So, you did the training and know the steps involved to do a lease-option, wholesale deal, subject to deal, or buying with seller financing. You know how to answer seller’s questions and already have an exit strategy planned. You even attended a seminar to learn how to invest with your Roth.
But are you really prepared to do deals?
The one week Amazing Selling Machine promotion revealed some important lessons which relate to a real estate business too… and why some people may not be ready to DO DEALS.
Quickly analyze then decide if you are in or out.
Really great real estate opportunities do not last long. You may have less than 24 hours to decide if you are in or out. You must to learn how to quickly analyze the pros and cons of the opportunity then either tie it up with a contract or walk away. Good deals have deadlines, just like the Amazing Selling Machine opportunity. If you do not grab the deal fast, your competition will, and you lose out. If you wait too long, the deal will be long gone.
Paperwork confusion
Before you start looking for an opportunity, you need to determine what paperwork is needed, figure out what is legally required by your State, and read every single word so you thoroughly understand what it says. Ideally, you need to learn how to create your own paperwork to protect money making transactions and not rely on fill-in-the-blank forms. You never know when you may need to grab a blank sheet of paper at the seller’s house and create a contract from scratch.
WARNING: If your paperwork is too long or too complicated, it could cause the seller to say no. When an Angel Investor presented a 29 page agreement with a lot of legalese it killed the deal. Keep it simple!
Where will the money come from?
There were a lot of last minute scrambles to increase credit lines on credit cards or borrow from friends or family to do the deal. Some lost out because could not find money for the deal before the deadline. You need to establish where the money will come from before you start talking to sellers. Sure, you can control the property with an Option. But even that may require an option consideration. Where can you get instant access to $1000 to $5000 for an option consideration if you need it? If you plan to buy the house, who will you borrow the money from? How much can you borrow? What are the terms? This needs to be figured out before you do deals.
Roth money takes too long & complicates the deal
While a Roth is a good way to build up tax free money you can use when you retire, it has a lot of stupid rules and regulations which prevent you from being able to use YOUR money the way you want to. There is much confusion about what you can and cannot do and many are afraid to move forward because they will break the rules. If you do break the rules, you can lose all the money in your account or more.
Some people lost out on the Amazing Selling Machine opportunity because they could not get money out of their Roth fast enough to do the deal. They lose!
Is it better to have complete control over your money and pay taxes or risk losing a deal because it is too hard to get access to your Roth money? Only you can decide!
Would having some money in a check book IRA solve the problem? If so, you need to make sure you know the rules and regulations for that.
An arms-length transaction means that YOU cannot be involved in your Roth transactions other than picking opportunity then directing your custodian or trustee to make the investment. Neither you nor your trustee can be involved in the deal/business. If you are running a business in your Roth, you will have to pay UBIT taxes. If your deal is too squirrelly, it could raise a red flag and make you an audit target
Cheating
The Amazing Selling Machine, like CashFlowDepot.com, is designed for one person to buy a membership and one person has access to the training materials or at most, two partners who are working the business together. I was shocked to learn that some people wanted to save money by getting a pool of people to buy the course then “share it” even though it is strictly against the rules.
When people do things like this it makes you wonder what else they would do to cheat the system. You lose trust and respect in them fast.
Your reputation is your most important asset. You should never do anything which would make anyone question your integrity!
Value vs. Price
Unfortunately, many Jack Miller students expect all courses and seminars to be cheap. If it cost more than $500 there is instant suspicion and they won’t even consider it.
At the same time, I have heard from many people who did not join CashFlowDepot.com because it is priced so low they did not think it could have much value. (of course, nothing could be further from the truth)
A higher price does not equal more value. And a low price does not equal less value.
This applies to the contractors who work on your houses too.
You have to analyze what all you are getting, the quality of the product/training and if the upside potential is worth the price. Don’t just draw a line in the sand that no training should cost more than $500.
