Two birds, one stone. 11 years and counting

I have finally taken the exciting and equally terrifying first step by setting my goal. I will end my professional 9 to 5 career of over 30 years at the end of December this year (2015) and will have hopefully begin my new career as a real estate investor.  But why does my title state 11 years? I remember reading Robert Kyosaki's Rich Dad, Poor Dad back in 2002 and feeling inspired to venture into the world of real estate investing. Although I didn't realize it, my reasons back then were pretty much the same as they are today and despite following Robert's recipe of looking at 100 properties making offers on 2 or 3, and buying 1, I honestly had absolutely no idea what I was getting into. 

Around late 2003 and early 2004, everyone was looking at real estate. The market was hot and people were literally buying properties with no contingencies and embedded escalation clauses. Sometimes they were buying them sight unseen using creative financing arrangements that leave even the most reasonable investor shaking in their boots. 

I wanted to go by the numbers; my plan was to go to my bank and obtain a home equity loan on our family home so that I may use the money to put a 20% down payment with conventional financing terms and all the normal contingencies. 

I searched Northern Virginia, DC, and Baltimore, and finally settled on Northern Virginia because I wanted to buy properties that were nearby that I could hold onto for long term and manage myself. I also liked Virginia because I knew Maryland and DC were tenant friendly while Virginia was not. 

My first realtor and I hit it off like oil and water... he kept showing me section 8 housing and prer-foreclosure properties in Maryland and DC where elderly and disoriented owners were about to be kicked out of their homes. I wanted no part of it, and stuck to my morals. Needless to say, we parted ways after a couple of confrontations and an exchange of choice words. 

My second realtor and I were far more compatible. She looked at properties as though she was looking for herself. I liked that. She had a good eye for quality properties in somewhat desirable neighborhoods, and we searched far and wide until we finally settled on a townhouse in a neighborhood nearby. I liked it because it looked like it didn't need any rehabilitation, it was very close to my home, and it was 'reasonably'priced for its location. So we put an offer on the property for 95% of the asking price and the usual contingencies (home and termite inspections). 

Sadly enough, the seller's realtor notified us that the seller had just accepted a non-contingent offer for the full price, but he went on to say that he had another townhouse nearby in a more desirable location that was similarly priced, and that he would sell it to me before listing it on the MLS if I offered full asking price. 

We set off to see the place and I was immediately hooked. "Let's go ahead and make an offer for this place with all the usual contingencies" I told my realtor. She asked me about the first offer, and I suggested we increase the offer to full asking price and see if what would happen. 

The very next day, I received a call from my very excited realtor. "You're not going to believe this", she told me. "They accepted your offer on both properties". I was both surprised and elated. We scheduled the inspections, and when everything came up clean, we settled on both properties a couple of weeks later. 

In my next blog, I will share my experiences of owning multiple rental properties.