How To Become A Millionaire In 10 Years (or less)

Brain... hurts! Must... stop reading... or head will... POP!!

Seriously, though. I've always been pretty good with numbers (left-brained and all that). But, for some reason, this RE investing stuff always makes my eyes glaze over after awhile.

Anyone else getting a brainache from trying to keep up with this thread, or is it just me? 8^]

(I'm not saying it should stop. It's a great topic and I'm sure a lot of people will benefit from it. Michael and Terry are providing some very useful, sensible information.)

Regards,
Chris

Chris:

I get "brain ache" trying to keep up with some of the creative financing guys. They bandy numbers about as if we should all just know them off the top of our heads. And never explain WHERE the numbers came from.

I find, if I know WHERE a number comes from and HOW that number is figured out, I can understand it and my brain does not begin to shut down in protest.

In the original post - the one with the fifteen year "table" - the value of the property is increasing at 5% per year. I just added 5% to each year's value to come up with the new value. The equity was that new value minus the $90,000 loan.

Simple "bush math" as I call it.

If I cannot do it on a normal calculator and need a financial calculator, I don't want to know. It's too complex. And complex things have a tendency to lack control.

I find, sitting down with a calculator and working through the numbers in presented stuff, lets me "own" the calculation method. Just reading it and trying to figure it creates brain strain.

A little while back we had a thread based on a real estate method that went like this:

Lease a property for six months. Pay the six months lease up front. And for doing so, only pay five months and get the sixth month for free. Then sub-lease it to a tenant for six months at a slight discount - the discount is so they will stay on.

The original lease payment (all five month's worth) was to be funded by investors at 12% - you owe them the money back plus 12%).

Your money came from the difference between what you owed the investor and what you took in in rent.

After all was said and done, you did a lot of work for little average payback. You got all your money up front - first and last month's rent - and after one year, you were basically managing the property for free.

The guy who presented the idea used numbers I could not figure out. I didn't know where he got his numbers from. And after asking for clarification - and getting it - I still don't have a clue.

I understand the concept. But not the numbers as they were presented. And what I don't understand I drop.

If you want to know WHERE a number came from in anything presented here and you can't figure it out yourself, ask. Once you know, you own it.

By the way... loan recalculations are figured by me using a free loan calculator I downloaded :o) I remember learning a loan formula at school, but it's easier to use software to figure it out.

Michael Ross

Now what I do if find someone in preforeclosure or relocating or going through a divorce. They need to move, and NOW!

I will step into their shoes and start to make their payments on THEIR existing loans. Usually this consists of making up the missed payments.

A few minor repairs and I have it out on the market. I am usually able to buy at 85-90% of current market value.

On houses with major repairs I have been able to do the same thing, but I am able to buy at about 60-70% of market value. This is my after repair percentage.

Based upon the need to keep money flowing I use other peoples money to do the repairs or making up the back payments. They get it from their IRA's.

Now, we do sell our houses, after a year, and keep a few as well. It just depends on if we have a better house to buy at that time. Also, you can't eat equity.

I agree, DO NOT BUY IN WAY ZONES. Now, with that said, I know of some guys here who are buying over 100 houses a year and making great money by doing just that. They have about 100 houses that they have kept free and clear by selling off the others.

I use a great deal of marketing to generate leads and to do follow ups with people looking to sell their houses.

Thanks Michael

Terry