How I accidentally got started in real estate.

"If I have seen further, it is by standing on the shoulders of giants." Is one of my favorite quotes. But we will get to that later. I decided to blog about my journey, and the ups and downs of real estate investing and life. My journey is probably not that unique, but I figured that there are a lot of newbies out there like me that could learn from my experiences along the way.  I have managed over $2 billion in construction projects at this point in my career, but I am only about 2 years into my REI journey.   

I graduated from college in the mid 90’s with a degree in construction management. After working for a small company for a couple years, I connected with a large commercial GC that does work all over the US. So, for about 6 years I was bouncing all over the country chasing the next big job. I was young, and it was exciting, I was building multi-million dollar projects, however I was working 70-80 hour weeks. One particular project we were working 80-100 hour weeks. So there was no time or energy left over to educate myself or do research on REI. I finally landed on a large project in Miami around 2002 that was going to keep me there for at least a couple years, so I figured what the heck and bought a house.

We all know what was going on in the housing markets in 2002 and Miami was no exception. Getting a loan was super easy. I mean super easy. The banks were throwing money around like crazy, and several of my co-workers took out interest only loans. I stretched further than I should have because I was ignorant at the time and thought that the bank wouldn’t approve me for more than I could afford. So I bought a house for $225k. I avoided the interest only trap and did some sort of a 7-year arm. I was definitely house poor and struggled just a bit, but nothing to serious.

Almost 3 years later in 2005 I got transferred to a different project and was moving to a different city. I still wasn’t educated in REI, so I decided to sell my house. In Miami, in 2005 things were booming. I listed the house for $400k and accepted an offer within hours. I don’t remember the exact numbers, but after realtor fees and closing costs, I cleared somewhere around 150k on the house.  Success!!

Still working crazy hours, and still not educated on REI I decided to buy a house in the new location (Orlando) since the last one was so easy. The new house purchase price was $297,000 and I put a $100k down payment. In hindsight there were a lot of other things that I could have done with the $150k, but at the time I thought that I was a real estate mogul just because I had some dumb luck.

So life happens, and I meet this wonderful woman (who would become my wife), but she lived 3 states away. So we did the long distance thing for about 2.5 years if you can believe it. Fast forward to 2007 and the market has really softened, but it isn’t terrible. I decide to move to Indy to be with my then future wife, and try my hand at being a landlord from 1000 miles away, having done no research, and having no experience. I pack my stuff, list the house for rent with my realtor, and move to Indiana.

Tenants weren’t bad and rent mostly showed up on time. Vacancy was a killer because I basically sacrificed a months rent to the realtor to list the place and find a tenant. I thought that I was clearing about $325 on the mortgage, but something seemed to always pop up that would wipe that out. So it was a break even deal at best, but I was building equity in the house with someone else paying the mortgage, so I was OK with it at the time. Plus my hope was that the house would continue to appreciate. The real downside was that nearly all my money was tied up in the house, and I had no clue how to access it.

Then 2008 hit. Remember 2008? Housing prices in Orlando tanked. Even though I was in a desirable area, it tanked hard. The only option that I could see at the time was to keep renting it, so I did. For 11 years. Making no money except the small amount of equity that would go into the mortgage every month.

But then 2009 came . . . to be continued.