You know that you’re a real estate junkie when:
- You have bought and sold more properties than your age
- You have lived in more properties than your age
- You’re on vacation discussing the real estate where you are vacationing
- You have re-designed the exterior of your neighbors house (in your mind)
- You have “your” real estate broker on speed dial
- The guy at Home Depot has you on speed dial
- You have your broker’s MLS password
- Your vehicle floor is covered in nails and tools
- Your vehicle is a sh*tbox pick-up truck, and you love it
- At night you dream about tossing your tenant’s crap out the door
- At night you dream about tossing your tenant out the door
- You have tossed your tenant out the door
In this post I discussed where cruisers get their money while cruising. What will feed our kitty? Continue on to find out.
I bought my first house when I was 23. I worked all summer babysitting, making $540 per week, saving every nickel. By the end of the summer, I had saved $4,000. It was just enough for closing costs. With a bit of finagling, I managed to qualify for a first time buyer, no money down loan. At that time, everyone thought my mom was crazy. They would say, “Why are you letting her buy a house, she’s going to ruin her credit, and, her life.” My mom was the one who convinced me to buy. She knew that I could do it, and I did.
From there, one house led to the next, until soon I was an established real estate developer/investor. I bought 3 unit buildings, gutted them, renovated, converted to condos, and sold. I also owned a bunch of “triple decker” rentals in crappy areas. I capitalized for as long as I could, while watching the real estate market climb rapidly. In 2003, 5 years after I bought my first house, I decided that I was done with Boston. I wasn’t comfortable with the exorbitant pricing. I sold everything that I had, and began to look for a new location. (I was very lucky, the market plunged soon after.)
I happened upon a large apartment complex owned by HUD (Housing and Urban Development). It was in another state, hours from where I live. The project was comprised of blocks and blocks of dilapidated row houses, in the worst possible area, drug plagued and violence stricken. Decrepit homes abound, crack heads, and prostitution reigned. It was a ghetto. Worst than anything that I had ever experienced in my 28 years. If all the abandoned, boarded up haunties in the area were to be razed, the place would be vacant. I bought it.
I went to the HUD auction and bid against 2 others. I paid $348, 000 at the auction for 145 units in complete and total disrepair. I was delighted. Compared to Boston, where you could buy 1 house for the same money, this seemed like a steal. The local papers had reports that snipers from the roofs of my new “wonderland” would shoot at cops, as they patrolled the area. So, the cops didn’t bother patrolling anymore. The place was a lawless war-zone. Anything went, murder, rape, drugs, prostitution and no one gave a damn, as long as it was contained to that area. I didn’t care. I was on a mission.
I brought a crew of guys from Boston, hired a few locals and immediately began to renovate and rent the units one by one, all low-income tenants. I completed 84 units in 1 year. The place was crazy, tools stolen daily, break-ins, vandalization, bullets through windows, and arson attempts in my units. I was even threatened a few times, which led to fights, cops, and questioning. Not to mention the nutty tenants. Anyone looking to live in this neighborhood had to be somewhat demented. I carried a small pistol in the front pocket of my jacket, and hoped to never have to use it.
I was a single parent at the time to 4 young kids (ages 2-4). I spent 4 days away, supervising my project out of town, then flew home for 3 days. Flying in and out, every Thursday night and Monday morning, like clockwork, to relieve my babysitter and see my kids. By the end of the 1st year, I was completely exhausted, burnt out and beat down. I was also in danger. I had been arguing with the residents of the crack house across the street to keep their “visitors” off of my property. The drug dealers were doing their best to intimidate me, and it was working. I had also heard through the grapevine that there was talk of kidnapping me. I know, it sounds crazy, normally I would have thought so too, but after a year in hell, I felt anything was possible, and with 4 kids, I wasn’t taking any chances. I sold.
My layer of tough skin developed that year. I left feeling that there was nothing that I couldn’t accomplish.
I spent the next year at home taking a break, and working on a fun historic home that I purchased. This house was in tough shape, everyone said that it couldn’t be restored. “Tear it down”, they remarked. I knew better. Fixed that baby up, and made it shine. The mayor of the town with the Historic Commission gave me a Preservation Award when the house was complete. I was proud. It was gorgeous.
My historic property sold and I was left with… What now? The market was a disaster. I wasn’t willing to risk doing anymore flips in Boston, but, I still had a family to feed, and bills to pay. I hadn’t a clue. I sat tight for a couple months when suddenly, one morning, as I awoke, it came to me.