I subscribe to a daily motivational email list from Mountain Wings

Call me a loser, but some of the messages can be really helpful.

I really enjoyed today's issue (September 1).
Rich Dad Poor Dad Dozen
I've been busting my tail working on rental properties since April, and frankly I've lost direction. I need to get back on track.

I think Kiyosaki's ideas are pertinent to this thread.

If you liked that issue, check out Summary of Rich Dad, Poor Dad

When I read "Rich Dad, Poor Dad," I immediately started thinking about my parents. I'm lucky to have great teachers.

Here's to your success. http://www.pelicanparts.com/support/.../flylicker.gif

Jürgen

I liked that summary Jurgen. I've printed it so I can read it at my leisure and absorb it more.

I've been self employed for over 25 years.
Some good, some not so good; but all have added to my experience, which is what got me where I am today. So it's all good.

I haven't done the franchise thing; but had friends involved. Here's my question, "Why would you want to own your own business where somebody else tells you what and how to do it?"

To me being self employed means no alarm clock and no bed time and no bossy-pooh. My businesses generate income for investments. Real estate is great. Read Kiyosaki's books; Rich Dad, Poor Dad is only the tip of the iceberg in his publishings.

Investments take alot of hard work and research. I'm always researching things for possible investment years from now? No get rich quick I'm afraid.

Lease a garage, put up a sign and start your own muffler shop. Be the best at what you do and you'll be nothing but busy! Our host is a good example of a businessman.

Good luck and get rid of that JOB (sorry for the swear word)

REALLY ! !

Darn, now my dreams have been shattered . . . ;)

Another thought:
Wish, Want, Need, Got

I wish I had a 930
I want a 930
I need a 930
I got a_________ (one day)

I'd think of it at a different* level. A combination of what has been mentioned here and a little added.

- Work for a shop or in the business to understand it better.

- Buy an existing business. The customer base and good name are worth alot. Perhaps as much for your local area as a Franchise. I'd suggest a privatly owned business.

- Have an extremely clear and realistic business plan.

- *Work to become a Franchisor not a Franchisee.

- "Partner" with people who possess skills that you do not and are vital to growth.

- Mistakes are the stepping stones to success. But try to learn from others' mistakes.

- Never forget, if someone else has done it so can you.

I do not have experience with being an out-of-state landlord, but I think you have a good idea. I recall one fellow in CA who was buying brand new townhomes in Nashville, TN. He found a mortgage broker that would finance the properties at 95-100% of purchase price, and a management company would handle the rest. He broke even on paper (due to high LTV mortgage), but I know the returns well great as long as he held the properties for long term.

The best part about real estate is it works for you even when you're sleeping.

The last property I purchased has an after tax rate of return just over 30%. Cash on cash return is around 24% conservatively. The stock market can't touch that year after year.

The biggest obstacle for you is finding an agent or company that can find good investments for you, and not investments that line their pockets. Depending on how you structure the deal, you'll probably need $8-20k cash to invest. Sometimes, you can get really low-down mortgages, and the cash in is very low. However, if you ignore everything else I say, listen when I say have a healthy reserve fund (at least 3-6 months). When the rental is vacant or you have a bad renter, plan on eating a few mortgage payments. It hurts, but the good times more than make up for the bad.

A lot of money is chasing real estate due to past stock market performance, but as some newbies get squashed, the stock market goes up, and the RE market corrects itself, the deals will start to get better.

You don't need to buy a property outright. Take your capital and leverage into several properties. Then, let time and inflation take care of the rest.

Sorry for rambling. It's easy to talk about things you love, like Porsche 911s. :)

Good luck,
Jürgen

As a more or less retired financial planner and analyst, think about something....If all franchise businesses were lucurative at the bottom end, why would one want to sell the right to make the money? For an example, why doesn't Walgreens sell franchises? The primary reason that franchises are sold is because those selling the license take minimum risk and make a substantial gain. Any time I can do that, I jump in...However, I agree that one should spend some time in a business as a "student" before investing one's hard earned cash (either already in the bank or borrowed). As for real estate, I can say this. When interest rates begin to climb as they will, the most logical result will be a corresponding drop in property values. Those who disagree might find themselves in the same boat as those who were in denial that the dot.com and tech sectors were in for a pasting five years ago. I had folks I knew who would say "I don't NEED a financial planner, I know all I need to know". Most of them now have about $.20 on the dollar. Here is a suggestion Find the local branch of SCORE. It is a volunteer organization of reired executives. The advice they give comes from years of experience and is free. You could find yourself linking up with someone who would help you develop a workable plan.

Good luck.

I just want to give a sincere thanks to everyone who has responded to this thread. There is some great advice here and it has helped a great deal. The more that I think about it, I don't think franchising is right for me, for many of the reasons listed. When I posted the original message, I was caught up in a moment right after talking with my broker. A few days reflection and I began to echo many of the same sentiments shared here regarding the downsides of franchising, and the auto service industry in general. I have always loved real estate, but also share the same views as moneyguy1 as far as property values and the inevitable rising of interest rates. Housing and bond prices WILL drop. So, I'm not sure it's the right time to get in, but I am researching opportunities. So for now, I suppose I will continue my search...I'll keep you updated. Keep the ideas coming though....thanks again!

Paul

Don't discount real estate just yet. I am not particularly worried about falling real estate prices. I will just use cash to grab some great deals. I am buying for long term, so a 3-7 year dip in values won't hurt. Rent levels generally will stay the same or increase in the sour years because there are fewer individuals who are qualified to buy homes. This means a larger pool of renters. If you look at the history of interest rates vs. home prices, a person who bought in year 1998 with higher interest rates has a mortgage payment the same as a person buying the same house with lower interest rates, but higher purchase price. If you don't sell the property, then you don't suffer via the high purchase price. Instead, weather the storm and in the interim live on good cash flow. Great wealth is accumulated when you buy real estate for the long term. Anything else is just quick cash.

A decline in bond prices will be met with a decline in housing prices. Again, if you are in for the long haul, I would not fret. Of course, in my area, appreciation has been rather modest (perhaps 10-20% on the past 4 years). In CA or hot markets, oh boy, you better hold onto your britches.

Now might be a great time to look at the stock market???? However, I can generate better returns through real estate, so it hasn't been a high priority for myself.

I do agree now is not the best time to start real estate investing. The local investment club is flushed with tons of newbies, and already there are stories about investors going bankrupt.

BTW, I diversify with mutual funds and IRAs. I am so tempted to sell the funds and invest in RE, but common sense tells me NO.

Good luck Paul.

Jürgen

A friend of mine just looked into buying a Big O tires franchise. They wanted $300,000 down toward a total cost of $1.2 M (which would have included him owning the land and building). In a round about sort of way (since it's illegal for them to get specific on income w/o a guarantee) they told him to expect to net $30-50K for the first five years or so then things would pick up.