OPM (by Robin [WI]) May 12, 2019 10:40 PM|
OPM (by Jim In O C [CA]) May 12, 2019 10:57 PM
OPM (by Homer [TX]) May 12, 2019 11:52 PM
OPM (by JB [OR]) May 13, 2019 1:00 AM
OPM (by Robert J [CA]) May 13, 2019 1:46 AM
OPM (by nhsailmaker [NH]) May 13, 2019 7:06 AM
OPM (by Ken [NY]) May 13, 2019 7:33 AM
OPM (by Beth [WI]) May 13, 2019 8:10 AM
OPM (by Doogie [KS]) May 13, 2019 9:53 AM
OPM (by myob [GA]) May 13, 2019 1:32 PM
OPM (by Peter [WI]) May 14, 2019 1:37 PM
OPM (by Robin [WI]) May 14, 2019 9:31 PM
OPM (by Chris [CT]) May 17, 2019 3:21 PM
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OPM (by Robin [WI]) Posted on: May 12, 2019 10:40 PM
There's a RE investor in our area who wants to be the next big name in RE. He's really smart. He makes money from selling his mentoring services, from selling his property management services, from selling his property management services to his mentees...
One thing that puzzles me, though. He prides himself on using other people's money and having no money of his own in his deals. He pays interest, sometimes hard money rates (15% plus 5 points) for that privilege.
Here's my question: I understand why you would want to use OPM to leverage your own money, but why wouldn't you want to use your own funds as much as possible? I can't imagine an alternative place that would provide a higher return. --204.210.xxx.xxx
OPM (by Jim In O C [CA]) Posted on: May 12, 2019 10:57 PM
I used OPM to start and gradually worked my way to MM (my money). No high interest or hard money high fees. No risk = lower reward! --185.31.x.xxx
OPM (by Homer [TX]) Posted on: May 12, 2019 11:52 PM
Perhaps he doesn’t actually have any money. When I first started, I was so broke I couldn’t even pay attention. I highly leveraged. Helocs, credit cards, Fanny, Freddy, Mama and Daddy. Personal home, sold my boat, sold my RV, Etc... luckily it paid off --75.141.xxx.xxx
OPM (by JB [OR]) Posted on: May 13, 2019 1:00 AM
I don't trust many of those "mentors." I believe many would lie, cheat and steal to get their hands on your money. It would not surprise me if he was getting kickbacks from "recommending" those hard money lenders. I also question much of their other advice unless proven effective through previous and trusted individuals. --24.20.xxx.xxx
OPM (by Robert J [CA]) Posted on: May 13, 2019 1:46 AM
Every time that I wanted money, my partners wanted me to put in equal funds and do all of the work. So after a dozen or so partnerships I decided I'd rather do things myself.
When a "big time" owner hasn't a steak in the game, when things go south, they can care less about something they have nothing to loose over a property they poured their heart and funds into. I've seen this happen maybe 40 times... --47.156.xx.xx
OPM (by nhsailmaker [NH]) Posted on: May 13, 2019 7:06 AM
In Commercial RE in NYC & SF I worked for the richest men in the world.
that is where I learned the Phrase - "RE is a game that is always played with other peoples money"
regardless if you are Trump or small town LL you borrow money from Hard money or Banks, etc --24.62.xxx.xxx
OPM (by Ken [NY]) Posted on: May 13, 2019 7:33 AM
He doesn't have any money of his own,that is why they preach so hard about using other peoples money to cover up the fact that they don't have any of there own.Probably living high on the hog and spending everything they make. --72.231.xxx.xxx
OPM (by Beth [WI]) Posted on: May 13, 2019 8:10 AM
With no money of his own invested he has no limits on the number of units. The sky is the limit! And, return on investment is infinite! with zero of his own money invested. Works well in an environment of inflation and rising rents. Can crash everything if rents are stagnant, or vacancies start to increase. --47.12.xxx.xx
OPM (by Doogie [KS]) Posted on: May 13, 2019 9:53 AM
I've used OPM in every deal I've done. Just bought another one last month 100% financed. It can get you going quick and the return is high because there's none of your own money. It's also a double edged sword, so definitely know what you're getting into.
I've always been skeptical of the "experts" that are selling their "systems". If they are making so much money, why do they need to sell their system? If you notice, everything they offer is an add on fee.
All that being said, 15% plus 5 points is pretty steep. Maybe it's not in some areas or some deals, but I've never come close to that in any deal I've done. Definitely make sure the numbers work before signing on the line for that one. --72.209.xxx.xxx
OPM (by myob [GA]) Posted on: May 13, 2019 1:32 PM
When we started out in 86 we needed OPM because we needed a crutch. Reality-- we didn't need others $. We didn't need support. Sounds harsh but if YOU want to be an investor go for it. By the same token know what your going for?
The OP mentioned how smart the guy was-- aren't all of them smart-- when none of there money is involved-- that's the smart part. --103.27.xxx.x
OPM (by Peter [WI]) Posted on: May 14, 2019 1:37 PM
I'm super skeptical of anyone who charges money to teach about real estate. Are you in the Milwaukee area? There is a group that is marketing like crazy to recruit people to buy into their "team." I had coffee with the main dude, who preaches using OPM, and while I admire his enthusiasm, it was clear he is not a seasoned investor or property manager. But if you have $20k to spend you can join his group. So, spend $20k to have someone preach about using OPM? No thanks.
I have learned a ton from going to the old school apartment association meetings and listening to people who have more experience than I ever will. It costs me $125 a year and the group is active politically which helps all of us in the business. --67.53.xxx.xxx
OPM (by Robin [WI]) Posted on: May 14, 2019 9:31 PM
I have properties in the Milwaukee area and also in Ohio. The person I'm referring to is in Ohio, but I share your opinion of gurus, with few exceptions. There's no substitute for pounding the pavement and pounding your own nails in, at least when you're getting started. --204.210.xxx.xxx
OPM (by Chris [CT]) Posted on: May 17, 2019 3:21 PM
Most of those guys harp on OPM in order to sell their classes to broke newbies.
I started out using OPM, now I use my own money. Why borrow a $100k at 10% when I have $100k sitting in a money market earning less 2%? I rather pay myself the spread and not have to deal with the OPM. --24.45.xxx.xx
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