Hello everyone,
I was recently introduced to this site and was pleasantly surprised of the wealth of knowledge and experience in one place. I would love to learn as much as I can in order to attain financial freedom. I think that Real estate is the most amazing and most exciting endeavor that can help anyone to achieve financial success. Like most interested in Real estate, I have read Robert Kiyosaki's books and believed that I could make all my dreams come true.
I purchased my first property at 24 and literally thought I was on my way. I was fortunate to take advantage of a program through my job where I purchased a house for half price as long as I agreed to live in the house for three years. I showed up at closing with 0 down and walked away with $300 at closing to say the least. I lived in the my basement and rented the top portion of the house in order to pay the mortgage. I always knew that I should focus on building passive income and that it would fund the life I wanted to live. After living in the house for 3 years, I cashed out 70% of the equity and purchased a 3 family residential property through HUD. I took out a rehab loan that was rolled into the mortgage for 90K and had plans of starting renovations immediately after the purchase. I knew that roadblocks were apart of the process, but I could not have imagined the hurdles that I had to overcome in order to continue on my journey.
I went into contract with a general contractor and it became the biggest learning experience I ever had. The contractor made numerous promises that ended up costing me a lot more than I had planned for.
I closed on the investment property in May of 2008, with the promise that the work would begin in June, but work did not start until August. I believed that I was too patient and easy going with the contractor and naïve to the inevitable pit falls ahead. The contractor promised that all the repairs would be finished in December of 2008, but all the repairs were completed in December of 2009. I had to make the choice to keep the investment property and loose my initial starter house to a short sale which took 7 years to complete. I depleted most of the money I had on reserve from the cash out and had to take out loans against my retirement accounts to pay the mortgage and the needed repairs to make the building habitable. The contractor finally admitted that he mismanaged the funds for the repairs and that the project was way over his head. I believe that he also learned a lot as a result of the experience.
Once the repairs were completed, I rented out two apartments and lived in the third for the next few years. The story goes on with problem tenants that further tested my love of the business, but that's another long chapter for another time. I would love to continue those story to no ends, but I am considerate of your time.
I was fortunate to have met the most amazing partner, who through patience and numerous books on investments has come to see the Real estate vision and is fully on board with me. Currently, We still have the 3 family which as a positive cash flow, two single family homes in Florida, and the house we live in. We have took out loans from our retirement funds to start investing more in real estate (Florida) because we believe in real estate so much, but now we are tapped out of capital. I attempted to take out a equity line of credit from the multifamily last year, but I was denied by the banks I applied to. We believe that the multifamily will continue to appreciate as time goes on and will net us a pretty decent payout. I want to increase our income through additional acquisitions.
The only idea we came up with was to sell our current house, downsize to an apartment, and use the proceed from the sale of the house to invest more in real estate.
We would love to get some guidance on where we should go next.
Thank you.
