Flip Real Estate and Make It Big Using Someone Else Money Essay
In 1980 I was young and broke. I was about to starve to death! I had no money, drove an old beat up pick up truck and had not so great credit. Not a really great launching pad for a would be real estate investor would you say? Despite all that I had going wrong, I did have one thing going for me I was too young and inexperienced to know I wasn’t supposed to be able to succeed as an investor, so I believed I could. That proved over time to be a valuable attribute.
I mentioned in an earlier hub that at times when I didn’t know what to do, I sought the advice of and older more experience person who did know and as I have often done in my life, that is exactly what I did in this case. I knew I wanted to buy and sell real estate but up until that point in my life all I had done was dream of doing it to the point that it became almost an obsession with me. I hadn’t done it but in my heart of hearts I knew I could. So I went and talk to a man I knew would know exactly what to do because he was already a real estate investment millionaire making the kind of money and living the kind of life to which I aspired.
As with most successful people upon agreeing to see me he made no bones about the fact that he was a busy man and didn’t waste any time getting right down to business. As we talked he began to tell me all the things that I didn’t want to hear. He told me that I was too young to be taken seriously, that I had no experience and even said that my truck didn’t quite project the image of a successful real estate investor. He of course drove a tricked out four wheel drive SUV that did everything but make you a cup of coffee. I was pretty close to being ready to throw in the towel feeling as if I had just gotten a pretty good ass whipping when he paused for a moment and with something close to smile on his face and told me something that changed my life. It had a tremendous impact on the way I began to do business then and still does today. He said and I quote ” Boy you don’t have much going for you but what you do have is what is referred to in the business as a (silver tongue), man you can talk. I had zero interest in sitting down with you but you talked me into it. My advice is to use that asset to your advantage. There are some really smart people out there who can’t string two words together but you have an ability to convey your thoughts. I’ll say again, use that gift.”
I left our meeting feeling a bit better than I had thought I would at the outset and on the ride home I thought about what he had said over and over again trying desperately to put a plan in place that would do what he told me to do. I couldn’t sleep that night and at 3 am got out of bed and sitting at my kitchen table wrote what would prove to be the best letter I had ever written up until that point in terms of dollars in return.
The letter was simple and to the point basically what it said was that I was a real estate investor looking to buy a tract of land of from 50 to 500 acres and if there was an interest in selling to contact me at the PO box or phone number listed below. The next day I borrowed money from my dad and took the letter to a local print shop asking them to produce 300 copies. I then went to the local tax assessors and made a list of names and addresses of everyone who owned 50 acres or more. This took about three days. I then picked up my letters, bought some envelopes and a few stamps and headed home to get started. I used my list and hand addressed a few envelopes each day placing them in the mail until I had completed the whole list. It only took a few days until I started to get some responses and all in all I got 32, a little better than 10%.
I then contacted my mentor and told him what I had done and even though he continued to say I was nuts he seemed pleased and told me that he would finance my gas and other incidentals as I looked at the available tracts and that he would also put up the money If I to place a deposit on a tract and buy it If I found one that made sense and would agree to split the profits with him if and when we made a deal. I gladly agreed as I had no other means of getting a deal done therefore I had nothing but time invested and really had nothing to lose.
In short order I found a tract that was owned by a gentleman who lived out of town. He hadn’t been on the property in years and wanted to sell it and he had already established a figure of $1000 per acre as his selling price. I had done some research and had determined that a local timber company had been buying tracts in the area similar to this one and that the average price they were paying looked to be about $1500 per acre. That said, there appeared to be a reasonable chance for profit on the this deal so I took it to my partner and he agreed. I made an offer of the asking price which the seller promptly accepted. We drafted a sales contract using a local attorney who had long represented my partner and I arranged to drive down to a town several hours away to meet with the seller and get the contract signed. Armed with a cashiers check for $500 as an earnest money deposit and the contract I headed down for the meeting.
I arrived at the sellers home, received a warm welcome and after going over the terms of the deal, presented the seller with the earnest money check and got his signatures on two copies of the contract one for him and one for me. I thanked him for his business and headed outside to leave for home. Talk about bum luck, my damned old ragged truck parked in his driveway would not crank. The seller had to jump me off to get me on the road. Man did I look like a big time Real Estate Mogul or what? Even still, broke or not, ragged truck or not, I had talked my way into a deal that was about to make me some money and I wasn’t to let a little thing like a worn out truck get me down. Over the years I have had a good laugh about that but I can assure it wasn’t really very funny then.
The next day, we checked the title to the property and began looking for a buyer. We found one in pretty short order, in less that 30 days to be exact we sold the tract to the timber company I spoke of earlier and made a $54000. We put up a $500 earnest money check and made $50000 after all expenses. I was ecstatic. My partner was happy as well and becoming convinced that I did have what it took to make it went on to back me on several other deals in which some very nice profits were realized. I have made a lot of deals and some serious money since then but there is never a deal that is any sweeter than your first. My cut was $25000 and at that time I thought that was all the money in the world. I would go on to make more but I will always remember that deal with a fondness like no other.
That is the story of my start in this business. If you are dreaming of doing something similar stop dreaming and start taking action. It is there if you want it bad enough and are willing to work for it even if your broke and drive an old ragged truck. Get out there and do it the only one stopping you is you!