All Forum Posts by: Tyson Scheutze

A change was coming…

In mid-2008, the market cycle mirage was still in full effect. To say the lending standards were loose would be a dramatic understatement. NINJA loans were more than prevalent. They were normal and underwriting occurred in a matter of days, if not hours or minutes. NINJA, which was short for no income, job, or asset verification, ensured that everyone was able to get high with increased supply continuously coming on the market.

We barely noticed any change in the weather. Macro trends weren’t relevant. We were just trying to figure out how to flip homes and keep the train rolling. I’ve tried to think back to those days in search of any defining moment of a market cycle shift. But news and market trends took a while to reach Augusta.

In Augusta, the market cycle change was more of an ease than a shift. I think a lot about the line from Ernest Hemingway’s novel, The Sun Also Rises, where the character Mike describes bankruptcy as gradual and then sudden. The market was always going in one direction: up. Until, suddenly, it wasn’t.

Augusta never had a dramatic run-up in price appreciation, so we didn’t have a precipitous fall. Suddenly, everything just seemed a lot harder. I remember it materializing first in our owner-occupant buyers. Underwriting, which was previously instantaneous, began to take longer. In 2009, 2010, and 2011, trying to close a loan for an entry-level buyer reached points of absurdity. If you were using a big bank, you could expect it would take 60-120 days to close, in what previously took 30 days. Your only hope was using local banks who didn’t need 9 people to “touch” the file to reduce the likelihood of default.

Between the fall of 2008 and 2009, I began to understand we had to shift course. Homes weren’t only taking longer to sell, they simply weren’t selling. It became clear that I would have to prioritize the rental portion of our business. I didn’t know anything about being a landlord other than I didn’t want to do it and didn’t think my career was in a position to not have large infusions of cash from home sales.

A change was coming and luckily we were somewhat aware. I initially tried to use some local property managers but got very frustrated with the results. Homes weren't renting, signs weren't put in the yards, and calls didn't get returned. The SFR property management realm at that time was a haven for agents who struggled to sell and a means to an end for brokerages to get more sales listings.

I thought there had to be a better way, and—even clueless—I could do better just by calling people back. I knew enough to know I needed help. I was awful at admin activities which did not present challenges and the ability to be creative.

So, I posted an ad on Craigslist.

I don’t remember all of the activity, but I interviewed several candidates at my makeshift office which was a single family home in Martinez, GA. The final two applicants were a guy who I enjoyed discussing music with and a much more qualified woman named Natalie who had recently relocated to Augusta.

Natalie, new to town and job searches, had notified her fiancé at the time of the precise coordinates of her interview with me, in case I turned out to be “some sketchy Craigslist guy.” I was pretending to be a lot of things in those days, but I was not a sketchy Craigslist guy. I was a real estate investor in need of help.

I made one of the best professional decisions of my life, offering Natalie the position. She agreed, and her first day was figuring out what we could work on together. Always looking at the big picture, Natalie and I made a filing system for the 3 or 4 properties we managed. I ran out of items for Natalie to do around 2 o’clock and asked her to go get the drycleaning for the nice shirts I had to wear to bank meetings to beg for money.

Even with our auspicious start, Natalie turned out to be a truly significant link in the creation of Auben. She was the yin to my yang. Everything I loved to do, she hated. Everything I hated doing, she loved. Where I was a head-in-the-clouds dreamer, Natalie was a practical penny-pincher. It was the first time I ever experienced this complementary dichotomy in a partnership, and it was liberating. We didn’t always see the world in the same way but we got sh#! done and began to create the building blocks of an investor-focused brokerage who acted in the best interest of our investors all the time.

The early days of Auben homes…

After we sold the Willowood home, I set out to find other homes to flip. Once you start the flipping machine, there’s a pressure to feed the machine a pipeline of properties. And I had hardworking people committed to my fledgling real estate vision and wanted to keep the train rolling.

High off a profit of 20k-ish, I hit the streets to find more homes to flip. I limited my search to the greater CSRA (Central Savannah River Area) but there really was very little I would not look at within an hour drive of Augusta. While it continued to be difficult to come face to face with distress, I enjoyed the challenge of coming up with a solution for the home-sellers I met. If that solution was not me, no problem. There were thousands of houses to buy and sell. And I began to understand the many variables of conditional and situational distress, always creating market opportunities—if you are always looking.

Looking for leads anywhere, one of my early mentors, Bernard, told me to go through my phone starting with letter A, and call every contact to tell them I was looking for a home. He used this method of contact cold-calling with frequent success. His approach was definitely aided by Bernard being extremely gregarious and friendly.

We also spread “We buy Houses Cash” bandit signs around town on Friday afternoons, hoping we could get through the weekend without municipalities asking us to take them down. We had “We Buy Houses Cash” magnets made and gave them to our contractors with the proposition of $500 if they got a lead on a home we purchased and closed.

I needed a name for my business and knew Schuetze Homes was not an option. Around this time, many companies like Zillow and Google were making up/modifying words for their brand. I wanted to be trendy but I still wanted to be at the front of the phone book. We named the company Auben Homes, not realizing people would always refer to it as “Auburn” or assume I went to Auburn University. It would not be the last time I realized that Georgia south was different from Kentucky south.

My brother’s college friends created a logo and we ordered free business cards from VistaPrint. Different versions of the logo were blue and black and brown and beige. Auben was born.

I went on the road to real estate seminars to gain more education. This was a practice I did consistently to try and make up for the sharp learning curve I was experiencing daily. The seminars were good for inspiration, even when I took the inspiration too far.

A year after starting Auben Homes, I announced my goals to my team, including the creation of an international office. My partner, Natalie, pointed out that we could barely make payroll. I was not deterred with details. I had more debt than when I began and a ballooning team of people who hoped I could provide a clear path to a job and a career.

Even though there were many daily struggles and small failures, I relished the challenge. I credit my parents and their experience as small business owners for instilling in me a strong sense of independence balanced with a desire to create and provide opportunities for myself and others. I wasn’t going to always get it right but I was going to get up again.

Daily, I made up the habit of calling my friend, Andy, early in the morning to remind him: “It’s a great day to be in real estate!” I told him this was motivation for him but I think it was really affirmation for me to keep going. We found a beautiful bones home on a street off Highway 1 outside northern Augusta, South Carolina. The home was a 1940s built Cape Cod- style cottage on a street called Bleachery in an area locals called “The Valley.” We also purchased a 3 bedroom/2.5 bathroom brick ranch home on Indian Trail in an established neighborhood called Montclair. Looking at names drawn in the cement sidewalks, we later confirmed this to be the childhood home of a good friend’s wife.

Bleachery and Indian Trail began with the same intensity as Willowood, but our small operation struggled to keep up with 2 flips. My mentor, Justin, came with tools to help bail me out of a floor joist issue on Indian Trail. Daily, I looked for instructions everywhere, taking mental notes of everything and everyone. I was learning the basics of investing, unaware that 6 years later I would oversee a team completing 125 renovations a month from Jackson, MS to Kansas City, MO.

Story is still being written @Dan M. Sharing some of the different detours my investment career took to hopefully give beginners confidence and perspective that its a long game and persistence is what often defines those who succeed.  

Before Auben Realty, it was Auben Homes…

January 2008 was not the ideal time to start a real estate flipping business. However, I was eager to pursue my vision of what a real estate company should look like. I found a can’t-miss lead on Willowood Lane in the Clairmont subdivision in Augusta, GA. Clairmont is a neighborhood of 1970’s-built, contemporary homes located off the main commercial artery in Augusta, Bobby Jones Expressway, which connects I-20 to Washington Road. Augustans know Clairmont simply as the neighborhood “behind the Home Depot”

Clairmont and Bobby Jones also serve as the dividing line between the two counties that comprise Augusta: Richmond and Columbia County. And certain streets in Clairmont have houses facing each other in separate counties. It was to be yet another lesson in market nuance when I learned savvy buyers paid a premium (10k-20k) for identical houses on the Columbia County side of the street of Clairmont–because of the more desirable public schools.

Like most decisions I made in my early days, I was on the wrong side of the street. Blissfully unaware of this market premium, I purchased the house on Willowood in January 2008 for $89k. The home on Willowood was a deal I acquired for the seller’s payoff. The home was a 4 bedroom, 3 bath split-level with many of the angles, finishes and details typical of 1970s modern. Like most homes we purchased, it was in need of some (a lot of) love.

The couple still living in the home would have been ideal candidates for a show on hoarders. Worse, they had a kid who had the daily reality of carving a path, wading through trash. The trash in the living room was literally waist high. As if not to be bothered with making the trip to the trash can, the residents of Willowood simply threw their trash over their heads. Pizza boxes, newspapers, clothes and toys were piled up everywhere.

We tackled the trashout with pitchforks and wide-mouth shovels and filled two 30-yard dumpsters without a single piece of construction debris. It was another reminder that real estate investing was fundamentally taking on other people’s problems.

My good friend Andy and I led the project management of the renovation with intense focus and dedication, trying to make up for what we lacked in knowledge and know-how with effort. I don’t remember a lot about this particular renovation, other than the trashout, but it birthed standards we tried to always incorporate into our future flips and rental renovations.

All of our interior paints were a Glidden beige, called Bone White. Our tile was typically a builder-grade beige from Lowes or Home Depot which we would lay in a brick pattern or diagonally to make it more visually appealing. Later we would use the same tile in our rentals (for durability) and add darker grout (beige or brown again 🙂) for less staining from resident wear.

With limited budgets, we were relentless in our search for bargains and closeouts, consistently searching the Tile Center and big box stores for small quantity closeouts. We also tried to keep as much as we could intact in the home, primarily out of necessity of small resale prices limiting our budgets. Operating in these entry-level affordable homes would be my saving grace when the market turned.

From the beginning of Auben Homes, I wanted to scale the business. So we began to think of things we could standardize. For the exterior, it was painting the front doors black or red, the body beige and black or white trim. On the interior, we snatched out shiny brass fixtures and replaced them with the trendy brushed-nickel and oil-rubbed bronze finishes that were required upgrades at the time.

Having something to prove on Willowood, we worked with a vengeance and remarkably completed the renovation on time and on budget-ish. From initial purchase to close of resale was 90 days. It gave me momentum to move forward but also a really difficult time target to replicate.

As I moved on to multiple projects running simultaneously, I would soon feel the stress and strain of a system and team not ready to grow to my ambition. I would learn firsthand that our effort could only get us so far.

The birth of SFR as an asset class after 2008…

In Motown founder Berry Gordy’s autobiography, To Be Loved, Gordy recounts a conversation with his father around the famous quote about a smart man profiting from his own mistakes. Gordy adds his own twist, stating “A wise man also profits from the mistakes of others.”

In my early investment career, there were many people around to teach me and the other rookie investors the ropes. But the no-mistake market was like a siren song luring beginner investors into believing real estate investing really was as simple as, “paint the house; raise the price.”

My partner and I took the market’s offering to the extreme and found ourselves having to “mistake-sale” our way out of some early ill-advised investment purchases.

• - The downtown building without a roof was sold to someone more qualified to renovate
• - Vinyl-siding made the dilapidated duplexes look a million times better and find an out-of-town buyer
• - We rented the Grovetown properties so someone else could develop them later

It’s hard to overstate how fortunate we were in the unraveling of our assets. Even though at the time, I felt anything but lucky. My work weeks were easily 80+ hours and often longer when you factored in the time it took me to figure out investing and project management basic practices. It was also during this time that I learned selling to other investors took a lot more work (and time!) than buying from distressed sellers. Time was still on our side.

And not selling was not an option we considered. We listed on Loopnet, Craigslist and MLS. We incentivized our buyers and agents. A couple of years later, desperately needing to sell a flip so I could meet payroll; I put 10% commission just on the buyer's side commission. Not surprisingly, the property sold fast.

Even though we initially were not planning on holding properties long term, the market softening communicated we had to adapt to renting properties. We tried to be creative in our dispositions, holding open houses and offering rent-to-own lease purchases. We found a book detailing a process to auction any house in 3 days and followed the process uniformly, unsuccessfully.

We had a lot of goals and an in-progress plan but what was really our saving grace was a market with tremendous stability, even in global real estate instability. The real estate bottom in Augusta was not nearly as bad as it was elsewhere. As we worked our way through the dispositions, I really began to question my career as a real estate investor. Several years in, I had worked harder and longer than I ever had in my life. And I only had more debt to show for it.

The fundamental aspects of real estate investing seemed hard to argue with, but I realized most of the people I was learning from were selling information first and tangible real estate second. They were in the information product business with a real estate background. Many of these people–although selling dreams to me and others–were very helpful assisting my real estate career. I stayed committed to the cause physically even if I wasn’t always with it mentally.

On New Year’s Day 2008, having sold nearly everything we owned so as to be able to get back to square one, I sat on the couch aimlessly watching football working through the haziness of a new year with a 2-year rearview of a lot of bumps and bruises.

Truthfully, I was ready to quit my career in real estate. I just needed someone to tell me I should. Talking to my girlfriend (who would become my wife), she pointed out I had never pursued real estate with my vision and my direction. I agreed even though I was unsure how relevant this detail was. The more I thought about it, the more I realized she was right. I needed one more turn of the screw to know if I could or could not make real estate investing work. And so in January 2008 I founded Auben Homes which would eventually become Auben Realty.

It wasn't all sandy beaches and umbrella drinks after that moment. However, Auben's intentional focus on creating an organization for SFR investors built by an investor who had struggled to figure it out, became something the market communicated a strong desire for.

Renovations and dispositions before the financial world fell apart…

As my partner and I both realized we didn’t have a lot of interest in running the operations of our real estate investment company, we began the process of preparing to sell what we acquired. It was not as simple as a stick-a sign-in-the-yard disposition process. Many of the “deals” we acquired required a lot of work to be market ready. I learned firsthand the meaning of sweat equity, even though I would ultimately realize very little equity.

Many years later, I would realize that, even though I made very little profit during this phase of my investment career, I was still extremely fortunate. Fortunate to get a great education. And even more fortunate to learn my lessons in a forgiving market in a forgiving market cycle. Many much admired mentors in multiple markets would not be as lucky.

Our projects circa 2007 required a lot of work before we could sell them. Much of our value came in tackling other people’s problems, specifically large, unwieldy renovations. Our wide-open buy box and fast and loose acquisition model also meant we were not satisfied with buying and flipping standard, traditional properties.

Purchased at a foreclosure auction, the pinnacle of our unbridled acquisition was a double A-frame home sitting cantilevered in a pond with an enormous homemade infinity pool. The home, previously owned by an electrician, was still inexplicably an electrical nightmare. There were hardly any right angles and very little that could exist in the home unexposed. Not a project I would recommend for nascent real estate rehabbers; we approached it with giddy optimism typical of this time in the market cycle.

This project which I affectionately dubbed “The Mistake in the Lake” would consume a solid six to twelve months of my life and end with a 6-car garage, a waterfall-feature flowing under the home into the pond, and a spiral staircase installed by a guy named Gator. Thankfully not all projects were the heavy lift like this one.

One project on the edge of “The Hill” area in Augusta which we did little cosmetic work to, sold quickly and above our expected price. After expressing my shock at the sale, I received some wisdom from our broker who was a second generation real estate guy. Quoting his father, he said simply, “Real estate is crazy.”

My goal, for my process-oriented mind, was to make my real estate less crazy and more predictable. However, we were basically gambling on every transaction at this point in our career. The adrenaline was intoxicating but the bank accounts and accounts payable were very sobering. Fortunately we were pretty decent at selling. Not as good as we were buying, but good enough to execute most of the sales before the world started unraveling.

The best decision we made during our disposition process was seeking out seasoned agents who were specialists in their market niches and letting them work their magic in their market specialties.

Check back soon for more adventures in investing.

Lead generation 101…

In my last post, I discussed the 2007 real estate climate in Augusta, GA. In retrospect, it’s obvious that, because it was way too easy to buy, the financial strain was beginning to settle in. At the time, we still didn’t see it. We weren’t looking at the whole picture because we were looking at individual situations of distress–not even aware of the systematic distress which would soon topple the whole US economy.

Scott and I were still intently learning to buy.

We looked for potential investment leads everywhere. We drove neighborhoods, a practice known as “driving for dollars,” and looked for abandoned homes with overgrown lawns, newspapers stacked in the driveway, and exterior decay. We looked at advertisements in the Augusta Chronicle and the appropriately named Iwanta (a weekly pennysaver publication) scouring the print for the words “motivated seller” or “owner-financing.” We networked with other aspiring investors at early morning meet-up breakfasts and monthly real estate investor meetings at the Columbia County Library. And we worked with wholesalers who put up “We Buy Houses Cash” bandit signs next to freeway exit off ramps.

We even had some really early internet-lead generation tools, basically online companies who required a monthly subscription exclusive to a county. They were essentially creating a platform for the company to run a PPC (pay per click) campaign in designated zip codes.

Of all the practices we used, the most effective way of targeting properties turned out to be mass mailing postcards and letters to addresses which received tax bills at locations different from their physical property addresses. I still have a CD-ROM of non-owner occupant addresses in Richmond County, GA.

The thrill of the hunt was an exhilarating rush, until you came face-to-face with the humanity feeling distress. When you are dealing with direct-to-seller acquisitions, problems are everywhere: divorce, death, bankruptcy, illness, layoffs. Many of the people we met lived very close to the edge. And generally, when we met them they were teetering on total collapse. One of the sellers Scott met with offered her diamond wedding ring to assume her mortgage payments. There were many sad stories and desperate people.

During this time, I remember meeting with many sellers, but one in particular stuck with me. Sitting at her dining room table in Grovetown, GA, her kids watching TV in the background, a single mom pleaded with me to explain why her monthly mortgage payment had nearly doubled. She had an ARM (adjustable rate mortgage) product which had been sold to her on the initial payment. Apparently, that was the end of the mortgage broker's explanation to her.

Faced with this consistent level of despair, it was hard to know how to react but I adopted an approach of total transparency which seemed to resonate with the people I met. If I didn’t believe I was their best option, then I told them so. I probably missed a lot of deals, but I could still sleep at night. And I soon found that the houses I didn’t buy referred me to other people. It was a great education in referral networks assisting with acquisitions.

However, with Scott and I both focusing all of our efforts on acquisitions, the assets began to pile up with mortgage payments coming due. As we would both soon find out, the majority of the work comes after you purchase. However, buying right, with the right plan and the right amount of capital, is what sets all the wheels in motion.

Retired marines, 25% management fees, and why roofs matter…

My investment career would have one more sharp detour before I had to deal with the aftermath of 2008. My partner Jeff and I had decided our inter-state enterprise lacked efficiency, along with profitability. He wanted to focus on wholesaling and I wanted to learn how to act like a responsible investor—something that would take another 10 years for me to really figure out.

I stopped looking in Orangeburg, Irmo, and Greenwood, SC and narrowed the scope of my search to Augusta and the greater CSRA (Central Savannah River Area). Unfortunately, geography was the only thing narrowed in my search for investment real estate. I still didn't know how to find or buy investment real estate, but I found a partner named Scott who was known to be able to do both. We threw our initials together, formed an LLC, partnered with my dad who provided seed capital, and were off to the races.

It was not hard for us to find properties, which is usually the case when your buy box is everything. Unfortunately, it was also not hard for us to buy properties, as the beginnings of the distress in the market began to show in the seller’s willingness to offer attractive prices, creative terms, and owner-financing. This environment of creative deal structuring became manna from heaven for Scott and I, and we went on a dizzying spree accumulating “assets” with little thought of how we would renovate, reposition and sell them.

Here is just some of what we bought:

• A building in downtown Augusta without a roof. I would buy back the same building (with a roof!) over 15 years later for over a million dollars more than I spent the first time
• 8 duplexes in Belvedere, SC the seller so badly wanted rid of, he paid us to buy them
• An assemblage of properties in downtown Grovetown, GA, so we could try our hand at land development
• A small mobile home park in Grovetown, GA
• A couple of houses and townhomes we could assume mortgages on

Scott and I were great at buying.

However, we failed to really discuss what happened next. Like most partnerships which don’t fully form, our passions, pursuits, and activity were not complementary. We both wanted to do the same thing. And neither of us wanted to run the operations–which would prove to be more than a small problem. We also found that just because we could buy the asset, did not mean banks wanted to lend money on the asset. In one meeting with a banker, I remember the bank representative, feet on his desk clipping his fingernails into a trashcan, staring past me as if I wasn’t in the room.

The loose lending bacchanalia of 2006 was gone. We were not in a promising place. We had accidentally become the worst type of investors: Collectors. And we had to figure something out, fast. Every day the market was changing. But we didn’t pay attention–lacking discipline and focus, we accumulated a lot of property and really had no plan. Up until that point, the market was so unstoppable, a plan was borderline irrelevant.

We set out to stabilize and sell, not knowing the world around us would soon be collapsing. Still not sure how to manage what we owned, we hired a retired marine who went by the handle Dragon6 to door-knock-collect rent in our mobile home park. He proved more effective than us but was likely not the poster child for fair housing. He charged a 25% management fee for his services and collections increased dramatically.

I remember thinking how I missed this portion of real estate investment training. I also remember again thinking that being broke in the music business was a hell of a lot more fun.

Making sense of make believe markets.

In a recent NYT article, writer Melissa Kirsch made the assertion that part of what makes us adults is reconciling the contradictions of our identity. As a new investor searching for success and investment identity, why we are successful is the question we often attempt to reconcile.

Most new investors, myself included, fail to properly weigh the impact of variables beyond our control—like market and market cycle conditions—into the success (or failure) of our investments. Often, we only become aware and begin to reconcile once something has gone wrong. As I referenced in last week’s newsletter, 2006-2008 in Augusta, GA was a perfect market to not be wrong. It was extremely fertile ground for a new investor. It was hard to fail, but, like most rookie and new investors, I made investing much more difficult than it had to be.

I traveled hundreds of miles a week from Greenwood, SC to Orangeburg, SC lacking focus, intention and discipline. I was unsuccessfully trying to not be managed by my investments. As much as I proudly wore the investor badge, I wasn’t really an investor. I was an active collector, occasionally acting like an investor. Even though I had no clue what I was doing, miraculously, I often made money, and it felt good. Everything was going as planned.

Then 2008 happened. The market was reconciling.

Thankfully my ambition and capital only had 2-3 years to expand, so my exposure was far less than many of my peers and mentors. I had 5-10 vacant homes while my mentors had entire apartment and condo communities–vacant and failing fast. It was an extremely difficult time to be in real estate and an especially difficult time to be an investor.

I walked away from $5-10k non-refundable builder deposits in southern Florida and began to feel market pain that would take a while to fully migrate to Augusta. Everybody was wondering where the bottom was and things were spiraling out of control. New construction spec homes in Florida we had been pursuing lost 50-75% of their value overnight in one quarter. Raised with the mindset of always paying bills and doing the “right thing,” there were basic financial survival questions that had to be considered—like the benefit of throwing the keys back to the bank.

My vision of sipping umbrella drinks by the beach had turned into a nightmare of financial ruin. It was shocking, but it wasn’t surprising. Years later, I would have discussions with fellow investors referencing episodes where beginner investors like my 2008-self were buying houses as simply as ordering a cup of coffee. A broken system had really made it that easy.

And like it always has to, the market in search of equilibrium had come to correct/reconcile. What seemed most surprising was the speed, depth and extent of the correction/collapse. Far beyond basic residential real estate distress, the residential real estate market teetered on taking down the entire United States economy. The hottest markets become apocalyptic wastelands of inactivity. On a visit to a spec investment in a failed Pulte Homes subdivision in Kissimmee, Florida, I had the feeling I was on a movie set in an alternate reality. It looked like a Zombie apocalypse had occurred. In a neighborhood with hundreds of homes, the occupied properties were less than five. Broken signs and overgrown lawns were standard. Many houses looked like the owners had left in the middle of the night—which was often the case.

Daily my thoughts focused on how being broke as a music journalist was a hell of a lot more fun.

As bad as it was, Augusta was okay. And it would be much more okay than most markets. Slow to rise in value and appreciation, correction in Augusta was a much softer landing. As I settled into determining the path forward, I began to understand the benefit and searing, Phoenix-like value of a slow and steady, unsexy tertiary market.

Augusta wasn’t an exhilarating ride up, but it was a forgiving fall down. And that would prove crucial for my investment career.

The habit of being a forever learner…

Someone who has given me a lot of great advice recently said to me,

At the beginning of my investment career, I was not in the habit of being passive in my investments. So, in the winter of 2006, I packed up a U-Haul in Queens, NY and made the trip to Augusta, GA to begin my ‘passive’ investment career in earnest. Hands On. I believed I had found the formula for success: Buy right, stand around the job site pretending to know what I am doing, make a bunch of mistakes, and still make money.

It was a formula I would follow for several years before slowly realizing the product of my success was not my ingenious innovation but a market that made it hard to lose. Augusta, GA in 2006 certainly was a hard market to lose in, but I did my best to challenge the market’s offering of consistently favorable outcomes.

I settled into renting a loft apartment on Broad Street in downtown Augusta for $450/month above Jimmy Williams sign company. While the rent was low, the building was the definition of deferred maintenance which I would soon discover in a utility bill from Georgia Power in excess of my monthly rent.

As I began to scout the Augusta market, all I could see was opportunity. Downtown Augusta had seen better days–with people only coming downtown to drink, eat, and then retreat to the burbs. I still saw potential everywhere I looked.

I was particularly drawn to the downtown historic buildings and a desire to create hip, loft style spaces. However, I knew my experience and capital needed to start smaller, more practical. I joined the local Real Estate Investors Association led by my first mentor, Justin, and began my search for single family investment properties.

Struggling to gain traction, I partnered up with a franchise owner of Homevestors. The Texas We Buy Ugly Houses company were pioneers in wholesaling and my partner bought in and brought me along.

My new partner Jeff and I set out to find homes. The only problem was deal flow in 2006 was tight. Looking online in the Augusta MLS, offline with Jeff's wholesaling operation, and chatting up other local investors didn't produce any inventory. Not to be deterred, we expanded the geography of our search, ultimately finding some homes.

We found a brick home in Greenwood, SC that we received “free” from a church on the condition we move it off their property. We found a home in Irmo, SC with a lot of random mirrors in the bedrooms and locks on all of the interior doors. We found a home in Orangeburg, SC off the beaten path in a market with very little life. And finally we found a home in South Augusta, next door to a hoarder.

I bought a used pickup truck and realized I was a long, long way from my music journalism life in New York City.

Our plan was simple, my partner was going to continue to focus on sourcing properties and running his wholesale business. My instructions were to figure out this project management thing, starting by picking up our day labor workers, creating scopes of work, and making material runs. It didn’t take me long to realize whatever material item was most needed was going to be left off the Lowes list every time.

With work in multiple locations, our market agnostic stance would not prove to be a good logistical decision. Utilizing the only project management skill I had of physical presence caused me to criss-cross the state of South Carolina checking on unsupervised job sites.

Workers in Greenwood were meticulously removing the brick off our “free” house we were going to move to a lot we purchased. Workers in Augusta were throwing our neighbor’s trash in a dumpster we provided–at no cost–so we could have a fighting chance of selling our renovated house in the future. The activity felt like progress and investing. What it really was, was an education.