Skip to main content
No. of Recommendations: 17
carlosmer:
The first problem I found in my area was the fact that the duplexes were too old to last another 30 years. They were expensive dumps. It would be cruel to take my wife from our house to one of those terrible duplex units that I saw.

Trick:
I don't know you at all, carlosmer, but I suggest you buy the book Rich Dad, Poor Dad. It's not a great book, but I think it might open your eyes to the way many real estate investors live until they get into the game a bit

I bought my first house in 1981. At the time, the prime rate was 19%, I was 2 1/2 years out of college, I had very little cash, but I hated paying rent. I tried to buy a 4-plex in a trashy neighborhood to live in one and rent 3, but I couldn't get financing.

So I bought a house. It was the house I could buy. It was about 700 square feet. It needed a roof. It needed windows. It needed a furnace. It needed paint, carpet, a new bathroom, a water heater.

It cost me $26,300. I was able to assume a first mortgage at 8 1/2%. I had the seller carry back a second. I hocked my car to raise some cash, and I ran my two credit cards up to the max to raise more cash. Then I was a homeowner.

With the first, the second, the car loan and the credit cards, my first dumpy house cost me $571 a month. But it was mine. And after 5 years, the payment was down to $160 a month, and I was saving a lot of money from my salary.

I moved out in 1986 into another fixer-upper, and that is when I became a landlord as I rented out my old house. In 1988, I started seriously playing "the game".

Since that time, I have bought and sold tens of millions of dollars of real estate. My current gross worth is in 8 figures, and my net worth (somewhat depleted in the last couple years) is still in 7 figures. My monthly mortgage payments total more than a lot of the people reading this gross in a year.

It is only in the last several years that I have assumed a more expansive lifestyle. It hasn't always been easy, and a couple times (including recently) I have been very close to broke. But it all started when I decided to live in a dumpy little house and fix it up, rather than live the way I thought I ought to be able to live.

I now live in a new 4100 sq ft home on 17 3/4 wooded acres well out in the country. It took me a bit less than 20 years from the time I started buying real estate to get to that house, and I didn't get to it until I was sure I could afford it under most conceivable circumstances. My master bedroom suite is about as large as that first house of mine.

I still own that little house, and today it rents for $530, and is in immaculate condition. I refi'd it a couple years ago to fund an expansion and got $50K against it.

As Rick says, it isn't easy and it won't "just happen." You'll have to work, and if you decide to do it seriously, you might just find yourself doing some things you never dreamed of doing before you started. Sometimes it is depressing, sometimes it is aggravating, sometimes it is frightening, sometimes it is just very difficult. But if you are stubborn enough and stay the course then at the end of the day, you have a lot.
Print the post  

Announcements

What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.