This thing called real estate: How I got my start.

Knowing that the odds of anyone actually reading this post are slim to none, I am nonetheless writing it so that I can let people know that there isn't always a master plan for getting involved in real estate. As a matter of fact if you are like me and an avid listener of the BiggePockets Podcast, then you know that the advice most of the podcast guests give is to just start taking action. This is exactly true for my story.

Through a rather strange serious of events that I'll perhaps save for a future blog post, I actually ended up getting my first two full-time jobs and purchasing my first house at the age of 22...before I even graduate college. 

I ended up working for a German software company in Delaware County PA (for those curious to ask no, it was not SAP). I knew I didn't want to live at home with my parents any longer. Most of my friends hadn't graduated college yet, so when I first started looking for apartments to live in...I was very disappointed to see the $800 and $900 price tags I was seeing. This would be close to 1/3 of my take home pay!

Fortunately for me though this was the end of 2008, which means the fed had already cut interest rates down to basically zero at the same time my mom worked as a branch manager for a bank and knew that mortgage rates were at an all time low and suggested that I look into a mortgage. Based on my $45,000 income at the time I determined I wanted to keep my monthly payment to $600 a month. Based on taxes and insurance this meant I could spend no more than ~$80,000 on a house. I started shopping around and basically identified 3 towns where I could possibly find something in this price point, where I wouldn't need to worry about being shot on a regular basis and I could have a reasonable commute to and from work. 

Through some stroke of luck I managed to find a property in Wilmington, Delaware for $77,165. This was a special property because it was a VA foreclosure. At the time the VA was handling their own foreclosures and they had a special program called Vendee Financing. This program involved 0% down payment for owner occupants, a 2.25% funding fee to be paid at closing, fixed $2500 closing costs. As I mentioned this was about half way through 2008 and so my rate was an amazing (at the time) 5% fixed for 30 years . I had just enough money to buy the property and still have I think $3000 in the bank. 

The house was in pretty rough shape though. I laugh at the people on HGTV who talk about wanting their house to be move in ready, because move in ready for me on this one meant that I had a roof over my head, running water, and heat. While I had all these things when I purchased the house, the heater blew within the first few weeks I purchased the house (we completely skipped over the part where I wasn't actually at the closing because I was in Germany for a few months and my mom had a power of attorney to do the closing). As a result my dad had to buy a new furnace for me while I was in Germany, so I had no say in that. The living room also had a cool built in feature that was a 4 foot hole due to a plumbing issue that flooded from the second story bathroom down into the basement. We got the plumbing issue fixed but the first night I moved into the house I had a red Solo cup sitting in the middle of the dining room to catch the dripping water until I could call a plumber in the morning. 

Anyway...I think you get the idea on this property...If I can dig up some old pictures I'll try to find them and add them to this post at some point of the before and after shots. 

For the next several years my friends and girlfriend (now wife) spent many weekends helping me do demo, peel wall paper (with plastic knives and orange cleaner from the dollar store nonetheless), and lastly paint the bedrooms. I was smart enough to know that I shouldn't handle installing the roof on my own...and while I redid the floor in the kitchen, I didn't trust myself to put the cabinets in straight for the counter top....although I don't think the guys I had from Lowe's did that much better than what me and a few friends could have accomplished. 

I lived in this house for just about 18 months before my company asked me to relocate to California. The market hadn't really recovered enough to sell it yet and the relocation to California was expected to be only about 2 years and I knew I'd need a place to live once I came home. So with a little bit of searching the interwebs I managed to find a thing called a "property manager". At the time I had not idea what this was, except that they would help find renters and take care of the property while I was living in California for 10% of the monthly rent. I ended up renting the house for $850 (mortgage payment was only $605) and I've actually had the same tenant in that house since June 2010. 

I wouldn't buy my next investment property until 2016 (you can read about that here on the BiggerPockets Forums), but I knew over the period of time that owning real estate was a good thing and always knew that if I ever moved out of a house I purchased I would rent it out and not sell it. Even if it lost me money, because this would be just a form of forced savings and investment in the form of tax write off and equity pay-down. Until I started educating myself on BiggerPockets in 2015, this was my prevailing frame of mind, now of course, thanks exclusively to BiggerPockets and the Podcasts, my criteria for purchasing investment properties is much different now that I'm educated and an active investor and all of my properties cashflow at least $150 after setting aside 35% of rent for property management, vacancies, CapEx, and repairs.