As many of you already know, I started my real estate investing venture on June 21, 1998. At that time I had not done one deal. I was going through a very difficult time in my life and went for broke. I quit my job, I had no money, and I had bad (but improving) credit. I had my bills covered for one month.
I pulled off a note deal at the beginning of July in which I made $1,500; then I pulled off a flip in which I made only $1,000, but my bills were covered for another month. This is the way that I operated in the beginning. I would go out and spend all day looking for deals and would do them at any price to get my bills paid another month.
Many people have a fear of doing their first deal. I had a fear of being BROKE. I had absolutely no fear of doing a deal, but I did not want to ever be broke again. I also talked enough crap to know I could never get a JOB again, I would have been ridiculed and have move from the country.
I made many offers on properties, some of which were haphazard. But I always made offers for the right reasons based on the right principles. I struggled with some in the beginning. I pulled my hair out, began biting my nails again, but I didn’t give up. I made every single deal happen. I didn’t wait for them to happen I MADE them happen by going out and finding buyers. I even went out and found financing for myself when I couldn’t find a buyer.
Since my early days which were not so long ago, I have partnered with someone who I work very well with. Together we are very well known in the Baltimore area, and very well respected as the guys who make things happen. Our operation has grown to one in which we can easily handle 10 deals per month. In fact, our sixth month together (April 1999), we did 11 deals. I guess I’ll have to shoot for 20 now.
During this month of May, we will be putting up numbers that will more than double (if not triple) the amount of money I have ever made in a year before. This has not made me slow down to relax and enjoy it. My partner and I are focused on the big picture. We are reinvesting everything we make and building a business. Currently we own 11 rentals (all for low maintenance). We are in the process of acquiring two more rentals this month.
So you want to know how we do it…
We buy homes that need work in decent neighborhoods. Immediately, we try. If we have no takers, we then purchase the homes, rehab them, and will either sell or lease option to our buyers. Our goal is to never make a mortgage payment with our own money. The first legitimate sale that comes along is the one that we take. We don’t wait around for the home run, we are going for a bunch of singles and creating the runs that way.
While my competition is holding out for the home run on a home in the same neighborhood, I have done many other deals. Once I have someone in a home under a lease option, I then “sick” a hungry mortgage broker on them to get them financed. The home runs come shortly afterward while the bases are loaded.
Because our outlay is almost nothing per deal, I can take on everything that comes my way. I have had to adjust my way of thinking as I progress. Originally I never wanted to have rentals, but that has changed. I don’t mind keeping rentals anymore, therefore, I can make something of every deal.
We have acquired numerous hard money lenders, we have established relationships with banks, attorneys, contractors, Realtors, mortgage brokers, other investors, etc… These relationships are the key to making things happen.
I still have a fear of being broke, which drives me to keep going forward. I do not have a fear of doing deals which have totaled 39 to date. I started with no money, no credit, and no deals. If I can do it so can all of you.
I give many thanks to the great people of this site who have inspired me, helped me, and made me feel good about myself and who I am! Happy Investing!
Editor’s Note: Three and a half years ago, author Steve Cook was a beginner. He started investing in real estate with absolutely no money and bad credit. In the past three and a half years, Steve has bought and sold over 170 houses on a wholesale or retail basis and is well on his way to financial independence. As Steve says: “Real estate investing has been great to me, and it can be great for you too.”