Don't get discouraged

[John Golden]

Hey BP fam,

I'm John Golden a new investor from Chesapeake, Va. Moved down here to Alabama back in 2012 to attend Tuskegee University. Never knew or cared about real estate from the start. I joined the Army national guard my first year at college and thought I would be doing that for the long haul (boy was I wrong). I graduated with a psychology degree with a minor in economics and had no job lined up after graduation. I always loved to work so I had jobs all throughout college, but never knew about saving or investing money. I bought my first home in 2016 during my last year of school. I wanted to buy conventional but I had not been the most frugal with my money and maxed out two credit cards for a whopping total of $20,000 on top of $70,000 student loan debt. My credit score was in the drain before my student loans even hit so I could not go that route. At the time I didn't know what I was doing but my dad was a retired veteran and he was disabled at that so figured he would qualify for a 0% VA home loan.

I went on Zillow and realtor.com because that was all I knew at the time and after a mere two weeks of searching, I found a home: 3 bed 2 baths with a huge basement and .56 acres of land. I was so excited so reached out to the real estate agent, the owner was looking to leave Tuskegee and move to Atlanta, Ga so he was motivated, but I didn't know what a motivated seller was at the time. Anyway he wanted $56,000 for it and we agreed, but unfortunately, after the inspection some work needed to be done. Some patchwork on the roof, new paint, and some pressure washing which came out to a few thousand dollars, which we asked to be deducted from the purchase price and he accepted. Unfortunately again, the VA hired their own inspector and he wanted the bathroom retiled, and some cosmetic work on the house which totaled another $4000 which we didn't have. The owner did not want to go down on the purchase price anymore and we were tired of the run around so we went half on those repairs. This whole process started in April with me looking at homes and lasted all the way up until August 12th. My lease was up at the current place I was renting in May and the owner refused to let me move in the home until the day we closed. The realtor took care of all the paperwork and mostly everything else so I did not learn anything on that deal and he represented both us and the seller so he got double commission (which I didn't even know was a thing).

So after closing, I moved in the master bedroom which featured a bathroom, and moved two of my friends I graduated with in with me( big mistake). I didn't know what market rent was but I knew that I agreed if my dad put the house and loan in his name I would pay the mortgage. My dad ended up borrowing more than house was worth so the loan was at about $65,000 and the house was about $57,000 of that. The mortgage was about $654 and some change and I only charged my roommates $200. I brought on another roommate a year later, but I lowered the rent to $175 for everyone. I was negative cash flowing and did not even know it. That same year in 2017 I found bigger pockets but I didn't dive in just yet. 

Not much changed up until this year when back in January I started diving back into the Biggerpockets podcast, watching at least one podcast a week or so. Thanks to one the members on here Hunter I joined a real estate investor club down here in Montgomery, AL and ran into some really good people. I was working part-time jobs at the time so I had the free time to drive for dollars and go around knocking on doors with FSBO signs, but my credit was shot and I had no real income. I found a guy who was a few years older than me and had steady income but didn't have time to go around looking for deals. We didn't fill out any agreement or anything even though we should have but we agreed that if I found the deals he would pay any EMD, attorney fees or any other costs that came up and we would be 50/50 partners.

We found our first deal in Montgomery from me driving for dollars, I was able to find 1 deal after probably 100 no's but this lady inherited this property from her dad, she was out of state and was paying property taxes so she had motivation. We were able to get it under contract for $25,000 and had an estimated ARV of 112,000. I thought we had a payday on our hands, but after finding a buyer off of facebook and him coming and running his comps he offered us $30,000. I should have negotiated and done more but I was just happy to have a deal with no money down and my partner only had to put $100 in total for the deal so we were stoked. We split $2,500 on that deal and went looking for the next. I found another home driving for dollars and we ended up making $2,750 on that one about a month later. I was like ok this can work.

Right after that, I started watching at least one podcast a day starting back in June and was realizing that this wholesale game was not for me. My partner and I kind of split ways after deciding that we had different next steps, he wanted to continue wholesaling and I wanted to focus more on working on eliminating my debt and start getting buy and holds and lease-options. I bought a list from listsource.com and used that info to send out a VistaPrint mailing campaign. I sent that out back in June with about 160 names and did not hear back from anyone. 

I finally got a call two weeks ago from a gentleman who had a tenant in place and was looking to move to Atlanta, Ga but did not want to deal with being a landlord. he owes $17,500 on the property, wanted $25,000 and wanted $2000 down. I don't have $2000 so I asked would he be willing to roll that into the purchase price and he accepted. The house is worth $32,000 and it already cash flows $175. I offered to give him $50 of cash flow since he is basically letting me come in with no money and take over the cash flow. The tenant has been there for 8 months already and has a factory job, but I plan on approaching him with a lease-option once the rental agreement is up or putting some new in. I still have the negative cash flowing property but I plan on moving my friends out and either putting students in or doing a lease option. 

I am looking to continue to do seller financing and lease options as well as try out the BRRRR method, but my biggest focus right now is working on my debt and credit. I love working and necessarily am not looking to ever be job free but I would love a job that has a great work-life balance with a decent enough salary to save and invest. I currently work as a financial advisor for a company and do not like it at all. I like stability and structure in my life and my income, I never knew you could apply to Biggerpockets until I was watching a podcast the other night so I did. I'm 25, single, no kids and I love traveling so I would love to relocate and learn and be apart of the BP team. Fingers crossed, hopefully, if not now then in the future.

For anyone else brand new and doesn't know what to do just pick something and do it. I'm new and I'm messing up left and right still as you can see but you can always adjust, pivot or get help. You can't miss if you never take the shot. Good luck!

Everything I have learned has been from Biggerpockets and Chris Goff so thanks for all the content and thanks for reading my story. Please comment, give advice, share your story or connect.