Your first investment (by Richard [MI]) Apr 29, 2021 11:50 PM|
Your first investment (by Robert J [CA]) Apr 30, 2021 3:07 AM
Your first investment (by DJ [VA]) Apr 30, 2021 8:07 AM
Your first investment (by Tom [ME]) Apr 30, 2021 8:25 AM
Your first investment (by S i d [MO]) Apr 30, 2021 8:40 AM
Your first investment (by Gene [OH]) Apr 30, 2021 11:28 AM
Your first investment (by 6x6 [TN]) Apr 30, 2021 11:53 AM
Your first investment (by WMH [NC]) May 1, 2021 8:17 AM
Your first investment (by Shelby [IA]) May 1, 2021 9:02 AM
Your first investment (by Ray-N-Pa [PA]) May 1, 2021 12:36 PM
Your first investment (by Pmh [TX]) May 5, 2021 5:29 PM
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Your first investment (by Richard [MI]) Posted on: Apr 29, 2021 11:50 PM
We have been talking a bunch lately about what we are going to do as the next few months go by. There are several directions/possibilities.
In the Govt rental takeover thread a few lines down, I mentioned how we were investors and entrepreneurs and how we decided to get into the landlord business. That got me thinking about my first investment and how I made the decisions to do this business.
Maybe some of you can relate how you made your first decision to become a landlord .
For me, I was a contractor doing mostly remodels, new houses, small commercial and industrial projects in California. Some of my customers were more experienced flippers who bought, fixed and sold places like many of us do. One day, I completed a job for one of these customers and I received roughly $10,000 for the job. My customer flipped the place a few days later and made over $40,000 profit. He was only there an hour or so each day, just to make decisions about the place. Once I saw that , the light bulb came on and I said to myself, "I'll be having a bit of that!" So I looked around and found a place that needed some work and would take the $10,000 as a down payment. The deal was done and my first rental was mine. Of course, I made many of the rookie mistakes, lost money from bad renters and so on. But, I sold the place a couple years later and made over $30K profit off it. By then I had several more places. I then sold my contracting business and retired and now live off the rents and the profits from flipping a few houses occasionally. I've moved a number of times during the time since I retired but I've always found places to buy, fix and flip and have rentals wherever I am. As I move, I just sell and move the investments to the new area.
How about you?
Your first investment (by Robert J [CA]) Posted on: Apr 30, 2021 3:07 AM
On my 16th birthday I went to my a Honda Civic. It was going for $7,000. Add tax, delivery, insurance, etc. -- we're at $9,000. I asked the sales women what can I get for the car 1 year down the road. She said I could net $5,000 from the sale of the car. I wasn't about to loose $4,000 in equity just to have a new car! So I walked away.
Two years later on my 18th birthday I made an offer to buy a 3 bedroom 2 bathroom pool home in Canoga Park, CA for $72,000, with only a $14,000 down payment. The offer was accepted. This was March 1978. In 1986 I sold the home and did an exchange. I got $125,000 in escrow and used $45,000 to buy my up-tick, putting $80,000 tax free into my pocket. Not going to explain the exact details. Then sold the up-tick property back in 2017 and got $520,000 after expenses.
So by not buying a new car at 16, that money went buying and exchanging the investment home, making me over $600,000.
Along the way I purchased many homes, apartments (small and large), retail, etc. --47.155.xx.xxx
Your first investment (by DJ [VA]) Posted on: Apr 30, 2021 8:07 AM
My first rental was the first house we had bought and lived in - until we outgrew it.
My previous landlord was a couple I knew at church - who spoke of the several rentals they had. And my car mechanic spoke of how his rental income helped him have his nice home for cheap.
It made sense that, more people are born every day and need a place to live and there is no more land being made - so there is always a market.
When we bought a bigger house for our family, the first one turned into a rental.
Thankfully, I knew enough to ask & get referred to a screening company run by very helpful, long-time local landlords who offered advice & referrals to tradesmen, in addition to teaching me how to read a credit report. They also introduced me to the local investors' group, where I soon met Jeffrey & his teaching. --68.229.xxx.xxx
Your first investment (by Tom [ME]) Posted on: Apr 30, 2021 8:25 AM
Bought a derelict commercial building in Portland, Me for 25K with my brother in 1976 when I was 25. we were both single then (key fact) and threw sleeping bags on the floor the first couple of nights.
Bought him out in 1999. Building now worth over 2M.
Onetime slum area is now called the "Old Port" --74.78.xxx.xx
Your first investment (by S i d [MO]) Posted on: Apr 30, 2021 8:40 AM
I briefly held a real estate salesperson's license in 2001-2002, during which time I got acquainted with an investor from church. I showed him a couple dozen properties and learned the ropes for what made a good investment.
Bought our first rent house in 2005 and still have it today. It's a little 2-bed, class C cheapie, but has more than doubled in value and still throws off about $200/month pocket money.
Our "empire" grew to 12 units, but then 2008-09 shut down our growth because we didn't understand how to profit when there was "blood in the streets" as Warren Buffett famously said. We started acquiring again in 2012 and are now into commercial and looking to take up flipping again for a stint as I've found a source of well-priced homes in a hot market.
My advice for starting investors would be to find the sources for money needed to grow. There is a lot of private money sitting out there waiting to be deployed somewhere better than a bank CD or passbook savings account. Offer people a better alternative and show them that you know what you're doing. Also, people who hate the stock market often like the tangible aspect of real estate, even though it still has risk it's a different kind that suits people's temperament better. Make it a win-win for all!
Your first investment (by Gene [OH]) Posted on: Apr 30, 2021 11:28 AM
In the 1980's, I had my first nice job and I wanted a nice car. So I bought a used car but I needed to borrow some money from my credit union. The loan was repaid by paying $100.00 every two weeks which came directly out of my paycheck. At the end of the year the loan was paid off.
The credit union's policy was that unless you stopped it they would put that money every two weeks into a savings account. At the end of 4 years, I had over $10,000 which I used as a down payment on our first rental house by assuming the VA loan. I still own that house and it is up for rent right now. --138.43.xxx.xx
Your first investment (by 6x6 [TN]) Posted on: Apr 30, 2021 11:53 AM
I am glad you started this Richard. Thank you for sharing.
I wish that I had been half as smart as those of you on this form and wish the same now but I am slowly learning from all of you.
I wish that I had realized a lot sooner how ignorant that I was about life and especially about money. When I was a kid I lived with my mother and my older sister. My mother was uneducated and we lived on food stamps and welfare. My parents had gotten a divorce when I was real young and they were not good with money but I didn't realize that for a long time. My mother never learned to drive and so we relied on others to take us places.
When I was a young teenager I came to the conclusion that I did not want to live on welfare as an adult. I don't where this thought came from and I still had no guidance and no knowledge of money or how it worked. For whatever reason though, I decided that the only way out of this life style was to find work and make a paycheck(very week check, might I add)and save every single dime that I could. I never went anywhere and experienced anything (and still don't, go figure) as that would eat up my ability to save. There is one major flaw though as I was not wise like Robert J and I love vehicles, especially trucks. I ended up not realizing what a waist of money that it was to buy and tinker with vehicles ( I should sell the Deuce now, poor Deuce). I did however manage to save otherwise and then I put a down payment on my small 1910 home that I live in today.
A few ago I decided to remodel my home and after that paid off my truck, which I also still drive as I don't want to buy a new one. I became debt free and I watched a cousin of mine grow up and start college and I realized that I just keep watching people pass me by and start work and making more money then I have ever been able to do. That feeling stinks. So, I decided to go down to a local book store and search through there free book bin and started getting the older college text books that nobody wanted. This was a challenge to teach myself from college textbooks when I wasn't good with books and hated reading. I just read them from front page to back including all of the contents and dedication and other pages as to not miss anything. Now, I did however, skip over a few pages of x-ray pictures in the beginning of a psychiatry text book(that was interesting) that I got as it was too complicated for me(they where x-rays of the brain, the part that I have trouble with, go figure).
After a while I decided that I wanted to look for a house to buy and resale or possibly rent. I found my rental at that point and I had no clue what I was doing, not that I do now. I didn't know what any of the terminology was or how to go about things. I didn't even realize that I was investing. Needless to say, I have made plenty of mistakes and have still got a lot of learning to do.
Unfortunately, it was only about 2 1/2 years ago that I realized that I needed to start learning more about it. I had a friend that talked about someone else that was getting into section 8 and so I started off Googling about it and I found a podcast that I was listening to and there was mention of this website. I have had a learning curve to learn a little about using the computer as well. I had never been on a computer very much at all and had certainly never been on a forum.
I paid 31k for this rental and it is now worth about 130k-150k. It is in a C class neighborhood and about a well kept C home. Due to this, and all that I am learning from all of you, I am starting to get the picture and am learning more about money. I am slowly realizing that, while my savings strategy saved my life, I could have done a lot better. I am starting to realize that saving the money in the bank is not such a great idea. Having some for a backup plan and for good measure is but the rest I need to invest.
For whatever reason, I have been hesitant to pull the trigger on another property. Partly Convid(thanks NE) I guess. When I bought my rental, I just did it. I am gradually getting to the point to "just do it" again. --73.120.xx.xxx
Your first investment (by WMH [NC]) Posted on: May 1, 2021 8:17 AM
6x6, you are still way young compared to some of us when we got in this! I *wish* we were your age again.
Given the current climate, it's imperative to choose the right tenants but you have learned how to do that here and at Mr. LL Convention so you are ahead of the game now for sure. --50.82.xxx.xxx
Your first investment (by Shelby [IA]) Posted on: May 1, 2021 9:02 AM
We were buying a house on contract (only way hubby could buy before I came in his life), but we wanted a bigger place. We knew we couldn’t just sell it since we still owed on it. So in 2010 we moved and left the house on contract to hubby’s oldest son, but we made the payments and he paid us. After a couple years of that he got in trouble again and went into hiding, abandoning his pregnant girlfriend and the house. She moved out, we paid the remaining balance and fixed it up a little. Then rented it out. Now we have 5 total. Slow but steady. --50.82.xxx.xxx
Your first investment (by Ray-N-Pa [PA]) Posted on: May 1, 2021 12:36 PM
The military authorized single service members a housing allowance which sounds great. The housing allowance for San Diego was a joke compared to the cost. I couldn't afford a SFH so I decided on a beat up 3 BR triplex in a not so nice area. The place was complete with bad tenants.
I learned an important lesson, if the residents are not happy - you will not be happy. I didn't know how to manage real estate so I basically had a flop house for other sailors.
Then I left for deployment. I just tossed the keys to the unit to a broker and asked him too look after the place and I would be getting back in 6-8 months. On deployment there is little privacy. I was really looking forward to getting my place back. I noticed something with Dave looking after the place.....it was REALLY making money.
After getting back I expected to move directly back into my old place, but Dave started talking craziness like tenant rights and I can just boot them out. I told Dave I wasn't happy about this and I didn't want to stay on the ship........he told me to go buy another place. I let him know that it is illegal to own more than one place.
So I was schooled and taught that this is a business and you can actually grow a business. --24.154.xx.x
Your first investment (by Pmh [TX]) Posted on: May 5, 2021 5:29 PM
bought 10 acres of land owner financed interest only payments with 5 year note. $50k. borrowed from 401k to pay. sold in year 6 for $350k to a developer. used some of the proceeds to pay 20% on each of our first 5 rental houses. --72.180.xx.xxx
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