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Saturday, December 26, 2009

principles of opportunity investment

In the begining it's a tentative situation. Your first few deals are small potatoes. To make money with no investment is not entirley accurate. Everyone has access to something. Some small amount that will be allocated for wealth building. I think back to when I was starting from scratch and at the time my cynical attitude made it painful, but looking back I remember the experience fondly. It's challenging to make money with no investment capital but when you are starting from scratch you have nothing to lose. With your back to the wall, you can go forward confidently in the knowledge that you literally have little to lose. Curiously, all great wealth once began from scratch. To make money with no investment capital is exactly the situation you need to be in if you want to succeed and get that first million under your belt. You see, it's not how much you started with that counts. It's not how much you have made that counts. What matters is the system. HOW you do it. If that is based on sound principles then you will never fear poverty again. I could make money with no investment capital if you dropped me in any free City on the planet. I guarantee you within a few months I'd be living well (providing I spoke the language). Starting from scratch, the first thing I would do is find a market. No money, but I have my self. I can offer a service. As soon as I make a few hundred dollars saved, I would begin applying the principles of opportunity investment. I would trade up and up until I had borrowing capacity. I would use the leverage that borrowing allows me to manufacture obscene compounding returns in real estate and large ticket items like used trucks and yachts. I would work until I was comfortable, then start spending on myself. You are in a better situation than my scenario. You have friends, contacts, and knowledge of your town. You have experiences and intimate perceptions of the existing markets in your home town. All you need is the knowledge to make it happen. To make money from scratch with no investment capital is easy. Don't be fooled into thinking your situation is hopeless. You need knowledge, tools, and skills. It's time you took a real shot at your first million, believe me the second and third will be easy.
(mudassar and iftikhar)

principles of opportunity investment

In the begining it's a tentative situation. Your first few deals are small potatoes. To make money with no investment is not entirley accurate. Everyone has access to something. Some small amount that will be allocated for wealth building. I think back to when I was starting from scratch and at the time my cynical attitude made it painful, but looking back I remember the experience fondly. It's challenging to make money with no investment capital but when you are starting from scratch you have nothing to lose. With your back to the wall, you can go forward confidently in the knowledge that you literally have little to lose. Curiously, all great wealth once began from scratch. To make money with no investment capital is exactly the situation you need to be in if you want to succeed and get that first million under your belt. You see, it's not how much you started with that counts. It's not how much you have made that counts. What matters is the system. HOW you do it. If that is based on sound principles then you will never fear poverty again. I could make money with no investment capital if you dropped me in any free City on the planet. I guarantee you within a few months I'd be living well (providing I spoke the language). Starting from scratch, the first thing I would do is find a market. No money, but I have my self. I can offer a service. As soon as I make a few hundred dollars saved, I would begin applying the principles of opportunity investment. I would trade up and up until I had borrowing capacity. I would use the leverage that borrowing allows me to manufacture obscene compounding returns in real estate and large ticket items like used trucks and yachts. I would work until I was comfortable, then start spending on myself. You are in a better situation than my scenario. You have friends, contacts, and knowledge of your town. You have experiences and intimate perceptions of the existing markets in your home town. All you need is the knowledge to make it happen. To make money from scratch with no investment capital is easy. Don't be fooled into thinking your situation is hopeless. You need knowledge, tools, and skills. It's time you took a real shot at your first million, believe me the second and third will be easy.

A Real Estate Formula

It was a simple real estate formula. The ads ran in our small-town newspaper for years before I realized exactly what was going on. They were always the same: A house for sale with 5% down and payments of 1% of the purchase price. Maybe a three bedroom home for $90,000, for example, with $4,500 down and $900 per month payments.
When a friend started doing the same thing he explained the process to me. It was a way to get a great return on capital, and it was the opposite of buying with no money down. There is no down payment at all when you buy, because you buy for cash.
The Simple Real Estate Formula
You probably know that when you buy for cash, you can often get a much better price. With no financing contingencies in the offer, and the promise of a faster closing, sellers are willing to sell for less. You can offer $95,000, for example, on a house that might be worth $108,000. If you can't get it for less than, say, $99,000, you walk away - there are always other opportunities.
Once you buy the house, you put few thousand into high-return repairs and improvements. These might include paint, carpet, and maybe asphalt for a dirt driveway. For our example, we'll say you spend $5,000. Let's suppose the house is worth $116,000 now. You're ready for the next important step in this real estate formula.
You put it up for sale, targeting buyers who can't get financing easily. You provide the financing. Because you are making it easy for the buyer, you can get more than the $116,000 value for the home - and do it without paying a realtor's commission. Let's say you sell it for 123,000. The buyer needs a down payment of just 5%, or $6,150, and makes monthly payments of $1230 per month. You charge higher interest than the going rates at the banks, of course.
This is a win-win situation. Your buyer is able to buy a home instead of renting, and you get a capital gain of perhaps $16,000 after expenses, plus good interest. Your total rate of return will often be over 20%!
In our town, the first to do this consistently were a father and son team of lawyers. They saved money by doing their own foreclosures when necessary. Once they foreclosed, they raised the price and sold the home all over again.
They made millions. Did you know that if you can get an average return of 18% on your money, you'll turn $75,000 into more than one million dollars in about fifteen years? That's the power of a good real estate formula.