What I’ve Learned Since Buying My First (Maggot-Infested) Property 10 Years Ago
I remember one of the first properties I bought nearly 10 years ago. It was such a dog. It was a turn-of-the-20th-Century home that had been turned into a duplex. It was large and grand but needed a LOT of love. I mean seriously. It was terrible.
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When I walked into it the first time, I remember seeing things I couldn’t believe — remnants from tenants who had lived in it and were evicted. Their parting ways were obviously made for reality TV, as they literally put raw ground beef into the floor vents. There was ketchup and mustard on the walls and trash everywhere. The place literally smelled like a mix between a trash factory and rotting, pungent, smelly summer body odor. Not to mention the maggots. There were maggots, too.
But no matter how terrible the house was, no matter how bad she smelled, or what kind of a nightmare I had to deal with, I was in love with this house. And how could I possibly know? It was my first investment property — and actually, the first property period I’d ever bought.
During this deal, we encountered all sorts of issues — from a crazy business partner who would leave for days on end, to the guys who I ended up having work for me who came from the day laborer place down the street, to the guys who ended up renting it out, and sort-of-almost buying, then not buying, then moving out. The project involved stone foundation work, dealing with old wood floors, and creating functional space. We struggled with what to buy for rehab materials and what not to do during the renovation.
It was a wild ride. It was insanity. It was NOT how the deal was supposed to go. It was an education. And a train wreck. And a life experience. It was the start of my real world real-estate MBA — mainly the how-not-to section.
But this experience helped shape me. It toughened me. It made me fear getting into deals just a little bit. It taught me lessons financially, on how to do business deals with others, and just in having the right people on the right job working together.
Now more than ever, I spend time with new investors from all over who are interested in the same things: stability, cash flow, wealth building. That’s why we all got into this business in the first place I think. As I sit here finishing up a little time away from working crazy days, I am enjoying the trip down memory lane, thinking of these first few deals we bought. It’s amazing to think about all the effort, learning, and time it took to do those first few deals.
If you are a newbie reading this post, wondering what its going to be like, let me just tell you: You are preparing to get into all kinds of things you can’t even imagine. You might not be swinging a hammer. Or maybe you are doing all the work yourself. Today you might now know how to view a foundation for issues, but you better believe over time, life lessons and deals will teach you.
And just because you have funds sitting in your bank account doesn’t mean you should buy real estate, either. It just means you have the opportunity to do so.
Tim Ferriss’ podcast is one of my favorites, and one of the things he asks his interviewers is, “What advice would you give your 30-year-old self?” I’m not too many years past 30, but I think the exercise still works for us to think of the real, tangible lessons we’ve learned. And I want you to think on it for yourself, your family, and your business, too. Thinking of the deals we have done and the lessons we have learned, and wondering what would have been helpful for me when I was starting out is a worthwhile activity.
Be Ready For the Long Haul
It’s not a sprint. It might be today — to get to title, close on a deal, view a potential property, or pay for unexpected expenses — but investing is NOT a sprint. Be ready to ride the ride, and take the experiences and turn them into more and better deals.
The long-term investor is thinking about long-term wealth building, cash flow, the structure of their business, and how to best use their resources. Make sure you have really thought through what kind of business you want, and make sure you’ve created a real business plan outlining how you get there.
Build an Awesome Business You Enjoy
I can’t imagine doing what we do everyday if we didn’t enjoy it. I love looking at properties, doing deals, working through numbers, haggling, and negotiating. It’s so much fun for me. If these aren’t things you like to do, make sure you have people around you on your team who do like then. It’s important to enjoy what you’re doing.
Just think, "If I get up for the next __ years doing this job, am I ok with that?" If you aren't, you better be thinking about how you can change it. There are so many facets of real estate that you can get into, from being a real estate agent, inspector or wholesaler to being a turn key investor or flipper. Just because you are an inspector doesn't mean you can't be an amazing buy and hold investor. It just means you need the right team around you.
Roll, Build, and Do With the Best
This year my Kansas City Royals won the World Series in baseball. It was momentous for the fans, the city, the team — it was just awesome. The office staff, players, and coaches had spent years and years building an incredible system to grow talented and hard-working players into a world class championship-winning team.
Don’t sell yourself short. Winning doesn’t come by chance very often. And I’m not into the lottery. I am into having the best people on my team — people who care, who share similar values, and who get what I’m trying to accomplish (because I’ve laid it out, and understand it myself!).
As you approach each and every deal, don’t be afraid to run forward — but also allow yourself to look back to all those other places where you can draw experience, knowledge, and the wisdom of others.
Now go get those next deals!
Investors: What was YOUR very first deal? What are the most valuable lessons you’ve learned since then?
Let me know with a comment!