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$396,000 Net Worth in Just Two Years

by Tim P., MI   

I just wanted to share my success story with everyone out there because I believe that with the help of Creative Real Estate Online, I am on the way to establishing a financial security that I never would have done without the help I have received from this forum.

Two years ago I began reading many of the posts on the Real Estate Financing Forum, hosted by Ed Garcia. I also began reading a lot of books. The one thing that started my real estate investing was Ed Garcia's plan of getting a line of credit from a local bank.

Now, I must admit I did not attend the How to Get Lenders Fighting to Give You Money workshop and mentoring. But being the entrepreneurial spirit that I am, I began to format a business plan to present to my local bank to obtain a line of credit to purchase real estate. With my first presentation I was able to obtain a $100K line of credit with interest only payments to purchase real estate.

My first project was a condemned property in a college student rental area in my home town. This house was boarded up, no utilities, but with potential. I drove by it one day and noticed a condemned sign on the front door and determined whom to contact about purchasing the property.

Through my readings on CRE Online, I came to the conclusion that I should contact the attorneys responsible for handling the foreclosure process. In doing that, I was able to get a payoff for the property of $52,000, and I set up my line of credit to pay cash for the property.

I must admit this was a scary and intimidating acquisition. Once I secured a payoff and took title to the property, I immediately began work on it. At the time that I took possession of the house, the side door was the only way into the house, and it had a keyed lock on it. I took that off and replaced it with my own lock until I was able to replace the door.

The next day, I came back to the house with my key to open the door, and it would not open. Someone had come and cut off the lock and replaced it with their own. I was really afraid now. I knew that the house was abandoned and was used as a drug house at some point. I figured it was the drug dealers or the original owner who had come back to scare me off.

I immediately replaced the door with a new door and lock and started to work on the inside. It took me and my handyman two and a half months to complete the rehab inside and out, and I then started to advertise the property for a six-bedroom student rental.

I was able to secure tenants for the upcoming school year, for $1,800 per month, after spending almost $15,000 for rehab, and those students stayed two years.

I just recently sold the property for $143,000. Not bad for two years holding. Now I am taking the proceeds and doing a 1031 Exchange into a six-unit apartment building. One year ago, I wrote letters to all the multi-family units owners in my area to inform them that when they were ready to sell, I would be interested in buying.

One of the owners called me a year later and said he did not want to work with a Realtor, and that he was ready to sell. To make a long story short, I was able to work out a seller financing term of 5% interest loan amortized over 30 years with a down payment from some of my sale proceeds from my first investment property. Now I own a six unit worth $225,000.

I am still learning, of course, but I wanted to write this success story to show that Creative Real Estate Online was the catapult to my success. I attended the CRE Online Convention last year in Atlanta and met Ed Garcia and Terry Vaughan.

I now have a net worth of $596,00 with all my investments in the past two years and am thankful that a forum like this exists. I will continue to learn and grow in my real estate investments and hopefully will have a chance to attend more workshops in the future.

 
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