All Forum Posts by: Dean Julie

I began learning about real-estate investing in 2007. Did my first short-sale in 2008 and netted $21,000 in 22 days. Bought two rentals in another state in 2009 on a credit card that I eventually defaulted on, because of divorce in middle of 2009. I've been clearing out all the post-divorce crud over the past few years.
The ex-wife and I short-saled the 2nd marital home with a $60,000 deficiency still lingering around. We foreclosed on an investment SFM. I got the 1st martial home in the divorce and rent out two of the rooms while I live in the other room. I still have the 2 out of state rentals that are holding their own at break even.
I lost my job in March of this year 2013, and here I am today.
I probably can hold out till the middle of summer without having to get another job. I've heard about, I've studied about, I've learned about real-estate investing all of these years, with an interest in short-sales and self-storage. If I live real lean, I can get by on $1000 a month. To live comfortably, I would prefer $2000 / month.
At this point in time, I can obviously do this as a full-time job. How possible and/or likely is it to get things going in a few months to cover my living expenses? Or, do I need to get another job and look into real-estate investing as side work until it can replace my job?

This one's complex and I need immediate input, so I thought I'd post it here. Feel free to move it to Landlording if it would fit better there.

This is a semi-cry story, and its long; brace yourself.
In May of this year, my now ex-wife decided she would get a divorce. Mostly to take the money, the kids and the house. Due to that, I was out of the real-estate business for most of this year. In April of this year, I bought two REO properties in Toledo, Ohio - I live in Utah. I paid $7,000 for each. The person that sold me the properties claimed that he was going to property manage. I paid him $1,500 per property to do that. As I said, the divorce consumed pretty much all my time from May until November 4th when it was finally completed.
On November 5th, the city of Toledo sent me a Nuisance notice concerning one of the properties I bought. It basically said that I have to either fix the property or demolish it, or the city would demolish it for me and send me the bulldozer bill. Demolition bills typically cost between $10,000 and $15,000. The proceedings from my divorce require me to pay $1,160 per month in child support. On top of that, I have to cut my ex-wife a check for $19,071 by December 1st.
Upon getting the notice from Toledo to fix the properties, I wanted to skip the whole damn country and fly to Spain. Haha! I speak fluent spanish. A few minutes after I had that thought, I just told myself to buckle down and get the job done! So, I started calling the Toledo Real-Estate Investing Association. Within a few days, I had a solid general contractor lined up to fix one of the properties. He gave me an estimate of $6,000 to $10,000 to rehab one of the properties like it needs to be.
Once I got the city nuisance notice, I started to call around to find out what happened to the "property manager" that initially sold me the houses. Turns out that he was just a middle-man who bought the properties from another company and re-sold them to me. That's fine; nothing wrong with that. I contacted the original company and came to find out that the "property manager" embezzeled $20,000 from that company and skipped town to somewhere in New York. Fortunately, I did purchase the properties and have title to them.
So, I began to call the utilities to get that next part taken care of. I came to find out that I had actually bought two duplexes instead of just SFH. Bonus. On one of the properties, I came to find out that there is an outstanding $3,025 water bill. Seems somewhere between January and April, the water had been left on and flooded the place before the city finally decided to shut it off. Not a bonus.
Despite all that, I listed the water damage property on craigslist and actually found a buyer for the property that was very interested in doing the fix-up work herself. I negotiated and she agreed to pay me $13,000 for that one on a rent-to-own at $280 per month until paid for. I am presently in the process of having her sign a lease agreement and put the property under a land contract for the sale.
The other property that is having the ~$6,000 rehab done on it, the contractor owns a dozen or more properties in Toledo that he rahabs and property manages. He says that he can do the same for this one and rent out both parts of the duplex, probably for $280 a month each side.
Oh, and the ex-wife and I had a "rental" property foreclose on us in July 14, 2009, and we are currently not making payments on the marital home (per the divorce stipulation) and she's living in it for free while I am stuck in a 1BDR $575/month apartment. Don't really know if that has any significance on any of this, but, like I said, this is a semi-cry story. Haha! :cry:
Oh, Oh! Chase Manhattan has our mortgage on the marital home. Due to us not paying on the property, they put a hold on all my accounts with Chase until I pay them off. So, on top of having a foreclosure on my credit, plus over 12 months of late payments on both 1st and 2nd's, I don't even have credit cards to fund any of this, much less loan possibilities of any type.

Ok, I think that's it. So, presently, I have the ball rolling on both properties. I have the city lined up to get utilities on. I have rehab being done on one property, with parts on order. The guy doing the rehab is well known in the local REI Association and will double as property manager. It should be ready to be rented by mid- to late- December. I have a rent-to-own tenant buyer in the other willing to do all the rehab, since she will eventually own the house anyways. I have $19,071 check to pay to my ex-wife by December 1st, and I think I'm gonna tell her to stuff it and use the money to make these two properties function. I'll still pay the child support.
I met with a bankruptcy attorney today and he said that my ex-wife truly screwed me over in that if I filed now, I would end up paying around $122,000 when it was all said and done. If her and I would have filed jointly, we would have paid the bankruptcy attorney $2,000 and been done with it all.

So, what is everyone's ideas, suggestions, advice, criticism, tips, tricks, sorrow, pity, pain, remorse, wish me the best of luck? In the end, I've been around enough, read enough on these boards and elsewhere, been to enough guru seminars, can find the contacts and people to make the project happen, am intelligent enough and tenacious enough to get this done; I just gotta do it without having a catastrophic panic breakdown. Hahaha! Still, I wanted to get as much brainstorming involved that I could as this is the first remote rehab/landlord I've ever worked. Thanks.

Dean

Re: to Norm Chrostowski - Selling drugs? That's so small time. I've personally considered getting into Somalian piracy. :eyes: One of my co-workers brought up the point that that might not look too good on a resume after retirement. So, I shifted gears a little and suggested anti-piracy. At the very least, I'd get to keep all the loot and nobody would complain! :woohoo:

This, I believe, is the big underlying issue. For me anyways. And, this is one of the biggest requirements of the entrepreneur in general. The business owner has to be the one to spell out for him/herself what to do and then go get it done. I figure that once I get this hurdle taken care of, I'll be pretty much good to go on all the rest of it. Working on it. :mrgreen:

Has anybody considered owning a private Jet plane? I have and they are expensive! However, I came upon the idea of how about "timesharing" a Jet plane? Several people can get together and buy a portion, rent a pilot, pay for hanger fees, etc. etc. What would be a better bonus is if someone were a pilot already and they would provide that service. I have been taking some flying lessons myself, actually, and this is what kinda got me on the idea.
So, is there anybody else that has thought about this? Anybody want to get together and see what would be required - probably how many people would need to group together - to buy a private Jet plane and timeshare it together?

Dean

One thing that I learned from the mentor that taught me about short-sales, is that with many parts of real-estate investing, is does appear and/or "feel" like the investor is ripping the seller(s) off. My mentor told me that if I prescribed to that attitude, those I work with will pick up on it and it will make it difficult to build positive business relations.
Now, don't jump on my case about for or against touchy-feelly theories. The yea or nay for that is not the point of this post. With my specifics of short-sales, I do remember back in the beginning when I would think in the back of my mind whether I was taking advantage of people's hard situations. After talking it over with my mentor, I started to shift my thinking towards that I was providing these people a great service. Given the circumstances they had, I was providing for them the best solution available. As I got more into that positive mental attitude, I became much more happy with what I was doing, regardless of what others were thinking about me. Even Fathers.
And ya know what? This is the same for every aspect of real-estate investing. When sellers have a broken house and they can't sell it, a rehabber will come along and provide the best solution to those sellers. When the rental thing isn't working for a seller. A landlord will come along and provide the best available solution for them. Every single niche of real-estate does just that: provide the best possible solution for people that are having difficulty selling their property(s). And, yes, the real-estate investor is going to make a profit. That's just the way things are and nothing is ever going to change it.

So, with your Dad, I would suggest that, instead of debating over the merits of making a profit in real-estate investing, focus on the positive things your provide the sellers that you work with. Place the emphasis on the good that you do because you are a real-estate investor. Make the good the focus of why you do it, in addition to all the additional benefits, including making a profit. Invite your Dad to share in the good that you make available from what you do.... Ok, ok, sorry for going off on touchy-feelly mumbo-jumbo.

In the end, even if your Dad chooses to bicker about the "bad" that you are doing because of being a real-estate investor, your positive attitude about the good that you make available will drown out anything your Dad, or anybody, might dish out at you.

Dean

I have heard this tactic/strategy/philosophy/(BS) taught and suggested by many. The theory is, if the property turns out to really suck, you just renig on the contract (with some contingency) and you're on your merry way. However, when I've went back to these people that said it and offer them deals, all of a sudden, they want to do miles and miles of due diligence before they even get close to considering putting properties under contract.
So, those that really do do real-estate, what do you do? Do you do your due diligence first? Or do you put it under contract first?

Dean

Got an "encouraging" email today from my boss at work that I've been making too many personal calls. Of course, these are for working real-estate deals. Usually, I'm pretty subtle, and when I have to be more specific, I go out into the hallway with my cell phone. As does everybody else at my work. Its not unusual around my workplace for 3-5 people to be out in the hallway during any 1 hour time period doing their personal calls. Granted, I'm probably the only one doing real-estate deal making calls. *chuckle* Real real-estate is done during business hours, so its kinda hard to do this stuff part-time after work, thus, I have to make calls during the workday. I try and be discrete about it, but it was bound to be figured out eventually. I haven't gotten questioned about all the time I spend on Bigger Pockets, and other similar places, but I could see that coming up somewhere down the road.
Anyways, anybody else trying to do real-estate investing while being clocked in from 9-5? Share your on-the-clock stories.

( P.S. Anybody spew any of that Kiyosaki crap about J.O.B., I will hate you and call you an idiot, so just don't. I don't wanna hear it. :nono: )

Got this in an email from a real-estate agent. With everything how it currently is, I can see how "they" would make this the new way for real-estate to be done. However, it does seem pretty harsh. Can anybody verify that this is legit? If it is... Ouch! this should make things "fun" :shake:

Well, this is the psychology section, so what are you expecting?

Anyways, the real big question remains: Is all of this stuff fun? And if its not, why do it? Thinking about it now, I have not ever heard any real-estate investor ever say something even remotely along the lines of, "Dude, this real-estate stuff is so much fun! You have GOT to come try this!" I have heard people say that about things like water skiing. I've heard people say that about Wii Sports. I've never heard a real-estate investor say, "I have the greatest job in the world!" (Yes, I know. A real-estate investor would never use the word job in a sentence about themselves. We get it already). I have heard people say it about things like mountaineering tour guide. Steve Irwin, The Crocodile Hunter, God rest his soul, never stopped talking about how great his job was. I've never heard a real-estate investor talk about real-estate investing with such enthusiasm, energy, and love of the work like the Crocodile Hunter did about his "job". I think it's safe to say that Steve Irwin truly had fun at what he did and didn't do it just to get to the fun things. The general consensus I gather from those that are actually doing real-estate, or those that build up a doing real-estate image, is that they aren't doing the real-estate because its fun. They are doing the real-estate so that they can get to the fun things that they really want to be doing instead.

Did I miss something?