How To Earn Extra Money

This is the Frequently Asked Questions page for the Work From Home Cookbook program.

1. What is Work From Home Cookbook?

WorkFromHomeCookbook.com is a sister site to How To Earn that provides detailed instructions in the form of checklists, videos, etc. (aka, "recipes") for making money working from home.

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One of the biggest challenges with exploring alternative ways of making a living is knowing how different decisions will impact your finances for the long haul. While formal classroom education, seminars, home study courses, and books are all a wealth of knowledge, actually getting out and applying that knowledge is really the only way to obtain the wisdom and experience that comes from being in the trenches.

Most people are probably familiar with the game Monopoly. They're probably also familiar with the stark differences between the game and the realities of life. It's incredibly difficult for a game or simulation of any sort to match what happens in real life. Some attempts are much better than others, and the free online simulator at Learn To Be Rich is definitely one of the better options out there.

LearnToBeRich.com is currently absolutely free. All you have to do is register for the game, and a password will be sent to you. Once you're in the game, the array of options that you're presented with can be somewhat daunting, so take the time to read through the options and read the tips that are on the screen during each turn, it really does help.

Every time you play the game, you are lead through the complete working life of your character. Each turn of the game corresponds to one month of real life. During each turn, you are free to take one of many, many different actions relating to your overall financial picture. For example, you can choose to focus on your career and try to get a raise, you can meet with a stock broker to look at potential stocks to buy, and you can start businesses. Every action you take has certain risks and rewards that correspond to the risks and rewards of the similar actions in real life.

The overall purpose of the game is to allow you to see the results of your financial decisions over an entire 45 year working life. The game throws in things that do happen in real life, such as the surprise stock that takes off like a rocket or the rapid increase in operating expenses for a particular business. The game models an amazing array of factors, including inflation, individual industry sector performances, housing trends, cost of living raises, marketing performance, and much more. All of these factors are based on real life historical performance and trending of the actual variable, along with the occasional random surprise factor thrown in to reflect the reality of booms, busts, good times, and tough times economically.

A recently added feature to the game is the ability to see where you stack up against other active players. You can compare ranking for bank account balances, real estate portfolio performance, net worth, and more.

The game was developed by James Orr, a professional real estate investor and Internet entrepreneur. The amazing part is that James is actually one of those rare guys that practices what he preaches, rather than just riding the seminar and infomercial circuit. James has built a sizable portfolio of rental properties, and has operated a number of very successful online ventures. The game is something that he does as a hobby to teach others the things that he's learned the hard way. He recognizes a severe lack of financial education out there, and he says, "You can learn a lot by modeling life and making your mistakes in a game rather than in real life with real money."

I would agree with his statement wholeheartedly, and this game is the best effort I've seen at providing an environment for learning this way. To check out the game for yourself, just visit http://LearnToBeRich.com.

Until next time,

Jassen Bowman

In any job, there are things that you’re going to like and things that you’re not going to like. Now that I have accepted the fact, for the time being, that real estate is what I “do” and that I currently have no backup plan (which drives me nuts), I have begun the process of ramping up my activity level.

With that increase in activity comes some interesting dynamics. It’s one thing to mail out a few offers or just sign a contract when James Orr sends it over to me on a partner deal. It’s an entirely different thing to be looking at a mailing list of over 2200 people that I am going to mail marketing pieces to this week and face the prospect of actually talking to 10-20 people that are in some sort of bind that requires them to sell their house.

I like doing marketing, I like talking to folks, I like trying to help people out. And I *LOVE* (there’s that word again!) running the numbers. I love seeing how I could possibly make a deal work by running different financing scenarios and using different creative strategies. But here’s what I don’t like: Trying to convince people that , in fact, this is how I would have to structure the deal.

See, the problem is that in a lot of markets, homes are overpriced to the point that what you can collect in monthly rent is insufficient to pay for the property. A lot of investors don’t have a problem with negative cash flow on a property because they’ve been taught over recent that it’s OK - the rapid appreciation will make you your money back. That’s NOT the right way to do it. That’s like buying stock in a corporation and, instead of receiving quarterly dividends, you pay THEM extra money every quarter so that they can balance the books and get out of the red.

So, trying to to convince people that their house is only worth a certain amount because that’s literally all that the house itself can support based on market rents is something I don’t relish. James loves the negotiating and the selling aspect of this business - I definitely do not.

Here are some examples. A property in Florida that I’m working on buying, with James as a partner, is worth about $90,000. The initial contract was for a $62,000 purchase price, but I balked at the $6,000 wholesaler fee (basically a commission to the person that found the house). So, instead of countering with the $58,000 I was willing to pay, James made up a number: $53,750, and countered with that. It was flat out rejected. To him, that’s just part of the fun and games, but for me, it’s embarassing to make THAT lowball of an offer.

In Provo, Utah, properties within the 3 mile radius around BYU command a slight premium on their price, and here’s why. The norm for student housing in that area is 2 people to a bedroom, so there are often 6 people in a house, or eve 12 people if it’s a legally zoned up/down duplex. Here in Fort Collins, that sort of thing doesn’t fly very well, but in Provo it does. So, with each student paying, for example, $250/mo, that 3 bed/2 bath house is now collecting $1500/mo rent for 8 months a year. Vacancies during the summer are high, but average annual rents are still high enough to bolster the value of that property in the minds of investors when calculating value based on income. But, the value is inflated, because the exact same house outside of the BYU approved housing radius boundary will literally be 20-30% LESS in fair market value. It’s insanity!

As I ramp up my marketing and aim for the goal of doing one or two deals a month, every month, I’m hoping that the volume of activity will itself get me to the point where I am comfortable presenting offers and negotiating with sellers. I’m also hoping that the self-imposed pressure of trying to make a deal work out will go away, just because I’ll have more options to choose from and can afford to be more picky.