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And you will learn everything you need to know to become a huge success with women.

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Beginners guide to becoming WEALTHY

Vice

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These days getting credit is a really big challenge. But I figure that if I can get it under these conditions, I can get more much more easily in the future when banks get a little more lenient.

So I'll be able to buy houses with credit cards, lines of credit, mortgages, private money, cash, and a home equity loan:

Credit Cards: I've heard of investors buying a house on a credit card, which can be a great idea if you do it properly. The interest rate does not matter, as long as you make a profit. Doing a rehab and turning the house in a few months is the best use of credit cards.

There's been cases where people have bought a house on a credit card, and then spent all the money they made and were stuck with the payments on the house. Don't be that person.

You should have AT LEAST three credit cards, and strive for credit limits of around $100k. You can increase your credit limit easily by demonstrating the ability to charge up thousands of dollars and paying it off quickly, then calling the credit companies and asking for a credit increase. There's ways to do this without actually spending your own money.

Your credit score WILL fluctuate between AA credit and C credit while in this business. For some reason people strive for the best credit they can possibly get (I read an article in Money where a man was on a quest for 850 credit), and that's a TOTAL WASTE OF ****ING TIME. Credit is to be used at a TOOL, not a TROPHY. It's kind of like getting a mountain or BMX bike as a kid and worrying about it getting scratched/dirty instead of using it for what it's made for. Then again, not everyone uses their credit to make money.
 

synergy1

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synergy1 said:
Our first daunting task is to secure funding in order to work on our projects. I won't go into specifics with what we want to do, but the projects are very engineering intensive. All the pieces are in place, but funding will be the number one show stopper if we don't get any. If we get funding and a revenue stream, the company could take off and all of us could be millionaires by the time we are in our mid 30's. If I am still posting on SS, this will be a good way to follow how this might ( or might now) be done.
Last year at around this time, there was an ongoing discussion about luck or the 'x' factor in helping those get rich quickly. As part of my business experience, I figured it would be interesting to post some closure on how that 'x' factor played out in our situation.

Our product would have required 5-10 more years of exhaustive R&D to become viable for markets. Even than, margins would have been low unless we were producing pharmaceuticals, which would than require more time and capitol to pass through the FDA. Thus a pitch to a typical VC with the capitol required for a demonstration without returns in the first 3 years was unlikely and we had to turn to government subsidies in order to try and piecemeal projects. Most small companies like us went via the SBIR route, and I wrote many of these solicitations for funding - none of which succeeded. However, talking to individuals close to DC and the federal monies said that they had dried up and SBIR award rates were a measly 10%. One award valued at over 1 million was rejected since "they had budget cuts in FY10", an 'x' factor out of our control. Had we been in a economic prosperous time, we might have gotten a quarter of a million or so to perform pilot scale feasibility studies, or even new subsystem technologies.

Ultimately, our venture failed chiefly due to the owner ship, but factors beyond our control certainly hamstrung our efforts to raise capitol as well.

As for R/E, I have several friends trying to start up their own holding companies. Considering the real value of most R/E is less than banks list, new house sales are stagnant ( houses over 750k in the month of august were 0, yes 0 - read zero hedge for the source), I don't see RE being a great conduit to wealth. As was said last year, that gravy train is over.

So what do people think a successful business model is today? Individuals and small business are struggling no doubt right now, but there have to be time/ money saving solutions these folks might be interested in. Web based apps seem to be all the talk, but require some savvy JAVA programming skills if you want to go at it alone. The upside is that its a low cost of business, and a possible way to make money. its certainly something I am thinking of doing on the side irregardless if I get work or not.

Post some new business ideas even if they are someone else's.
 

strong like bull

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bump...

regardless of what the chicken littles say, now is the time to plant your flag and get started. it doesnt matter, real estate or any other business venture or investment. opportunity is at hand and ripe for the picking. assets are for sale at pennies on the dollar... this is one of those times, where 10 years from now some people are gonna look at eachother and say "man, i shoudve jumped in and bought a couple houses while they were so cheap". theyll have regret for not taking action. others will be proud that they were ballsy enough and had the vision to know it was the time to act.

who would you rather be?

the people who buy houses today... the market makes it so hard to lose money. if you could snatch up houses for 65k that in 10 years will be worth 350k... it shouldnt be a matter of IF you should buy. but how MANY you should buy.

youd be hard pressed to find a dollar for dollar better vehicle to wealth than real estate. little (or no) downpayment and a mortgage (preferably offset by a tenants rent) in exchange for a six figure asset? plus tax benefits? where do i sign???

real estate isnt the ONLY avenue to wealth, but for many it may very well be the most practical.

pension plans are a thing of the past
401k was originally designed to supplement retirement, at best
social security will be bankrupt before half of us even get to it

even if it isnt real estate, we all owe it to ourselves to build some form of wealth producing vehicle to take you to the future you want.

-slb
 

harkkam08

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STR8UP said:
I started to write this post and it got too deep into more advanced stuff. So here is the revised version. If I get a chance I will clean up the other one and put it up as well.
_____________________________________

How do I become wealthy? The answer to this question has most certainly eluded all but a select few individuals. Those few people have developed a talent for amassing riches. Others are content to live their lives in the middle class, supporting the poor by earning a reasonable sum of money just to give it up in the form of taxes. And the poor....I hate to say.....bring it upon themselves. They lack the motivation to make positive changes in their life.

The first thing you must do to begin your journey toward success is study. I'm not talking about signing up for a course at your local community college. I'm talking about purchasing books and tapes by people who know success. Your first purchase should be Rich Dad, Poor Dad, by Robert Kiyosaki. This will teach you the fundamental differences between the minset of the rich versus the mindset of the poor and middle class. Be forewarned; the information you will be reading is likely CONTRARY to everything you THINK you know about acquiring wealth. If you are able to keep an open mind you will eventually be able to comprehend what he is saying. If you understand immediately, congratulations. You are well on you way to becoming successful. Once you understand the wealthy mindset, it's time to learn the nuts and bolts.

Your next purchase should be Building Wealth, by Russ Whitney. In his book Russ outlines the steps you need to take in order to achieve financial independence (make enough money from your investments to be able to quit your job and concentrate on making REAL money). If you put his ideas into action you will be well on your way to immeasurable wealth.

His methods revolve mainly around real estate. There are other ways to acquire wealth, but none as quick and safe as purchasing real estate with no money down. The stock market is another vehicle used by many, but requires an initial capital investment. Sure, you can start with a couple hundred dollars. But the rate of return you would have to earn to make it compare to real estate, over a given period of time, would be astronomical. Business has certainly created a multitude of millionaires, but it is tough to get started in and takes much trial and error.

I have been fortunate enough to have experienced all three. And despite the fact that I started a business last year that looks to have the potential to eventually make me millions, I would still recommend real estate. It took me 6 years to make any money in business. It took less than a year to make money in real estate.

Think of it this way. Lets say you are able to purchase your first piece of income producing property using a no money down technique. Lets say you were able to buy a $100,000 house for $90,000. It happens everyday. You just earned a paper profit of $10,000, without ANY initial investment.

Small effort, large return. That's the name of the game.

I can hear the naysayers now. "But you may not be able to turn around and sell it immediately....real estate commissions would eat up the profit....blah, blah, blah". What they don't realize is that you have already done your homework, and the property you just purchased will be leased to tenants for $1200 per month, while your mortgage payment and other expenses total only $900. You have a POSITIVE CASH FLOW of $300 every month, to do with as you choose (Think FINANCIAL INDEPENDENCE).

They don't realize that you are going to HOLD this property for at least several years. While your tenants pay all of the expenses. You should be able to increase the rent every couple of years (which means that $300 turns into $400 turns into $600 per month and on, and on...). Meanwhile, the VALUE of the property has increased. Instead of being worth $100,000, after a few years it may be worth $120,000, or $140,000.

Another consideration is TAX BENEFITS. Since I started purchasing real estate and have become self employed, I have paid VERY little in the way of income taxes. I paid MORE taxes when I worked as a bartender.

I collect dividends from my corporation, so I pay NO social security tax! This is why the middle class end up supporting the poor. The don't purchase income producing assets that provide a tax shelter. Could you think of a few things you would rather do with your hard earned money than support deadbeats? I can. And do.

So you have purchased one income producing asset. Your confidence is through the roof! What do you do next? BUY ANOTHER ONE! And keep buying them. If one property increases your net worth by $40,000 over five years, what could TEN properties do? You get the picture.

I purposely did not go into detail regarding the mechanics of purchasing real estate for no money down. Building Wealth will teach you several methods. I would also recommend courses by Carleton Sheets and Robert Allen, two more legends in the real estate game. Read, read, and read some more. I couldn't possibly include the volume of information necessary to get started in this post. That's what the books are for.

But remember, all of this knowledge will do you no good unless you take action. Start by driving through neighborhoods you might be interested in. Make some calls to owners of for sale by owner properties. You aren't committed to anything until you sign a contract. You will learn much by simply talking to people.

A few things to remember:

1) Ignore anyone who says it can't be done. Your well meaning parents don't know everything.

2) Protect your credit score as you would protect your life. Wealth cannot be obtained without debt. Your ability to borrow large amounts of money is KEY to retiring wealthy. A million in debt is a million in net. Investment debt is GOOD!

3) Network! Meet as many influential people as possible. I will guarantee you that most successful people would be more than happy to suggest a few pointers to a seriously interested newbie.

4) Persistence is a must! If you think that you will become super wealthy overnight, don't even waste your time trying. In the beginning it will seem as if you are doing a lot of work for little pay. Give it time. Time is your best friend.

5) Take action! This is the toughest step in the entire process. This is where most people fail before they even begin. The law of inertia will take over after your first successful deal.

I hope this information helps. If you have any questions I'll do my best to answer.
Good Advice But there is a problem here, the 90k used to buy the 100k property. Most individuals dont have 90k of cash lying around.

Secondly you have to factor in costs such as keeping tenants and collecting rent from them and keeping the repairs in order Hiring the right people to do these repairs and now if you have a day job that means even taking a day or two off to handle such things.

Also you could get a loan of 90k strike a deal with the broker and pay him 90k upfront for a 100k property. Now you need to rent it fast so that you can start paying the interest on the loan.

But you must do your due diligence that perhaps taking out a mortgage would have a lower interest rate then taking out a 90k loan from a bank.

Better yet is to use some money that you have and buy established business which offer owner financing. If the previous owner will allow you to pay the price of the business that he is selling it to you for that means he is confident that the business will run and you can pay him back.

Now we all need a day job but you have a day job, what you need is a manager that runs the store and tie his compensation into profits so that after (Money paid to previous owner for purchase) + (Salary of Manager) + (All other costs) will be less than the revenue you generate resulting in a positive net income.

Buying running business is better than buying property and using it to rent it out to people. Since the housing bubble has made property cheaper if you have the capital it would be better to buy property in the hopes of holding it till the markets improve. You also have an influx of those whose home has been foreclosed looking now for rental property so that means the demand for rental property has gone up.

Thats why it does make sense to buy property and rent it out in a metropolitan area, however such properties do cost more than 100K and to get a discount you need to pay all cash upfront and that means lots of people cant do that.

Remember that these books are great however when their are market opportunities that exist in an efficient market they will be snatched up quickly there is reason that cheap house is still on the market, not because its a hidden gem but because the big boys have passed up already and dont want it.

You can only get rich or wealthy through NOT using the methods and techniques that are in these books. Because at this point it defeats the purpose eventually everyone will be doing it and all profit margins will fall to zero.

Only the unseen opportunity is what will generate wealth, however these books are good because they get you to think of things in new ways hence allowing you to discover new un-forseen oppurunites.
 

strong like bull

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not trying to be a smart ass, but you might have misinterpreted part of the concepts.

"Good Advice But there is a problem here, the 90k used to buy the 100k property. Most individuals dont have 90k of cash lying around."

the 90k house is acquired via a mortgage. this is one of real estates strong points, is that for a relatively low amount of money (little or no downpayment) you can acquire a high value asset (90k house)


"Secondly you have to factor in costs such as keeping tenants and collecting rent from them and keeping the repairs in order Hiring the right people to do these repairs and now if you have a day job that means even taking a day or two off to handle such things."

the smart investor does the same thing a smart businessman would.. due diligence. these costs are factored in to the deal.. positive cash flow is whats left after all expenses, including vacancy rate, are factored in.


"Thats why it does make sense to buy property and rent it out in a metropolitan area, however such properties do cost more than 100K and to get a discount you need to pay all cash upfront and that means lots of people cant do that."

for what its worth, most RE discounts come in the form of buying from a distressed seller. for instance, guy is in a hurry to sell because his job is relocating him. so although the asking price is 150k, he accepts your offer of 120k.. maybe because the house is already payed off or he only owes <100 on it so its still a good deal for him. and good for you also.


"Remember that these books are great however when their are market opportunities that exist in an efficient market they will be snatched up quickly there is reason that cheap house is still on the market, not because its a hidden gem but because the big boys have passed up already and dont want it."

out here in phoenix, theres so many houses coming on the market through foreclosures and etc that they are literally slipping through the cracks. its actually the opposite as you said, there arent enough investors to buy them all. i just bought a house for 65k thats worth 90k as is... everything important is functional and solid, just needs some TLC. believe it or not is was already on the market for a month. and im not some big shot investor or RE guru. i just spent time doing my homework and sizing up opportunities and when the time was right, i struck.


"You can only get rich or wealthy through NOT using the methods and techniques that are in these books. Because at this point it defeats the purpose eventually everyone will be doing it and all profit margins will fall to zero."

the concepts outlined in those books and the original thread and follow-up replies by str8up are as, if not MORE effective today than when he started the thread years ago.

why?

because now everything is DIRT CHEAP. its gonna be a long time before the buying opportunity is as great as it is now, thanks to levelled out values and low interest rates.

acquire a dirt cheap/discounted property, spruce it up, rent it out. rinse and repeat.

not even considering the cash flow, just the appreciation alone you will make great money in the long term. the 70k house grows to a 300k asset over the years, while the tenants are paying the mortgage for you. small scale/part time investors have a great way to build a nest egg for retirement while full time investors can really build up wealth.

im not discrediting business, even though 90% of business fail within the first five years. but please dont discredit real estate. if you actually sit down and look at the facts, the common man has just as much if not more of a chance to make it via real estate than business.

-slb
 

harkkam08

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I think its 90% of all NEW business fail. But after reading your post you make a good argument about RE.

Now I know Phoenix has had a hell of a price drop, but are finding renters proving to be difficult for you?

Also can a student who has excellent credit rating, get a loan to purchase these properties. I dont think a bank is going to give me a mortgage if I dont have a job.

Have you looked into auctioning for foreclosed properties?

Also how did you evaluate the purchase of your 65k home to be 90k?

I saw a house with 3br going for 50k in MESA not bad at all and then checked craigslist and saw 1br homes going for rent at 600.00 a month. I used a loan calculator and figured out that a 50k mortgage at a 4% intrest rate over 20 years is 300 bucks a month.

Now the questions becomes again how hard is it to find tenants, how long will a property sit on the market before it finds tenants.

thx man
 

Vice

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harkkam08 said:
I think its 90% of all NEW business fail. But after reading your post you make a good argument about RE.

Now I know Phoenix has had a hell of a price drop, but are finding renters proving to be difficult for you?

Also can a student who has excellent credit rating, get a loan to purchase these properties. I dont think a bank is going to give me a mortgage if I dont have a job.

Have you looked into auctioning for foreclosed properties?

Also how did you evaluate the purchase of your 65k home to be 90k?

I saw a house with 3br going for 50k in MESA not bad at all and then checked craigslist and saw 1br homes going for rent at 600.00 a month. I used a loan calculator and figured out that a 50k mortgage at a 4% intrest rate over 20 years is 300 bucks a month.

Now the questions becomes again how hard is it to find tenants, how long will a property sit on the market before it finds tenants.

thx man

Some banks will not pre-qualify you for a mortgage if you apply for a loan on an investment property that you are going to be renting out. You'll just need a down payment that's larger than an average down payment on an owner occupied home.

Finding tenants is easy. Finding GOOD tenants can be challenging. You need to screen them, because having no tenant is better than having a bad tenant.

You can also hire a property management company to take care of finding tenants and manage the property, for a rate between 8-12% of gross rent. But they don't get paid unless there's a tenant, so that's their incentive to get it occupied as fast as you can.

There's also services that hook up tenants with landlords, and vice versa. These services will require payment only when a match is made.

And the reason why not everyone does is is this: fear.
Most people don't know that they don't know.
Some people know, but don't how how.
Some people know how, but don't have the guts to pull the trigger.
 

strong like bull

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its an unfortunate situation, but i know a lot of people who used to own homes and are now renting instead. mostly because of going upside down and owing more than its worth/cant afford to own. millions across the country lost their houses... they all still need to live some where!

part of the deal with this house was it was listed under value.. so its a bargain to start. but it also has a lot of potential. the after repair market value is easily 110-120k given comparable neighborhood houses. and the repairs ive begun and plan for down the road, are 5,000 max.

this is also initially my primary residence. so i qualified for a first-time homebuyer downpayment assistance program through HUD. that in itself saved me thousands on the downpayment.

its a 3 bed, 2 ba, 2 car garage, pebbletech pool with waterfall, big lot.. mortgage, taxes, insurance etc combined is only $530 a month. and given the neighborhood when im ready to move on it could easily rent for $1000-1200. enough cashflow to cover all true expenses and enough appreciation potential to make it worthwhile to keep for the long run. its a 30yr fixed, so if i just kept it as a rental even in 15 years when im charging 1500+ for rent my payment is still only 530 a month.

or you have the option of using the equity (at least 30-40k) to cover the costs of picking up another house and expanding..

and these kind of houses are everywhere!

-slb
 

harkkam08

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Vice said:
Some banks will not pre-qualify you for a mortgage if you apply for a loan on an investment property that you are going to be renting out. You'll just need a down payment that's larger than an average down payment on an owner occupied home.

Finding tenants is easy. Finding GOOD tenants can be challenging. You need to screen them, because having no tenant is better than having a bad tenant.

You can also hire a property management company to take care of finding tenants and manage the property, for a rate between 8-12% of gross rent. But they don't get paid unless there's a tenant, so that's their incentive to get it occupied as fast as you can.

There's also services that hook up tenants with landlords, and vice versa. These services will require payment only when a match is made.

And the reason why not everyone does is is this: fear.
Most people don't know that they don't know.
Some people know, but don't how how.
Some people know how, but don't have the guts to pull the trigger.
So if make a larger than normal down payment I can get a mortgage w/o a job?
 

Warrior74

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harkkam08 said:
I think its 90% of all NEW business fail.
On the flip, I've heard that the average millionaire starts 10-12 businesses before he becomes a millionaire. Which is why the stories you hear about some guy who started a business and got rich on his first shot are the ones you hear about. They buck the odds.
 

Vice

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harkkam08 said:
So if make a larger than normal down payment I can get a mortgage w/o a job?
It must be for an investment property, and each bank has their own contingencies, such as having six month's worth of rent on hand.

So yes, you can get a mortgage without a job, but not for a private residence.

If the banks don't let you do THAT, you can always seller finance the deal.
 

Teflon_Mcgee

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Vice said:
It must be for an investment property, and each bank has their own contingencies, such as having six month's worth of rent on hand.

So yes, you can get a mortgage without a job, but not for a private residence.

If the banks don't let you do THAT, you can always seller finance the deal.

Getting a loan without a job is very hard now (compared to a couple years ago.)

I have a 790 credit score, I make (without counting my wife's income) twice the average household income, and I had a 25% down payment and a VA loan guarantee but still I could't buy a house (primary residence that I planned to fix and rent) because I have no verifiable income.

I didn't realize that banks will consider investment properties if you don't have a job. I might have to try this route.
 

Vice

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Teflon_Mcgee said:
Getting a loan without a job is very hard now (compared to a couple years ago.)

I have a 790 credit score, I make (without counting my wife's income) twice the average household income, and I had a 25% down payment and a VA loan guarantee but still I could't buy a house (primary residence that I planned to fix and rent) because I have no verifiable income.

I didn't realize that banks will consider investment properties if you don't have a job. I might have to try this route.
If they don't (which wouldn't be surprising), there's always seller financing.

And there are federal government programs out there that can help you buy a house and guarantee you a loan. Check the Fannie Mae and Department of Housing and Urban Development web sites, I can guarantee you that you'll find something that you can use to buy a house.
 

BigJimbo

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15 year olds hyping real estate in 2010? Geez, doesn't surprise me. I hate to be the voice of reason, but NONE of you will ever make a fortune in real estate. Most of you will end up divorced though:up:
 

strong like bull

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"15 year olds hyping real estate in 2010? Geez, doesn't surprise me. I hate to be the voice of reason, but NONE of you will ever make a fortune in real estate. Most of you will end up divorced though"

right, because obviously the true path to wealth is to sit on the sidelines and disguise your insecurity/ignorance/fear as being the "voice of reason."

your post is so unfounded you make yourself look so silly. i love to start the day with a good laugh :up: thx

-SLB
 

Vice

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strong like bull said:
"15 year olds hyping real estate in 2010? Geez, doesn't surprise me. I hate to be the voice of reason, but NONE of you will ever make a fortune in real estate. Most of you will end up divorced though"

right, because obviously the true path to wealth is to sit on the sidelines and disguise your insecurity/ignorance/fear as being the "voice of reason."

your post is so unfounded you make yourself look so silly. i love to start the day with a good laugh :up: thx

-SLB
Yeah, this BigJimbo guy is under the impression that I'm fifteen years old.

I think he's the first guy on here that's gotten under my skin and made me want to say mean things to him/about him over the internets.

But then I glanced at his posts and realized he really doesn't add much value to the forum, most of his posts are about putting down the U.S. and glorifying Ukraine/Russia.

I'm Ukrainian and I see this kind of guy all the time, the kind of guy who just irritates the hell out of everyone by trying to be superior all the time. You know, "that guy".
 

Teflon_Mcgee

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cassanova35 said:
lol i thought this was a forum of learning and about attracting women not wealth creation lol ..... opps something im reading wrong then :)
Because wealth and women are so exclusive of each other?
 

DonJerky

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Lot of house still out there Bullman, and a lot more coming. If it plummets down again, I'm all in with ya.
 

synergy1

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Another, not so obvious, is that one lucky break, or one supremely shrewd decision (can we tell them apart?) may count for more than a lifetime of journeyman efforts. But behind luck, or the crucial decisions, there must usually exist a background of preparation and disciplined capacity. One needs to be sufficiently established and recognized so that these opportunities will knock at his particular door. One must have the means, the judgment, and the courage to take advantage of them
This was quoted from the Post Script of the Intelligent Investor. While the discussion is now a few years old, the subject of luck came up and this quote rang out a lot of truths regarding ones luck and those keen enough to capitalize on good breaks. This quote echo's those thoughts nicely.

The quote was talking about graham's firm and their purchase of 50% of GEICO interest in 1948 which made them millions.
 
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