30 years ago I closed on my first real estate deal. It was a foreclosure, owned by the Resolution Trust Corporation. The RTC was a federal agency created in 1989 to resolve the Savings and Loan Crisis of the 1980s, which resulted in approximately one-third of all US savings and loans failing.
Armed with just enough information to be a danger to myself, I made an offer and much to my surprise it was accepted. But there was a problem. . .the RTC wanted a $19,000 down payment. Nineteen thousand dollars?! I had nineteen dollars. LOL But I did have a credit card with a $20K cash advance available. Off to my bank I went and I cashed out. (Word of advice: don’t ever do this!). Signed the papers, mailed in my money, and I was now the proud owner-to-be. . .but there were unexpected obstacles.
The foreclosed owner remained in the property. Despite multiple on site visits and mailed letters he wasn’t responding. I persisted and much to my surprise one day the door opened a crack and thus began a multi month journey through this man’s personal hell that eventually led to a $30,000 profit.
He owned a local Jamaican bakery that was failing; his marriage was ending and his soon-to-be-ex moved out with their daughter; and now he had lost his house. I became his crying shoulder and confidant, stopping by once a week or so with beers and a sandwich. He quickly trusted me enough to let me walk around and check out the house. At one point I noticed a fist sized hole in the wall at about ankle height. When I asked about it, Desmond replied, “I was arguing with my wife, got angry, fired off a round from my shotgun.” Message to self: Desmond has a temper and a shotgun. This friendship lasted several months until he was ready to move on. With the help of two local kids I loaded his personal goods into a rented truck, said goodbye, and thus began phase two of my entry into real estate.
Marketing for a buyer was predominantly done in the print media. Yes, horror of horrors, there was no internet or social media! I forget how long it took, two months perhaps, but I found my buyer. Now, it was a matter of the winding, tedious journey of going from contract to closing. At that time in New York it was about a four month process. Paperwork, lawyers, and bureaucrats, oh my! But we eventually reached the finish line and when we did, when all was said and done, somehow I made a $30,000 profit. I was thrilled, to say the least, and thinking I was now the smartest guy in the room, I jumped into another deal, another foreclosure, but this one had a very different outcome. But that's a story for another day which I will post up soon.
