Stud said:
While Vice is right about having a mentor on your side, you should never pay for one. All your mentor is concerned about is the cash and if you think otherwise, ask yourself, if I stopped paying this man his $100 / month (paltry sum for a mentor worth his salt), would he continue to help me research deals or whatever else he does with you? The answer is more than likely no, which tells you where his true intentions lie.
Why couldn't he buy the house with cash? Don't listen to stooges being filled up with guru's garbage. The real estate community is filled with them, very similar to the PUA community. There is no right or wrong answer, just know that where there is a will there is a way, especially when it comes to creative real estate financing.
elite7, you're obviously very inexperienced in real estate. I would suggest reading books and finding somebody who has done well in real estate and pick their brain. There will be plenty of foreclosures on the market for years to come.
Let me elaborate a little more on what exactly my mentor is charging me $100 per month for.
The $100 per month is more for a "club membership", where we meet twice a month and focus on whatever real estate strategy it is that we've set out to learn. We also have access to the forms and documents required for doing these transactions, and they have been approved by a real estate attorney (even then, I still run the docs by my own attorney). Since I'm still a beginner, he guides me through my first few deals, and we've agreed to share a portion of the check. He also double-checks my research on properties.
So we're both making money (win-win situation), and I'm getting
PAID to be educated in real estate. Compare that to college, where I'm going into DEBT to learn something that won't pay nearly as well as what I'm doing now. In spite of that I'm still going to college part-time, but for a different reason than money.
You may be able to find a mentor that will take you under his wing for free, or even get paid for it.
There's nothing wrong with buying the house with cash, and it's entirely possible. But tying up your cash in one property will make it challenging to put your money elsewhere. You can buy one property with all cash, or five similar properties with a 20% down payment on each one.
There are tons of gurus out there, and unlike pickup, you need to consult with your attorney regarding your local laws, because what works in Washington may be illegal in other states, and vice versa. Use your common sense, and don't get put into prison for a white collar crime.
But as Stud said, read, read, read books, and meet with experienced investors.
As you already know, the best way to learn something is by learning from a mentor, and going out and actually doing it yourself.
STR8UP's guide to building wealth is a good thread on this topic, check it out if you're serious about this.