It never ceases to amaze me - how so many self-professed "experts" post articles, blogs and even news stories on the topic of real estate which have no basis in facts. Amazing! It amazes and confounds me because, as a successful real estate investor since 1969, I know a little about this subject. In fact, I have personally trained thousands of people, and many of today's "gurus" either learned from me, or from someone who learned from me.
I know, I do not ordinarily go off on a rant like this, but real estate
investing is my passion. I love it. I am good at it. Been doing it for
over 50 years and teaching it for over 30 years. And it just ticks me
off when these charlatans - including the late-night hucksters pimping
their seminars - damage the reputation of investing with the garbage
they spout.
Some of the misinformation includes...
Bankrate, for example, posted an article for MSN. In it they claim "no money down" investing is a fantasy, and flipping is hard work.
WRONG, on both counts. Having been an investor since before most of these "experts" were even born, I can state unequivocally that a) "No Down Payment strategies not only exist in the real world, but are used daily, and b) flipping can be the easiest method of investing. I must assume by their ignorance that they think the only "flipping" is with properties that need rehabbing. But truth be told, you can flip ANY property, often within a couple of weeks - or even within minutes - and without anything involving labor, like this student of ours who flipped a property at the same time he purchased it - for$16,900 profit!
Then another "expert" writing for WiseGeek is telling folks that a simultaneous closing involves a seller writing a note for his property, and selling both the property and the note, or some such insanity. Having done numerous simultaneous closings (aka double escrow), I had no clue what that not-so-wise geek was pimping. A simultaneous close is when you buy and resell a property either at the same closing, or at least in the same week, as long sas one is tied to the other.
I have read articles by "experts" that state unequivocally that the double escrow is illegal. So TOTALLY wrong! Not only is it not illegal, it cannot be made illegal. What is illegal is the fraud that so often was perpetrated by using a double escrow. Unscrupulous investors, working with crooked appraisers and greedy bankers would get the appraiser to over-value a property, to increase profits. So, HUD steps in and makes a policy (not a law - HUD cannot make law. Only Congress can) that any bank issuing a government insured mortgage (HUD/FHA/VA) must insert a seasoning clause, meaning a seller must own the property for at least 6 months before selling. But even then, waivers can be granted as long as you can show the property is worth what you are asking. And again, banks are only required to insert the seasoning clause on HUD/FHA/VA insured mortgages.
And guess what? One of the people saying double escrows are illegal is an attorney! I question how he could possibly pass the bar. But fully half of all Realtors also believe that nonsense, as do many Title companies (which are usually attorneys).
Some misinformed people, like the writer for Bankrate on MSN simply discourage people from trying, which should be a crime in itself. Others, like the "infomercial gurus" just pick people's pockets. One woman wrote me just today (which got me on this tirade) that she attended the Kiyosaki "Rich Dad" seminars and got soaked for $57,000 and received nothing of value in return. And while I am not as upset as she must be, it still pisses me off!
I teach ETHICAL real estate investing. And I am good at it. And when I see so many unethical clowns and morons posing as experts, it gets me hoppin'.
Normally, I am pretty easy going. My wife says I must be the "separated at birth twin" of Phil Robertson (Duck Dynasty) - easy going, and "happy, happy, happy."
But not so much when I get letters from folks who got ripped off by hucksters and cons professing to be in the same profession as myself.
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