Memories of The Little Rascals

When I was growing up there was a show on TV (yes we had TV back then) called Our Gang or sometimes The Little Rascals. It was a cute show about a bunch of kids and all of the trouble they got into. Every now and then the gang would need or want to raise some money, normally to help out some poor widow who was about to be evicted from her home or for other good causes. Invariably, someone would suggest - "Let's put on a show!" Then one of the other characters would chime in - "I'll get us a stage." Another would shout "We'll get together a band." And so would begin an episode in which the whole gang participated, some as the stage hands and some as performers (either in the band or on stage). Of course in this little show everything came out alright and the day was saved for the poor widow.

I think of that old show whenever I work with young, naive buyer who are out to invest in real estate, with the thought of "flipping houses." It's like - "We'll buy a fixer-upper" and "You do the painting. I'll do the repairs. We'll make our fortune" Most of these young innocents have no idea what they might be getting themselves into and most do not have the capital or the skills to really take on the challenges ahead. Unfortunately, many learn that the hard way, with the end result adding yet another foreclosed property into the current mess. Of course they have also damaged their credit along the way, many maxing out credit cards to buy the paint and materials to fix up the place. The lucky ones break even and a few might even turn a small profit.

So, what am I to do when facing one of these young entrepreneurs? I try to provide some counsel on the risks and size of the task ahead. I have lots of information on my Web sites http://www.themilfordteam.com/ and http://www.mihomebuyer.com/ about investing in real estate and about buying fixer-uppers. There are pages that show what the paybacks are from various updates and upgrades to a house and lots of artilces on the pitfalls of real estate investing. I try to provide educational information, without being so negative that it would turn them off to working with me. The truth is that real estate investing for the little guy is a very tough, very risky business. Yes, it can also be very rewarding; but you have to have the wherewithal to ride out a longer than expected sales cycle when you go to sell and the skills (or contacts) to get the necessary work done for reasonable prices that will still allow you to make a profit. It's not like Our Gang; it's real and it's your money and credit rating at stake.