Rich Dad - Learn To Be Rich Seminar

[NerdSmasher]

I am attending this seminar in Cleveland Ohio; and would like to share some of its points with everyone.

It's Friday through Sunday, though, so I've only been through Day 1 as it stands. Once we got past the obvious basics in the morning, however, there were a few very good tips for the day. I should note, that this is intended to be a Real Estate course, which is why it's in the Real Estate section of the forums


Day 1 Highlights

Hard Money Lenders - I'm sure most here know what these are. The interesting point that was made was that it's possible to get a loan from them, in which the entire collateral is the home with which you're buying, in the form of a lien. In fact, if anyone could explain how this can be possible, I would be fascinated to know; because it seems as though that would mean there is literally no downside if you fail (Because you don't have to have your credit involved at all with Hard Money, if it's done correctly).


They also spoke about getting homes under contract, and then selling the contract to others. In fact, they almost quoted word for word UtahInvestor (Was that his name? Can't recall exactly at the moment.) from the RichDad forums on that subject. But, of course, it was still good information.


One of the wonderful little gems he pointed out, also, was that you can delay your first mortgage payment by almost a month after you buy a house, by electing to pay it on a day of the month that happens to be less than 30 days away from the one you're closing on. And, if you put a right to show clause in the contract, you can also show prospective tenants or buyers the property for up to 60 days before you even have to purchase a property! So, you can delay paying anything while looking for tenants/buyers for almost 4 months if done correctly; and collect the first month's rent basically before any expenses; and the second month's will cover the first mortgage payment.
I'm not sure if this works with Commercial property, but if it does, then it would potentially be possible to get a few thousand dollars basically right off the bat if you purchased the property correctly.
(Sorry if that doesn't make sense... I can elaborate if anyone would like me to.)


I'm fairly certain that those were all of the main points of usefulness for day one. Everything else was just going over the basics; and some math that was extremely idealistic... Tomorrow, we'll be playing Cashflow though, and that should be fun, and I'll update this with any new gems of info!

 

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[NerdSmasher]

Day 2 Highlights

To be honest, nothing much was learned on day 2, other than that it's really hard to teach people how to play CashFlow that never have. Though, they did say we were getting better at the random chants we were supposed to be doing periodically; whereas on day 1 they said we were pathetic. And, day 3 we were wonderful! I'm guessing this is somehow in line with the teaching process of Robert Kiyosaki. Tell them they're bad, getting better, then good... whether anything changes or not. Could be wrong, though.



Day 3 Highlights

Once again, no particularly useful technical information or anything. The useful thing we learned, in my opinion, was negotiation skills, to some extent. And that was just from practicing with those at our tables. But, of course, they weren't that hard to negotiate with, because we both knew everything from the get-go...

And, of course, they tried to sell everyone on $50,000 worth of extra training seminars (no joke) and probably half the people there signed up for them. Granted, throughout the 3 days, half of what we learned was how good the rest of the trainings were, and how much we needed them if we ever wanted to succeed... And, of course, the first day everyone called up their credit card companies to have the limits on their cards raised.


All in all, I can't say I didn't learn anything. But, I didn't learn a whole lot; and I can't say whether or not I'm going to really use any of what I did learn.
But, if you were curious as to whether or not this seminar would be useful to you, perhaps it helps =)

 

[mtnman]

Spam! Lol

 

[andviv]

Thanks a lot for sharing, rep++

Did you pay for this seminar?
This is what has been criticized here about this and other seminars, they want you to pay some "small" amount and then they go hard on upselling you the next big thing.
I hope you got your time's and money's worth attending this seminar. It is a good networking opportunity and you said it yourself, you learned something.
Again, thanks for sharing.

 

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[kidgas]

Wow! I can't believe that people will actually fork over $50,000 for seminars full of stuff that you can get for free on the internet or at the public library. I am truly amazed. It is a sad commentary on our society.

 

[andviv]

Wow! I can't believe that people will actually fork over $50,000 for seminars full of stuff that you can get for free on the internet or at the public library. I am truly amazed. It is a sad commentary on our society.

This same topic has been discussed here at length before.

Lots of people trade money for time. For example, if you are "busy" and can't spend the time reading books and googling the info you need to get your career started AND somebody promises you van learn this quickly and have somebody guiding you then they believe it is a reasonable price to pay to ensure a higher chance of success.

What most don't realize is that, in order to make it work, it all depends on you, nobody will make it happen for you. It is your commitment, dedication and discipline that will make you succeed.

 

[Diane Kennedy]

Everything else aside, asking to get your credit card limit raised is a GOOD idea.

Believe it or not, this will INCREASE your FICO score.

I went through this thread and just remembered that. I'm putting that down as an action item for both my husband and I. (Another tip, my husband and I keep our credit separate. It gives us double the leverage power and more flexibility.)

 

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[NerdSmasher]

Well, there was apparently a pre-seminar that was free. And, at the pre-seminar, they basically sold this seminar; which cost $500, and anyone who paid for it could bring a guest for free. So, I actually got to go for free, as a guest, to this seminar. And, this one, of course, sold other ones.

As far as it being a good networking opportunity... actually, we weren't allowed to exchange information with anyone. That's not to say that we didn't (obviously) but anyone who was there really had no idea what was happening, and barely understood real estate at all. Clearly, most were almost desperate for money... and all had the mindset that Rich Dad Poor Dad instills in those who did poorly in school - School is worthless. Most people there weren't the smartest people... and I believe that's why they were so easily fooled into signing up for the other seminars.

Now, I do believe that the other seminars will have useful information in them. But, I still don't think most people will use it much, if at all, and that's really the problem. And, of course, why it's a waste of money. I personally have never spent a dollar on my education, and I know a lot and am putting it to use as best I can at the moment.

I'm just as shocked as you Kidgas... it's very strange, indeed. I can understand that some people just can't learn from books and such, but these are the people that need someone telling them what to do. The problem is, if you need someone to tell you what to do now, that's not going to change once you know what to do. So, odds are you'll never use the information, because no one will be telling you to! That's partially why so many people stay employees, I believe. They just wouldn't know what to do without a boss.

I do hope that those who did pay for additional training seminars don't destroy themselves because of it, though.

 

[NerdSmasher]

Everything else aside, asking to get your credit card limit raised is a GOOD idea.

Believe it or not, this will INCREASE your FICO score.

I went through this thread and just remembered that. I'm putting that down as an action item for both my husband and I. (Another tip, my husband and I keep our credit separate. It gives us double the leverage power and more flexibility.)

I should add, the guy teaching this seminar did mention that. The problem is, after he mentioned that it will raise your credit score, he said not to care about your credit score; and to be leveraged out as highly as possible in investments. Max out ever credit card, every HELOC you can get, etc.
Now, if everything you invest in works out perfectly, that's great advice to make more money. But, something usually goes wrong... especially for people who have never invested in real estate before in their lives!
Plus, of course, they told us that our education is an investment, so we should go to the rest of their seminars, and put it on credit.

 

[biophase]

One of the wonderful little gems he pointed out, also, was that you can delay your first mortgage payment by almost a month after you buy a house, by electing to pay it on a day of the month that happens to be less than 30 days away from the one you're closing on. And, if you put a right to show clause in the contract, you can also show prospective tenants or buyers the property for up to 60 days before you even have to purchase a property! So, you can delay paying anything while looking for tenants/buyers for almost 4 months if done correctly; and collect the first month's rent basically before any expenses; and the second month's will cover the first mortgage payment.

If you use this tactic you do not delay your mortgage payment by a month, instead you are actually pay your mortgage a month before you have too. That's why you don't have to make a payment until a month later!!! Nothing is free.

I can't believe they would call this advice.

 

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[NerdSmasher]

If you use this tactic you do not delay your mortgage payment by a month, instead you are actually pay your mortgage a month before you have too. That's why you don't have to make a payment until a month later!!! Nothing is free.

I can't believe they would call this advice.

Logically, that's what you'd think. But, assuming he wasn't lying (which I wouldn't put past him) he said that 30 days have to pass before you make your first mortgage payment. So, if you elect to pay on the 1st of each month, and close on, say, June 3rd, then you won't pay on July 1st, because it's only been 28 days. You'd make your first payment on Aug 1st.
I don't think I was completely clear with that originally.

But, if that's incorrect, I would like to know!

 

[AroundTheWorld]

I know I have had closings where my first payment wasn't due for more than 30 days.
However, I also seem to recall that I had to prepay the interest for that period at closing. (??)

 

[AroundTheWorld]

As far as it being a good networking opportunity... actually, we weren't allowed to exchange information with anyone.

Weren't allowed?

Are you serious?

They actually came out and said you WEREN'T ALLOWED to NETWORK??????

WTF????

Uh.... Networking is one of the main reasons to attend these things.

I'm shocked.

 

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[NoMoneyDown]

I know I have had closings where my first payment wasn't due for more than 30 days.
However, I also seem to recall that I had to prepay the interest for that period at closing. (??)

Exactly. I haven't had one yet where I didn't have to prepay the interest up until the first payment is due. And, since most of the time the interest on a new loan is almost the entire monthly payment, your actual first payment IS at closing.

 

[MJ DeMarco]

Networking would allow people who were on to the scam communicate it to others. Also, the moment you close on a loan, the interest accrual clock starts to tick. There is no free ride just because the payment isn't due for XX days.

Great to see professional speakers giving real estate advice. Perhaps I should give a seminar on molecular biology.

 

[Russ H]

Great to see professional speakers giving real estate advice. Perhaps I should give a seminar on molecular biology.

MJ, this is a technique used by LOTS of experienced flippers.

DISCLAIMER: The info I'm about to provide DOES NOT WORK in most of the markets in the US today, because we are in a declining market with long listing periods.

However, the techniques below WORKED, very well, in many areas of the US, from 2000 to 2005-- a VERY LONG TIME in real estate terms. During this time, a good flipper could have flipped 4 or 5 houses a year.

Make $30-50K on each house, and you've got a tidy way to generate capital, just like in the game Cashflow 101.

You can use this capital to then buy investments that will yield passive income.

********

Here's how it works:

The flipper gets the seller to cover the interest, or they have it worked into the closing costs which are rolled into the loan balance.

This is VERY, VERY smart if you are flipping a property.

If you're able to make the repairs and actually close on the sale (flip) within 60-90 days, often there is NO OUT OF POCKET payment to the lender.

MJ, this really is a smart way to use resources when doing short term holds/flips. The whole idea here is to use the "float" given by lenders to finance your business.

If you are really, really good (fast) at flipping in a HOT MARKET, you can really make money doing this.

Scenario:

COE-60 days: You lock up a house under contract for a good price
. . .During the period of due diligence, you inspect and line up contractors for all the work needed

COE- 0 days: You close on the 3rd or 4th, and contractors begin work day of recording
. . . Contractors work over weekends so you don't lose any time (you hired fast people)

COE + 10 days: Exterior repairs/landscaping occur FIRST. Photos are taken

COE + 11 days: House is listed on MLS within a week or two, w/photos. BUT NO ADDRESS.
. . . Any interested parties are told the house will be first shown in 2 or 3 weeks (tell them owner is moving out and repainting interior)

COE + 31-45 days: You get all repairs/improvements done within these few weeks.

COE + 45 days: House starts getting shown about 5-6 weeks after close of escrow.

COE + 45 + 30 days: In a hot market, house sells within a few weeks if it's priced right, w/a 30 day close.

TIME PERIOD: 75-90 days after COE (2.5-3.0 months) you no longer own the house.

 

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[NerdSmasher]

Weren't allowed?

Are you serious?

They actually came out and said you WEREN'T ALLOWED to NETWORK??????

WTF????

Uh.... Networking is one of the main reasons to attend these things.

I'm shocked.

Haha, yeah, I found it humorous myself. Granted, I didn't do much networking, as no one there seemingly had any experience in the area. But, they said it was so that Real Estate professionals couldn't simply market themselves at such events... Like I said, though, people still did.

The really amusing thing was how they kept saying you need to build your "Power Team" before you do any investing. That team of people who will do everything for you... but not to do that until you've taken advanced training so you know how to find someone.


And, I think Russ is correct with what they were teaching. Considering the speaker supposedly made his money; or started, somewhere around 13 years ago, he would've gone through that period... and he seemed to have made his money recently. Granted, I'm not completely convinced he or any of the people there who said they were rich actually were. Because, if they were, I don't know why they'd waste 3 days and over 30 hours of their time on something like this... Or be such aggressive salespeople.

 

[Diane Kennedy]

I have to come back to the "no networking" clause as well.

They actually said "Don't talk to anyone?" And what was the justification for that?

I go out of way at my seminars to put people into as many groups as possible. I think that is often the biggest advantage of financial seminars - meeting someone who has contacts, contexts, helps with accountability, etc.. It's a BENEFIT not a detriment.

It almost sounds like a control issue.

 

[NerdSmasher]

No, we were completely allowed to speak with each other. In fact, we constantly had to change tables and meet new people. They just didn't want us exchanging information for some reason And they DID tell us not to do that.

But, like I said, people still did. And, at the end, they let any professionals give out their information to anyone who wanted it.

He did say, however, that if anyone had "negative energy"; or thought someone else there did, to tell him so he could have them "removed" immediately. I'm guessing so that they wouldn't stop anyone from buying their programs.

 

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[biophase]

Logically, that's what you'd think. But, assuming he wasn't lying (which I wouldn't put past him) he said that 30 days have to pass before you make your first mortgage payment. So, if you elect to pay on the 1st of each month, and close on, say, June 3rd, then you won't pay on July 1st, because it's only been 28 days. You'd make your first payment on Aug 1st.
I don't think I was completely clear with that originally.

But, if that's incorrect, I would like to know!

What you say is true.

If you close on May 29th, your first payment is July 1st. 31 days
If you close on June 1st, your first payment is August 1st. 60 days

But here's the difference.

If you close on May 29th, at closing you pay interest for May 29th and May 30th. Your July 1st payment covers the interest from June 1st to June 30th.

If you close on June 1st, at closing you pay interest for June 2nd to June 30th. Your August 1st payment covers the interest from July 1st to July 31st.

So let's pretend that you mortgage comes out to $50/day and your closing costs are $2,000.

If you close on May 29th, your closing costs are $2,100.

If you close on June 1st, your closing costs are $3,400.

You just paid an extra $1,300 29 days earlier than if you had closed two days earlier. Which is the better deal?

However, if you can get the sellers to agree to pay for all closing costs including prepaid interest... definitely close on the 1st.

Old post from my blog about this:
http://www.livelearninvest.com/blog...on-a-certain-day-of-the-month-save-you-money/

 

[randallg99]

I should add, the guy teaching this seminar did mention that. The problem is, after he mentioned that it will raise your credit score, he said not to care about your credit score; and to be leveraged out as highly as possible in investments. Max out ever credit card, every HELOC you can get, etc.
Now, if everything you invest in works out perfectly, that's great advice to make more money. But, something usually goes wrong... especially for people who have never invested in real estate before in their lives!
Plus, of course, they told us that our education is an investment, so we should go to the rest of their seminars, and put it on credit.

I will go on record and state that the above has got to be absolutely one of the worst pieces of advice given. A lot of people getting slaughtered in this current market don't have true unleveraged equity....

a couple of years back, I went to a Trump Money seminar which was a platform for 5 smooth talkers go to schmooze and impress the audience for an hour each and the end result was that those asswipes were getting rich... after each spiel, there was a line of dopes who were one charge away from being maxed out waiting to buy a "real" seminar/training... and there were programs from $2999 up to 25k...

sitting behind me were two women who I got to talking with in between speakers and the one who worked as a realtor told me that she went to a seminar (probably the same one you went to) and was told to refi and max out her credit holdings every possible chance. I immediately assumed that she bought more real estate with the proceeds but she told me that she uses the money for cars and vacations. I think my eyes crossed when she told me this....

 

[TaxGuy]

I immediately assumed that she bought more real estate with the proceeds but she told me that she uses the money for cars and vacations. I think my eyes crossed when she told me this....

This right here is why "max out credit and HELOCs" is bad advice and oh yea, why we're in this crisis :smxB:

Now if you're investing it like bflbob and making a higher ROI than your interest, then it's good advice, but advocating this advice to the "get rich easy" guru followers/MLM zombies is irresponsible and borders on deceptive practices as one of the reasons for this "advice" is so that someone who can't afford it and probably doesn't know how to properly use the advice they learn can spend thousands on these seminars that they can't afford- with home equity or credit cards :nonod:

 

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[Russ H]

one who worked as a realtor told me that she went to a seminar (probably the same one you went to) and was told to refi and max out her credit holdings every possible chance. I immediately assumed that she bought more real estate with the proceeds but she told me that she uses the money for cars and vacations. I think my eyes crossed when she told me this....

We had a person interview w/us 2 years ago.

She was in her 50s. Pulled up in a Jag (S class-- what we call "Sh*t class" b/c they're essentially Ford platforms w/a Jag grille). Was wearing Jimmy Chus, dressed to the nines (which in the wine country is weird-- everyone here is max casual).

She went on and on about how innkeeping was her dream job-- just sitting around all day talking to guests. That she had reached a point in her life where she wanted to have "fun" and was only going to work at "fun" jobs.

We tried to warn her that innkeeping was crazy hard work-- cooking, answering the phone, long hours (we all work 10 hour shifts, 11 hour days). There are precious few minutes in the day to catch your breath, b/c you're always running to catch up! (workaholics thrive in this atmosphere, tho).

It was clear she wasn't listening. Her eyes kinda glazed over while we were going over this stuff.

Here's the funny part:

When we asked what she'd been up to these past few years (her resume didn't say), she said she'd been a realtor (still was) but hadn't sold ANYTHING.

NOTHING!!!

She'd been a realtor from around 2004-2007-- the craziest RE market this country has ever seen.

And she'd sold nothing.

We asked her: How did she survive?

She told us she'd gotten a huge HELOC on her house, and was pretty much living off of that.



So for the past 3 years, as everyone around her was making mountains of money selling RE, she was flitting around, taking bigger and bigger loans out on her house, and spending it all on things like the Jag, the Jimmy Chus, nice clothes, etc.

I was gobsmacked.

A perfect candidate for foreclosure.

Wonder what she's doing now?

-Russ H.

 

[MJ DeMarco]

Wonder what she's doing now?

-Russ H.

Sitting around blaming the Govinator. :smxB:

 

[Russ H]

Good point, MJ.

Probably waiting to get some bail out money! :smilielol:

-Russ H.

 

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