Lambros Politis

Here is my story, which should give you a little insight into who I am and what I'm hoping to accomplish in the arena of real estate investing. I am a 32 year old professional who recently happened to stumble into real estate investing when my hand was forced into begrudgingly purchasing a duplex from my parents. This duplex had been the bane of my existence as an adolescent growing up, since I was the de facto property manager--my parents are Greek immigrants whose English is barely serviceable and they heavily relied on me to take care of their finances. I took the property off of their hands because they were getting too old to look after it, and I figured, if I am already managing the property, I might as well reap the benefits of home ownership. Shortly after I purchased the duplex, however, I was shocked to discover that I had significant equity in the property, to the tune of ~$150K. I paid $262K for it and its worth around $415K according to the big Z. Moreover, there is a nice little positive cash flow of ~$650/mo. in income. In addition to the equity I have in the subject property, I also have ~$50K in cash, along with another $20K tied up in a pet project that I could, in theory, call at any point. So here I am, in the extremely enviable position of being a young professional who earns an okay living, who was undeservedly gifted all this equity in an income generating property, and who has a little pocket change to invest. The two hundred thousand dollar question now becomes, what the hell do I do with it? I read Gallinelli's book and am no closer to deciding on a course of action. Switching gears briefly, I want to share a story with you about my father and I promise to relate it back to my interest in acquiring investment properties. For as long as I have known my dad, he has been a fearful man, extremely risk averse, and from what I can recall, most of his actions came from a place of fear and insecurity. When he first came to the US, he had an opportunity to purchase commercial property, a strip mall, with his brother. Instead of investing in the property, he chose to send the money back to Greece in the form of remittances where his other siblings eventually squandered it all away on goats, presumably. Now that strip mall is worth over $1.2 million dollars, and today, not only would it have been fully paid off, but it would also be generating just south of $10K/month in rents. To this day, I still resent my father for his lack of investment foresight and for putting the needs of his siblings (who he is no longer on speaking terms with) before that of his own wife and son. That said, I am terrified of history repeating itself and making the same type of mistake that he made. What I know with certainty is that I have something here; between the equity and the cash, I have a golden opportunity to make a move and create a little wealth for myself and my fiancee. What I don't know is how to best invest the acorn that fell on my head. In addition to the assets mentioned above, I am also saddled by $135K in student loan debt. My area of practice is foreclosure defense, short sales, bankruptcy law, and loan modification, so needless to say, I have been scared straight from purchasing a residential property for myself. Furthermore, as I am sure you're all aware, the sun is setting on distressed property sales in light of the economic recovery, so I suspect that I will be experiencing a significant reduction in salary in the next 5 years or so. I would like to offset that reduction by generating rental income from investment properties so that I can maintain the lifestyle that I have now grown accustomed to. Moreover, my ultimate goal is to acquire enough single family residences/duplexes/tris/quads, to eventually live the "American dream" of a (mostly) passive stream of income. If I had to summarize my investment goals, pie in the sky would look something like this; make sufficient rental income to supplement my salary to afford me the freedom to work part-time September through May and spend my summers in Greece by the time I am 45. I am not sure if I need a financial investor, or a life coach, or a Bodhi Sattva guru to reach those goals, however. I have talked to a number of folks that I respect and trust and each of them has a very different take on how I should invest my money. What I think I really need is a mentor, a like-minded individual with a bit more life experience, who has been down a similar road and has wisely invested his/her money in a way that made sense for them. I am a smart (enough) guy; I understand cap rates, net operating income, and I am not intimidated by numbers. I just lack the real estate experience to determine the PROPER order of operations to meet my goals. $5K+ a month in net rental income within 10 years seems attainable upon first blush based on my back-of-the-napkin calculations, but how does one get there without overextending or over-leveraging oneself in the process? Do I liquidate the duplex and use the sale proceeds along with my cash as a down payment on a multi-plex? Do I keep the rental and use the $50 - $70K of cash on hand that I have now to nickel and dime my way to my goals by acquiring and renting out single family residences? Do I heed my financial adviser's advice and liquidate everything and invest it all in the market with him? From where I stand, I've only got one chance at the prom queen--I don't want to have food stuck in my teeth on our first date. I'm scared to pull the trigger, paralysis by analysis. Ultimately, I would love to connect with a mentor/friend/adviser who could provide me with a little insight into the matter; I promise to one day pay it forward, when 20 years from now, I come across someone's charming profile, and take that young investor under my wing. Thank you in advance for taking the time to read this and for allowing me to share a bit about myself (and my neurosis) with you today.