The mistake I almost made…

Well being that I live in California it was a complete culture shock when I looked at prices in…. well basically any other state other than California (with an exception of a few). The first city that I was looking to invest was Indianapolis, Indiana. The reason for this was mistake number 1. I heard from one person that he invested in single family homes in this city and made good money doing it. One may wonder why I consider this a mistake. The reason why is that I relied on someone else’s research to try and make a decision for myself. Next, who know’s if he was truly making the money he said he was I had no proof. I also didn’t do the proper research on the area to decide to buy in this area. There’s a lot more but let’s carry on…

After seeing the prices and picking my jaw up off the floor I decided to hire a real estate agent and get pre-approved a loan. I actually had a really good agent out there but again I was relying on someone to do the work for me. I was also determined to do it remotely, because the guy from the workshop said he did (please don’t judge me or ask me why lol). Anywho, I proceeded with the loan process where I was finally turned down after he decided that I wasn’t qualified due to not being in my field of work for 2 years. After I was let down with this news I was bummed! After “all the work” I put in I was turned down 🙁 man I was bummed. I carried on with my regular day job for and again put real estate in the back of my mind again for several more months.

Now in the big picture what was the mistake(s) I made? Look my eyes got huge when I seen you could buy a whole house for $50,000! I mean a whole house, that was amazing to me. I figured I have a mortgage on an income property of something close or less than what most people pay for car notes. I figured after mortgage, taxes, and insurance I would be walking away with about $500-$600 per month. I didn’t educate myself much more than hearing what other people had said. I wasn’t much of a book reader at the time so I thought I could get away with not reading the books so many people recommended.

What did this mean for me ?? This meant that I wasn’t aware of other things people budgeted for through rental income such as vacancies, capital expenditures, and even repairs and maintenance. This means that I didn’t know that you should check the job market in the area so you wouldn’t end up owning a home in a situation similar to what happened in Detroit. This means that I didn’t know a damn thing about investing in rental property and I am glad that I didn’t make what could have been a horrible mistake. Being turned down for that loan in the long run could have saved me a bunch of money.

Moral of the story educate yourself. I am now a big advocate for self education. Of course you can go and pay the big guys thousands of dollars and get in debt before you even make anything, but I like the idea of self education, networking and then using that money towards your first deal in whatever area you choose to work in. There is tremendous value in educating yourself before jumping in 3 feet of water head first!

Filed under: Avoidable mistakes, Business, Fina

Why Real Estate?

Hello world and welcome to my very first blog post!

I wanted to start a blog just so people can know more about my story and know where my actions are coming from. So let’s get to it! I want to give you the nitty gritty so we’re going to take a journey all the way back to when I was 18 or 19. I received a post card in the mail to attend a free real estate event and get a free digital camera just for going. So I went and invited my cousin to go with me. It was at a fancy hotel in the heart of downtown San Francisco where they served hors d’oeuvres (yes I had to google that spelling!) and had hundreds of chairs in the middle of a huge conference room. We both went to the event which was interesting but sounded “too good to be true”. They displayed an 18 year old man who had made thousands of dollars working with them. We thought there was no way, this must be a scam! Then the sales pitch came just pay us $2,000 and we’ll teach you how to make millions too. That was it for us tell tell sign it’s a scam! We stayed a little while longer then it was break time which for us was time to go! We left and went our separate ways and didn’t think of it until years to come.

It took all the way until 2015 when I kept seeing this commercial on TV come learn how to flip houses and make money in your spare time! Over and over this commercial played until I finally called the number and signed up. I went to this one (which was also at a hotel) and listened to the speaker present. This guy different from the first event made it make since. Maybe it also helped that HGTV and other networks had started airing flipping shows on TV which made the whole idea seem so much more believable. Anyhow, he spoke of places he bought houses fixed them up and rented them out to come away with positive cash flow at the end of the month which they called passive income. He spoke of how he did this in a different state remotely without even having to visit the state to see the house or check up on the property. He spoke of how he bought properties fixed them up and then sold them for a huge profit which he called rehabbing properties. He spoke of this thing called financial freedom which was not having to depend on a w-2 job to be able to support yourself and family. Everything he talked about was like nothing I had ever heard of before.

Then came the catch…. We will teach you how to do all of these things in a 3-day seminar for only $200 but wait you can bring someone with you. Being that I was still a broke college student and I had about $102 in my bank account I knew it was over. But then a little ol’ lady next to me said do you want to go together and we split the fee? I thought about it some more and said yes! We went together to the 3-day seminar and guess what?! My mind was blew even more! The things I learned about, S-Corps and C-Corps and LLC’s and tax deductions and flipping and buy and hold and on and on and on was soooooo amazing! I knew they had to teach me more! But wait, then the catch came again! We will teach you all of this in our coaching program for just $30,000 but wait remember it’s your education you’re paying for. Well I knew I was seriously out this time, but what I learned from those classes was well worth the $100 I spent. Not only because of the knowledge they taught me but from the new world it opened my eyes to, now that was priceless!

Unfortunately, that 30k price tag discouraged me for a while, but not forever! Real estate from then on always stayed in the back of my mind. I’ve always wanted to own a business and I finally put a tag on what that business would be. I always knew that it was people who owned businesses who were rich and/or wealthy and I knew I wanted to be that one day. I knew that I wanted to help people in this world who need help. I knew I wanted my family to not need or want for anything and I seen real estate as a beginning to that end. I now knew that what it was that I wanted is called financial freedom and I now had a path to getting there!

It took up until 2017 when I buckled down and got serious about it! There was no more playing around I needed to do this and I needed to do it now. I found a website called biggerpockets.com which I learned unbelievable amounts of information but wait get this FOR FREE! I couldn’t believe there was such a place and none of these seminars dared to mention it (I guess you can see why). I also began to self educate reading as many books as I can and listening to podcasts. I went to school to get my real estate license. I also started to go to real estate networking events in my area. When I took the plunge I wanted to make sure I was ready!

If you’ve made it this far I’m glad I didn’t bore you to death! 🙂 I just wanted to give an overview of where this career started and where it’s brought me to. I am looking forward to what lies ahead of me and hopefully I can bring some positive go-getters along on the ride with me!

Thanks for reading I’ll be back soon!