Monday, April 23, 2012

The Sub2 Camel Hump

Camel’s humps go up and down.  Yes, they do.  Know why?  Because camels store water in their humps, and their humps expand and contract according to how much water they’ve stored.

If the camel’s hump is small, it may refuse to get up and walk, until he gets his hump filled.  In other words, if the Camel’s hump is shriveled, he won’t let you ride him anywhere.  And if you’re depending on that camel to get you to the Promised Land, you’re screwed ...until your camel gets some “hump water.”  

That’s exactly the way it is with the wrong Sub2 prospects.  They’ll just sit there, stare, and spit.  The only solution is to wait until they get their humps grown back.  And this can take a while, because a camel can drink you under the table, as it were. 

In the same fashion, until the Sub2 prospect is properly motivated, he won’t be interested in giving us his deed in return for debt relief.   Promises to protect his credit by taking over his payments, and otherwise allowing him to move on, won't matter much.  He’s got options.  And the option he’s exercising now is just, “sitting, spitting and waiting with a shriveled hump.”

So, what’s the point?  The point is that we need to find and qualify the Sub2 sellers that have “big humps.”  These are the sellers that are ready, willing, and able to be 'ridden' to the Promised Land.  They’re ready to give up their deeds and debt. 

The question is, “How do we find these Sub2 sellers?”

There are several ways.  One way is to look for prospects with expired listings.  These sellers have experienced one or more of the following:

1.    Suffered one or more failed escrows...
2.    Couldn’t lower their asking price and still pay the realtor...
3.    Afraid of being a “FSBO” seller (For Sale By Owner)...
4.    Just need quick debt relief for any number of reasons...

Speaking of those who just need debt relief, another hidden source of prospects are those who typically get in trouble within the first two years of home ownership.  These are sellers that bought houses, accepted all sorts of credit card offers, loaded up the cards, bought new cars, furniture, and appliances, and now find themselves rationing toilet paper.  They can't wait to give us their problems, if it solves "their problem."

Then it’s a matter of making no down offers that will allow us to get in light, and resell without a lot of overhead ...and capture thousands of dollars in down payments from motivated buyers..

Of course we only want to buy and sell newer, nicer homes that everyone wants.
It should go without saying, but we want to quickly disqualify and wade around the sellers sporting shriveled humps, that just want to both sit down, and then spit on us.

The great news, is that you can easily find these Sub2 sellers using the same system I've been using for years.  It's a sophisticated system to both find, qualify, and close on the most motivated Sub2 sellers in this market.  It's about making money flipping nice homes in just days without down payments, loan apps, a job, or credit.
$20 Dollars Down
If you would like to learn the system I used to find the seller with a big enough hump to accept just twenty dollars for his equity, just click on the following link to see a video about how you can do the same thing:

“Finding Sellers With Big Humps, And Riding Them To The Promised Land.” 

Of course, that's not the actual name of the presentation...but you'll get it, once you see it.

Friday, April 20, 2012

Two Million Burning a Hole In My Pocket

Here's what I said to a wanna-bee, 20-something, with $2M dollars to invest in commercial real estate...
Dear $2Millionaire,

"You've got great goals and a plan, but for the love of gawd, leave that money where it is!!!!!!

You need to act as if you had about .20c in your pocket, not $2M.

Any investor you talk with that had a wad of money in the bank when he started will tell you about his disasters and losses.  Why?

Because having that much money in the bank (or available) is the instant-rice recipe for making the most short-sighted, ignorant, stress-relieving, prideful, cocky, stupid moves e.v.e.r.  !!!

That much money sitting in the bank is so easily mishandled, it's like holding a lit stick of dynamite in a room with the gas turned on... Something's gonna blow like Mt. Vesuvius, before anything good ever happens.

At 25... honestly, and without insulting your character and intelligence, you need to SLOW down.  You've made a wise decision consulting this forum... Just saying.  But...

$2M is like having an Olympic-sized pool of opportunity waiting for you to dive into.  It gets your juices going.  The problem is you don't have any diving experience, much less know how to swim, much less hold your breath, or even do a lap without drowning.

So, what's the answer?

Start with a wading pool. (OK, this is an analogy, not an instruction to go buy a kiddie pool...)

Fill the wading pool with some water, and splash a little, and learn how to fall face first into the wading pool without injuring yourself.  Then move to the Doughboy pool and learn how to hold your breath underwater until you're confident you won't drown by accident.  Then learn to maintain your buoyancy by dog paddling. 

Then move to the bigger in-ground pool with a diving board.  Learn to do cannon balls off the diving board.  Then move to jumping head first and coming up alive (If you fail at this point, you've got other problems, besides bad depth perception).

Then practice holding your breath at the bottom of the pool until you're confident you won't drown by accident.  Then learn to swim underwater from pool end to pool end without coming up for air.  Then practice laps and learn to breathe.

After all that, you'll have learned how to hold your breath, do laps and dive with ease (and all without a brain injury).  Then you'll be prepared to dive into the deep end of your Olympic-sized pool and begin training for the big leagues.

Short of that, and you'll find yourself jumping headfirst into the Olympic-sized pool, only to discover there's no water, and instantly become a financial quadriplegic. 

Meantime, anyone with $2M+ is going to be almost compelled to accept what they believe are short-cuts around the practical experiences they need to make profitable decisions.  Decisions based on reality and experience, not on hunches and/or bad advice from others who don't have anyone's best interests at stake, except their own. 

With this much money, many larger, stupid mistakes can be camouflaged.  But if the mistake is large enough the camouflage instantly fades, and the losses become grossly obvious, and one is left with a bulls-eye on his forehead and a message on his back that says, "I Lost $2M And All I Got Was This Lousy T-Shirt"


It will take some discipline to overcome the temptation to take the fire hydrant hose you've got in your hands and not just spray water all willy-nilly on shiny objects in the guise of "investing."

So, I would suggest that you go buy a four-plex with 20% down with conventional financing, and make that work first.  Of course you want a bargain.  After that purchase, think about what you've learned by buying at the wrong price despite the agent's advice; in the wrong neighborhood, with the wrong demographics, with a wrong management approach, with wrong tenants, and finally with the wrong financing ...all after three of your tenants bail on you and do $15,000 worth of damage to your investment just because.

Then accept the losses, and start over with your more sophisticated understanding of reality.  Go buy an actual deal-of-a-four-plex, raise the rents, increase it's value, understand how to create wealth out of thin air, and then rinse and repeat, until it's second nature. 

Then move up the food chain using the exact principals and experience you garnered with the smaller properties by scaling up to multifamily projects, commercial buildings, and finally to development of shopping centers, golf courses and ...the sky's the limit.

Then, you'll find yourself with several hundred million in savings, and that old $2M you left in the bank will seem like chump change.

Meantime, if you start with baby steps, you'll likely avoid blowing $2M on pipe dreams that professional snake oil salesman will tell you is the steal of the century.   

So, don't dive head first into the Olympic-sized pool without first learning to splash in the wading pool.  And then when you're ready to dive in, you'll know to check that there's actually water in the pool. 

BTW, "The [rea] Donald" crashed and burned with millions to start with.  His answer to why, was that he took his eye off the ball.  Well, if a situation can arise with someone with this much experience, and this many millions to "camouflage" his smaller mistakes, than it can happen to anyone with way less millions and way less experience.  Again, just saying.

TheDonaldJr, you have in your hand either a bomb, or the tools to begin strip mining for Gold.  It depends on how you walk with it.  Either way, you need to take baby steps and start very, very small.  You've got YEARS to scale up, and turn that $2M into $7B "TheDonaldJr. dollars." 

I'm pulling for you and wish you extreme success!!!  beer beer beer