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  Dear
Steve,
I have seen so many infomercials and advertisements
about people who have become wealthy through real estate.
They say that these people used "no money down"
techniques to buy properties and then made significant profits.
Are these tactics often successful, or are these isolated
incidents?
-- Todd
 Dear
Todd,
Real estate investing is hard work, best started conservatively
with thorough market research, studious caution and some of
your own money, plus the realization that "get rich quick"
is a pipe dream.
But that's not what a lot of these ads you're
referring to are selling. "Sweat equity" is not
very sexy, after all.
Sure, plenty of people have
made out in nothing-down deals, but these are very tough to
find in legitimate form, especially with the growing throngs
of infomercial-watching novice investors out there looking
for them. While the strategy sounds tempting in these ads,
"no money down" often means lying to a lender or
cheating an unwitting seller.
In fact, it's amazing how
many "nothing-down" buyers have ended up in bankruptcy
court after they get into a couple of negative-cash-flow situations
with mortgage payments that are 30-percent higher than normal.
So much for financial independence! Morley Safer once said
in a "60 Minutes" segment that Americans "have
long wanted something for nothing. Now they want something
for nothing down."
I'm convinced you can learn as much or more
on legitimate Internet real estate sites for free as you can
by paying big money to some silken-voiced real estate guru
trying to sell you expensive pamphlets, books, seminars, CDs
and "boot-camp" sessions based on rare or specious
opportunities.
Not that all the gurus are hucksters. In fact,
many of them are selling perfectly legitimate, impressively
packaged products -- albeit often with false hopes thrown
in for free. As the adage goes, if it sounds too good to be
true, it probably is.
Lo, there are no "secret techniques"
out there in real estate. Too many smart people have been
playing the game a long time and know all the advantages.
Most of the people who are now financially independent from
property investments took years, if not decades, to get that
way, starting out quite modestly and learning a lot of painful,
but enlightening, little lessons in the process.
For more on "nothing down," specific
programs and real estate gurus, visit www.johntreed.com.
The refreshingly cynical, widely read John Reed is known as
the "anti-guru" of the industry and offers reams
of free, sobering advice.
Best of luck.
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