Kurt Cobain is a big deal.
If you are still lost, just trust me when I say that Kurt Cobain was, and is, a big deal.
As the front man of the 90′s grunge band “Nirvana,” Cobain led the group to over 75 million album sales worldwide, brought “grunge” music to the mainstream and earned the reputation of being the band that popularized alternative rock.
In short – Kurt Cobain changed rock music forever.
Tragically, Cobain’s life was cut short when he committed suicide in 1994, but his fame only grew as he became known as “the voice of a generation.” To quote journalist Eric Olsen of MSNBC,
“Cobain, a small, frail but handsome man in life, has become an abstract Generation X icon, viewed by many as the ‘last real rock star’ [. . .] a messiah and martyr whose every utterance has been plundered and parsed.”
However, before Nirvana and Kurt Cobain were household names, he was just another young kid from my town of Aberdeen, Washington.
Around the city today you can still see landmarks named after him, art projects dedicated to him, and everyone has a story of someone they knew who knew Kurt personally.
This is my story: I accidentally bought not just one but two of Kurt Cobain’s former homes and that’s not even why they are my favorite properties I own.
My First “Buy and Hold”
If you have been following me here on BiggerPockets or on my own blog you have probably heard how I began investing at just 21 years old with my first purchase – which turned into my first “flip.” After successfully selling that home, I decided to enter the world of real estate investing full time (after reading an article on BiggerPockets showing me that it was, indeed, possible to survive and prosper as a landlord).
It was the absolute height of the real estate market and prices were exceedingly high. I knew I wanted to find something for my new wife and I to live in that could also serve as an investment. Therefore, when “The Duplex” appeared on the MLS as a bank-owned property – I jumped at the chance to offer on it.
To be honest – I had no clue what I was doing and definitely didn’t realized that one shouldn’t buy an investment in the absolute height of the market.
I did, though, and The Duplex became my first “buy and hold” property.
“The Duplex” is two separate homes crammed together on one small lot. The front home has two bedrooms and one bathroom while the house in the back has just one bedroom and one bath. I purchased the property for $82,000.00, painted and installed carpet in both homes, and moved into the small one-bedroom home in the back while I moved tenants into the front house.
The rent of $650 for the two-bedroom home covered the entire mortgage – including insurance, taxes, and utilities. As long as the rent came in, my wife and I were living for free in our own home.
Flash Photography Not Permitted
Within several weeks of moving the tenants into the front house, they began to notice flashing light at random times coming through their front windows every few weeks. Soon, they began to notice that the flashes were people in cars driving by and taking pictures of the house.
I didn’t know what to make of the pictures, and we all just assumed it was someone from the county doing some kind of assessment. So we ignored it for over a year until finally the tenants figured out what was going on.
How? A van of European tourists asked for a tour of “The Cobain house.”
When I heard this, I set out to see if it were true. Had Kurt Cobain actually lived there?
What I discovered was that Kurt Cobain had actually lived in both homes. His parents lived in the small one-bedroom in back for the first several months of Cobain’s life and moved to the larger two-bedroom home for the next year or so. The Cobain family then moved on and forty years later I purchased the same duplex.
Pretty cool, but not the best part.
A Rock Star Investment
I love to tell this story – but not just because of the history. I love this story because of the investment I made:
- I purchased this home at the worst time to buy – at the height of the market – but I don’t mind.
- The home today is worth at least 25% less than I paid for it. Since I put nearly no money down, I am underwater – but I don’t mind.
- The home is located in a flood zone, which means I need to have two separate flood insurance policies on the property as well as two separate homeowner’s insurance policies – making my monthly payment more than 50% just insurance – but I don’t mind.
Why don’t I mind?
Because I bought it right.
The home produces positive cashflow each and every month. I knew that from the beginning. I made an investment that produced cashflow from day one with a fixed rate mortgage. I may have been a novice in regards to my investing at the time – but math never changes.
I’ve moved several times since living in that tiny house and now have two wonderful renters in this property who consistently pay their rent and take good care of the homes. If the market continued to decline and my property value plummeted even further – I don’t mind. I know the market will come back some day, and I bought with the end in mind. I don’t need to worry about how the local immediate economy is because I know that my payment will never change.
That is true investing. It’s not a huge gamble or risk but a calculated business decision based on sound principles.
Invest Like A Rock Star
If you are looking to buy an investment, I encourage you to buy it right. The prices in your area might be significantly different than the figures I talk about above (I live in a very low income, low cost, & low rent area – after all, it is the birthplace of grunge music) but don’t let that discourage you. Every market has good deals – it’s your job to find them.
Don’t simply hope that a property is going to work out – know that a property is going to work out. Do the math, create guidelines, plan for the worst, and then move forward.
You may not buy a home once inhabited by a baby rock star but if you buy right – you just might build more wealth than one.
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