In the Beginning

I got turned on to real estate investing when I was house sitting during college in the mid '80s (yep, last millennium) for the parents' of a friend.  I found an REI course by Ed Beckley stuck in their den book case.  

I read it, copied it, applied the techniques and then quit.  Cold calling FSBOs seemed like an endless search for the elusive needle, aka "good deal." Didn't see that going anywhere fast.  And of course, it presupposed that I would have been able to identify a good deal if it bit me in the ass.  I couldn't and it didn't. 

Later during grad school, I got student loans that I didn't need, because they were interest free while I was in school and for 9 months thereafter.  Free money!  Who could resist?  Not me.  

At start of each semester, I stashed the cash in a money market account.  Huh? Why?  Because the interest rate was 16% or more at that time.   I made a bundle as passively as I possibly could.  

I left grad school sans degree (OK, I did cash in the credits for a second BS degree--I'm full of BS).  But I had $24k in the bank, "only" owed $16k in student loans (still payment & interest free) and a part-time, freelance job.  What lender wouldn't love that?  All of them, it turns out.

So with conventional loans out of reach, I looked for another path.  That's when I discovered "seller financing."  

My landlady had three rental houses, plus the duplexed house she and I lived in. I spent many hours sitting in her backroom off of her kitchen listening to her stories about my home town (Lexington, KY).  These stories when back to 1914, when her family moved to town.

Spending that time not only taught me a lot of real history of the area, but it also developed a trusting relationship with her.  So when I approached her to sell me some of her neglected rental house with seller financing, she was receptive. It didn't hurt that she was a tired landlord who was no longer able to manage or afford to maintain the properties. 

I bought two houses at one time, paying 10% down and getting 10% interest rate when the going rate was 12%-14%.  A year later I bought a third house and few years after that, I bought her home and she became my tenant.  I had jumped REI in a big way (for me). I had on the job training in restoring rundown houses and dealing with tenants.  

I also had to get a real job to help pay for it all, but more about that next time.