I hope my little taste of success will help other people get going on their real estate investing career. I was like most of the CRE Online visitors. I slaved over the >articles, success stories, and message boards over and over until I practically memorized them. I took notes and typed up pages of tips, strategies, other wisdom from the pros on the site.
The only problem is, that I didn’t do a thing with them. They sat in a folder for two years before I had enough confidence and guts to actually use the info that I had gleaned from CRE Online. My freshman year in college (when I was nineteen) was when I started my obsession. My junior year was when I finally stopped analyzing things and did something about it.
I searched for a multi-unit property that would cash flow and have flexible financing. I have great credit, but not a lot of cash. I let everyone know what I was looking for and waited, and waited, and waited.
Finally, one of my college friends had a grandfather who wanted to get out of his rental properties. I talked to him and found that he owned a fourplex and a single-family house he wanted to sell. Both properties were free and clear and had great tenants.
I asked the seller what he wanted out of the properties; he said he thought the fourplex was worth at least $190,000, and he was willing to carry part of the note. The fourplex was in great shape (for a 30-year-old property) and comped for about $215,000.
I worked the numbers and found that I could make a decent cash flow at $164,000. I offered $155,000 to see if he would bite; he countered at $170,000; I said I’d buy at $164,000; and he accepted. We later agreed at a $10,000 down payment (borrowed from my grandfather) and 6% for 30 years.
From the get go, the property cash flowed $450/month, and I made some small upgrades. I still have the property, which now comps for $250,000 – $270,000. I got an offer out of the blue for $243,000 last week. I have yet to counter because I want to find another bigger property to roll the equity into.
Sorry about my longwindedness. (I can never seem to keep things short.) But, in just over two years the property has climbed in value almost $100,000, while I have made over $11,000 in positive cash flow. During that time I have bought two single-family homes that both have a nice cash flow.
Now, I have a monthly positive cash flow of $895 and some good equity built up. I plan to sell one or more properties soon to roll into a larger apartment complex. I know its not a huge success for some, but it’s a start. I’m still working full time, but I hope to build my business over the next year or two, so I can investing in real estate full time.
I’m only twenty-three and have my whole career to look forward to! If you take anything from this story, please realize that the money doesn’t come from reading and memorizing articles and courses. It’s in the action you take and the deals you make!