Merrick, I am glad u took my comments as intended. Honestly, I dont see the sense in investing in something for my business that is not gonna produce income for me. Peoplenet, IMO may be a valuable tool that gives you piece of mind, but I dont see you recovering the initial and monthly costs of operating with it. I think you have good business sense in general, but I do not think you realize the thin profit margins in which your truck is operating in. How much are u predicting to profit yearly on this one truck operation? How many years will it take u to recover your initial upstart costs of this operation? I'm pulling for ya man, but i think you are way too optimistic in this venture. I have been around trucks way too long to have as much confidence as you do in this. I do wish you luck though.

Does the driver you have mind staying out a long time? If he doesn't mind you'll do ok. It's the guys that don't mind going all over and waiting every now and then that will make you money. Some will have a concept of what you are trying to do and others could give a hoot. Hopefully you've got yourself a good driver. Only time will tell.

I meet a fellow the other day who has a couple of trucks, and he rents them out. One is rented to his brother-in-law who pays him rent on the tractor and trailer. Then he finds his brother-in-law loads and skims off them.

I drove him to pick up a trailer from TRL in PA as they have almost sold off all of their trailers & trucks. They were a 400 truck plus company and sold their building to Prime, and liquidated all their assets.
He was buying 4 more trailers to rent them out to other drivers.

I'm rambling, I don't stay up late. Time for me to go to bed. My wife had one of those Jewlery partys. Bunch of laughing noisey women in the house. :shock: Did I spell that stuff right? zzzzz......

Well I will be drawing some heat on this I'm sure but to be honest I don't have a specific number I plan on making. You know a lot of this is just putting one step forward and moving on.

Recently, I don't know if I mentioned it already, when I was talking with the guy from the brokerage who has been wildy successful in life, he even mentioned that if someone needs something their rule is to say yes and then figure out how to get it done. He mentioned a lot of it is just moving forward.

While I think it would be a lot smarter if I could answer my profit projections, I think if everyone did that a lot of people wouldn't be doing what they are doing. I think when all is said and done, when a lot of people (and I don't mean this in trucking, but just in general) look back at what they've done they probably think, "man that was crazy, I can't believe I did that". Either you will be successful and you will be glad you did, or you wail fail and then pick up and move on.

As to how long til I recover my initial investment, to be honest I have put very little money into this. Almost everything I have done is borrowing other people's money (credit cards) at 0% interest. Then I just pay back it all with the money from the truck. Even the People Net, I just got a bunch more credit so this stuff cost me 0 of my own money. I am responsible of paying it back, but like I said I try and do that with the truck.

Thanks again for your comments though, and I appreciatae your goodwill.

Sideman, definitely staying out is one thing I have been putting emphasis on, if they say they need to be home every couple of weeks, then I just tell them that I won't be able to do that. The guy I am going to finally put in my truck, just got divorced and has no place of his own.

Interesting about that TRL thing, I mean 400 trucks and they were out. I looked it up real quick and it looks like they sold their building for 6 million.

I'll say one thing, even just from looing into my friends stuff, if you use the business as a personal ATM you will be ill prepared for the bad times like we are seeing now. The same silly parable we heard as kids about the squirrel who saves for winter and the other that doesn't is just as true today has it always has been and always will be.

Day one in the brokerage. My head was spinning. I spent the day in the intermodal division. Man you can haul stuff cheap on a train. They were sending stuff from New York to Miami for like $1.35 a mile. From Ohio to Miami was like $1.65 or less I think.

They have loads right now from Minnesota that need to go to Miami but I guess sometimes there are problems with getting the rail cars, but it's only $2000 on train and the trucks want are quoting $4,000 or so so they are waiting on a train.

I use to wonder where all those trucks pulling containers out of the port were going. I guess CSX offers Door to Door service. They pick it up, put it on a train and then deliver it to final. If you hold up the draytruck for more than an hour I think it was, CSX charges the broker $80.00 per hour.

People would call up for rates and they would just post the load and then when a truck would call they would then go back to the customer with that rate. I should note I was with one woman only, I don't know if they all do that. I was thinking that if a truck quotes too low they are only screwing themself.

Their goal is to make 15% at the end of the day. I saw some of the rates. They have a load they are trying to push to New Jersey from Ohio for like a little more than $2.00 a mile. But they were only making like $100 on that. I could see the customer rates and then what they were trying to get a carrier to move it for. Like I said was mostly on intermodal today, but it didn't seem like they were trying to make an insane profit on each load. I will maybe be in the truckload division tomorrow.

It was wierd looking at things from that end. The next couple of months are supposed to be good in Florida but for them the next couple of months is "bad". Kind of like learning "debit" and "credit" from an accounting point of view which is backwards from us.

As for stuff coming out of Florida, someone made a comment that fuel could go to $50 and they still will only be paying $1.00 a mile there. Apparently they have the freight cars that go back to Chicago for like $600. They will send them back empty if they have to, they never have enough cars in Chicago.

The lady I was with was calling and calling all day and nobody "bit". Seems like a lot to try and get someone to let you quote them. Then you have to have them fill out a credit application. You think they want to be filling out those things? All I can say is seems like a lot to get a new account.

Giving a quote on a intermodal load is pretty painless. You just email the rail yards for their rate and within a few minutes you have a quote. Then add your percentage and there you go.

I noticed that a lot of brokers offer up their loads so they end up being double brokered. The girl was telling me that they have too much to handle so broker them out. She didn't even bother with those; said they were too cheap.

Well that sums that up for now.

Didn't get so much info the second day at that place. It was an office environment which means it was just a job to most. I guess that's how offices are, people do what they are expected to do, no more no less. I don't look at any of this as a job.

Seems like a lot of these brokerages pay salary, which surprises me. You would think people would be more motivated if they were strictly commission. I don't know, but for me an office environment is stiffling. It just saps out any enthusiasm I might have. Probably a lot of us here and that's why we are in this industry.

I'll say one thing, I appreciate this dispatching a bit more now. I don't see how I did it while I was driving. While that truck is moving it takes a while to find a good load. I had it posted the other day, and the phone was blasting off the hook, also I was helping find loads for my friend and I was working on the factoring. I was missing the tranquility of the truck I have to say.

This factoring is a huge business; I had no idea. And I'm not talking just in trucking. I am trying to arrange one deal, and it's a bit confusing. This company in South America handles the logistics of exporting flowers. They only handle the logistics part, so they wouldn't be factoring the flowers just the logistics part. All I had to do was set up the interest than hand it over to the sales people. So I still don't know how it went.

But especially for people in countries where it's not so easy to get money from banks, this factoring is not too bad a deal. Especially since they do the credit checks and collecting for you.

As we are coming into season, I thought maybe I'll just rent a truck for a couple of months and take advantage of the season. I called Penske and based on 3,000 miles a week, they want about $900 a week. Not worth it.

I was actually thinking about getting another truck but since I paid for my insurance outright, I guess I couldn't get another one without paying outright too and and I can't just do a partial term. In June my year is up and then I should get much better rates.

Next week I should know if I will be an agent for this company to start brokering.

Today I went down into Miami and drove around the cargo section of the airport. I don't know, we take one load to the next, but there is so much going on. I saw a lot of those Foward Air trucks, Werner, a Covenant, plenty of flower distributors, freight forwarders, consolidators, warehousing. I wish I could understand everything that was going on.

Here was one place I saw www.kwe.com/ . Never saw them on the load boards :) I drive myself crazy trying to figure out everything. I don't know if I mentioned it previously, but one time my wife and I were walking in the Everglades and I was standing there and I realized that there were probably hundreds of different things around me, trees, plants, grasses, and I couldn't name one. So much around us goes on that we have no clue.

Anyway, my truck is heading back east. This guy is not bad, seems happy out there and he seems to know what he is doing. He likes the hand holding though; I told him I'm spoiling him cause when he gets back he's going with my friend and he'll be one of 15 instead of one of one.

Later I will put the numbers for his first week, exact mileage and fuel, and pay. So far it seems ok.

I always like reading this thread....Bump :)

Wow! Great story. Took me a few days to read it all but great insight.

Where is that Merrick, iced coffee drinker, short & sneaker wearing guy??

Still drinking iced coffee, still wearing shorts and sneakers, but actually had to dress up the other day as we went to a conference.

Still in trucking. Have 4 trucks now and am about to buy my fifth probably this week. Thank goodness all is well and really if I could, I'd buy another 4 trucks but it's hard to get the financing now.

I believe I have a pretty good system in place and could really run a lot of trucks.

I'll say one thing though, as anybody who has read through all of this knows that I'm nothing but honest, I really hate this business. Let me clarify, I like seeking out new work, I like dealing with the people on the phones; I like buisiness development but all our hard work is in the hands of the drivers. Well the drivers are the ones doing the actual work ,but I mean if they decide to stop the truck and deviate from the route or go 100 miles out of the way all the work of getting new customers goes out the window

Thankfully I don't really have any horror stories and I stay on top of everthing, but I have no problem firing people.

Really one could lose their a** real quick in this business if you don't stay on top of things. I have no idea how anybody has trucks and drivers and no GPS system in place to track the trucks.

Also I was bending over backwards with these drivers trying to make them happy; people take advantage of that and a lot of what I was doing I have now stopped.

Don't get me wrong, I have some really good drivers and I appreciate them and they all seem real pleased. But they know I am watching.

I now have my wife helping with the paperwork which I was real bad at. The paperwork in this business just doesn't stop.

But all in all, I must say I'm excited about the future and really think I can do well in this business.

I am glad to hear that you are still doing well, merrick. You are right about drivers. They can make or break your business. I could tell you some real horror stories.

Man it's like I wrote this LOL. Your GPS is with Transcore IIRC?

Good to hear from you. I figured you were still out there.
If I was driving for you I would buy you an Iced coffee machine to get on your good side.

Truly amazing, how a person that know's very little about trucking, can be so succesful. It just show's with hard work and determination anything can be accomplished. All the best, Merrick!!

I appreciate the kind words, sorry Sideman no iced coffed machine for me; Mcdonalds iced coffee is all I drink.

Rank, the system I use is Peoplenet PeopleNet | Fleet Tracking Management

As mentioned, I don't know how anybody in this business and running a few trucks doesn't have a system like this in place. Out of route miles is a killer and I like I can check where everyone is 24 hours a day.

Ended up buying the 5th truck. Great deals out there now that's for sure.

By the way, I'm an agent for a factoring company if anyone needs any info just PM me. If you don't use it better (I don't factor) but if you need it, I can get you a percentage back.

I just read today that Wabash Trailer might put themselves up for sale; I have 3 of their trailer all 2008 and was about to buy another one. Lots of giants falling in this whole mess.

Yep....I have horror stories from both ends of the spectrum...

Well as I sit here enjoying the sun down here in South Florida, I have to reflect how did I get into this business of trucking.

Just an update, I have 5 trucks right now running out there. Small by most fleet standards, but was it really just 18 months ago I was driving my own truck out there? I read through some of this thread, and it really is amazing how little I knew or naive I was getting into this. This business is without a doubt not for the faint of heart.

Don't get me wrong, trucks payments are made, driver payroll is done, I'm not factoring my invoices (though I am considering it for other reasons) and all trucks are out there moving. Two coming back from California right now and two more on the way out. I love sending them on those long ones as I don't need to be looking for loads every single day which is not easy in this environment.

As I have mentioned before I run my trucks with those of my friends so basically we are running 22 (he had an O/O whose reefer broke and they are done.).

Actually the more trucks there is, it seems to make things easier. It makes it easier to recover loads if a truck breaks down, it makes it easier to pre-book and finally it makes it easier to sell your services. Greater capacity that is. It funny I think somewhere in the beginning of this thread I asked what capacity was. Again it's amazing how little I really new (not that I'm Mr. Know it All now)

I never really had the accounting done properly but now my wife has it all under control. It was ugly there for a while. I remember I had at one time $19,000 of billing that I just had sitting there waiting to get done. I wouldn't bill for weeks. This business generates a tremendous amount of paperwork. I think they have things like electronic billing but I'm not there yet. I'd have to say the easiest people to deal with as far as billing is JB Hunt. Don't do much with them but just email the bills then that's it. TQL is on the email things now too. Don't do much with them either though.

I did end up setting myself up as an agent for a large brokerage but I haven't done much with that. I feel much more comfortable selling the trucks than selling brokering service. A lot of people don't want to seem to deal with brokers. Of course the reality seems that brokers end up with it all, but all I can say from my personal experience, when I call they tell me they don't want to deal with brokers.

Of course you have companies like Classic Carriers who go in and sell their trucking service then turn around and broker it out. Actually a lot of companies do that.

Also as mentioned I believe before, I have set myself up as an agent for a few different factoring companies. Actually that I like doing. You either need it or you don't but like health insurance or auto insurance, you may not need all of it. That is There are little things and fees that can be added or deleted from the contract that could really cost someone. So I read those details over and make sure people aren't getting screwed.

Anway back to the trucks, one good thing about running the trucks with my friend is I see his operation. His was never really set up right, he has a bunch of new trucks with massive payments. His accounting is still not being done right. He has massive overhead. Basically it is one big lesson on what not to do. I have been reading a lot of Chris1's posts here. I don't think he was here before but he seems very knowledgeable on this business. I think in a recent post he mentioned that you should be able to run new equipment. I don't know, I have 5 trucks and really the payments are about equall to one of my friends new truck. ( did pay down a bunch on the first two before the prices of equipment dropped and now they are cheap to buy). Really seems like his new trucks break down more than my Freightliners. As of yet I do not see how to make money with $2,000+ payments.

Also I have learned of one big trick in this business. You are making money, you have a ton of money owed to you so you think you are doing great, and then a breakdown happens and you put it on a personal credit card. You figure you will pay it back in time. This happens over and over, whether it's paying for repairs, paying the down payments on plates and insurance or buying new equipment. You never seem to pay it back as there is always another thing to do.

My friend is steeped in debt. In truth I am too, but the last few pieces of equipment I bought were with cash. I will no longer feed the business with personal money. The money is supposed to go from the business to the personal not the other way around.

I had to put the plates and down payment on the insurance on a credit card this year. I bought too much equipment too fast that I wasn't prepared for those expenses. It cost a lot of money to run these trucks every day. But I opened another account at the bank and every week I put aside money for next year.

As for the freight out there, well we do keep the trucks moving. I secured a big account that has really kept us busy. Actually we had another one out of Florida but that seems to be winding down, but it realy was good while it lasted. Considering we are in the worst environment for trucking in our lifetime, I guess we are doing ok. Of course I am impatient by nature and and always am thinking that I need to be doing better.

I think it could get pretty good if this economy ever turns around. Just think, my friend a couple years ago, got one million dollars of equipment with just his signature from GE. Now he can't even get a $12,000 trailer. He may be in debt but truck payments are always made on time. I wonder how many other people have their access to capital restricted as well? Must be tens of thousands. What happens when it turns around and their is not enough capacity?

I have read that a lot of trucks parked are now gone and sold to foreign countries. Those trucks are gone forever. However I have also read that a lot of the trucks are just parked or mothballed as they say. JB Hunt, Werner etc have had massive reduction in fleet size. Who know really knows the truth.

The trick of course in life is to have multiple streams of income. Someone on this board, has been buying houses with the money he makes from his trucks. I think he's from Alabama. Now would be a good time to be doing that as houses prices have dropped quite a bit.

So as I look toward the future, not sure how many more trucks I am going to get, I will buy more I'm sure. This is why I am now considering to start factoring myself. Banks aren't going to lend me much more. I usually have between $50,000 or $70,000 owed to me on the street. (I have never been beaten on a load, once. Check credit, check credit, check credit before you haul anything.) If I could pull all that money in at once I could buy more equipment.

Wow, great thread. I was wondering something toay. Is it crazy to maintain my current job with Sysco, buy a truck, and hire a driver to run it OTR?

It is difficult to make money with one truck and a driver, especially when you are not around to keep a check on things and keep him moving. Finding decent paying loads is a full time job in itself, especially with this economy. If you plan on buying a truck I would suggest you drive it for a while yourself before putting a driver in it. There are two things working against you with drivers in your truck. The economy and drivers. With the down economy rates are low. There are a lot of drivers who will not take care of your equipment. Some will steal from you. Finding a good driver is a challenge, regardless of the size of your company. You will learn much when you drive your own truck for a while. You will also be able to check it's general condition and the fuel mileage. Some drivers are dumb enough to sell your fuel. It is so easy to catch them. But you are still out the money and inconvenience. Unless you drive the truck yourself it will be difficult to make any money with it. In order to make money having drivers you need to have several trucks and play your averages.

Thanks for the advice GMAN, you the man.

Thanks for the update merrick, sounds like you really jumped in the business and are learning a lot. Don't be a stranger. :)

Now if we could just get you to cut back on the iced coffees and relax a little bit, you'd be golden.

The guys I talk to seem to indicate it's best to either have one truck and work at it full time yourself, or have 5-6 trucks and come off the road to take care of them and all the paperwork.

Hey, I'm in your neck of the woods. Mclane in Kissimmee. I live in GA now. Trying to bid on local lanes.

I like running into FL., but I won't come here unless I book something leaving here beforehand.

Good to hear from you.

Sidman...did you end up selling that nice lookin Int'l or keep it for your new adventures down in dixie?

I,m still running it. I did not expect to sell it. Just settling in here in Fayetteville, GA. I go home to much to cut the lawn. Got to get my ass in gear and actually do some running. I,m looking for a reefer to run some local frozen. May rent one for now. I included the rent in my bid for the run.

Put deposit down on another unit. This will bring me up to six. I think I am going to have to start factoring though. I truly dread it but I see no other way to grow. These banks won't lend. Drivers are plenty, we keep the trucks loaded; it's just a shortage of equipment now.

I just got today a bid sheet for a lot of lanes but they want dropped trailers. I never know how to bid these things either.

The past two weeks have been expensive, a new clutch on the road ($1700) New brakes on truck and trailer, air bags went on truck as U bolts shifted (2nd time this has happened now [not on same truck]). My friend had a worse one though, one truck has been in the shop for about 5 days now, had an exhaust leak or something and they were going to try and nurse it home. It burnt the clutch, engine harness, and all other types of stuff (I still don't understand mechanics too well, and quite frankly don't want to. I hate it)


I was talking to one of the companies I am an agent for factoring. There is a company that is looking to do $4,000,000 a month. Imagine that and I dread $50,000 or so. But the bank I guess who has the liens on the equipment also has a lien on their receivables and they won't let it go. I don't know who they are but I don't think they are going to make it. He was telling me that a lot of people now calling but are too far gone.

Seems like for those of us that hang in there, things might turn out all right. I have come to the conclusion that there has to be better ways to make money than trucking though, but I'm in it for now at least.

A friend of mine told me about an article that he read in Truckers News concerning banks and lending. According to the article some banks have eased their lending and made loans to marginal carriers which has prolonged the inevitable failure. Had they not made those loans many of them would likely have gone out of business. Some of the debt free carriers are setting back and waiting until these marginal carriers falter so that they can take advantage of the situation. Once capacity diminishes rates will come up. When you have owner operators and carriers taking anything that comes along then rates are going to take a nose dive or sit flat.

I read that article GMAN. But banks are only going to let that go on for so long and forget about trying to get new equipment now with bad credit.

I forgot there was something else I learned yesterday, CH Robinson is now clamping down on those that may have five trucks for example and are only paying insurance on one.

Or those that have one truck registered but somehow are doing a million dollars in revenue (double brokering)

I also read some where recently that the government was going to start clamping down on companies that get whacked with safety fines but just shut down and open under another name

here is the article
The Associated Press: GAO: Unsafe truck, bus operators still on highways

Capacity is going to get tighter and tighter. Maybe not today, maybe not tomorrow but it is going to happen.

I am not sure how CH Robinson would know if someone had one or fifty trucks insured unless they spoke directly with the insurance company. In any case, under current laws the insurance company would be liable for any claims, regardless of whether it was insured or not. Of course, they would then come after the carrier who failed to add any additional trucks. It could get ugly. It would help if insurance companies would lower rates. I was able to get a reduction in rates but they wanted to hit me with a 25% rate increase this year after a 30% last year. There was no reason for such increases other than greed. I had no one with tickets, accidents or cargo claims. They went up due to driver turnover. I would not want to get a truck out on the road without having adequate insurance coverage. I can understand why some might push the envelope and take a chance, but they are risking a lot.

I think it would be a good idea to clamp down on carriers who shut down and reopen under another name to avoid fines, etc., I am just not sure how they would enforce it. They could open under another corporate name and essentially it would be a new company. The only way they could accomplish this is to track ownership, and that is no guarantee that it could not happen.

I think for the insurance, not sure but they are going by what Safer Web has for units then maybe asking for proof of insurance.

I don't know but a lot of shiftiness in this business and the more they weed it out the better. Hard to compete with trucks that are running without insurance payments etc.

Kind of like those companies that lease on people; they are making more money off the drivers than the freight.

I had a guy leave me about a month or so ago as he wanted to own his own truck. Calls me more than you can believe waiting for a spot to open up to come back.

I am not sure there are a lot of people who don't have insurance on their fleet. I would not be surprised if there were some, however.

Any company that relies on the banks line of credit to survive probably should not be in the buisiness if they would go out of it if that bank cuts them off.

that is why Heartland Express, Werner Enterprises and Crete Carriers will never go out of buisiness as their balance sheets are very strong even in todays market conditions. Knight transportation as wee i might add..

Not sure if the above companies have lines of credit, I'm sure they do, but nonetheless Werner, Heartland, Knight also sold part of the company to the public which I'm sure is in part why they have plenty of cash.

Crete is not a public company so I don't know what their balance sheet looks like.

One final note, a company may not need a LOC to survive but they may need it to grow. You can't grow without capital. Right now it is extremely hard to obtain capital.

I think it's much less stressful just to run one truck and do everything yourself, especially if you don't have to do too many miles. I'd do 1,000 miles a week - just for fun - while investing money into triplex and fourplex multi-family buildings for extra cashflow. I know that if I live in one unit and rent out the rest, getting the loan is relatively easy. The beauty of real estate is 1) it's passive income - you don't need a GPS to track your 'investment' 2) you can write off depreciation from every building against your trucking income resulting in very little income tax (if any). I have one rental apartment right now and getting $925 a month like clockwork feels pretty good (rented out my 1 bedroom condo to a couple of young professionals in Guelph, ON, Canada). I email them a rental invoice 10 days before it's due and they send me the money a week later by Interac email which I deposit electronically into my bank account. I don't remember last time I met with them face to face :)

You've got that right Tracer. I agree with you 100%. However there are no triplexes down here in South Florida and the ones they had where I'm from (New England), well not the most desirable tenants.
But seriously, I don't know about up there, but down here if you had cash you could buy at prices that are unbelievable.

I said it above, trucking is definitely not the best way to make money in life. You know somewhere in this thread I mentioned a place down here called Carrier Service. They handle all the IFTA and permits and stuff. Family owned business since the 50's I think. I was talking to the owner's son the other day and I asked if he could name me one person that he has know to get rich in this business. He couldn't name one person. He felt people did better before deregulation.

I have no idea about that so I won't comment on that. But my partner always says that the only time you make money is when you cash out and sell the equipment (now is not that time obvioulsy). I told another friend of mine that who use to own a trucking company even before deregulation (he hauled horses from New England to Florida) that same comment about only making money when you sell and he laughed and agreed.

What all the old timers tell me, that you can make a comfortable living with this. I have been very fortunate in a way. I work in partnership with people that have skills I don't have. The in house mechanic has saved me a fortune. This guy is good too. I mean a whiz with electrical stuff.

I have obtained fuel discounts kind of like Rev use to say he got with that company he was leased on to. I use to wonder if he was telling the truth with those discounts, but I can log in now and check on that stuff. To be honest I wasn't supposed to get them, but I pushed for it and had a few email saved from some sales people who promised me things they weren't supposed to. I'm saving about $1,000 a month now currently.

And let's be honest, this is the worst trucking environment in our lifetime, is anyone really making money right now? But nonetheless the last few months I have bought a truck and trailer cash (2006 freighliner for $34,000 and a 2006 Utility reefer for $34500 with 4000 hours on it) The trailer wasn't such a deal but I needed a trailer.

Anway back to the real estate, I agree it's a better source of income. Depends on a lot of things though cause you can lose your rear in that to. In the state I'm from, people can stop paying rent and they will be there forever while you go through the courts. Here in Florida is another story, their stuff will be on the lawn faster then I think they realize.

Well nothing in life comes easy anway

One of my favorite books is a tiny 100 page volume first published in 1929. It's called "The Richest man in Babylon". Here's an interesting quote from this book: "A man's wealth is not in the coins he carries in his purse; it is the income he builds, the golden stream that continually flows into his purse and keeps it always bulging". -Arkad, The Richest Man of Babylon

Real estate seems a good way to create such an income...

Another book that I like is called "Multi-Family Millions" by former BROKE landscaper David Lindahl who started investing into triplexes and fourplexes in US. His first property that he bought with $0 down was 'cashflowing' at $972/mo (that's net profit!). At the end of Year 1 he owned ... 11 properties getting $11,000 a month. I believe he used a property management company to take care of the day to day operations.

I have quite a few of real estate books in my truck... I'm not saying getting started is easy but as "Rich Dad" used to say, "Buy assets; avoid liabilities" :) No matter how you look at it; when you're buying real estate you're getting an APPRECIATING asset, often at a discount. When you're buying a truck, you're getting a RAPIDLY DEPRECIATING asset.

If I had 50 grand to spare, I'd buy a $500,000 multi-family building and hire a property manager to take care of the headaches with tenants. Something like this: MultiFamily

Speaking as a real estate agent/investor, now is not the time to do this. First, loans for small investment properties are nearly impossible to get. Second, rents are plummeting. I just had to reduce most of mine. Third, because of the first two factors, values are declining. Fourth, because tenants are having such difficult times financially, landlords are faced with high numbers of evictions.

I have evicted two tenants in the past month. Both left the units totally trashed. The fist ones unit was all brand new, gutted to the studs and totally re-habbed before they moved in just over a year ago. The cleaning bill was $600 after I spent most of a day getting the big stuff out. I think I'm going to repaint the whole thing and depending on how much carpet I replace that will be $700-$1500 more. I have a money judgment against the tenant for over $2000, which does not include any damages for the condition the unit was left in, but she is contesting the wage garnishment. I'm not sure it's worth seeking a judgment for the damages.

The second one is even worse. By the time I'm done with cleaning, carpets, sheetrock damage, window coverings, new paint, whatever else I find that's damaged, I could be into this one for $4-5,000. Not counting the loss of revenue while I do all the work, not counting the cost of finding and screening a new tenant to rent the place to at a new, lower price. I'm spending my Sunday taking pics and de-grunging the place when I would rather be riding my motorcycle.

When I hear people talking about how easy it is to make money with income properties it reminds me a lot of people talking about buying a truck. I've owned/managed properties since 1990. I'm a licensed real estate agent and a Certified California Residential Property Manager. It's not that easy. If you don't comply with the Fair Housing Law you can get in big trouble. If you don't budget correctly, if you don't watch every aspect of your business you can still lose, especially in an economy such as we have now.

Maybe you should try renting to businesses instead of people. I mean - get a warehouse or an office building and then rent them out. It seems to me businesses would be more motivated to be good tenants, especially if they pay most expenses. I used to be a real estate broker in Moscow, Russia and made some good money by renting office space to U.S. business people who were opening offices in Moscow.

Commercial/Industrial? In this economy?

I want to meet your connection- you're smoking way better stuff than I can find.

There are pros and cons to any business. In a poor economy the most important thing people can do is to survive. I think that is where most people are at this point.