When it comes to real estate investing let me tell you that nobody is a bigger procrastinator than me. I first found Creative Real Estate Online in 1998 while doing a search for “creative real estate investing.
We had just moved to Arizona for a higher paying job. I had bought the famous late-night infomercial course, and found it very interesting and informative, but I was too chicken to actually do anything.
I made a few calls, asked a couple of real estate agents about their clients’ existing mortgages, and upset most of them for asking such a question. I just gave up after a few calls. I decided that this business was difficult, and I would have to gain more knowledge.
So, I did a search for “creative real estate,” and this site popped up. I looked around for a while and found the discussion forums. I clicked on just about every post and every reply. I was hooked.
I spent the next few weeks glued to this site; new questions were asked and answered every day. Plus there were real estate investing articles, free advice, and so much more. I couldn’t believe this site was offering so much for FREE! I learned a ton!
I continued to study
But I couldn’t bring myself to take the plunge. I knew there was always another new course out there, new information and strategies for investing in real estate, but I didn’t want to spend what little money I had on new courses. I knew if I didn’t DO anything, I would just have a shelf full of real estate books.
Then I got involved in an MLM (Multi-Level Marketing) company selling financial products because their sales pitch was irresistible. A friend took me to a meeting, and I was hooked. I signed up, expecting money to roll in if I just “followed the system.” Well, I did that, and it was harder than advertised.
After a year in that MLM, I quit to focus on real estate investing. I don’t regret trying MLM because I learned valuable sales skills. I do regret the thousands of dollars I lost on that venture.
At that point, I knew I had to do something. I still had my full-time job, a family, and no savings to speak of. I knew that real estate investing was the best way to building wealth. So we moved back to Maine in 2002, mostly because our families are here, and I knew that real estate in the northeast was older, and multi-family properties were more available.
My first deal
We found a duplex for sale, actually two separate houses on the same lot, which we immediately bought. We live in one house and rent the other. (It was already rented, which made it easier.)
I calculated that my portion of the mortgage payment would be about 40%, and the tenant would pay about 60%. This made total sense to me. I knew I could count on a rental payment every month, and for what I was paying out of pocket, it was a steal!
We settled into our new place, and our tenant has been great. He always pays in advance or right on time. I’ve learned a little management from owning this duplex, which is essential.
The real deal: Cash flow
But I knew in the back of my mind that this wasn’t a pure investment. I know a lot of people buy a duplex and live in one unit, but I still wanted the challenge of buying a property as a pure investment. Finally, in Summer 2003, after finding a creative-thinking real estate agent, I found a property.
It was a three-unit building in desperate need of repair. I did the numbers and they worked, so I bought it. I got a construction loan and hired a crew to fix it up. I put about $20,000 into fixing it up, plus my own (free) time, and now its done. I’ve had the property for over two months, now, and I have just rented all three units.
I am making cash flow on this one; probably not as much as I’d thought, but it is making money. I will refinance into a conventional loan in a few months. I know I have increased the value of it and the neighborhood.
The point is, I just took the plunge. Five years after finding this site, I did my first real deal. There is no substitute for experience. I’ve read lots of articles and books on real estate investing, but if I hesitated and missed this deal (as I had done many times before), I would not have the experience. Now I know first hand what needs to happen on a deal like this.
The next one will be easier, and I’m looking forward to it. Yes, it took me five years, and I’m 30 years old now, but I can say that I did one! Thanks to CRE Online and everyone who has responded to my posts and questions. I love this community, and I hope it stays around for a long time! Thanks!