Photo credit: pencilsoda

This last post in the current series signals the return of the 7 Millionaires … In Training ! to its ‘old’ home right here at the NEW, REVAMPED, BIGGER, BETTER, BRIGHTER, ALL-STAIN-REMOVAL:  http://7m7y.com.

Soon, we move on to the next phase of this ‘grand experiment’ and ask the 7MITs to really examine: “is this [their selected Growth Engine] an opportunity worth pursuing?”

With Mark’s “Craig’s List Ad”, it looks as though he has settled on Tax Lien Investing as his preferred vehicle to get him to his Number? Is it investing, or is it a business? Does it even matter? Stick around, and we’ll find out (if not in this post, then in Mark’s next ones) …

________________

I’ve been settling in the MM101 comfort zone for a while. Now it is time to move up to MM201. I do need momentum and I think I did not recharge enough from the previous exercises to move forward fast enough. I tried “forced” recharging via a business development deal with my accountant and encouragement from my peers but it is still not enough. The plan for me is to redo some of the exercises we did last year to plant enough fire for me to push through.

My number and my date haven’t changed. It is still $5million in 10 years. It is well explained in my previous posts. With my accountant, we have developed a business plan where I’ll spending the next few months preparing for tax lien auctions in South Carolina which will happen in the months of October, November and December. The goal for me is to review my training materials and to develop a written procedures for various targeted counties and also line up the necessary resources – property reviewers, real estate attorney and the bid history to get an idea of competitors and patterns. There is a lot of work but we spaced them out proportionately every month leading to October.

The first year will be focused on South Carolina. I’ll then repeat the process in other nearby states like Maryland, Georgia, Florida and Texas. All these states will fit in to a 5 year plan where there is a target tax lien acquisition, potential conversion, rough expenses, etc.

It looks like I have a lot of things going on. I know without a great push from within, it will not move very far. That’s why I’m going to go back and redo some of the exercises.

Wanted 1: Growing Tax Lien Holding Company

A growing tax lien holding company with operations in at least 5 states. Must have written procedures, templates and archived documents to operate in the various counties which have different proceedings. The written procedures must cover all stages of the tax lien process including due diligence, property review templates, redemption of tax liens, foreclosure processes, strategies to manage properties and established contacts with local resources  – property reviewers, real estate attorney, and investors.

Start Here

Photo credit: massdistraction

Mark is income ‘rich’ compared to what he needs to spend; now, imagine adding: wife, children, dog, college fund, bigger house (hence, bigger mortgage, bigger land tax), more food, clothes, it’s enough to make you want to stay single …. is that a dream or a financial nightmare?

Looks like we’ll have plenty of RE and finance=type issues to chew over in the coming weeks and months …

_________________________

In my last post, I discussed about creating 3 year programs in lieu of a formal MBA program. I’m now ready to venture more into real estate investing, be it in tax lien or investment properties. I did acquire a tax lien a while ago on a small condo and it is now due for redemption. It is time for me to investigate more into this particular property. I will definitely need seek legal advice on this.

I have been thinking about buying another house and convert my current townhouse into a rental. I was looking last year and did put up a few offers but none of them came through. It is a good thing since the real estate market has been declining. Looks like I might be able find better deals in the next few months. However, the area I’m in did not decline as much. It’s time to go hunting!

As you can see, I’m going to start with real estate investing first. How am I able to fund these investments?

Let’s take a look at my current financial health at NetworthIQ.

I’m fortunate enough not to have any consumer debt. I did have a car loan earlier this year but I paid it off using a HELOC which is at a lower rate. The interest is tax deductible too. HELOCs are great now since I did get a very good deal at prime minus 1. This is a very low 3.0% at the moment. Looks like I’m not likely to pay this off very soon. There is still some equity to be tapped to invest but for now, it is better not to incur more debt.

Given my current income, I do live below my means. However, all my income is tied to my current occupation. I would like to add some passive income through rentals or other ventures.

My living expenses are low relative to my income. This does not mean that I live frugally. I spend quite a lot on traveling, going out, parties and on toys. I’m looking forward for a trip to Asia next month! There is definitely a lot of cost cutting opportunities. But I should think about generating more income instead. Right now, I’m thinking about selling a lot of unused toys and items around the house on ebay.

Currently, I’m saving quite a bit. I see only less than 50% of my paycheck after taxes, deductions and retirement contribution. I think this made me spend less than what I earn since I don’t see the money to begin with. I put in 10% into my 401K, ermm 201K and 15% into the ESPP program. The 401K is not very healthy due to the current market conditions. The proceeds from the ESPP program are usually reinvested in stock investments and Roth IRA. Sometimes, I send money home (overseas) and build up my travel allowance.

Plotting the course

Photo credit: nicora

I love Mark’s “3 Years To [Insert investment activity of choice: Real-Estate; Stock Investing; Small Business; Online Business; etc.] success …” concept. I recommend that he trademarks it and – at an absolute minimum – registers some domain names now … such domain registrations to last at least 3 years, of course

Mark’s idea turns each ‘learning exercise’ into a future information product …

AJC uses the mountain as the analogy on how steep or difficult it is to reach our number. The number to me is a first step in deciding the destination. I’m not evaluating how difficult or how easy yet but it is an important first step. Having the number is like having the treasure map, it tells you where to go. There can be many routes to ‘X’ but we have to choose carefully. There can be quick routes or short cuts but there are more interesting routes as well that will give you the experience that you need.

Now that I have a destination, how do I get to ‘X’?

In my original application back in April, I mentioned that I was contemplating joining an MBA program part-time to move forward career wise. I did quite a lot of research for a couple of years, right after I completed a part-time Masters program. I may sound like a serial paper chaser but I do find that it is not exactly what I wanted. After meeting a few successful entrepreneurs and reading about them, I got motivated to start a business or several businesses. Instead of getting an MBA, why not start a business and learn from it? Learning from the school of Hard Knocks could potentially produce better results and may cost less. Don’t get me wrong, an MBA program can be good because they are structured to teach various important subjects. Most importantly, you have to finish the program within a predetermined time frame.

I have quite a variety of interests and have invested in programs and seminars on self improvement, real estate, stocks and options. My main idea is to create a time-bound program to explore these various areas. For example, setting a time frame of 3 years to learn and apply specific real estate investing techniques or learning and investing in stock options successfully. The grand plan is to create many 3 year programs that people from all walks of life can follow and apply to be successful. These programs will be available as services that can be sold and marketed in various forms. I view these programs as an alternative to the regular MBA program. No degrees will be conferred but the experience gained will be as valuable if not more.

Fast forward to the present situation, according to Michael Masterson, I will need, “Real-Estate together with Stocks and Small Businesses”, to achieve the 40% Annual Compounded Growth Rate needed to reach the number.  That is almost exactly what I’ll be doing in the next few years.

In the area of real estate, I’m going to start investing in Tax Liens in a few targeted states. The goal is to make profit from these investments and also to hold a few properties as income producing assets. The main benefit from this activity is that it is not a year round effort since tax lien auctions are held periodically depending on which state you are investing in. The low periods can be used to pursue other activities like investing in stocks and stock options. For income producing properties, the management should be off loaded to property management company. All these activities will be recorded and organized so that I can create the various 3 year programs that can be sold as services.

]]> http://7m7y.com/2008/11/21/plotting-the-course/feed/ 0