I love reading other folks’ stories discovering how they got into real estate investing. Everybody’s path is unique and entertaining. Reading the BiggerPockets forum this week, there was a thread on exactly that and it gave me the idea for this article. In the vein of “still getting to know each other”, I thought my story would help and entertain you. So here goes nothing…
Those Damn TV Gurus
The year 1987…the town Cheyenne WY…
If you remember that far back, TV gurus were in full swing. There must have been a dozen late-night informercials. Dave Del Dato, Charton Sheets, Robert Allen, Tom Vu ( “I’m rich you not” …hilarious), and a guy named Sharkey..or Shackly who said he was a “former teacher turned real estate millionaire” all had infomercials running at the time.
But those infomercials did their job. I couldn’t stop thinking about real estate investing. I didn’t have the cash for their courses, so I went to the library…and guess what?
Every one of them had a book in the library! Plus I found a bunch of other real estate investing authors who were actually better writers but had yet to land an infomercial deal.
I read them all in a weekend – 6 books – and started looking at houses Monday morning.
The Hunt for the First Deal
I discovered a friend of my wife was married to a real estate lawyer in town who handled all the foreclosure filings for the big banks. He had picked up a small 2 bedroom home that was condemned due to “in the wall” gas heaters…you know the porcelain jobbers you light with a match?
Other than needing a new central heating system and a kitchen / bath upgrade, it was a great house.
This lawyer made the mistake of telling me he bought it at the courthouse steps. So I looked up what the bid amount was in public records and knew what he paid…$24,300. He had it on the market for $38,000. I decided to keep looking.
I must have looked at 60 houses. I wrote a few low-ball offers to no avail. At night the bleakness creeped in like a thief trying to steal my dream. During the day, my wife’s un-approving glances weighed on my shoulders eroding my resolve to keep trying.
Over the next 45 days, my wife’s glances became stares, and the stares turned into arguments. She was worried. Worried I’d “do something stupid” or “get into legal trouble” or (my personal favorite) “embarrass me or my family”. After all, I was listening to those “ridiculous people on the TV”.
I tried to ignore all of it, but it wasn’t easy.
Ask and Ye Shall Receive
Another 2 weeks came and went with no success. Then lo and behold my wife was talking to her friend, who mentioned her husband the lawyer had purchased the foreclosure house I’d looked at a few weeks back using a 90 commercial loan… and the note was coming due in 20 days!
When my wife told me the story I knew what to do. I waited another 10 days, and wrote an offer. Knowing what he paid…I wrote a contract giving him $800 over his purchase price. I can remember his reaction at his dining room table like it was yesterday. Pissed off is putting it mildly!
He slammed his hand down on the dining table simultaneously leaping to his feet shouting, “You’ve got to be kidding, right?”
I didn’t say a word. (Honest admission time; this was not a tactic. I was just exhausted due my fruitless hunt for property, my dissolving relationship at home, and I’d just driven 50 miles in a snow storm to present this offer. I truly didn’t care if he signed it or not.)
I got my coat and headed for the door…didn’t even get half way there before I heard….”Wait”.
He asked for a couple of lame face-saving concessions…which I agreed to…and he signed the offer.
Oh…did I mention…I’m a college student at the time…no job, no credit, no cash…no wonder this ‘power real estate lawyer’ was mad.
Well, by the time I got this deal under contract my mother-in-law who initially thought my investing dreams were silly was instantly converted to my biggest fan. She wanted in and ponied up the cash becoming my new 50/50 partner.
Long story longer, we doubled our money in 6 months!
What Did I Learn?
- Get educated anyway you can…the library, BiggerPockets, and the Web in general is free so there is no excuse to go into investing not knowing what you’re doing.
- Never listen to family or friends about your dreams. They’ll come around when you succeed.
- Take the emotion out of your offers. Of course, I just stumbled upon this one. But it’s true. The one who cares more loses.
- Find the deals and the money finds you. Partners and/or lenders come out of the woodwork when the deal is good. Focus on putting as much profit in your deals and you’ll never worry about finding the money.
Now Go Get’m…It’s Your Turn!