Why Not Me

As painful as it was to see my beloved Broncos get embarrassed last Sunday, I couldn’t help but be happy for the Seahawks. If you don’t follow the NFL and want to hear a great underdog story, read up on their quarterback Russell Wilson. Because of his height, many naysayers said he could not be competitive as an NFL quarterback. At a young age, his dad told him “Russell, why not you.” He carried this mantra with him and this season made it the mantra of his team. Since the beginning of the year he told his teammates, in regard to winning the Superbowl, “why not us.”

Thus far in my investing career, I have had modest success with 10-15% cash returns for buy and hold properties. I started when the market was near the bottom and interest rates were super low. I also had to put forth a ton of cash (i.e., 20-25% down). I don’t want to sound sad about these returns, it is way better than the returns I was getting from mutual funds. Still I see others making great cash out and cash-flowing deals (like flips that pay $30,000, or distressed properties that yield 60% returns).

When I hear about these deals the doubter in my head says “you are not smart enough to do that, those deals don’t really exist, they are too risky….” My realtor ran some comps and estimated that one of my properties had increased in value by about 20% over the last four years. Again I heard the doubter in my head “that can’t be right, I would never be able to sell it for that much, no appraiser would value it that high.” Appraisers have always gone the wrong way for me. I am meeting with the appraiser to open up the property tomorrow. I can already hear the doubter in me talking to the appraiser “no way the market has appreciated that much right? Although rents have increased, it does make it more risky for vacancy, you shouldn’t appraise it for that much….”

If it appraises for at least 15% above what I paid, I can do a cash out refi to reposition the equity. Also, the increased equity would be something like a 15% annual return over the last four years (on top of my 10% cashflow)! I am nervous as this punk, who knows less about the market than I do, holds my opportunity in his hands. Also, I don’t think an investment I made would get a 25% return “I am not smart enough, I don’t deserve it, I’m just an average Joe can’t pull that off.”

Okay, I can’t control the appraiser or the game being played around me, I can only control how I respond. It doesn’t matter what return I got, or what I paid for it, this property is worth at least 20% more than I paid for it. I am capable of getting a good deal and buying below the market price. Why not me!

God Bless and keep moving forward