My intro to real estate "buying a crack house"

[Miles Goodwin]

This will be my first post on bigger pockets. I have been a member and follower for quite some time, learning as much as possible to feel more comfortable in the investment world. After lots of reading and youtube watching, I finally pulled the trigger on a property and started my BRRRR process I will write a separate post dedicated to that project in a different forum. I wanted to use my post to give a back story on me and my process of getting into real estate.

       About me. I am 25 years old married and grew up with two parents who both were very traditional when it came to finances, jobs, wealth, and going to college. I was an average student throughout high school and decided to go the traditional route of college eventually obtaining a bachelor's degree in business management. I would credit college to my pivotal moment when I didn't want to be a slave to a 9-5 or the traditional route. in my abundance of free time at college I discovered bigger pockets and real estate. I started reading and soaking up as much information about it as I could. It was my sophomore year when I decided I didn't have to be the traditional broke college kid. I found a way to schedule all my classes in just two days a week. With the extra free time and my partially earned business degree, I started a business doing little home projects for people in the area.  The jobs started out with a family member that lived near the college and quickly grew to their friends and neighbors.  I was making good money and saving a lot to continue to grow my business even more. 

         The summer going into junior year I realized my biggest expense of college was my living off campus and associated costs. I decided to transfer schools and move back into my parents. With my now improved grades, I was able to obtain more scholarships and finish my bachelor's degree at no cost to me. When I moved back to my hometown was when things took off. I was doing mostly construction and home renovation projects, which I knew would later help with rental properties once I was ready to jump into that arena. Senior year (2020) my business grew astronomically, this was when covid-19 was fastly spreading and large companies were struggling to maintain large crews, migrant employees, and guidelines put on them. I was able to pick up a large number of commercial maintenance contracts that I was barely able to handle by myself and one other employee. This growth and the people I met along with way are one of the biggest contributing factors that pushed me into real estate. I had basically become a building manager for a large industrial park, where I slowly picked up every building in the park.  

        With a business producing a healthy profit I started looking for properties to buy. I knew I wanted a fixer-upper so that I could gain a lot of sweat equity when I finished. I didn't think the opportunity would be staring at me every time I was sitting on the porch of my house. During this time period, I recently bought a house in a decent area of the town. Across the street was a house with a poorly maintained lawn and broken windows. It happened one day when I was cutting my front lawn. A car rolls up, It was a lady who owned the house at the end of the street. She stopped to introduce herself and small talk. I eventually asked her what she knew about the house and she let me know who the owner was and that they bought it to fix it up but had health problems so they couldn't. I said well if they wanna sell it let me know I might be interested. This house was the ugliest one on the block. I thought it was perfect, with new windows, fresh paint, flooring, and some landscaping it will be great. 

I soon met the owner, He showed me the property and wow it was rough. He informed me that he had someone break in and squat in it. They were doing drugs, busting walls for fun, and living there for quite some time before anyone noticed. At first glance inside I thought to myself no, no way. this house just needs to be torn down or burned. After looking over everything I quickly said thanks, ill let you know, knowing well I would not buy this place. That night I talked to my wife about it and that's when we dubbed it the new name, "The crack house". I didn't know how popular or catchy the name would be. Fast forward a year we still refer to it today as the crack house. After long considerations, a dozen spreadsheets, and touring it a handful more times, I decided I would buy it if the price was right. Talking with the owner we discussed and negotiated. He started out at 15k but I was about to get him to settle for 3k. It was a 2 bed 1 bath, 1,000sqft with a full unfinished basement for 3k! The ARV of the property was hovering around the 80k mark but I knew there would be a lot of work to be done.

I always thought I would never be able to find an off-market deal like this. Yes, it would require a lot of sweat equity and renovations but I knew if I properly BRRRR this property it would open up opportunities when finished. like I said I will save the numbers and details of the crack house BRRRR for a separate post but I wanted to give an example of how with some sweat blood and tears anyone can start investing in real estate. It seemed very intimidating at first (just like writing my first post on here) but I had to trust the analysis I ran and my numbers/projections. Having experts and others who have traveled the road before you also helps boost your confidence greatly. My recommendation for people looking to invest in real estate is first to read as many books as you can about it but also do not hesitate to talk to people. I found so many helpful contacts just because I brought up real estate to people. If you talk about it and are knowledgeable about it, you almost naturally attract other like-minded people. This is how I found rental property #2, story on that to come!

Thanks for reading!