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Tuesday, November 29, 2011

Consistent & Persistent Action!

A coach/mentor cannot force people to get a return on their investment. That is what the cost of entering a coaching program is, an investment. Most of them truly enjoying teaching others how to make money investing in real estate, but if they offered their expertise for free, they know nobody would ever use the information. They'd show up, be entertained, and go home and do just what they did yesterday; The actions that made them no money. By charging a reasonable amount, but enough so that it creates some pain, it should inspire the heck out of those students to get their money back plus a return.

In my program, we are telling everyone exactly what we do to get deals. We are not keeping any secrets. Mike is consistently buying houses month after month and so are Ryan and I from a variety of sources. I share with our students all my exact MLS searches. The same searches I look at every day. Not just once a day M~F. I looked at them multiple times every day, holidays included. I never stop looking for an opportunity. I even took a seller call on Thanksgiving day. 
We make offers on the properties that come up in those farms I share with my students. If my offers are getting accepted and other investors' are not, then they need to relook at their numbers and figure out why they are offering what they are. Maybe they are over budget on their rehab expenses. Maybe they under estimate ARV so their offer comes in lower? However, just looking and thinking about what one should offer won't put any deals in your pipeline. The deals are out there. Looking at the MLS doesn't get agents banging on your door begging you to sign an offer. Agents are notoriously lazy people. Some of the laziest I have ever met. I'm a licensed Broker and 99% of the agents out there make the rest of us look bad! They don't work until noon, then they immediately go to lunch. They don't ever answer their phones. As an investor, we need to be hounding them. We need to force them to look at and submit our offers.

The one thing every student should learn from a coaching/mentoring program is that this business is not easy. If you believe the late night info gurus who tell you it is while they are sitting next to the ocean front pool (that they rented for the infomercial shoot) with some other person's  yacht in the background, then maybe real estate is not for you. It is simple, but it isn't easy. It takes work. Lots and lots of work. That is why I have a constant reminder on my daily planner that says "Consistent and Persistent Action!" They are simple actions, but if I am not doing them, nobody else is going to care... Well, except maybe my wife! My mom doesn't care. My neighbor doesn't care. The people I run into at the local monthly meetings don't care. The agents certainly don't care. It will only be reflected in MY bank account. (I guarantee you I start making a lot more offers when my checking account starts falling below 6 figures!)

If you want another great motivational blog to read, I invite you to check out my friend Steve's blog. I think I'm his biggest fan! Steve is buying houses in many of the same neighborhoods I do business in, yet we never cross paths. (There truly are a lot of fish in the sea.) He shops straight out of the MLS. If you go back to his earliest posts, he said it took him 4 months of writing offers to get his first contract accepted. Now, just 3 years later, he has done over 100 houses and has somewhere around 40 or 50 rental properties. Hard to keep up with him as he moves so fast! All these deals were acquired locally in just the last 3 years and the majority of them bank owned listed properties.

Get your nose into the MLS. Search Craigslist. Post ads. Send mail. Put up bandit signs. Try running an ad in the classifieds. Wear a t-shirt that says "I Buy Houses!" DO SOMETHING!!! Then, take the incoming calls, screen out the losers and dump them. Don't get hung up on a lead just because they called. If there isn't any equity, on to the next one. Find the winners and keep writing those offers. Those who grind it out will have measurable results and see a return on that investment.

Good luck to you and Happy Investing!

Sunday, November 27, 2011

Avoid These Top 5 Mistakes of Landlording

Since the title is Top 5 mistakes of landlording, I am taking financing out of the equation. I will assume the property was purchased correctly and now we are dealing specifically with management (or lack thereof) issues:

1. Renting to family or friends.This is the biggest mistake I see in the business. I don't know how many properties I have purchased from people who didn't want to kick out Jr. because he hadn't paid rent in the last 10 years. (I have one in escrow now and sis hasn't paid her $250 rent, on a $1,200 rental in the last 15 years.) I once went to inspect a house where a nephew was living. It was lunchtime. He was drunk. After about 20 minutes in the house he pulled a handgun out of his surf shorts and pointed it at his pet goat.

2. Treating your tenants like friends and/or commingling tenants and relationships.This goes right along with #1. Being a landlord is being in the people management business. Being friends with your tenants shows them you are weak. They will attempt to take advantage of you. Our philosophy; Rule with an iron fist and a smile! Treat them fairly, but if the rent is late, it is time to start thinking about moving to another place. I know a few landlords who have started relationships with their tenants. Hands down, they all agree this is the biggest mistake they have made. A great motto you can use: Pay the rent or don't pay the rent. Just don't park the car with the oil leak in the driveway!

3. Not raising rents for fear of tenants contacting you.
When I contact a private seller of rental property I always ask three question;
1. How much is the rent?
2. How long have your tenants lived in the property?
3. When is the last time you have been inside?
When the rent is way under market, I bet you can already guess the answer to the next two question! The #1 reason landlords don't raise rents is because they don't want to deal with their tenants. They keep the rents low in hopes the tenant will not contact them about the property needing repairs. What ultimately happens however, is that the property slowly starts to fall apart. The landlord won't raise the rent for fear of the tenant complaining about things that need work or moving out. The tenant won't contact the landlord about things that need work for fear of having the rent raised. Don't be a part of this double edge sword. If the rents are going up in your area, raise them accordingly.

4. Not inspecting your properties annually.
Not inspecting your properties leads to them accumulating massive deferred maintenance or shabby repair work by the tenant. All the money the landlord thinks he is saving every year by not fixing things or having his handy tenant fix them compounds annually and the repair bill becomes so high they end up selling the property for pennies on the dollar to investors like me.

5. Unnecessarily paying utilities for your tenants. I don't pay any utility for any of my properties. I look at this as subsidizing my tenants lifestyle at the expense of my financial freedom. If they can't afford to pay their own utilities, they can't afford to rent from me. Even with our housing clients, they all pay their own utilities. If you are giving away free gas, electricity, trash pick up, or water, I highly encourage you to send out notices today, that your tenants will be required to switch service into their own name.

Tuesday, November 15, 2011

Flipping Properties for Maximum Profit

Check out my new video on my Youtube Channel IEInvestor. In this video, I discuss the outcome from a condo I recently flipped only spent $135 cleaning out the trash.

Tuesday, October 11, 2011

Tenant Screening Red Flags!

We get all kinds of wack-o applicants calling us about our properties. Here is a list of the some of the most common situations we come across and when you come across these situations, we hope you will scrutinize those applications a little more!

1. If you hear "Can I plant flowers?" – Don’t fall for it. They are pigs!

2. I like to pay a few months’ rent in advance. – If you accept this person, you’ll be getting to know your eviction lawyer’s new fee schedule real soon.

3. They keep saying how much they love the place. – You won’t ever see an application from these people.

4. They are willing to move in before it has been cleaned. – That is because they are pigs and prefer to live in filth.

5. Can you work with us on the security deposit? – This is a job you don’t want.

6. Unmarried couples who want to live together. – Treat them like roommates.  Qualify each individually because they may break up and the one with the income will move out.

7. They tell you all their problems. – Escape! Escape! Escape!

8. They nit-pick everything when viewing the place. – Tell them it is obviously not suited for them and ask them to leave.

9. The applicant leaves something blank on the application. – They don’t mind lying to you about it. They just don’t want their lies to be in writing. Abort!

10. They are self-employed and have no previous tax records. – These people have no problem stealing and will gladly add you to the list of people they steal from.

Pay Attention to Where the Dollars Go

Although we use real estate as the vehicle to produce our income, regardless of which business you are in, it is always about paying attention to the bottom line. Understanding where the dollars come from and how they are paid out will help you maintain a clear picture of your current financial position and provide you with a road map to your goals. If you plan on doing your own bookkeeping, there are many unique situations you will have to understand how to record in order to be sure you are paying the taxes you owe and not paying any you don't. If you decide to hire out your bookkeeping, hire someone with the experience related to recording transactions you will be doing in your business. Does your bookkeeper know that a mortgage payment potentially has three parts; principal, interest, and impounds? He might, but is he assigning each to its own account and classing them all to the same property?
Buying a property subject to brings on a whole new set of challenges for an inexperienced bookkeeper. Payment statements need to be obtained from the seller or the lender to be sure you are taking proper credit for payments you will make while you hold the property. A bookkeeper with limited real estate accounting may not understand how to enter the numbers from the HUD when you purchase, how to record the repairs you make, or how to correctly enter your final HUD after you sell making sure your profits and expenses are properly accounted for.

Get QuickBooks and take some classes. It is best if you understand how transactions should be recorded before you turn your books over to someone else. If your CPA discovers errors when it is time to file your taxes it could be financially disastrous to your business and your free time while you attempt to remember deposits and withdrawals made weeks, or months before. Your bill to her will also start to increase as she helps you try to figure out what you were doing back when you were doing it. There are many associations related to our industry who offer classes on bookkeeping. Other successful investor's recommendations should also be sought out.

Follow the dollars and be sure they are properly recorded. Knowing where your money goes and comes from gives you a clear picture of where you are financially and helps you plan your tax strategies before your fiscal year ends. It could mean the difference of having something left over for your pocket at the end of the year after taxes or scrambling to figure out how you are going to come up with Uncle Sam's share of your profits.

Sunday, September 18, 2011

Coaching, Mentoring, & Mastermind Groups

I have been involved in no less than 8 mastermind groups thus far in my career. Some of these I facilitated. Others, I was a participant / member. Some were free. Others were very, very expensive. Each has given me an opportunity to surround myself with like-minded people willing to open up and share knowledge about their business, strategies they use, fresh new ideas they have picked up on their journey. The most important facets of these groups has been the 'how to implement' discussions. One can certainly discover new ideas everywhere; YouTube videos, Facebook posts, books, meetings, and social encounters. However, rarely will you get the hands on details of implementation like you get from being involved in mastermind groups. The members of my many mastermind groups have to gone to great lengths to SHOW me how to do things. They have mailed me information, given me books, paid my way into conferences, the list goes on and on.

I recently attended one of two annual meetings where I discovered that I should be teaching what I so easily do to those who struggle. I have struggles too. At that same conference, I learned a great saying, "Pay those who play at what you work at." After that conference, the thought of running a real estate investing mastermind/mentoring program constantly nagged me. How could I do it without feeling guilty? Would people sign up? At what price would it be worth it for me to take on such responsibility and still be fair?

Recently, I did launch my mastermind / mentoring program. It is not a coaching program. I think there is a significant difference. A coach sits on the sidelines and tweaks what you are already doing. A mentor takes you down into the mine, shows you where the gold is, teaches you how to dig it out, then shows you how to sell it for a profit. As for it being a mastermind group, I expect all students to help each other. We learn and grow as a group. I am very excited about this next evolution in my business. If you are interested in applying, please fill out our online application.

Good luck to you and I hope you are on track to exceed your 1 year goals for this year and more than 20% of the way toward accomplishing your 5 year goals. You do have written goals don't you?...

Saturday, September 17, 2011

My Video Channel

From time to time I upload videos to my YouTube Channel. Here is the latest one I uploaded where I go through a rental house we are currently rehabbing.

If you'd like to learn more about the types of deals we do out here in sunny Southern California, please subscribe to my channel. Also, I always appreciate any comments, questions, or requests!

Thursday, September 15, 2011

Cash for Keys?

Just finished one of 2 evictions I have going. Thanks to California's extremely liberal view of tenant's rights, it only took me a few months and about $800 in legal fees to get the tenant out of my property.

I had the Sheriff show up yesterday and the tenant was already moved out so I did not need his services. On a side note, if you know the tenant is gone and you let yourself in instead of waiting for the Sheriff to get you in, they will refund most of your money. I bet you didn't know that did you?

I got inside and the house was what I expected. The carpets are ruined, the walls need to be painted, and the house is generally filthy. No major damage at least. Of course, the tenant will not be getting a dime of his security deposit back. However, I think next time around, I am going to just pay them to move out. If I could have gotten him to take $1000 to move out and leave the place clean, I would have saved about $4,000 in lost rent and rehab. I will post a video at my YouTube Channel this weekend.

I have used this method very successfully in the past, but I stopped doing it for some reason. Have any of you tried this before?

Tuesday, September 6, 2011

If You Have Eight Hours to Cut Down a Tree...

Down at my gym, some of the guys don't care much to spar me. It is not because I am quicker, stronger, or a better fighter than them. It is because of my method of attack. To jab, one needs to get within striking range of the opponent which means you are also within their striking range. A cross requires a fighter to get in even closer. My Sensei actually took me aside one day during a sparring session with another gym and told me to get in there and jab more. I didn't take his advice because, quite frankly, I don't much care to get punched in the face. I prefer to attack the legs. One of them is always sticking out there, way in front of the rest of the body. It's an easy target. Why attack the head when a leg is such easy prey? With just a few well placed chops of my shin, your leg will suddenly start to feel amazingly just like Jello. Small muscle spasms will eat away at your ability to lunge forward stripping away the power behind your punches. If I see an opportunity to strike the head, I take it, but I like to end my combination with another solid strike to the leg. An opponent can be disarmed very quickly if he doesn't have legs to stand on. However, it takes a lot of strong or one very accurate punch to the head to render an opponent defenseless. I approach my investing the same way I fight.

If you are a lumber jack and you head out into the forest to harvest a tree do you start at the top? Trimming away the leaves, then the twigs, next the small branches, the larger branches, and finally leaving behind a single log jutting up from the Earth like a giant toothpick? Do you cut that toothpick into 8' sections so you have ready made 2 x 4s? No! You get as close to the ground as possible and chop the whole damn thing down in one go. Then you drag it out of there and harvest as much of it as you can.

Why wouldn't you approach investing in real estate any other way? Monday through Friday there are countless fools, yes, I called them all fools, standing around the courthouse steps, pockets loaded with cashier's checks, exposing themselves to the risk of skin cancer, wasting their day getting up early, comping dozens of houses, driving (or sending some other fool) around to see if the structure is still even standing, all for the privileged of competing with each other to see who can pay too much for a piece of crap property and do it in the riskiest and laziest possible way; paying all cash. I like going down there sometimes just to watch the circus! (To be fair, a few select individuals have the system figured out and they stay in their offices and send buyers to the auctions. Still not sustainable, but definitely smarter!)

The banks have these fools by the neck. They are totally collared! Why would you ever let a bank put the screws to you like that? The banks borrowed the money to make those horribly risky loans, then sold them off to some other schmuck for a profit, only to continue making more money servicing the notes, and finally made a sweet heart deal with the Fed to line their pockets with even more money! I hope this isn't new news to you?! You can learn more Here. And people are happy to go down to the court house steps and bid against each other to buy these houses? It just doesn't make any sense to me. I have heard horror stories of investors realizing anywhere from 6-15% returns for doing this kind of business. Wow! A whopping 15%! I can barely contain myself....

I prefer to deal with the MILLIONS of private sellers out there. While the fools are picking the leaves off the trees, I am sharping my ax. They can spend their days, weeks, months picking and picking those leaves. I spend mine at home, relaxing, reading books, training at the gym, and when I am ready, I take one solid whack at the private seller's equity and drop the whole tree.

I don't settle for 6%. I think 15% is a joke. It makes me laugh thinking about it. The deal I am working right now has a 54% return and that is not over a 12 month period. I prefer to do one of these a month over the 3, 4, do I hear a 5? 6 going once. Twice. 7 in the back corner! I don't know how many deals they have to do to match my one, but I am sure it is a few. I have been buying from private sellers since 2005. Even in 2006, 2007, 2008, and 2009 when the market was sliding and nobody new where it would end up. I ripped some serous equity back then.

I am the Pawn Shop of Real Estate. I have decided to rename my blog this. It is what I do. If you have a $150,000 house and there is $30,000 owed on it, I don't offer 70% - repairs - wholesale fee -, -, - whatever that lame formula is they teach at real estate investing principals. I offer $30,000. I tell sellers up front not to talk to me if they expect retail. I'm not that guy. There ain't none of that nonsense around here. If they want retail, go forth into the World and gamble with the market. When it doesn't work out, I'll be waiting, relaxing at home, training at the gym, or fly fishing on some pristine river. I've got time.

See, I have been the seller with that house that made me lose sleep. A house that infected my every waking thought. Oh, how I wished someone would have just made me an offer and made me even. I didn't care about the profit any longer. I didn't want the cheese. You can have the cheese. All of it. I just wanted out of the trap. Even though the banks should be feeling this way now, they are not. Have you ever wondered why? If so, you probably didn't click that link above.

When my ax swings, the seller's equity shall fall in my direction. I will get the cheese because I deserve it. But, Mr. & Mrs. Seller, you will be out of the trap. However, please don't ask me to pay your closing costs. I get all the cheese. You need to find Mr. 70% - repairs for that kind of nonsense offer.

I will be attending CRE Super Conference October 7~9. I will be surrounded by investors who know the meaning of building a sustainable investing business. These are the investors I have seen around through the last cycle and I expect to see them still making money when the circus has packed up and left town. This isn't a Short Sale Super Star or an REO Get Rich Quick seminar. You do know those are all a load of crap right?

This is an educational event taught by investors with DECADES of experience. And that experience all points back to dealing with real sellers who have real equity. If you are not at the event, I fully expect you not to be in business in the future. Don't take it personal. It is just the way it will be. I don't care how many deals you are doing now and how much money you have squirreled away in the bank. I've seen it before and those that didn't change with the market lost their houses (and even mansions) to foreclosure and have disappeared from my life. Mike Cantu wrote a whole course just to help those same investors out because he knew it would happen to them. He saw it happen before and he didn't want to have to go out and make new friends. He even makes a list of who he thinks will be out of business when the market changes. Very similar to Howard Stern and his dead celebrity list he makes every year.

If you are not at CRE Super Conference, there is a good chance you'll make that list someday. I know I'll never be on it. Do you, Mr. & Mrs. REO, Short Sale, Trustee Sale, my income depends on a bank providing me with inventory and providing my buyer with a loan?

Friday, September 2, 2011

Doing Deals When You Have No Money!

The last thing I would do would be to drive around looking for properties. The first thing I would do is head out to my local print shop or craft store such as Michael’s (if they are still in business). Look for chloroplast stock. This is the material that bandit signs are made of. While you are there pick up a stack of Post Its if you don’t have some at home and a ½” wide construction style black magic market. You may need to run over to Home Depot to pick one of these up and that is OK because while you are there, grab a staple hammer and a box of staples.

While you are out, drive by any local liquor stores. I am not talking about the high end liquor stores. I mean the ones where the parking lot is more gum than asphalt and the creepy dude with the skull cap hangs out all night leaning against the front wall chain smoking cigarettes. Out front, there are typically lots of racks with free classified ad sheets. Grab all the ones that have ads for rental houses or houses for sale.

Once you have acquired all your materials, go to Google and sign up for a Google phone number. You may consider using a cell phone number, however, I don’t know if they are traceable or not. You want to avoid being harassed by the sign police so do not use your home phone number.

Using your black marker, write “I BUY HOUSES” or “SELL YOUR HOUSE THIS WEEKEND!” on the signs. Then put your phone number down below. Notice the flutes (holes) on the ends of the chloroplast. You want to make your signs so the flutes are horizontal. That way, the wind won’t wrap them around the telephone poles you put them up on.

If you need help learning how to hang bandit signs, go to Youtube and type in “how to hang bandit signs.” There are dozens of videos and you will get a great education on how to hang them up. You will see some guys use the roofing nails with the plastic washers on them. I don’t care much for those. The staple hammer is fast and very effective. Once it gets way past bedtime, head out and hang up those bandit signs.

Early the next morning, get out the all the classified ad sheets you picked up and start looking at the For Rent, For Sale, and definitely the For Sale By Owners, or what they call Fisbos (FSBO). One thing I specifically look for under the For Rent category is the rentals that are in one area and have a phone number with an area code to a different area. We already know those people live away from their rental and they may consider selling. It is especially painful when an out of town owner has a vacant property. Start calling these ads and inquire about their house for sale. If they say it isn’t for sale, tell them you must have misread the ad, but since they are on the phone, would they consider selling it. Any owner who is ready to receive monthly payments is primed for seller financing.

When you are done ripping through the print ads, head to the internet and start searching Craigs List . You can search Google for any online classified ad pages or FSBO websites as well. Start sending out emails to everybody. Pay particular attention to anyone with a listing stating the property is available now. That means the property is vacant and if they are losing money on the mortgage, they could be a perfect candidate for seller financing, lease options, sandwich leasing, or a straight sale at a discount. Even if they don’t want to sell today, ask if they might consider selling at some point in the future.

Once you have gone through the online ads, hop in the car and head out to do some good old fashioned door knocking. Hit up your favorite neighborhood and start at one end of the street and work your way down both sides. Knock on the door. Take a few steps back and hold your hands folded in front of you to give off a non-threatening appearance. Don’t wear articles of clothing that cover your face like a hat and sunglasses. Don’t carry a clip board or anything that would give the appearance of a sales person. When someone comes to the door, great them kindly and tell them you are very interested in buying a house in the neighborhood. Then ask if they know anyone that might be interested in selling. When they point out the listed house down the street, tell them you are not looking for that kind of seller. You would prefer to deal with someone directly, someone who tried to sell in the past and it didn’t work out or someone who has had a change in their living situation such as a new baby, a divorce, or someone with a job transfer or loss. You will be surprised how much people know about their neighbors.

If nobody is home, pull out the Post It and write “I am interested in buying a house in this neighborhood.” Put your name and your Google phone number on it. If you have more time, go online and find a printer that sells custom made Post Its and get yellow ones that say NOTICE on it bold black letters. Stick your Post It on the front door or somewhere it will be visible especially if they have a garage they use that allows them to get into the house without going through the front door.

Happy Investing!

Monday, August 29, 2011

Eviction Court

I have been cruising along quite steadily without hitting any roadblocks in my landlording business. A few speed bumps along the way and 3 uncontested evictions, but no other major issues. The first eviction was for a guy who I had purchased the property from. Apparently, he wasn't all there so his brother settled up with me after he moved out.

The 2nd eviction was for a tenant who lost her job because her son was shot twice while walking down the street and she spent her time at the hospital instead of going to work. I can understand that, but at the same time, the doctors are much more qualified to deal with the patient than mom is and from my experience of driving by the house and seeing him and his buddies out there late into the evening, I am 100% positive his mouth was part of the reason he ended up with two bullet holes in him. Regardless, the person who shot him is a sissy and should have taken it up with him in the backyard the way neighborhood problems among the youth should be dealt with.

The 3rd eviction was a tenant who was just a total jerk. I believe he also lost his job, but he started harassing me and giving me a hard time. I have every intention of suing him as soon as I can track him down. I have my ways and I have found the last two locations he lived, but he had already moved before I discovered he lived there. I created a fake Facebook account and sent him a friend request which he accepted. I know he is still in town and working again. I just can't figure out exactly where yet.

This summer, I hit the roadblock; 2 evictions at the same time and so far one of them is getting a little nasty. The tenant sent me a text msg stating he will see me in court. I didn't actually expect him to file an answer, but he did. I then had to show up in court with my attorney which cost me $225. I say 'me' because this dirt bag tenant most likely not ever get a real job and therefore he will be totally uncollectible.

I showed up in court for our schedule appearance and of course he didn't show. My attorney told me that it is much better if they do show because you beat them fair and square in court and it is done. If they don't show, they can go back to the court later on and whine and complain that their cable went out on their big screen TV so they couldn't finish level 5 of their favorite Xbox game and therefore need a new court date. Believe it or not, they can and have gotten new court dates according to my attorney!

Today, I received an email from my attorney claiming the tenant requested an Ex-Parte. An Ex-Parte hearing is a hearing heard with 24 hour notice, it is usually done to delay a lockout, which this appears to be the case. My attorney informs me that I do not have to be there for the court appearance. I am thinking, "why wouldn't I want to be there for the court appearance?!" This scumbag answers my eviction costing me $225, doesn't have the ca-hones to show up wasting my money and the tax payers money, then requests more time to move out?!?!?! Talk about ridiculous.

Why can't I request they move out sooner because I have a mortgage to pay and will need extra time to get the place ready for my new tenant? I have every intention of going tomorrow. I hope I get a chance to speak with the judge. If he even thinks for one second that it is OK to allow these people to stay an extra hour, I am going to let him know what I think.

As far as I am concerned, when you decide that you will not be paying the rent on-time, start packing and looking for a new place to live because that is the moment when you have decided to move out.

I'll let you know how it goes.

Sunday, August 28, 2011

5 Year Anniversary

Five years ago today (08/28/2006) I purchased 2035 Western ave for $200,000. I purchased this property from a wholesaler. I don't remember what his wholesale fee was, but I believe it was $5,000. I used an equity line of credit and paid cash for the property. I spent about $5,000 on rehab (I had no idea what I was doing!). To find a rehabber, I asked one of the other investors I knew if he could refer me to someone. The guy did a great job on this property even though he turned out to be a total tool on the next deal.

Western ave is a 2 Bed 1 Bath in a not so great area of San Bernardino. It is hard to believe I paid $200K for a 2 bedroom house in a not so great neighborhood, but the numbers made perfect sense back then. I sold it on 11/16/2006 for $272,000 and made about $25,000. The funny thing about this deal is how little I knew what I was doing.

Even though I was a licensed real estate broker, I had no idea how to sell a property. (They don't actually teach you that when you are studying for your license.) I didn't know what disclosure were required or how to even negotiate a counter. I was totally clueless! I was able to list the property in the MLS. It took me a few tries to get all the required data in there. Once I got an offer, I called up a neighbor who has her license and asked her to handle the transaction for me. I think I paid her about $2,000. I got copies of all the disclosures and kept them in a file.

The point (moral?) of this story is I was determined to succeed as an investor. I might have jumped into the pool headfirst without checking to see if there was water in there first, but I knew the integrity of the wholesaler I was buying from and every thing worked out well.

I had a lot of problems (lessons?) dealing with that property from homeless people sleeping in the garage, disposing of an old RV and an extremely old rusty car, to someone breaking in, and having to evict the woman the wholesaler purchased the house from. It was a fantastic learning experience for me. Unfortunately, after this deal, I got into 2 or 3 even worse situations, but I am all the better for it now.

These days I own quite a few houses and several small apartment bldgs. The cash flow is doing very well and I mainly focus on wholesaling properties.

How long ago did you start, and where are you at today?