Monday, September 1, 2014

HYPE VS SUBSTANCE--SCOTT YANCEY vs COGO

There seem to be a lot of gurus coming to San Diego lately. No doubt it is because San Diego and Southern California in general is still a very hot market even though the pace at which prices were climbing has slowed. Watch out for hype vs the substance. When I went to the Scott Yancey seminar in Feburary, Scott Yancey never made an appearance, it was all his coaches and teachers. I got a few nuggets so I wouldn't say it was wasted time, just go slow if you are new to real estate.

I have still not fully recovered from my first four day seminar in June 2013. You can read about the experience below. I am on my 3rd property manager who is working with me to correct the errors of previous owner and property managers. Still haven't made any rent to speak of from the house, still costing me more and more in repair. The only reason that I have not dumped the property is because a very large medical health company (i.e. Cerner) has just purchased 300 acres just a short distance from my house. They are going to build a large research and processing center over the next few years.

A second company (i.e. IHOP, no not the pancake company, but the International House of Prayer) has also purchased and leased large areas near my house.

If I had it to do over again, I would be purchasing real estate notes from COGO and Secured Investment Corp. Their underwriting process is efficient, immaculate, pays anywhere from 8% to 15% return on their short term notes (6 to 24 months).
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I believe the Yancy program also sells notes, but you have to buy into their program. You don't have to buy any program to buy COGO notes; you just buy the note. COGO makes their money on the spread between what the borrower is paying in total (say 18%) and what you are getting as the note owner (for example, 15%).

(And if you are wondering if people really pay 18% for a loan, Oh Yea! The banks are not lending, particularly to investors. The people with all the lend-able money are those in the private sector. Since there is no prepayment penalty, at least from COGO, the faster they complete their project and pay off their loan, the more they save. You as the note holder simply roll your money into another note if they pay off early.)

However you cut it, just ask a lot of questions, be cautious and skeptical of the hype, and study any materials that you do decide to purchase. Be aware there is a lot of free information on real estate investing on the internet also, and the library has current and informative books as well. One person I love to learn from is John Cochran. Every Saturday he offers 2-3 minutes nuggets on his blog at http://systemssaturday.com/blog/

You make your money when you buy; so if you are new to buying, take your time to learn what to buy.

(Disclaimer: I have been working with COGO and Secured Investment Corp. since last December and find them to be an exceptional and multifaceted company offering real estate education, mortgages, and real estate notes. They are the first company to be approved by the SEC to sell franchises of their loan mortgage process for private investors--non-bank. It is direct peer-to-peer lending. They have programs that guarantee your principle for a price, of course. For investment funding text "FUNDING" to 41411.)

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