SuccessStories New Success Stories Updated August 2003 Need a little motivation or inspiration? Landlording can be frustrating at times. This page was created to offer hope beyond your current challenges by reminding us of the "rewarding" aspects of landlording through sharing monthly examples of some of the Success Stories of our website visitors. We invite you to share your real estate and management success stories. See the bottom of this page if you wish to submit one of your success stories to be featured. SUCCESS STORY by Jerony, NJ. I encourage website visitors to take a long view of rental ownership - as long as over 20 years which means you need a staying power, both financial and mental, to succeed. A gentleman tenant moved in a one-side of a duplex of my first investment in 1979. This man still lives in the same unit, never missed a rent payment, and seldom complains. He has paid over $275,000 rent so far. Thanks to him, the duplex is paid off long timr ago. By the way I paid $100,000 in 1979 for the entire duplex. To be fair, his rent is below market by about $200/mo and he is happy. This is only 1/2 of the duplex. Last year, this property produced $25,000 net cash flow. Not bad considering my downpayment was $20,000. SUCCESS STORY by Bobbie, CA. Recently a tenant told me she was so happy to rent the place I owned that she brought me a gift. She left me a bottle of wine. Actually I don't drink wine. She called and told me she had roses in a planter but they fell over in her car, so she brought me the wine. I was really touched. What's more, she asked me when I wanted to receive the rent. It is due by the 25th before the rent due month starts. So I told her the 20th would be fine. Since the first time she had to pay cashiers check for rent and security deposit, she has been paying me in cashiers check ever since. And by the way - when she first rented the property, she didn't move in for over 2 months, but paid the rent anyway. It is a fun business! SUCCESS STORY by Wright, UT. My breakthrough property," states real estate investor, author and educator Wright Thurston, "was a 24-unit property comprised of two 12-unit buildings. It took me from the little league to the major leagues." Until then (1982), the young IBM executive had invested in nothing larger than two and three-unit buildings. Wright and his family lived in Alaska at that time, and it was becoming clear to him that larger multiple unit properties were the way to go. "We were living in what was at the time the single most expensive city in the U.S.-- Fairbanks, Alaska during the Alaska Pipeline days," he explains. "We realized that it made more sense to invest in multi-family units rather than in single family houses, or even duplexes or triplexes." "Because of high prices, it was virtually impossible to invest in a single-family home and then rent it out for enough to cover the mortgage payments. So I had been looking for a multi-unit property because I realized (1) the cost per unit would be less, (2) the competition would be less, (3) my time investment would be less because I could delegate some responsibilities to an on-site manager, and (4) I could still cover expenses even if there were a few vacancies. There were all kinds of advantages." One day, Wright found a classified ad in the newspaper that appeared to be exactly what he had been looking for. It said that a 24-unit property was for sale for $325,000. The price seemed incredibly low....until he went to see it. "How bad was the property?" asks Wright. "Have you ever been in a building where you didn't want to bump up against anything because you were afraid you'd get something on you? That's how bad it was!" Wright returned home to tell his wife Janett that the property was a major loser. But Janett reminded him of something. "Isn't it the worst property in a nice area?" she asked. "Yes," said Wright. "And doesn't it have all the right things wrong with it?" "Yes," he answered again. "Couldn't you use your management skills to turn it around?" she continued. "Yes!" said Wright as he bounded for the telephone to call the real estate agent. "Wright," cautioned Janett before her husband reached the phone, "you can buy all the property you want--just don't use any of our money." "No problem, honey," he called back as he was dialing the number. "We don't have any anyway." As it turned out, the owner was a motivated seller who worked out of state. He owed back taxes and assessments were due. He was a real "don't wanter." The seller was asking $325,000 with a $40,000 down payment. The remaining $285,000 would be satisfied by Wright assuming the existing private first mortgage and the seller carrying back a second mortgage for the balance. Wright agreed to the price and terms, but with two modifications. First, he wanted to split the down payment by paying $20,000 at closing and the remaining $20,000 in 30 days. This would give him a chance to get the down payment money because he knew he would receive prorated rents and security deposits at the closing (which he could put toward the second $20,000 payment). The seller agreed. Second, Wright asked the seller to subordinate his interest in the property so he could use the property as collateral to borrow the funds needed to fix it up. Again, the seller agreed, on the condition that Wright would not borrow more than $60,000 and that Wright would give him a $60,000 note secured by his home until Wright could show him receipts proving that the $60,000 had been spent on the property. Wright agreed, and the sales agreement was written up and signed During the next few days, Wright pleaded with banker after banker to grant him a $40,000 loan based on his clean credit record. He finally found someone willing to give him $20,000 on a short-term commercial note. He was halfway through the race, but the last lap was the toughest. "I wore out the knees of my suit pants groveling in front of every banker in town," he admits. Rejection followed rejection. At one of the very last banks left, Wright finally got his loan by promising the banker he would deposit all of the rent money from the property (over $120,000 per year) into that bank each and every month. Wright got his money, closed the deal and spent the next six months fixing up the buildings, using the four-part improvement program he now teaches throughout the country. Eighteen months after Wright acquired his first "diamond in the rough" for $325,000, the property appraised for $850,000. That's a $525,000 increase in a year and a half! Making a great deal even better, Wright refinanced the property (after separating it from a 3/4 acre piece of land to the side of the buildings), paid off the two seller-carried mortgages at a discount and walked away with some loose change in his pocket. How much loose change? Try $268,000. "And that money was tax-free to us until we sold the property," adds Wright. Plus, the 3/4 acre commercial lot separated from the property appraised for $105,000. So when the smoke cleared, Wright had $268,000 in his pocket, a $105,000 free and clear commercial lot and over a quarter of a million dollars worth of equity in the 24-unit property. Add all that to a positive cash flow that at times exceeded $6,000 a month, and you have a real estate diamond of immense proportions. Wright Thurston soon took off his IBM suit and became a full-time real estate investor and educator. Check out the article he has written on Shortcut To Financial Success With Multi-Units. Wright also is the author of one of the most popular real estate courses featured on this website. SUCCESS STORY by Bill, AR. Here's how I got started investing. A church in my town had just completed a brand new brick church and wanted to sell the old wooden church building to be torn down for materials for $1000.00. The minister was a friend of mine and approached me about buying it. I asked him why they wanted to tear it down because it was still a decent building. He said they needed the lot for additional parking for the new church (it was across the street). I noticed that the lot next door to the old church had a FOR SALE sign on it and asked the minister why they didn't buy the other lot since it was already vacant and would make an excellent parking lot. He said the church had spent all their money completing the new church and had no funds available to purchase additional real estate. I told him I would think about it and get back to him. The next day I called to see what the price of the vacant lot next to the old church was and learned they were asking $4000.00 (this was several years ago). I called the minister and told him I would be willing to purchase the vacant lot and donate it and $1000.00 cash towards the construction of the new parking lot if the church would deed off the lot that the old chuch building set on. He said he would talk to the board and get back to me. The board voted to accept the offer with the condition that I would not rent the building out for use as a chuch. I then asked my banker to meet me at the old church and asked him if would loan me $8,000.00 and take a 1st mortgage against the church, which he readily agreed to. I bought the lot, deeded it to the church, wrote them a check for $1,000.00 and put the $3,000.00 that was left over in the bank. I then ran and ad in the local paper and advertised it for $10,000.00, nothing down, with owner financing. A former realtor in my town saw the ad, needed a building for storage (he had aquired several steak houses and need a place to keep his extra equipment) and agreed to my price. As we began to discuss terms I ask him if he had any property left from his days as a realtor that he would be willing to trade for my equity in the property (like I had any). He said he had a lot in an older addition that he would be willing to trade for my equity and assume my bank loan. We agreed I took title to the vacant lot and a couple weeks later sold it to a house mover for $5,000.00 cash. The Church got their new parking lot. The owner of the lot next to the church got his money. The Ex-realtor got his storage building. The House mover got his vacant lot. And I wound up with $8.000.00 cash, that I used to purchase my first rent house later. So that turned out to be a win/win deal and we all did OK. SUCCESS STORY by Dan, MD. Purchased SFH in inner-city neighborhood that looked a bit marginal, but was surrounded by fairly good areas,for 160,000 (probably near market value at the time), lived in it for 2 years, rented for 2 years, sold for 322,000. Got fairly lucky on buying in an appreciating neighborhood. Moved two blocks away, to an even worse area, purchased a magnificent turn-of-the century mansion, with chandeliers, original stained glass windows, 9000 square feet, 16 foot ceilings, needed some work, for 230,000. Just appraised at $475,000. Another old dilapidated mansion on our block, 8 apartment units, full of drug dealers and users. Bought the building for $112,000, threw out the dealers, renovated the units, now have great Yuppie tenants. Was offered 184,000 a few months ago for the building, turned it down. SUCCESS STORY by Dan, MA. My favorite is my 8 unit. Bought it about 4 years ago for $275K with no money down. Bank loaned 75% and the rest was a 2nd mortgage from the seller. Refinanced last year and used the cash to pay off the seller (at a discount of course). Currently owe about $270K on the property and it was recently appraised for about $650K. SUCCESS STORY by Nancy, MI. Two tenant success stories that were "unexpected". One tenant, Section 8 no less, stayed with us 2 years. Always paid her portion of rent before due date. (she worked and was raising a son by herself) She was immaculent. Planted bushes and flowers in front of the house. Never complained about anything. She left because she saved up enough money to purchase a house and when she moved everything was in excellent shape. This Section 8 tenant made up for all the bad ones I've had over the years. Another tenant. This gal has been with us almost 3 years. When she drove up to the property she was in a real clunker of a car with lots of men in the car, she was the only woman. She was dressed poor, looked like a gypsy. Both my husband and I rolled our eyes and said, "Yea right" to each other...knowing she wouldn't qualify. However, to our surprise she had excellent credit. Couldn't turn her down, everything checked out. Worked at Ford Motors Assembly plant for over 20 years...Was good so we rented to her and were prepared for the worst. Turned out she is one of our excellent tenants. The grounds outside the house look like a Paradise Garden. No problems with her at all. Turned out the men in the car were her brothers and her son. Just goes to show don't judge a book by it's cover. I was quite ashamed for it and have never done it since. Clothes or car do not make the person. Many more, success stories, but these three stand out. SUCCESS STORY by Reggie, MA. Sometimes people ask, "With all the challenges and frustrations that come with the landlording business, when you weigh the pros and cons on everything is it really worth it?" My response is that I have been a landlord for 25 years and I would not get out of the business. Sure, I've had days I have been upset, but not enough to throw the towel in. Over the years, I've had people tell me, "I could never be a landlord." They've watched me, cut the lawn, paint the house, shovel the driveways and walks, clean up after tenants an prepare the apartments for the next tenant. Now I watch THEM go to work every morning and come home every night because I retired on June 30th. I was able to because of the property I own. Because I am only 52, they now say, "I wish I had done what you did." I wish they did too, because it's tough finding people in the middle of the week to play in a foursome! SUCCESS STORY by James, CA. Yes, landlording is a hard business. However, at times you can set your own hours and vacations, thats what I like. I've taken 3 cruises this last year: Two weeks up the east coast to Canada. Two weeks cruise the Mediterranean sea. Twelve days cruise through the Panama Canal. I'm only 55 and I have been retired now since 1989. My renters pay my way. Life is sweet when your building is paid for. People look at you funny when you look like you could be their child and you say, I'm retired. Editor's note: We invite you to join us on our next Landlord Getaway Cruise. We invite you to submit your success story. Please note: To make this section of our website as informative and educational as possible, we ask that included in your success story, please submit "detailed" explanations of exactly what you did or how you accomplished; 1) a good deal (how you found it, bought it, and maximized the profit) or share 2) a great tenant story (how you found the residents or kept them or got their cooperation, or any good outcome). Remember we are looking for "details" in the stories. Submit your story to editor@mrlandlord.com. Put "Success" in the subject line. Thanks!