Excuses Don't Achieve Goals

[Chris Virgil-Stone]

This is the story of my first steps as a real estate investor and some of the challenges I faced. I'm writing this in hopes that other's will take control of their future and dreams instead of letting their past or what's "normal" govern their lives.

Like many others, I went to college in hopes of a better future. Fortunately for me, I was able to secure a job as an accountant 6 months prior to graduation. This meant that I was set for life and wouldn’t have to worry about being able to pay my bills again…until I graduated. See, the area I grew up in (and got my first professional job) was small, so the $35,000 per year accountant salary wasn’t very glamorous. You may think the extra $20,000 over the pay I earned at Wal-Mart would be life changing, but it was not. Once you add in student loan payments and and rent (previously paid by student loans) I had an extra $1,100 per month of payments. That extra $20,000 ($14,000 after taxes/deductions or $1,167 per month take-home) left me with a whopping additional $67 per month for having a professional job and bachelor’s degree in finance. I knew immediately that I wasn’t going to accept this and that I would not live my life working hard just to scrape by.

As a fresh college grad with a fancy degree and 6 months of (relevant) work experience it didn’t take me long to find a solution. I just needed to find a higher paying job. Such a simple solution… until I remembered that finding my current position took 100+ applications and months of applying to every opening I could find. Relentless, I decided to pursue higher pay and started applying to places that I believed would shell out more money for my entry level skills. Come to find out, not many employers want to hire someone with 6 months of experience who hadn’t been with their current employer long enough to earn 2 weeks of vacation. I decided to re-focus and that’s where I found real-estate.

I knew a couple as well as a co-worker who each owned a duplex in addition to their personal residence. From hearing stories about their investments, they seemed to be doing quite well. It seemed like a great idea to have 2 units in one house, 1 unit paying the mortgage and expenses and the other unit providing passive income. I decided to set up a meeting with a mortgage specialist at my local bank to discuss mortgages so I too, could buy a duplex. When they said I would need 20% for a down payment I quickly saw my dream of being a real estate investor shattered. How was I going to save up $20,000 with my measly extra $67 per month? So, I did what most would do, and I went home to sulk on my crushed dreams…yeah right!

(This is the part that sets other investors and myself apart from those that never get started in real-estate)

I find strength in adversity. When someone looks down on me, tells me I can’t do something, or acts as if they are better than me, I work endlessly and tirelessly to prove them wrong, or I used to. Now my bar for personal development and growth is far higher than any of these “haters” can ever measure me against. Growing up, there were teachers who looked down on me because my family was different, and by different, I mean poor, living in a crappy trailer park with a single mother of 2 (think 8 Mile trailer park, just a little more rural). This year I’ll make more money while I sleep than most of them ever earned from their teacher’s salary. I’ve encountered people like this at every stage in life. Often these types of people do not understand sympathy, which Merriam-Webster describes as “an affinity, association, or relationship between persons or things wherein whatever affects one similarly affects the other”. Many of these people grew up with everything handed to them, and while it may seem like they get a head start in life, they often do not have the strength to push through the tough times. There is nothing wrong with growing up with abundance, however if it is not balanced with sympathy and a strong work ethic, it often leads to failure from laziness.

I want to highlight that this “grit” and work-ethic is necessary in being successful in anything. If you’re willing to give up when the going gets tough, then you will never see personal growth, or your dreams come to fruition. This quality of “mental toughness” is in every person that has experienced sustained success. How do I know they are “mentally tough”? You see it in their stories of overcoming adversity. Anyone that appears “successful” and hasn’t overcome adversity is just a fly on the wall, waiting for the fly swatter called reality to crush them.

Anyway, back to real estate. I refused to quit and started looking up more information on how I could buy a duplex. I came to learn that with a minimum credit score and only 3.5% down I could buy a property if I lived in it for 2 years using and FHA loan. This means I could be a real estate investor for only a few thousand dollars. The only problem was I didn't have a few thousand dollars. I didn't have a lot of areas I could cut my current expenses to save it either, so I needed to look for extra income or borrow it. I'm never one to ask for help but I was fortunate that my brother was able to lend me the money for a few months.

The specific duplex I ended up buying had filthy people living downstairs (days old food left out, clutter and trash everywhere, holes in walls, etc.) and decent people living upstairs. I asked for the house to be vacant at closing as I wanted to renovate each unit and my wife (girlfriend at the time) and I planned to live in the top unit (bottom unit provided more income).

 So, in March 2013 (3 months after graduating college) I closed on my first investment property. I made my first big investing mistake within minutes after the purchase. The filthy downstairs tenant had moved out, but the place still had garbage in it, holes in walls/doors and stuff (probably food) smeared on the walls. Each tenant’s security deposit was transferred to me at closing. The filthy tenant had called me that same day asking about his security deposit and I politely informed him that he would not be getting it back. This caused him to be erratic. To make a long story short, I ended up wanting to start with a clean slate and returned the deposit to him which is the right move for any purchase. The extra $900 deposit was really tempting to hold, especially since I didn’t have any money to purchase the house or to start renovations in the first place.

My wife and I, along with the help of a couple friends (enticed by beer and cheap pizza) started renovations right away. Since I didn’t have any money it was all done on credit cards. Overall the work mainly consisted of laminate flooring and paint in each unit. This only cost about $1,500 - $2,000 in materials and I had no prior construction experience. Youtube was a great resource. During these renovations I worked on the house early mornings before work, getting up before 5 am, on my lunch break, in the evenings and on weekends.

After the downstairs unit was renovated and rented out, I had to figure out a way to pay my brother back. I didn’t want to give him the rental income, that would put me right back to square 1 until he was paid back. I figured I could make some extra money mowing lawns after work and on weekends. I had done this for a couple of old ladies in high school at $5 a pop. Since I had to buy a lawn mower and weed trimmer for the rental property anyway, it was a cheap way to make extra income on my own time. I advertised on Craigslist and I started slinging my push mower and weed trimmer in the trunk of my 2-door Ford Escort, bungee strapped down. That was a sight to see. The lawn business started to grow, and I had my brother paid back within 4 months. Before long I was making more per hour mowing lawns (~$25/hr) than I was at my day job as an accountant.

Over the next 3 years I continued to renovate the property doing most of the work myself. I also continued to mow lawns in the evenings and on weekends. I eventually upgraded to a Jeep with a trailer and riding mower and then to a zero-turn mower. All these things allowed me to save and/or make more money, leading to where I am today. The sweat-equity from improving the duplex allowed me to live rent free for 3 year and make over $30,000 on the sale of the property, mostly tax-free. I will say that I was more lavish with money back then, spending much of the rental and lawn mowing income instead of saving it. Had I saved more, I know I would be more advanced down the real estate path.

The message I want to get across is that, if at first you’re told “No” or are unsuccessful, don’t give up. Far too often I meet “aspiring investors” who have been sitting on the sidelines for years, never taking the first step. Maybe they don’t have the money, time or knowledge about how to get started, they’re from a different social status or ethnic background, or they’ve faced some other difficult life event. I don’t want to hear it. I don’t care! I want to hear what you’re doing to overcome those challenge so you can get started. Take small, actionable steps each day toward your goal. Don’t let your current situation dictate the path you take or the life you have; tell your current struggles to go to hell and make the decision to live the life you want. You only deserve your dreams if you’re willing to sacrifice and work for them. Just this morning I opened LinkedIn and the very first thing I saw was a quote from Jim Rohn that says it perfect- “If you really want to do something, you'll find a way. If you don't, you'll find an excuse.”