complete overhaul

As for the hurricane thing....I'm in the middle of the state and my properties are downtown condos. Had a direct hit from Charlie and had zero problems with any of my units despite the fact that it looked like a nuclear bomb had detonated in the middle of town.

 

[STR8UP]

Originally posted by Bible_Belt
I don't believe in diversification

Those sound like famous last words. The real estate market will not keep booming forever. In the late 90's, every stock milionaire thought that his gains would last forever. If those people had diversified, they would still have something left today. But they made all of their money with tech stocks and it seemed silly to put money into anything else. When an investment keeps going up and up, it's great to be along for the ride, but nothing goes straight up forever.

With one big hurricane and an insurance company default, all of your money could disappear. Why take the unnecessary risk of losing it all? I have seen so many stock traders lose all of their money. This country probably has more former millionaires than millionaires. Easy come, easy go. Don't let that be your story, too.

Oops, wasn't finished.

There is a HUGE difference between the tech stock implosion and the stuff I am doing. Those stock gains weren't based upon anything but pure greed. At least the market I am in is still relatively cheap compared to other metro areas and the fundamentals aren't too far out of whack to justify sustaining the price or even going up further.

I still stand firm on diversification. It's one thing to start throwing money at something without understanding what you are getting yourself into, it's another to have a decade of experience backing you up. I have said it before, I don't recommend beginners trying to pull off what I do. It's all about knowing what you are capable of.

 

[Luveno]

Sounds great, but the million dollar question I have is:

Where do you start?

 

[STR8UP]

Originally posted by Luveno
Sounds great, but the million dollar question I have is:

Where do you start?

You start by pulling up my book thread and bury your nose in financial education for a month instead of trying to bury your nose in you-know-what.

Get crackin!