A picture is worth $1000


Lessons from the first deal

Thursday I had my first walk through as a landlord. More I think about it, more excited I get. All my life I’ve been on the other side of the coin. Things are definetly changing.
Rehab was a challange for me. I was definetly stressed.
As laste as Tuesday evening I wasn’t quite sure how I was going to pull it all off.

Throughout the process I kept telling myself “I am learning a lot of new skills and paying the premium for some major lessons ” Just to make sure I “got” them I thought I’d better write them down. After all many of the mistakes I made were the things people warned we about. Even as I was making the mistakes I was justifying them as “learning”

This is what I learned:

  • Network with people who are ahead in the game
  • You will pay either money or time & money.
  • Trust your instinct
  • Even if you don’t know squat about rehab you’re still the boss
  • Breathe often
  • Let go and let god
  • Make a list of lessons learned along the way.

1) Network with people who are ahead in the game:
Knowing people who have been where I was, and having their support is very important. I kept calling pretty much everyone I knew for every problem, just asking stuid questions. When the carpet guy didn’t show up on Sunday ( by then I was used to contractors not showing up) I freaked out for about 30 minutes, and simply thought about people I could call for help, and I did. Monday morning I had 3 people lined up for carpet ( just to be safe) Monday 5pm carpet was in.

2) You will pay either money or time & money:
This shouldn’t even be an issue for me, but it happened. I tried to nickel & dime the rehab. I don’t even want to write about it. I am not sure what happened, but instead of getting a licenced contractor to do the job I hired a thief and a liar to teach me this very important lesson.
The rehab on this house consumed every minute of July for me. I didn’t look at a single house, didn’t make a single offer, I was totally sucked into the house. What’s funny is, I didn’t do the rehab myself. I was just baby sitting.

3) Trust your instinct
If you feel like the guy is feeding you crap, he is. All along the way Willie (Henderson), and Ike (Huey) were lying and feeding me bunch of rubbish. I knew it, but I hoped I was wrong, hoping they will somehow came to their senses, which is Segway to the next lesson

4) Even if you don’t know squat about rehab you’re still the boss
I fired & I advised business owners to fire many people in my career. For some reason ( that I’ll analyze soon) I didn’t fire sub-standard contractors who worked on this project in a timely manner. I should have never hired Willie, nor Ike to begin with, but shouldn’t hesitate to fire them either.
Also, I think the best thing to do is to admit you don’t know, rather than try to fake it. I don’t know squat about rehab, and I don’t want to know. What I know is I have a checkbook, and I am not affraid to use it.

5) Breathe often
There’s nothing better than taking nice deep breaths to ease your mind. After all nothing matters if you’re not healthy, and stress is the cause off all dis-ease.
To learn about breathing exercises click here.

6) Let go and let god
Unfortunately I don’t do this as often as I should. I always wait for things to ovewhelm me to the point where I can’t take it anymore; Then, I let go and let god. As soon as I did that WHAM ! things started getting done.
I like Wayne Dyers description ” Every time you feel resistance you say to god my plan is better than yours”

7) Make a list of lessons learned along the way.
I think it’s important to keep notes of the lessons. They will serve as reminders, as well as guidance to others.

My First Deal ( A short Sale)

It took me 1 year to get my first deal. My original goal was to get 10 homes my first year. I thought I’ll just put 100 bandit signs and Viola! let the houses roll.

Well it wasn’t that easy. Infact I was getting very discouraged. And one day I got a call from a guy who wanted me to help them with foreclosure they were facing. ( I’ve been sending postcards I designed to foreclosure lists) He said he actually got my card from some other person,

The bank was Citi Financial. The Guy who wanted me to buy his house paid $65,000 for it in 2001 and he had not paid his mortgage in 2005 ( he called me in May)

At that time I had not done a shortsale. All I heard from the people in my local REIA was, they took long and they were hard to do.

The house looked and it stank like money (a.k.a. cat urine)

I contacted the lender and explained to them I was thinking about buying the house and I wanted to do a shortsale, and offered $15K

Needless to say the lender thought I was out of mind, and oredered BPO. I asked if they like to see pictures, and the lender said yes. I sent 15 pictures ( 4 of them below)

As soon as they saw the pictures and received the BPO they asked me ( with a much nicer tone) to bump up my offer higher, and I did.

I estimated my rehab to be $5K ( read my post about rehab). To make long story short I got the house for $22,500. Well that’s not 100% accurate. All the closing costs, hard money & the rehab is done I’ll be in it $34K.

We’re putting in the new carpet tomorrow, bathroom will be finished on Tuesday. Friday my new resident moves in.

I’ll post about my struggles on the never ending rehab later ( once it’s finished) and about new experiences as a landlord soon after.

Greatest Jorney in the world starts first with a thought. begins to be reality with the first step.

This is mine.