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[This message has been edited by Neil]

Here's why I have so much time on my hands to date Latinas.  Okie wanted to know.  

Rich Dad Poor Dad is by Robert Kyosocki. Try the website www.richdad.com

Prenuptial agreement saved me alot.  Also credit to Crown Financial MInistries.  I met a mortgage broker at the classes and he started me on my first investments in sub-prime mortgages.  Also have been investing in 17-18% tax certificates since 1987.

I made a few dollars as a personal injury trial lawyer and invested most of the money in sub-prime mortgages. Retired in 2000 at 45. Interest rates on my mortgages are 13-17% for people who the bank turn down for mortgages. I can also borrow money at 4-6%.

I am now in management, as my accountant says, I manage to get to the mailbox and manage to get to the bank. Last year all of my loans performed and no forclosures.

Converted my SEP IRA to a Roth IRA and use this as the vehicle to title mortgages and property and tax certificates.  No taxes (income or capital gains) are ever paid on the money which flows into my Roth.

Life is now great!  Travel each month for 10 days.  God Bless.

... in response to Secrets to my success/retirement, posted by Neil on Feb 23, 2005

Neil:

1.  Are you buying existing mortgages, or funding/originating new mortgages?

2.  Are you funding owner-occupants or investors?

3.  Is this typical of Crown Financial Ministries, or did you just happen to run into someone that was versed in this type of investment?

Gracias

... in response to Re: Secrets to my success/retirement, posted by Looking4Wife on Feb 23, 2005

[This message has been edited by Neil]

1. funding/originating new mortgages as a private individual.  I know others who buy the paper at a discount, but I do not do this.

2.  yes.  both even restaurant loans and some warehouse loans. some are 6 month rehab and flip loans.  sometimes property held in land trusts.  

beware about owner-occupied loans (residential refis).  some states, and the federal government have additional regulations on residential refis, a/k/a  "Section 13" mortgages.  some states require disclosures and other documents when the interest rates are higher, to protect homeowners.

3.  just happened to run into someone who needed help funding some bank turn-downs.

... in response to Re: Re: Secrets to my success/retirement, posted by Neil on Feb 23, 2005

Neil,
Since I can't view your personal email, can you email me?  You can find mine on my personal info. I have some ideas that I want to discuss with you.

                         Thanks,
                         OkieMan

... in response to Secrets to my success/retirement, posted by Neil on Feb 23, 2005

[This message has been edited by DavidMN]

Maybe the better book is 'The Millionaire Next Door' that shows remarkably modest spending habits of some fairly wealthy people. Reminds me of the million dollar cup of coffee that Scott Burns, the Dallas Morning News columnist, wrote about. Plug in any figures you want, but if you use:

-22 year old person
-buys a $3.50 Starbucks five days a week (coffee, tax, tip)
-50 weeks a year
-retires at age 65
-figure the opportunity cost/investment return of the coffee money at 10%
-figure inflation at 3% annually (you increase coffee cost and devalue investment returns by the same percentage)

At the end of 43 years the daily habit has cost $832,000 or $233,000 after adjusting for inflation.

... in response to Re: The $832,000 cafe au lait, posted by DavidMN on Feb 23, 2005

I really liked the Millionare next door.One of my favorite parts was that 40% of millionares bought only used cars.I liked that.I love cars,but I never bought a new one in my life.I was just never willing to lose that much money that fast on something.And I never traded my car to a dealer,I always sold it myself.If you trade it you wholesaled it for very cheap.Anything over that was built in to the new deal if you bought from them.
Lots of basically poor people will get themselves over their head in a bad car deal and trade out of it into an even worse car deal,with a forever high car payment.
My last car I bought before leaving the states and selling it to my son,a 6 year old BMW 740i,cost new $65,000.My cost,$13,500.And in like new condition.It cost someone $52,000 to own it the first 6 years.My plan was to have it cost me  $7500 to own it the next 6 years,with a residual value of $6000.Pick the right car and repairs are not much more than you would pay keeping a new car in warrantee.
And,just sales tax on it new,$5362 in California.Would probably cover the next 6 years repairs.Then there is insurance and licence fees,much higher on anew car.
The old saying,buy a used car you buy someone elses troubles should be by used,take advantage of someone elses extravagence.
I owned a used car dealership specializing in European cars,mostly BMW,s.But I could never ever see paying what they cost new.

Pete

... in response to Re: Re: The $832,000 cafe au lait, posted by Pete E on Feb 23, 2005

Pete, I fully agree with your quote...

"Buy used (cars), take advantage of someone elses extravagance".

... in response to Secrets to my success/retirement, posted by Neil on Feb 23, 2005

http://www.johntreed.com/Kiyosaki.html

When the word secret is used relating to success whether financial or other, the red flag goes up :)

There is no secret.

... in response to Re: Secrets to my success/retirement, posted by Brassa on Feb 23, 2005

http://www.johntreed.com/coaching.html

Seems like John T. Reed is a self-proclaimed expert on alot of subjects including Robert Kiyosaki and Reed has also expertly written books on coaching football and baseball.  His websites offer alot of purchase opportunities from A to Z.

... in response to Re: Re: Secrets to my success/retirement, posted by Neil on Feb 23, 2005

I certainly don`t deny Reed has some interests as well. I guess my main point was there is no secret to wealth or prosperity in the same respect there is no guarantee.

... in response to Re: Secrets to my success/retirement, posted by Brassa on Feb 23, 2005

thanks for exposing some of these things about Kiyosocki.

I also note in his book "Retire Young, Retire Rich"  That he confessed that the velcro wallet company he founded went bankrupt and he lost all his money in this venture that he said was a success in his earlier books.

... in response to Re: Secrets to my success/retirement, posted by Brassa on Feb 23, 2005

HAHA!! Another byproduct of the late-night infomercial industry, which is a byproduct of the "sucker" industry.  

SCAM!!

... in response to Re: Re: Secrets to my success/retirement, posted by doombug on Feb 23, 2005

Remember that guy that was about 3 feet tall that was selling his rags to riches?
He did not last long I wonder how much he sold.

... in response to Re: Secrets to my success/retirement, posted by Brassa on Feb 23, 2005

Maybe no secrets,but there are lots of things most people are not aware of.And lots of ways to make terrific returns your financial planner will never tell you about because
because he is afraid to do anything very risky with other peoples money.They will forget the big gains and blame you for the losses and if it was something unconventional he will be in big trouble.A financial planner friend of mine is proud of his 12% returns for clients but himself he will buy penny stocks,willing to lose on 4 to make big money on one.Can't do that with clients.
The other factor.In investments its thought there are 2 parameters,risk and return.There might be a hundred,but let me add one.Work.If you are willing to do the work you can find investments in things like real estate that will NEVER knock on your door.THE BASIC RULE,IF AN INVESTMENT FINDS YOU RUN.The good ones are the ones you find with lots of effort.
Follow the math in an example I did above.My son puts down 25% on 4 condos,they double in value.His equity goes up 400% .He could have made that in 2years.It is nowup 600% in 6 years,100% a year vs 200%This is a real example.He could have moved them to Scaramento,where alot of property doubled in 2 years and then Florida,where alot of property doubled in 2 years.Each time making 400% in 2 years 4 times 4 times 4.Thats 56 times his original investment.
He didn't.But he is in the process of taking the 600% now.Actually its about 550 % after selling costs.In 6 years.
Its not a SECRET,but you might use that wording if almost everybody does not understand how it works.Of course this involved great timing.You have to find those investments where the timing is good.Just doing anything anytime will not work.
But,I will say from my experience,its awhole lot easier to do and a whole lot less likely to lose money than starting a business.There you better really know what you are doing.
Works best if its something you know extremely well,as in having worked in the field learning on someone elses money.

Pete

... in response to No secrets,but  lots of  ignorance  out ..., posted by Pete E on Feb 23, 2005

Understood. But my point was essentially focused at Kiyosaki . The book`s "story" immediately preys on a scenario many have experienced, Rich Dad Poor Dad. I dont want to do an essay reply lol...but look into that a little more than just its title and you`ll see...or some will.

... in response to Re: No secrets,but  lots of  ignorance  ..., posted by Brassa on Feb 23, 2005

OK,
I was commenting in general.I didn't look at it that much.What Neil is doing makes sense but there are alot of real estate type investment seminars that tell you what might be possible but extremely hard to do,with alot of people unable to do much with it at all.
And I didn't take time to read the link you refferenced.

Pete

... in response to Secrets to my success/retirement, posted by Neil on Feb 23, 2005

Interesting.Yes trust deeds and second loans is one way to do it,particularly if you can borrow alot of money cheap.
I invested in Real estate alot but I see people where I was from,San Jose Ca.taking Robert Allen courses and thinking about 100 financing,which I used to do before you could just get it from a lender and buying income property.There you would have to put 70% dn to get break even cash flow.Its important these ideas be realistic or you are asking people to do the impossible,buy property in San Jose nothing down and have positive cash flow.Not there.
But my son refied his house in 1999 and bought 4 condos in San Jose.I helped hiom,found places,kicked back my commisionsto him.He got one place 15% under market because it reaked of smoke,the lady was dying of lung cancer and just wanted to sell now and live out her 2 months in peace.One of my investors just couldn't get by the stench of it.Not your creative investeor.So my son bought it.It basically cost him nothing,he got cash flow out of it,and they each went up $220,000.Time to move the money out of there.Rents went down,the cash flow is even on $900,000 worth of equity. A person buying one to rent would have to put the $220,000 each down just to get break even cash flow.I told him that would be insane,so its insane to keep them also.
He has an idea where to move it.We will see.He should have traded  it in to Sacramento in 2001 and Florida in 2003 and that equity could be $10,000,000.But hindsight is 20-20.In the mean time,his old man,me,just spends all his equity on the lifestyle he gave his Colombiana he no longer has.
He gets his ideas from me,his tight ways from his mother.
I am a hopeless spendthrift,can't get by on $3300 a month in Cali without raiding my savings.

Pete

... in response to Re: Secrets to my success/retirement, posted by Pete E on Feb 23, 2005

San Jose is an anomaly--I think someone even mentioned this before.  I've lived there, and it is among the most expensive housing markets in the country.  San Francisco's housing costs are higher, though salaries are greater in San Jose.  New arrivals to the city HAVE to be wealthy to afford a home there.  You are completely reliant on this market continuing to rise, and it's impossible.  I live in Sacramento, and see reminders of the exodus from the Bay area every day.

... in response to Re: Re: Secrets to my success/retirement, posted by doombug on Feb 23, 2005

From some preliminary real estate searches of basic houses,small 3 br 2 bath types,it looks like they went from about $115,000 in 2001 to about $240,000 in 2003
in Sacramento.The price differences is real,I may have the dates off a little.
Andproperty basically doubled in Las Vegas in the last 2 years as I understand it.Now Pheonix in the dumps along time is hot.To late there in my opinion.
The San Francisco Bay area has been strong along time because of limited land,high building costs and high salaries.Others places more recently have caught on because of low interest rates,creative low interst rate adjustable loans  and easy loan qualifications.
Are we headed for a bust?I think so.BUT,think about it.If you buy income property its a good thing if new income property construction and new home sales are slowed by higher interest rates.Cuts down the new competition coming on the market and increases the number of renters.So prices could drop but rent go up,exactly the opposite of what happened in San Jose the last 4 years.
For the owner of income property the biggest risk is the local economy and jobs where your property is.Anddamage to your property.
Example,I won't say where untill my son checks it out and buys there.$200,000 for a 4 plex,each unit rents for $850.
25% down,P and I at 5.75 % ,payment on each building,4 units,$875.Other expenses maybe $725 a building.Possitive  Cash flow per building $1800.He can buy 4 4 plexes for each $220,000 equity condo in San Jose,trading basically break even cash flow for $7200 for each.Times 4 condos.
All this from borrowing money on a house and buying the 4 condos 6 years ago,the short term effect of which was to increase his income because they used to have cash flow,now its about even.
Too good to be true on the 4 plexes?Maybe.Whats the vacancy rate?How fast do the renters destroy them?Will they be worthless before too long?
I have seen some bad area property basically be worthless,the owners could not get enough income to keep them repaired the tennants were so bad.

Pete

... in response to Secrets to my success/retirement, posted by Neil on Feb 23, 2005

I teach economics and what Neil has done / is doing is exactly what I teach in our course on financial institutions.  Neil is doing what Fannie Mae does; borrow money fom investors at low rates and lend it to borrowers at high rates.

My only recommendation is for Neil to diversify his portfolio of loans so that it is not dominated by high risk borrowers.  Interest rates are rising which will raise his borrowing costs.  Neil will have to raise the rates he charges to borrowers to maintain his profit spread.  But his borrowers are the ones least able to absorb an increase in payments and therefore are the first ones to default if their borrowing costs increase even moderately.

My question to you Neil is whether you have looked into doing the same thing in LA.  Are there profitable opportunities to fund mortgages in Colombia, Venezuela, etc. ?

... in response to Re: Secrets to my success/retirement, posted by Brazilophile on Feb 23, 2005

I also recommend the Millionaire Next Door.

In Colombia I am unable to open a bank account.  Anyone know how?  I went to BancSantander, Citibank and others.

I tried to buy an apartment in Cartagena, but the administrator wants a bank account.

Probably best, because Cartagena is fun now but will not be in a few years.

I am sure there are opportunities in SA to invest, with better returns, but first, open a bank account so the person you trust with your investment can deposit the money each month.  Then you take it out with your debit card in the US.

Default is OK with me, because there are default penalties of 3% of the principle balance, late fees, and interest rate increases to the highest rate allowed by law upon default.  Watch your loan to value ratio going into the loan and keep it about 65% to 70%.  Look at every property yourself and don't rely on some out of town appraier.  Banks will lend 80% and have a harder time if default occurs.  I benefit from default and have never lost yet.

... in response to Re: Secrets to my success/retirement, posted by Brazilophile on Feb 23, 2005

You could probably get 30% down here.But your never losing money would probably be history.And currency valuestrsaditionally would have worked against you but would have worked great recently.
AND high risk borrowers is the reason he is getting that interest.It comeswith the territory.The trick,which I'm sure Neal knows,is to invest in what appears to be high risk paper when it is in fact not that high of a risk.Say lousy credit but you have a good equity protection of your loan.Maybe even looking at the borrower to determine if his bad credit was somewhat explainable.And of course his ability to pay you.
Back to the real world,my finances.

Pete

... in response to Re: Re: Secrets to my success/retirement, posted by Pete E on Feb 23, 2005

bad credit score is ok with me.  I only look to the value of the collateral.  I also evaluate the borrower, but place little weight on his credit score.  I have even loaned to people IN bankruptcy.  This is good because the court will supervise the payments to you and the bankruptcy trustee will send the payments to you monthly.  Only watch your loan to value ratio.

... in response to Re: Re: Re: Secrets to my success/retire..., posted by Neil on Feb 23, 2005

Thats the key,equity protection,which is just what lots of home lenders do not have,making 100% loans,My ex wife even bought a house,100%.She was working part time.Must have been a no doc.But she had a great credit score after I paid off her 3-3 year old credit cards,High 700's I bet.And never screwed up her credit before,basically never had much of a chance to.Things like credit scores being gold will bite them on the ass big time.A good idea used to extreme becomes a bad idea.

Pete

... in response to Secrets to my success/retirement, posted by Neil on Feb 23, 2005

Great web site and lots of good info!!