Over the past ten years, I had “successfully” built up an aviation facilities management business. After ten years of hard work, in February of 2001, my wife and I decided it was time to “start taking money off the table.” That is to say, after ten years of reinvesting in the business, it was time to take some money out and put it into other investments like real estate.
Part had to do with our daughter entering high school and wanting to invest more for her college education. And with the birth of our youngest son, David, in January of 2001, we wanted to “slow down” and enjoy watching him grow up as highly involved parents.
So we made some adjustments to our life style in anticipation of using some of the income from my business to start a real estate investment program. With this commitment and my wife’s blessing, I traveled to Atlanta for the Creative Real Estate Online Convention in search of ideas, partners, and mentors.
I was blessed to have found all three. I had the opportunity to meet Steve Cook who has been incredibly successful in Baltimore doing flips with little or none of his own money. With this new found freedom to invest, it was my intent to invest in a property or two each month using the profits from our aviation services business.
Fortunately, after spending some time one-on-one with Steve and learning his system, I was able to pull together my first deal: a two-bedroom REO just outside Washington, DC that I was able to buy for $24,000 and fix up for $8,000.
I quickly realized through coaching from Steve, that with Hard Money Lenders coupled with good deals, you do not need a lot (and in some cases any) of your own money to get deals done. What I had no ability to know at that time, was that by the time I had my second deal under contract, the plans my wife and I made in February would be “toast.”
years developing was forever changed.
Our business was the management of the General Aviation (GA) facility, servicing the private jets coming in and out of Washington National Airport (DCA).
Our customers included people like Oprah Winfrey, Bill Cosby, John Travolta, members of Congress, Presidential Candidate George Bush, and the CEOs of the Fortune 100 who come to Washington to meet with the President and members of Congress.
For ten (10) years we reinvested our earnings from this venture and, as a result, received numerous awards, including being voted by the pilots who fly private aircraft (corporate jets) “The Number 1 base in the United States”, every year since 1996.
Although National Airport was reopened in October, the FAA and, more importantly, the US Secret Service continued to prohibit private aircraft traffic into National Airport. After carrying payroll (with no income) for two months, we laid off all of our employees just after Christmas.
The losses since September 11th have basically wiped this business off the face of the earth, and so far there is no indication that we are going to receive anything from the Federal Government, other than enough to pay off our equipment leases.
So, I share all of this with you, not to seek pity or prayers (although I’ll take the prayers), but to say you can devote ten years of your life to doing things “right,” being “the best,” and making plans for the future, and then the unthinkable can wipe it all out in an instant.
As Robert Kiyosaki says, “You need a plan to be safe, secure, and rich.” Unfortunately, I had not read this until after September 11th. Fortunately, God has provided for me and my family and always will. Specifically, before the crisis hit, we were able to get two deals under our belt and a third one (my first flip) done in early November.
My first deal I decided to keep. The property I bought for $24,000 now appraises for $110,000, because I was able to secure a very good Section 8 tenant who pays us $935 per month and her own utilities. I am working on the refinancing now to pull some cash out to cover the rest of 2002.
The second property we were able to buy for $32,000. I attempted to flip it but, at the last minute, the deal fell through. But the hard money lender was willing to lend almost 100% of the acquisition and fix-up costs. After a little creative thinking, we decided to convert the garage into a legal bedroom and turn it into a three-bedroom house.
It is going back on the market at $120,000, but I may keep it and do another Section 8, since I have already been told by the Section 8 office that they will pay $1,250 for a three-bedroom house, and my payments to our hard money lender are only $580/month.
The third property I flipped to another investor for a $7,500 profit, and my family had a very nice Christmas despite the collapse of my other business, and the rest (quite a bit) went into the bank to fund more deals. My wife and I enjoy seeing our 15-year-old daughter and 10-year-old son participate in the business. Even six-month old David “helped” sign the documents for the closing on our second property.
I am currently working on deals four, five, and six concurrently and hope to share and learn more at this year’s CRE Online Convention with my friends and fellow investors. None of this would have happened so quickly if I had not attended the Convention. The best part of all is not even the deals we have pulled together. It is the people who have come into our lives since last year’s CRE Online Convention.
At last year’s Convention, a group of us met after the Friday Dinner and decided to put together real estate investor’s group in our area. When we got back home, four of us showed up for the initial meeting.
Since May 2001, this group has grown to over 100 people who get together the first Saturday of every month in the DC area–over 100 people dedicated to helping each other make a difference in each other’s lives through real estate investing.
On September 11th, ten years of work went down the drain. But despite this, my family’s future in real estate looks very bright. I thank God for Creative Real Estate Online, JP and Terry Vaughan, and Jeanne every day.