Didn’t do much over the long weekend. Just tried to relax and recharge my batteries. Happend to get a really good book from Barnes and Nobles called
The Millionaire Maker by Loral Langemeier.

It;s basically the same sort of philosophy that I believe in. Use debt to leverage yourself into wealth, get rid of consumer debt, buy wealth producing assets. But its a very structured approach on how to do that. The book sort of picks up where Kyosaki’s Rich Dad Poor Dad stops. Rather than the feel good, change your mindset type of book, its a hands on workbook on taking yourself to the millionaire status in 3 to 5 years.

Of course, if you’re reading this blog there’s a good chance you’re already on the raod to millionaire status, but if you find yourself floundering without a roadmap, this book is the place to start.

Got a call today from my mortgage company. They told me that today was the last day to get pay for 3 mortgages without the late charge. I told him the only reason I hadn’t paid was because I hadn’t recieved a mortgage statement. [ I had just closed on the 2 properties in December]. The same guy had called me 2 weeks ago to tell me I hadn’t paid on another mortgage for one of the same 2 houses in question.[4 loans in total. 2 loans on each house].

I asked him where they were sending the mortgage statements. He said they were being sent to the properties 2000 miles away from where I live. I blew my top. I had repeatedly told the loan broker, escrow and the lender that the statements needed to be mailed to my mailing address, but apparently it was too difficult to follow. Anyway I he already had my checking account info and I gave him authorization to pull the funds directly from there.

I asked him to send me the mailing address and loan info and I’d add it in for direct online payment right there and then, but as usual they were about to sell the the loans so there was no point. I guess I’ll have to go through the same scenario next month.

Going to college is an important part of growing up. The friendships and experiences you gain last a lifetime. And in the process you usually get an education that provides the opportunity to earn a decent living. Provided of course, you make enough to pay off your student loans.

According to an article about a social worker with $118,000 in student loans posted on Boston Gal’s Open Wallet some people go overboard to get a degree that doesn’t pay well enough to pay the bare necessities. A graduate degree in social work only nets you a $30,000 salary. Not enough to pay off your student loan.

Maybe you should consider that when choosing your major. In most businesses, any improvements or additional investments have to meet a 3 year payback period to be considered worthwhile. When getting an education that costs $120k, you should be able to make an extra $40k over what you would’ve been able to make without it. After all, going to college is an investment in yourself, right?

The girl in the article somehow found a part-time job that pays $25/hr to supplement her income. Maybe she should make that her full-time job and do social work on the side!

According to an article in the Sydney Morning Herald, Home prices have slumped in Australia.

Its the same ol’ story that I’ve been harping on about thats affecting parts of the US like California. The scary thing is since its already happening over then, how far behind are we???

ING just announced 4.75% interest on regular savings on all new deposits and accounts until April 15th. After that it drops to 3.75%, unless of course the fed raises the interest rates and then it’ll be higher.

While a 1% increase doesn’t sound like a lot, it does represent a 27% increment over the previous interest rate. The lower the interest rate, the large % increase it represents. And the lower interest you get on your money, the more you should look to make it work harder.

Of course there are a lot of ways to make more than a measley 4.75% on your money. 2nd trust deeds usually yield 10-15%. Developers and Builders often borrow money for their projects that yield 12-40%. Of course, higher the yield, higher risk.

I’m almost at the end of my ability to buy single family homes now so I’ve started looking at much bigger projects. As JFK said “They cannot achieve greatness who do not tke great risks”, so thats what I’ve decided to do. Take great risks. Which is why I’m trying to borrow a few million from the bank to finance that oil deal. I’m flying to Oklahoma City to check it out next weekend.

As part of my risk taking strategy, I’ve decided to buy properties in bulk and sell the the remainder off to other investors. I tried doing that last year in St George, but it seems the builder is now having financial issues and might squeal on his commitments. So I decided to partner directly with the developer on future deals so there’s less chance of failure.

I’ve got a few partners together and we’ve bought a complete subdivision in the outskirts of New Orleans. Actually, its in Wallace which is sort of in between New Orleans and Baton Rouge [which has seen a huge spike in prices and rents after Katrina]. There’s currently a great shortage of housing available in New Orleans. The agents involved have a huge list of people looking for houses to rent.

We’ll be offering the lots at a rather small markup and hooking up the buyers directly with lenders and builders. The good thing about it is that the entire subdivision is not in a flood zone and doesn’t requrie any sort of flood insurance. The tax rate is also a low 1%. I plan on keeping a few lots for myself and selling them in 12 months. The lots range from 37k to 43k.

You can get a lot loan with 10% down and the payment will only be a few hundred bucks a month. I expect the lots to be worth about 20k more in a year. After waiting for a few months even if i start building, it takes 7 months to build a house, so I can easily stretch it out by a year, which should be great for appreciation.

Also FEMA is going to stop paying families 3-4k rent per month after 18 months, so all these people who’re living the high life in hotels and cruiseliners will have to look for proper accomodation. What better place than a brand new home outside a flood plain, thats 30 mins from the center New Orleans and 40 minutes from Baton Rouge!!!

Here’s the link to the temporary webpage we threw up. Its called www.preconlots.com. It should have pricing and plat info up pretty soon along with a few interesting links about New Orleans. We’re probably going to offer special pricing for the first 12 lots, but I might be able to extend that for readers of my blog. [yeah its an ego thing 😉 ]

Please provide suggestions about the webpage and how to improve it. Its difficult being critical when you have an involvement in the project.

I made the 1st ever Carnival of Entrepreneurship!

Adventures in Money Making offers a tips on what to look at when buying a dry cleaner business. Some of the advice is specific to the dry-cleaning business, but much of it is just good, sound advice if you’re considering buying any type of business, like making sure the seller doesn’t own another similar business that you’re going to be competing against.

In an interesting development, I’m found myself as a minor equity partner in a deal having about a 100 lots near New Orleans. I’ll probably get 2-3 lots in the last phase after I get some money from somewhere [probably the sale of the Boise house that I’m purchasing this week and wil be flipping, hopefully for a profit].

Its located in Wallace, which is inbetween New Orleans and Baton Rouge. After the hurricanes, Baton Rouge saw a huge spike in pricing and rents since people from New Orleans moved there. Wallace is a lot closer and the agent working on the deal already has a list of about 150 potential renters. According to the articles I’ve read on online newspapers, there are a lot of jobs in New Orleans but not enough housing. FEMA is handing out $3000-4000/month to help people pay rent and they’re living on cruiseliners and in fancy hotels. At some point this will stop and they’ll have to start looking for cheaper accomodation.

The lots are around 40k[plus minus a few thousand] and the building costs are around $85/sq ft. According to what I’ve heard, the finished product will be around 10% below market at todays prices and maybe more in 6 months when the house is finished.
Here’s the website: www.preconlots.com.

Anyone out there buying in New Orleans with comments??

A friend of mine brought a business proposal for me to look at. Its a Dry Cleaning business in a nice part of Houston [if such a claim can be made]. The owner wants $490k for it and it apparently generates about $150k in net income. Not knowing anything about these sort of things I called my uncle [well he’s not really my uncle and I never met him] and asked him what he thought about it.

Uncle had some really great points. These sort of businesses are cash-businesses. There’s lots of scope for employee theft or partner theft if its run by a partner. It also means the owner can cook the books and show less income. However if the owner knows he going to sell the business in 2 years, he can divert income from one cash-business to another, thereby making seem more profitable and thus worth more money.

In this business, a lot of revenue comes from contracts from hotels. Since the previous owner knows what the deals are, he can undercut your pricing and steal your business. He proudly told of a friend of his who did that to the guy who bought his dry cleaning biz and drove him out of business in 6 months. [Bad karma if you ask me, but thats life I guess]. Moral is make him sign a non-compete and have him carry back as much of the purchase price as possible.

You also want to work there for a month to see if its really generating the revenue that the seller claims it is. That also constitues training if you’ve never worked in a dry cleaners before. You should compare the revenues for that month to the same month last year. [In places like houston, revenues in summer are probably higher].

He also mentioned that if you opening any biz in partnership make sure its within an hours drive of where you live or a 2 hours flight. If your partner claims a piece of machinery breaks down and it’ll cost 20k to fix it or replace it, you need to be able to go there immediately and see if thats the case. If you live a 6 hr flight away it might cost you 2k just to fly there on short notice.[you’re not going to stop biz for 2 weeks just so you can get a cheap flight!]

And always the standard question of why is the owner selling such a profitable business. They’ll usually say they’re getting out of the business or moving to some other country. Find out if the owner has any more dry cleaning businesses that he’s not selling and my use to cannibalize your business.

Just got my year-end statement for my Amazon Credit Card where I get points to buy books on Amazon.com.
I spent a total of $13,000 on the card last year which means I spent a total of $40,000 on both credit cards. Now I know why I don’t have any money. On the positive side, I atleast know where my money went and I got $130 worth of free books off Amazon.com.