Real Estate Investing / Foreclosure Investing Complaint - Real Estate Investing
BALTIMORE, MARYLAND -- Ok, this has got to stop!!! Too many good people are making bad decisions and getting hurt. Let me give you a little background, I have been buying, selling, and renting real estate "PART TIME" for the past 4 years and after reading an article today (Money Magazine, Dec 2007, page 110) I feel a warning needs to go out to all who are considering investment properties. Everyone has heard about these seminars to teach you about how you can make millions in the real estate market, the seminars are free, "no need to bring your checkbook because there is nothing to buy". I have attended several of these seminars over the years and they are all basically all the same. The past one was just so far over the top it was unbelievable. For two hours, (that's all the B.S. I could take before I had to leave) the speaker spoke of his "success" in the real estate market without ever being specific and how he quit his corporate job so he could make this incredible fortune and spend his time with his family. Sounds great, but the truth is much different.
Every time at the end of these seminars they ask "only those who they feel are right for this market" (If you want to know if you are a candidate or not, just show up with 15k and see how well qualified you really are)to become partners and be mentored (sp?) by their highly successful teachers, and all for the small investment of 15k. You will spend 1 hour a week for a year being shown the in's and out's of the real estate market.
People have been quitting their jobs believing in these fantasies of fortune to be had in the real estate market and losing everything, including the 15k "investment in mentoring". Some truths everyone should know:
1) 50% of investment properties are in foreclosure as we speak, with every indication that it will increase in the next few months.
2) Many of these "mentors" have never purchased real estate in their life other than their personal homes. What they are selling you is the concept of being successful, and if you cannot do that on your own you don't need to be dealing with real estate.
3) Mortgages for real estate have come under a lot of scrutiny in the past 6 months, prepare to put a minimum of 10% plus closing cost down out of pocket and jump through a lot of hoops for every house you buy.
4) Market values are dropping like a rock, houses are staying on the market longer forcing already cash strapped investors into bankruptcy.
5) Many insurance companies will not right a policy on investment homes and the one's who will charge an additional premium for it.
6) If you don't know how to do some home improvement or are not prepared to do the work yourself, don't get involved. Hired contractors will take you broke faster than the market.
7) If you don't have the financial reserves to be able to complete a rehab and support the mortgage for at least 12 months, don't get involved.
This post is not intended to discourage anyone from seeking a better life, quit the contrary. Be smart, everything you can learn from these courses are available to you for free. I like to see people succeed and I hate to see these "real estate evangelist" continue to dupe people into false dreams. If anyone is considering investing and needs some advice feel free to call me (410) 529 3006, ask for Tom. I am happy to share any knowledge I can. If you have a lot of questions please email me at Dealerdirect@verizon.net, just keep in mind I check my email about every 3-4 days. Good Luck