How I went from 0-122 units mortgage free. My tips and secrets
I started off as a Police Officer at 22yrs old. While doing that I purchased my first home at 23yrs old. I bought a double home. Here in Cleveland that consists of an apartment on the bottom and an apartment above that. I rented the lower unit and it paid my mortgage. I was married by 24 with a child and my wife didn't work. So I would supplement my income by flipping cars. I took auto mechanics in school and after work I would throw transmissions in cars or what ever it took. Police work didn't pay well.
I then started managing bank owned properties. I made decent money doing so. While I was debt free. Lived for free. Car payment free I was able to focus all my money into purchasing real estate. Here are HUGE moves I made that help me get ahead.
- Your home is your biggest debt and will hold you back. If your serious sell it and purchase a home where you live rent free or mortgage free. A duplex or double.This a huge tip.
- Own a car that is paid off. Absolutely no car payment. In my opinion its second biggest expense that holds people back.
- Sell all of your toys. If your toys are payments definitely sell them. If they are paid off sell them and use the funds to some how forward you into real estate. SELL THEM
- I didn't go on vacation's for years. I mean it was years. Save the money from the vacations and apply it towards your real estate ventures.Take one maybe every 4 years. Once your successful you can make up the loss later. When you really can afford it. Now I take at least 3 a year.
- If you get a return from your tax's save or use that money towards your real estate ventures. I would get at times 7k tax returns. Instead of blowing I would use it for real estate.
- You better learn how to swing a hammer. Read a book on repairing homes. I knew nothing but I got to the point that I now have serious remodeling skills. You have to cut costs. If you only have one or a couple homes there's no reason you cant fix it .Believe it or not I finally parked my service truck 2yrs ago. I have a box truck with exterior service doors with materials inside that I can roll up on any repair site and fix it. I stopped doing repairs at 80 units. So if I can handle repairs on 80 units and a full time job you can do one or the couple properties. I now pay about 200k a year. But that includes complete rehabs. But you save huge money. I probably should of stopped 4 yrs ago with repairs but I enjoyed it. One last thing. Knowing how to do the repairs educates you on costs. It helps hugely when dealing with contractors
- Manage your own property. BUT READ YOUR LOCAL LANDLORD TENANT LAWS. I managed and still manage my own properties. At first I did it just me and my wife. It saves you a lot of money and you learn the system until you get big enough to farm it out. You should know the system.
- Go being realtors backs. If your interested in a property and your gut is saying the relator is holding up the deal. Find the owner and talk to him. About 7yrs ago mixed use loans were impossible to get in this area for properties under 500k. So we were in an owner financed time. If you had a building below that and you were looking to sell you were stuck. Or someone came with cash at a huge discounted price. I bought 6 apartment building. I owner financed all of them for 5yrs each. 4 of them had what I call a speed bump of a realtor. Negotiations weren't working. But I knew that all 4 owners were elderly. If they met me and had a conversation they would love me. I went behind the relators back and found all sellers. I pitched my offer and told them my story and they fell hook line and sinker. I've paid them off and I can remember one owner told me that I was heaven sent. Realtors can hold a deal back. If I didn't do that I would of never got those deals. I paid $385 for all 3 buildings. They appraise now for 1.6m.
- Be confident in yourself and your plan. My biggest critics were my family. Ignore all negativity. Stay focused.
- Find your motivation. Mine was Mother , wife and kids. My wife use to clean rooms at a hotel before we got married and my mother and I were very poor and she was in bad health. My ABSOLUTE FIRE was that my wife will never clean a room or do anything that I feel a queen shouldn't do. My mother I wanted to spoil and treat her to a better life than my abusive step father gave her.
- Work your *** off. People see where I'm at in life and think I inherited it or just tripped over my position in life. Boy that ticks me off . Now I work about 60hrs a week. I use to work 7 days a week 15 hrs days. Now I feel like 60hrs a week is slacking.
- Selection of your significant other if huge. If you marry someone that likes to spend your screwed. My wife is from a third world country. She is cheaper than me. I love it. You have to be on the same page and dedicated. My wife use to come to the house I was rehabbing with my kids, That was our family time. She would sweep while my young son would pick up trash. Id be hanging new kitchen cabinets or installing floors. My other two were barley walking and the other in a car seat.
- Know when to buy. Now for an entry level investor is hard. To me wait for these prices to fall. I happen to be blessed with timing and the recession was my best times. Prices are too high. If your not a big player. Sit back and wait. What goes up must come down. And Vic versa. Learn to follow Trends. Things can only go so high before they don't make sense. Know when to strike.
- Be frugal.
- Show integrity. It goes a long way.
I hope this information is useful. Good luck with your investments.