As a young boy, I was lucky to have some great mentors. My grandmother is one of the best business teachers I’ve ever had and before I get too deep (which I will in future articles) into the financial analysis of real estate investing, mortgage financing, and other “on target” topics, I thought it best to tell you a little about me first. The easiest way to learn all about me (and real estate) is to get to know my Grandma.
So a story is in order…
Grandma told me once as a teenager when I pestering her to spill the beans how she made so much money, “Your grandfather and I never cleared more than $35,000 a year from the restaurant.” I didn’t believe her…and it must have shown on my face because then she said with out hesitation…and I’ll never forget it…almost as a whisper…
The words echoed through my head and I just stared at her. She smiled a little crack of a smile…and said it again…”real estate”.
A flood of questions began forming I simply had to get the answers too and over the years, I got them all…and I’m here to share them with you. So stay tuned.
But I am getting ahead of myself…you need a little back-story before we move on…the restaurant!
My grandmother owned a small restaurant in an Ozark Mountain town called Rogers, Arkansas. The town or the restaurant was not very remarkable. The restaurant opened everyday but Sunday at 4:30 am to serve breakfast to the early-rising working folk. The first in the door every morning was Sam Walton.
If you know your Wal-Mart history, the very first “Wal-Mart Discount City” was opened in Rogers, Arkansas in 1962. The corporate headquarters to this day is a few miles away in Bentonville. Back in 1971, when my learning at Grandma’s knee began, this first store was being converted to Sam’s proto-type “Supercenter” store to prove to Wall Street his concept would work in rural areas…and he needed a hearty breakfast to get the day started.
As I said, there was nothing remarkable about this restaurant, except the lady who ran it. It wasn’t only me who thought so. Sam thought the world of Grandma too. And I was soon going to learn why.
As kids, we don’t really know that much about our elders’ adult lives. We are not privy to the “reputation” of our parents and grandparents in the community until we get older…or until we endeavor to find out. I always noticed how patrons at the restaurant always treated my Grandma with so much respect, but I just assumed they were being nice. Down deep I always knew there was more to it and vowed to keep my eyes open for any hints.
My answers would come in a handful of years when our talks about real estate grew more substantial. I knew at the time we lived in one of Grandma’s “rentals”, but I had no idea so did a large chunk of the community.
Come to find out, every waitress that ever worked for my Grandma, rented from her. A lot of the nurses at the hospital also rented from Grandma. Many of whom eventually went on to buy the house from Grandma, often times with her going down to the bank with the tenant and cosigning for the home loan.
I asked her once after notice this predilection to rent predominantly to women, “Why so many women renters Grandma?”
She said, “They never had a chance. I can remember in the 1950’s, when your Grandfather was in the Navy and on that damned sub for years at a time, I had to tote your mom and uncle around to rent places to live. The landlords all looked at me funny…like I had a “scarlet letter” on my dress or something. More than one got a little fresh with me too…if you know what I mean.”
I didn’t. So, I clarified, “You mean they implied a “roll in the hay” would get you the rental?
“Oh, there was no implication…it was plain spoken.”
The only retort I could muster was, “Gross”.
She said, “I promised myself if I ever got to a place where I could help other women or single mom’s who also endure this indignity every day…I would.”
My first lesson was about to arrive…she was carefully crafting her next words…I could tell…
She said, “Rob if you can relieve somebody’s shame…do it. And at all costs, never add to it.”
Then it hit me. Grandma wasn’t in this rental game only for the money. Hell, she may not have been it for the money at all!
She was on a mission. A mission to stop the indignity she once felt as a woman with 2 children who just “looked” like an unwed mother. She could just imagine the actual unwed mothers who fell for the advances, and many did since their shame was real.
Now I also had my explanation for my Grandma’s stand in the community…the reason she was so respected. It was all starting to make sense.
What can you and I learn from this?
As landlords we now have the opportunity to do the same thing…relieve shame. There are a ton of foreclosure victims who are being shut out of the rental market due to their foreclosure. A recent article in the San Diego Union-Tribune quotes industry insider stating:
Ron Bowdoin, who oversees 2,500 rental units for the SARES-REGIS Group in Los Angeles and the Inland Empire, said foreclosure victims often fail to meet his company’s credit standards.
“As they reach the brink of foreclosure, their credit reports have suffered tremendously,” he said. “We have to do a co-signer or large deposits to get them into apartments.”
They feel awful and get treated by the big rental agencies and apartment complexes like day old fish. A foreclosure on your credit is today’s “scarlet letter”.
As private rental property owners, we decide who to rent to…and I am now imploring you to take a look at the foreclosure victim as the best renter you can find today. As a matter of fact, my original title for this article was, “Foreclosure Victims Make The Best Renters”.
I believe and my Grandma proved relieving somebody’s shame makes you the winner. Helping today’s foreclosure victim puts you on the same path as my Grandma.
Believe me when I say…and I’ll demonstrate this with future articles here on Bigger Pockets…it’s a spiritually and financial fulfilling path.