Real Estate, Lending, Credit & Budgeting Experience Pays Dividends

[Glenn Michaels]

Investment Info:

Single-family residence other investment.

Purchase price: $410,000
Sale price: $810,000

Learning what to buy, when to buy, where to buy and how to buy can be very rewarding. EXPERIENCE! This is a word that comes with time. It can't be replaced. It teaches you how to win and how to lose. All of it combined has so much value. Gaining profits and especially large ones is really fun. Losses are hard, but teach us so much more. The key is to learn from it. That's what I've done. I taught my investors who started as a buyer and morphed into more!

What made you interested in investing in this type of deal?

I started investing in Real Estate back in 1984 when I was 24. At 19 I was very interested in how ANYONE could become a millionaire. After reading and learning about stocks, bonds, mutual funds and real estate, it became very apparent the easiest way to do this was to buy property that someone else pays off for you. Seems easy right? Experience & knowledge has taught me. I love teaching it to others.

How did you find this deal and how did you negotiate it?

I helped my investor refinance over 20 properties into 8 loans saving $7,000 per month. This led to discussing what she was doing already selling off properties with numerous agents. Sadly I had not kept in touch with her (MAJOR MISTAKE) and found out her current agents weren't maximizing profits for her. She asked me what I would do differently. My past experience paid off. I ended up selling the balance of her properties and she maximized profits in the millions.

How did you finance this deal?

Conventional financing which took a few months to evaluate her best options. Today I have many more options.

How did you add value to the deal?

I've done almost every type of real estate from construction, land, multi-unit, small hotel, raising capital for off shore to traditional and most common; single family investment property. Looking at a home and analyzing what to do and how much to invest for the largest return on investment for short term and long term are crucial. Especially remodeling. I can definitely say there is not a magic formula but experience with winning and losing in markets helps discern what works and what doesn't.

What was the outcome?

This was a huge success. Actually because this investor kept every property for more than 10 years they all paid big dividends. Many properties purchased were bought when prices were high but tax deductions and long term turned them into high equity properties. I also helped her to snow ball her loans to maximize profits. A few years later she decided to retire. I remodeled her remaining 13 homes with a strict budget and returned large profits.

Lessons learned? Challenges?

Real estate is very cyclical and often what seems like difficult markets can be actual opportunities. Long term investing in real estate rarely or seldom becomes a bad story. Negative cash flow can turn into tax deductions & equity driven as rates decrease, properties & rental values increase. Time is the key to utilize success. I've honestly been greedy and gone after big deals. Luck & timing could make anyone rich. Or poor. Stick to what has proven success!

Did you work with any real estate professionals (agents, lenders, etc.) that you'd recommend to others?

How many people can say they have 39 years in real estate, 23 years in lending, was a certified credit counselor in 2007 and teach budgeting? Obviously, I love real estate. It's something I enjoy teaching and helping others to learn and achieve success! Numerous times I have been the buyers agent and did the loan simultaneously. Often I'm just the lender for the real estate professional. Always I have something to share with the buyers if they want to learn.