Rich Dad Poor Dad

[re410]

What do you all think of the Rich Dad Poor Dad movement?

In Manhattan there are a ton of people cashflow 101 and investing in real estate in Buffalo and Philly. Below are two emails.

What do you all think?


Dear Friends and Cash flow Members!
I have not realized how much of an interest there was in Philadelphia
Investing within our community until I saw what a great turnout we
had for our last discussion meeting! But seeing such great interest,
I have decided to publish an answer I gave to one of my potential
investor about the types of deals that I handle in Philadelphia:

But first a little rant about Philadelphia:
Philadelphia housing situation is very affordable in comparison to
our New York City and vicinity. However, as this is a very loosely
kept secret, investors from New York, New Jersey and as far as
California are purchasing properties at a great rate. Better
neighborhoods in North Eastern Philadelphia such as Mayfair,
Wissinoming, and Oxford Circle have appreciated over 30% within the
last three years. The same is happening in the North West. Some
bargains can still be found there but more time and effort is
required.

On the other hand, Western and Eastern Philadelphia are investor hot
spots in rehab, tax lien or foreclosure properties. Every month,
Sheriff's Department is selling these rehab properties and there
are
two auctions next week. I am in Philly all this weekend selecting
properties for my investors. If anyone is interested in getting
together and seeing some properties please call me at 917-863-4235

Physically, most of the city is comprised of 2 or 3 story row houses,
usually made up of three bedrooms and one bath. There is also a full
basement, usually unfinished. The load bearing walls are usually
brick. Sometimes these houses have wooden shed kitchens or
attachments. Usually these houses range from 900-1300 square feet.

There are several things to look at in Philly:
1) Cash Flow Deals: Pick up houses for 40-70k, depending on the area
and rent them. If chosen wisely, you will have a positive cash flow
and a good possibility of appreciation in the future. Usually 5% or
10% down plus closing costs is more than enough if you have a decent
credit score. You can likely get into this type of deal for about 9K.

2) Rehab: Get a shell house for 10-20k and add another 20k for
repairs, house will appraise for 40-50k+. Cash out refinance and turn
it into a cash flow deal similar to above. As a result you have
practically no money in the deal anymore and a possibly an infinite
ROI.
Ex: Total Investment after rehab 40k
Appraised value 50k
Cash out refinance @80%LTV 40k
(you got your money back)
Rent $750
Mortgage for 40k at 6.25%-$246
Taxes and Insurance -$250
Cash Flow $206/month

3) Tax lien flips: purchase tax lien properties for 10-20k each. Sell
them within 2 months to other investors for 40% mark up. Will need a
little clean up, but not much.
Risks are that we are not going to be able to move them with in 2
months. If so, we turn them into deal 2 above. Some risk, but great
returns as you only need to put up 10% which will hold the property
for 2 months.

4) Foreclosures: Similar to 1 and 2 above. Usually purchased for 65-
75 cents on the dollar. Starts at about 40k.

Philadelphia Sheriff's department is selling close to 300
properties
at a tax lien sale during two auctions next week. One is on Tuesday
and another on Thursday.
I am going to be in Philadelphia this whole weekend starting with
Friday PM in order to examine some of these properties. If you are
interested in coming out I would be glad to spend some time with you.


The next is about Buffalo


Greetings FUTURE FA$T TRACKER$,



On Friday, January 16, 2004, I flew to Buffalo, NY.
On Saturday, I visited 25 properties with .... I narrowed down 5 that I liked.
On Sunday, I went back to look at the 5 properties I liked with Properties to get a rough estimate of the rehab work needed. Later that day, I made offers on all five properties.
3 offers were accepted and I went to contract on all three.

Estimated Cashflow for ALL THREE COMBINED: $950.00- $1,050.00 per month


Property # 1:

Legal 3 Family
Closed on 02/19/04
Renovation completed on 03/10/04

*Estimated Cashflow: $400/month Positive
Status: Secured tenant for top floor, 2 more to go. Currently working on Cash Out Refinance to get back capital outlay.
Partnership:

Property # 2:

Legal 2 Family
Closed on 02/27/04
Renovation completed on: (Currently on or about midpoint of completion.)

*Estimated Cashflow: $250-300/month Positive
Status: (Halfway through renovations)



Property # 3:

Legal 2 Family
Closed on: Scheduled for 03/19/04
Renovation completed on: (Scheduled to begin on 03/22/04)

*Estimated Cashflow: $300-350/month Positive
Status: Scheduled for closing 03/19/04
Partnership:


Many thanks to the Properties TEAM for helping make this happen.

[ewokforhire]

I have read these two books "Real Estate Riches: How to Become Rich Using Your Banker's Money" and "Rich Dad, Poor Dad: What the Rich Teach Their Kids About Money--That the Poor and Middle Class Do Not". I didnt like either of them.

[re410]

Was it because he's wrong or he makes it look too easy?
I am pretty much impartial. He's got some good nuggets but I think he makes real estate easier than it is.

[ewokforhire]

I didnt really feel there was alot of practical knowledge. After i read them, i didnt feel like i learned very much.

[Arizona Home]

In my opinion, it is a new twist of C. Sheets. Only person getting rich here is Robert Kiosaki.

[rogerdan]

Rich by selling us books. But in a way, he is also sharing knowledge with us.

[Matt0111]

I didnt really feel there was alot of practical knowledge. After i read them, i didnt feel like i learned very much.

I have to disagree here. Though there is not a step by step classroom type lesson, there is one BIG lesson for all Americans here...

Do not work for money, make your money work for you. The poor and middle class are constantly keeping up with the Jones'. Buying new cars, mobile phones, cd players, plasma TV's, a bigger house everytime they get a raise (though great for my industry and our economy, not good for their personal portfolio). I like when Robert says if a home (mortgaged) is your biggest asset, you're in trouble.

I also agree that all of these people pitching books and seminars are making way more money from doing that than they ever could following the advise they peddle. I can always spot a Carlton Sheets newbie when they call. I sometimes feel like asking the person on the phone if they were up late last night, cause you just know they were, that's how they saw the info-mercial. If it was that good of a system, he would be doing it himself and not selling his books, tapes and seminars.

HA

[Duncan Pollock]

There's an inescapable point the guy fails to point out: that it's becoming increasingly difficult to "steal" anything these days. The current -- and prevailing -- market is focused on fair value or nothing.
The days when the economy had been bought to a grinding halt by the supply side economists (dare I say the Reaganites and the Thatcherites?) have long gone. Then it was easy enough to find distress properties and people who couldn't give the stuff away and you could pick things up for a song. But not now.
Those of us who've been in this business for a while are well aware that you have to work at buying and selling today's houses. It certainly isn't a Get Rich Quick situation -- unless you're writing pie-in-the-sky books about it!

Duncan

[ewokforhire]

[SIZE=1][B]

The poor and middle class are constantly keeping up with the Jones'. Buying new cars, mobile phones, cd players, plasma TV's, a bigger house everytime they get a raise (though great for my industry and our economy, not good for their personal portfolio). I like when Robert says if a home (mortgaged) is your biggest asset, you're in trouble.

That is common sense to me, maybe you were enlightened when you found out your not suppose to buy things you cant afford.

[Alex]

What do you all think of the Rich Dad Poor Dad movement?

In Manhattan there are a ton of people cashflow 101 and investing in real estate in Buffalo and Philly. Below are two emails.

What do you all think?


Dear Friends and Cash flow Members!
I have not realized how much of an interest there was in Philadelphia
Investing within our community until I saw what a great turnout we
had for our last discussion meeting! But seeing such great interest,
I have decided to publish an answer I gave to one of my potential
investor about the types of deals that I handle in Philadelphia:

But first a little rant about Philadelphia:
Philadelphia housing situation is very affordable in comparison to
our New York City and vicinity. However, as this is a very loosely
kept secret, investors from New York, New Jersey and as far as
California are purchasing properties at a great rate. Better
neighborhoods in North Eastern Philadelphia such as Mayfair,
Wissinoming, and Oxford Circle have appreciated over 30% within the
last three years. The same is happening in the North West. Some
bargains can still be found there but more time and effort is
required.

On the other hand, Western and Eastern Philadelphia are investor hot
spots in rehab, tax lien or foreclosure properties. Every month,
Sheriff's Department is selling these rehab properties and there
are
two auctions next week. I am in Philly all this weekend selecting
properties for my investors. If anyone is interested in getting
together and seeing some properties please call me at 917-863-4235

Physically, most of the city is comprised of 2 or 3 story row houses,
usually made up of three bedrooms and one bath. There is also a full
basement, usually unfinished. The load bearing walls are usually
brick. Sometimes these houses have wooden shed kitchens or
attachments. Usually these houses range from 900-1300 square feet.

There are several things to look at in Philly:
1) Cash Flow Deals: Pick up houses for 40-70k, depending on the area
and rent them. If chosen wisely, you will have a positive cash flow
and a good possibility of appreciation in the future. Usually 5% or
10% down plus closing costs is more than enough if you have a decent
credit score. You can likely get into this type of deal for about 9K.

2) Rehab: Get a shell house for 10-20k and add another 20k for
repairs, house will appraise for 40-50k+. Cash out refinance and turn
it into a cash flow deal similar to above. As a result you have
practically no money in the deal anymore and a possibly an infinite
ROI.
Ex: Total Investment after rehab 40k
Appraised value 50k
Cash out refinance @80%LTV 40k
(you got your money back)
Rent $750
Mortgage for 40k at 6.25%-$246
Taxes and Insurance -$250
Cash Flow $206/month

3) Tax lien flips: purchase tax lien properties for 10-20k each. Sell
them within 2 months to other investors for 40% mark up. Will need a
little clean up, but not much.
Risks are that we are not going to be able to move them with in 2
months. If so, we turn them into deal 2 above. Some risk, but great
returns as you only need to put up 10% which will hold the property
for 2 months.

4) Foreclosures: Similar to 1 and 2 above. Usually purchased for 65-
75 cents on the dollar. Starts at about 40k.

Philadelphia Sheriff's department is selling close to 300
properties
at a tax lien sale during two auctions next week. One is on Tuesday
and another on Thursday.
I am going to be in Philadelphia this whole weekend starting with
Friday PM in order to examine some of these properties. If you are
interested in coming out I would be glad to spend some time with you.


The next is about Buffalo


Greetings FUTURE FA$T TRACKER$,



On Friday, January 16, 2004, I flew to Buffalo, NY.
On Saturday, I visited 25 properties with .... I narrowed down 5 that I liked.
On Sunday, I went back to look at the 5 properties I liked with Properties to get a rough estimate of the rehab work needed. Later that day, I made offers on all five properties.
3 offers were accepted and I went to contract on all three.

Estimated Cashflow for ALL THREE COMBINED: $950.00- $1,050.00 per month


Property # 1:

Legal 3 Family
Closed on 02/19/04
Renovation completed on 03/10/04

*Estimated Cashflow: $400/month Positive
Status: Secured tenant for top floor, 2 more to go. Currently working on Cash Out Refinance to get back capital outlay.
Partnership:

Property # 2:

Legal 2 Family
Closed on 02/27/04
Renovation completed on: (Currently on or about midpoint of completion.)

*Estimated Cashflow: $250-300/month Positive
Status: (Halfway through renovations)



Property # 3:

Legal 2 Family
Closed on: Scheduled for 03/19/04
Renovation completed on: (Scheduled to begin on 03/22/04)

*Estimated Cashflow: $300-350/month Positive
Status: Scheduled for closing 03/19/04
Partnership:


Many thanks to the Properties TEAM for helping make this happen.

I read your article about buying properties. II'm trying to buy my first investment property. What do you think is the best way to get started? Is there a form I can use to determin what is a good deal?