The Beginning...

Like many new investors we didn’t know how to get started. A little bit of background to give you context for our story. My business partner and I, both graduated with a degree in Entrepreneurship and were both heavily involved in the Collegiate Entrepreneurs Organization. With a mountain of student loan debt and the job market at an all-time low, we should have just been happy to have jobs. For better or for worse, we are wired to think bigger. As entrepreneurs at heart, we began months of phone calls trying to figure out what our big idea was going to be. Every phone call seemed to end with more confusion but with a reoccurring question: What about real estate?

At the time I was working as a management trainee for a large national bank in Cincinnati. My primary role was selling bank services to small business owners. A trend began to emerge. My wealthiest business customers were in the real estate business in some form or fashion. Weather it was a commercial warehouse or 20-unit apartment building, these were the guys with the money. My father owned rental properties while I was growing up. He ingrained in me that rentals were a good investment for the long term. My father once told (he read from a book) if you owned twenty 4-family buildings you could be a millionaire.I didn’t know what that meant but it sounded attainable.

So there it was. Real estate. How we were going to make our fortune. With the decision made we did what any entrepreneur would do. No not research or finding a mentor… We created a name, filed an LLC, designed a logo, and added up every dollar that we had. I was in banking so of course I knew where to go to the loan, or so I thought. So with every penny that we had we could afford a down payment on a low-income property but that wasn’t going to cut it. We quickly learned that the bank wanted to see 6-months of reserves and would need both of our wives one the loan to get below 45% debt to income. Remember the mountain of student loan debt that was killing our DTI. So we decided we would work on getting our numbers in-line. So we paid off car loans, refinanced homes, switched jobs, took promotions and let another year slip away. Realizing all that time and work would get us a property but then what. One buy and hold property wouldn’t do much to grow our business. Not the way we wanted. So it was back to the drawing board. May be wholesaling was the answer. More on that next time...