I am hopping on a plane today for Santiago, Chile, to get a “boots on the ground” perspective of Simon Black’s new real estate development and sustainable community, so today’s article comes from one of our very own Kung Fu Finance community members, “Aunty from Hawaii” (and no, I don’t know her, at least not yet, although Kung Fu Guy is also from Hawaii — small world!). 🙂

I hope you enjoy her great “from the trenches” post as a beginning real estate investor. She has recently been purchasing investment properties in Las Vegas that have positive cash flow and has a story for us about how taking action, even “imperfect” action (much like my buying physical silver story), is much better than doing nothing and moves you closer to your goals.

It’s also a peek into the expensive world of investment classes…are they worth it?

Here is her story…

Enjoy, and I’ll be back on Friday with preliminary notes on Chile and some QnA!

To your financial success,

— Kung Fu Girl

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Aloha from Aunty! Whenever those free 2-hour Rich Dad Education “Learn to be Rich” events come to Honolulu, Aunty goes. The speaker is usually an excellent salesman who offers additional training for 3 days in a class that promises to “teach everything needed to get rich with real estate investing for the bargain price of $199” (and you can bring a guest for free).

Three years ago, I began with my first free 2-hour introductory training and decided to attend the $199 training, too. As it turned out, the $199 three-day training was a prelude to an extremely expensive package of courses ($9,000 or more!).

The trainer in the 3-day “crash course” was very good at summarizing (with a little bit of wrong information) all the different techniques, which are based on advanced courses in the Rich Dad Tigrent Education packages. I signed up for the package that cost $16,000 (yikes! and I didn’t tell Uncle until way later) because I figured the advanced courses would help me get over the humps and give me the confidence to invest.

I took Foreclosure, Master Trader, Asset Protection, Lease Options, and Creative Real Estate Financing classes. I learned the most from the Asset Protection class and the Master Trader (swing trading stocks) classes. Although there was a lot of information in the other classes, most of the information taught could have been learned from books. [What these classes teach are not really what Robert Kiyosaki preaches. Rich Dad Education is a trademark name that pays Robert Kiyosaki royalties to use his name, face, etc.—but their content is their own. To learn from these groups is not the same as learning from Robert Kiyosaki.]

What did I do after the classes?

For a few months, even after getting some classes under my belt, I remained in the “not sure of what to do” phase and did not take action.

I was contacted by Rich Dad Coaching (another company with the Rich Dad trademark but not affiliated with Rich Dad Education). For $6000 (yikes again and I didn’t tell Uncle!), I subscribed to having my own personal coach for a 45 minute call, once a week for 16 weeks. It came with a guarantee that I would purchase property during the coaching period, or they would continue to coach me. Not too shabby since I also got a $300 Cash Flow game mailed to our house. It came with a gold metal mouse and cheese!

I had a rather poor learning experience with my coaches (one spoke too softly & seemed disorganized, and the other was too impersonal, impatient and book/course focused), but it did give me a sounding board with a real person for my very first deal. It was like having a security blanket which I really didn’t need, but felt safer to have.

The leap

After going through two “wrong-for-me” realtors, I finally found an investment minded Vegas realtor — a recommendation from our entities attorney. I used a free worksheet that I found on the RichDad.com tools tab to analyze the properties my realtor send me via email. I put in offers and was thrilled when one was accepted!

Looking back, I could have skipped the Rich Dad courses, but on some level I must acknowledge that they must have helped. All of the information that was taught and the tools that were used are available for free on the Internet or in books if you know what to look for, but I probably wouldn’t have actually taken the plunge without education, or on my own without a hand to hold.

I also had to make use of what I was learning because of the guilt of spending so much, which forced me to dive in.

If I could do it over again

Would I spend $22,199 on classes and coaching if I could do it over again? Probably so if I didn’t know what I know now because I was clueless.

Are there better ways to spend $22,199 to get into real estate investing? Definitely! I would buy a $100,000 single family home or 4 plex with 20% down and 80% financing and rent it for $1200 for the sfh, or $2000 for the 4 plex per month.

Advice for newbies

One of the best ways to learn is to play the Cash Flow game with other investors or wannabe investors. Just by playing, you will get the shift in your mindset on the best strategies and also help you get comfortable with investing.

Join a local real estate investor club (google search for city and real estate investment club). I joined the Hawaii Real Estate Investors in 2009, annual dues of $120 or $15 per meeting. I am glad I did because I have met some of the finest fellow investors, mentors and supporters there. This club brings in speakers every month with real estate specific topics to educate. Their annual Hawaii Wealth Summit is incredibly rich in content and networking.

Networking is super important. Your best and most reliable contacts for your power team of realtors, mortgage brokers, bankers, rehabbers can be found from people you network with. Go to meetings, seminars, or places that successful people hang out in. One good contact can make a world of difference in your investment success.

Read a lot of books, search and learn. If you are motivated enough to learn on your own and take the leap on your own, then do it.

If you need to be pushed or need someone to talk to, coaching helps. If you do spend that much money on courses or coaching, make sure you do take the steps and actually invest.

If you have already spent a lot of money on courses that will “teach you to be rich”, do something with it. Appreciate the fact and your guts that you spent money to learn and because of just that alone, you have taken action towards your success.

A great quote I heard was “You don’t have to get it perfect. You just have to get it going.” True, that.

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Aunty blogs at HonoluluAunty.com and is a committed, successful real estate investor who believes in taking charge of her own finances and not depending on Social Security and/or Medicare for her financial future. She is an active participant here at Kung Fu Finance and I thank her for sharing her story with us!