What were you doing when you were 14? I was at the mall — all day, every day. Or at school, thinking about being at the mall. I “worked” as a babysitter, making next to nothing that I promptly spent on clothes, shoes, candy, and other assorted nothingness.
The 14-year-old me would have made a terrible landlord.
THIS 14-year-old is a LOT different.
Perhaps you remember Willow’s story? It actually came out about 4 years ago. Somehow I missed it, but it’s so inspirational I wanted to share it with you again.
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Willow started off her real estate journey by trash picking. Maybe you are more familiar with its sister-term, dumpster diving. Either way, Willow would happen upon something at the curb, find value in it, and take it home with her to sell on Craigslist.
She would also scour the free Craigslist section to find items she thought had value, pick them up and resell those, too.
Keep it in the Family
Willow’s mom is a real estate agent, and they live in Florida. Back during the housing crash, Florida was ground zero. Foreclosures were rampant. As foreclosures picked up, Willow added trashing out abandoned homes to her list of ways to find things to sell.
Related: I Dropped Everything to Invest in Real Estate With My Significant Other: Here’s My Story
Willow’s mom worked with investors, and sometimes Willow went along for the ride. One house, about to be sold, was filled with nice furniture. “It was filled with all kinds of stuff! I was like, ‘I can sell this stuff if he’d want to let me have it,'” she said in an interview with National Public Radio.
That investor was probably all too happy to let her clean out his house for free — trashing out a home usually costs you money. Willow was happy to take things out of the house and sell for cash, so the arrangement was a win-win. Soon, she had a fairly steady income from selling things she removed from foreclosed homes.
Willow’s mother came home one day telling her father about a property she had found, a 2-bedroom house made out of concrete block. It was listed for $17,000, and she was considering buying it. Willow convinced her mom to go 50/50 on it at $12,000.
Her mom was a little surprised to discover that Willow had saved up around $6,000 from her trash picking, foreclosure clean-outs, and Craigslist finds. But she agreed to split the costs with Willow.
Favorable Market Conditions
The 2012 Florida housing market could be viewed in two different ways. On one hand, you have ridiculously low prices — trying to sell an owner-occupied home in that market was near impossible. On the other hand, picking up properties was ridiculously easy — so easy a 14-year-old could do it!
One man’s trash is another man’s treasure. Quite literally in this case when you consider how she funded her purchase.
Willow had extremely favorable market conditions. The property she purchased at $12,000 rents out for $700/month, putting it into the stratospheric 5.8% Rule. (The 1% rule is that monthly rent equals 1% of the purchase price.)
She purchased for such a low price that she paid cash. Her monthly obligations are pretty low, allowing her to learn how to be a landlord without much monetary risk. Yes, she is risking her life savings, but that’s still a relatively small amount.
A Landlord Times Two
Willow purchased her second home a few months later in 2012. She paid $17,000 for it, and then rolled up her sleeves and got to work.
Both of these homes needed work. A new kitchen, complete trash out — where I’m sure she sold anything that had value. But turnaround was quick, and the properties were rented easily.
Unfortunately, tenant issues happen to almost every landlord, and Willow was not the exception. Her first tenant skipped out in the middle of the night, leaving her sort of in the lurch. Again, she paid so little for it that she didn’t have a mortgage, and was making such a great return that this didn’t leave her in the lurch.
What’s Stopping You?
Real estate investing is so easy, a 14-year-old can do it. What’s stopping you from joining her?
When did you start investing? Do you plan on starting your kids out on the investing path as early as 14?
Let’s discuss in the comments section below!