Real Estate Spark Plugs
by Dan Auito
Ideas, Ideas, Ideas, Ideas, Ideas!
That’s what this report is all about. This series of related real estate tales
is written specifically to get your motor running and your wheels turning.
Let’s begin easing you out of the pits. I mean, comfort zone! I’m going to
slowly and methodically give you as many little sparks and insights to the
relatively simple ways that ordinary people use real estate to achieve
extraordinary results.
Stories are the best spark plugs. They let you casually observe from a safe,
secure and understandable view point. I will write to answer most of the
questions that I feel I myself would ask if I was reading what you are about to
read.
I want you to know something from the very start of this report and that
something is this: I care about you and I sincerely mean that. I really do want
you to move to a new comfort zone, one that is pleasurable and free from fear. A
place where you realize you have the power to achieve greater things than you
currently can imagine.
It’s possible for you to start being a more powerfully directed purpose-driven
individual who is well organized and on track to higher achievement. You will
change and grow, slowly and steadily with every page you read. With every
thought and insight you gain, your desire and courage will grow as well.
Napoleon Hill wrote one of the greatest books of all time. It’s called “Think
and Grow Rich.” The essence of that book, the secret it reveals time and again
is this:
You Must Develop A Burning Desire
Don’t put this book down thinking the previous statement is cliché and that you
already knew that! I am simply leading you to my next point, the next point
being is – your desire needs a starting point. So to start developing desire, my
secret is you must have a purpose. Why do you want to pursue real estate? I know
what you’re thinking: to make money, to have security, to feel useful and appear
successful. Good points. I agree you can have all of that and more if that is
what you desire.
Now here is something that comes before any of those things you desire. What is
the purpose of all those things? Purpose, purpose, purpose...you need to first
define purpose before you get the things. My purpose, or so I thought early in
my career, was to move up to a nicer house and have my first house become my
first rental property. When I moved up to the next one, I quickly learned as
soon as I rented it out, I was in some way responsible for creating happiness
and security in the life of another person that was of no relation to me.
It soon was evident to me how the choices I made in choosing that first property
either would help me or hurt me in my quest to succeed in the real estate
investment business.
All of it is cumulative, everything you do and how you do it adds up. It
compounds itself and it either makes your life easier or more difficult. I am
going to give you experiences that you can learn from that will make your life
easier; I am going to show you how. That is my purpose.
The book that gave me the unknowing courage to take my first steps in real
estate was a book called “How I Turned $1000 into $3 Million in real estate in
my spare time” by William Nickerson. He was a master storyteller and by osmosis,
after reading his book, I found myself gravitating towards the real estate
classified section of my Sunday paper.
Eventually I leapt and my life had changed. It was an FHA foreclosure, a
two-bedroom, one-bath home with a built-in, screened-in pool, with a Jacuzzi and
a built-in sprinkler system. I bought it for $46,000 and used the HUD 203K rehab
program to fix it up. I spent $16,000 to update and make repairs. They then gave
me one loan for a total of $62,000. It took me three months to complete it and I
was in; I had done it!
My life changed, I learned, I took the leap. From then on I had confidence.I had
already had my first home but now I had two. Well, I was in the Coast Guard and
wouldn’t you know, three months later we moved. Uncle Sam took me out of St.
Petersburg, Florida and dropped me in Kodiak, Alaska, for my next tour of duty.
Well guess what? I was armed with ambition, courage, confidence and just enough
knowledge to be considered dangerous, so I bought a duplex as soon as I came
ashore on Kodiak Island. Now I had three dwellings and my relationships and
responsibilities were growing with my new tenants counting on me to provide a
clean, functional and pleasing environment for them to exist in.
It looked like this: My mother rented my first house and an elderly couple
rented the second one and my duplex came with an existing tenant who was a
hospital administrator, so I was lucky. I was able to ease myself into the role
of landlord without getting burned early in my career. I now had two houses and
a duplex in the span of about one year. My brothers and some other family
members took notice and were pretty well dumbfounded. They couldn’t figure out
how I had, all of a sudden, become a real estate wizard. It felt good to make
that change in so short a time.
I got that from reading a book! And that my friend is how you are going to do
the majority of everything you do in real estate, by reading and taking steps
towards duplicating the success of others in a repeatable pattern. The key is to
understand that you can do it if you read the right books and apply the very
basic formulas that are handed to you.
So I learned trial by fire and it has been very gratifying. I’ve since went on
to collect 17 properties, 23 tenants, 2 real estate licenses in Florida and
Alaska, an assistant appraiser’s certificate and over a hundred books on real
estate. I just kept learning and growing and gaining momentum for the last 13
years. I am still in the Coast Guard, too, and I work at Alaska One Realty in my
spare time. In two more years, I will be retired at the ripe old age of 42.
Sounds like a sort of fairy tale, doesn’t it? Don’t let me fool you. It’s hard
work and I’m still not a millionaire, but I want you to have the truth, so I
will be honest with you every step of the way.
I know why I am not a millionaire and here is why. I would periodically sell
property that was going up in value and paying for itself through the rent
checks. But being in the Coast Guard would dislocate me every four years, so I
found myself selling out in order to avoid being what is called “an absentee
landlord.”
This is an important lesson for you. It has prevented me from becoming a
millionaire up to this point. The lesson is: find an area on this planet that
you could and will live in, and stay close to it. Don’t move more than 10 miles
from your farm area. The farm area is where all your properties are located.
Long distance “landlording” is tough! It can be done, but you lose the ability
to control the situation compared to if you were there. I’ve served my country
and saved people’s lives, so for me it has not been in vain. I have no regrets
but if you don’t have to leave your area of expertise, don’t!
The networks you build and the contacts you build, in the process of “doing”
real estate, are so valuable that when they are no longer at your disposal, it
puts you at a serious disadvantage.
Not to mention when you move you have to acclimate yourself to an entirely
different market, build new trust-based relationships and start all over again.
It’s like a treadmill you’ll be running and running, however it gets you
nowhere.
I’ve used it to my advantage. I have been forced to accelerate my abilities to
rapidly duplicate my success whenever I am moved, but it is still an uphill
battle. My point: Don’t move too far from your farm or your network of bankers,
appraisers, carpenters, tradesman, real estate, friends, tenants and so on. Once
you have the skill you can duplicate your success anywhere you go but if you
don’t have to go…enough said on that!
I like to say, “Don’t sell the goose to get the eggs.” What that means is if you
need money to buy more property, use equity lines from other property to do it.
You will get the same amount of money or more by using an equity line as if you
sold it. However, you get to keep the asset and the money! I go into this in
“Magic Bullets,” so I won’t drone on here. Just know you don’t have to sell your
property to get the cash out of them.
So here we are. You know a little bit about me and you may have picked up a
nugget or two. Let’s find a few more.
There once was a man who wanted to buy some investment property, so what he did
was look at growth patterns. You should do this too, by going to your city’s
planning and zoning department. You can see growth patterns and you definitely
want to buy property that stands in the way of growth.
This is how he used what he learned. He saw that city planners had decided that
a new artery (highway) would benefit their city by creating linkage to another
city about 100 miles away, so being a smart investor he only went as far as a
ten mile limit to be able to be close to his investment.
Now on average, new growth will radiate out from existing prosperous cities in
the direction it is planned at a rate of about one mile per year. So our smart
investor had a 10 – 12 year plan to cash out in about 10 – 12 years.
What he did was buy, I believe, 10 acres of commercially zoned property very
cheaply because there was no demand at the time. He bought it, fenced it in, put
up some lights and a gate, and held onto that little bugger. Now that new
highway was coming his way and the good folks, through their taxes, were paying
to have it built.
It didn’t take long for the heavy equipment to start cutting a swath towards his
fenced-in storage facility and when they got close enough to him, he started
renting out a secure area for everything, from road cones to generators to
backhoes. You name it - it was stored there. This more than paid his land off.
Now the men and their equipment eventually moved on further down the trail but
they left a finished highway behind them. And guess what? Low and behold, people
started driving on it, and then started buying property to build houses on to
get away from the city. Since the new highway was a straight shot into town, ten
miles out was breeze.
Well, of course, here comes the herd and everyone is just populating the whole
darned area. And within ten years, residential housing surrounds Mr. Investor,
and can you guess what he’s got? Yep, a prime piece of commercial property, 10
acres large.
So in accordance with his 10-12 year plan, he sells his storage facility to make
room for the new office/business park complex for over $2,000,000. That, my
friend, is vision, and the sooner you get a clear picture of what it is that you
want to specialize in, the sooner you can retire to the islands.
How hard was that? Don’t tell me you can’t do it, you can! I’m here to help you.
I’m going to give you secrets no one else dares. Do you ever wonder why people
won’t tell you the secrets? Of course you already know this but I’ll tell you
anyway. It is because they are operating on a scarcity mentality, as though
there won’t be any left for them. Or if learn something and act on it, you will
get ahead and have a great life. Well, misery loves company and silent
oppression is the rule.
Here’s a little story that poor quality real estate agents won’t appreciate
either but I’m going to tell it to you anyway. The reason I can tell it is
because there are some great real estate agents out there who absolutely don’t
fear what I am about to tell you and would let you know it if they were in my
position.
Here’s the deal: Some agents want to be like the Wizard of Oz. They want to
create the appearance of marketing and transacting real estate as being
technical and very legal, a deep dark mystery. Well, it’s not! The truth be
told, you can write a contract on a napkin and it would stand up in court. I
will emphasize here that you write on that napkin along with the terms of your
agreement, “The terms set forth on this here napkin are subject to my attorney’s
approval.”
An attorney will cover you completely for around $750.00. Prices may vary,
however that is an average home transaction. There is a lot I am leaving out
here but my point is this: If you own property, you can sell it anyway you want.
“Magic Bullets” will teach you. Let’s move on.
Exposure is the key to finding buyers and sellers in real estate. If a property
is priced fairly and everyone who is looking for that type of property knows
that it is in the availability pool, it will be found and the transaction will
proceed as advertised. Price it right, advertise it properly and let the lawyer
take care of the details. No commission, just a flat fee. Period.
Now that I have that off my chest, I will tell you a story about Dan, a 21-year
old friend of mine, and his wife and their new baby. He’s a hardworking guy who
does his work without complaint and all the other “workers” pick on him for
working so hard. Can you believe it? The other guys are so insecure and lazy
that they make fun of a guy who is doing the work of three men, mainly of the
three who are ridiculing him. Well, believe me, this doesn’t go unnoticed by me
and I take him under my wing. Dan wants to buy a house, so I begin the process
of saving him years of trial by fire and save him $25,000 at no charge. That is
because he deserved my help.
Anyway, here is the story: I began with him by asking him what type of home he
thought he would be comfortable with and a price range. He indicated a 3-bedroom
for around $100,000.
Knowing what he wanted and knowing the area, I was able to take him shopping for
the house he was looking for. Now I always go after the “For Sale by Owner”
homes first because I know they won’t be adding any commission figure into their
price, because they won’t be paying one. So at 6% of $100,000 he will get $6,000
more “house” for his precious dollar.
I also told him besides the “For Sale by Owner” homes, we would be looking at
oddball discount companies that help distressed sellers further part with their
money and property. The mentality of a seller who uses cheesy companies to help
them sell their property is pennywise and pound-foolish. If you’re going to use
professionals, then get a professional.
So off we go. After a day or so, we have found our house. Sure enough, El Cheeso
Inc. has a sign on it. The screen doors are flapping in the breeze, the weeds
are dancing on the lawn, but this house is indeed a 3-bedroom, 2-bath, 1-car
garage with a fenced yard and it’s selling for $110,000. Well, due to the fact
that there is a divorce in progress, and a new girlfriend who doesn’t like the
place, and El Cheeso Inc. giving no representation, I negotiate for Dan and he
gets it for $99,000. What’s so great about this deal is this exact same floor
plan in another house was for sale down the street, on the same street, for
$25,000 more.
The moral of the story is good things come to those who deserve it, and that is
another key to real estate. You must work hard so others will take notice of you
and help you succeed.
Here’s a beauty for you. This is about being in real estate circles and keeping
yur eyes and ears open and often times your “yapper” closed. This is the story
of Brian and Julie. Here we have two hardworking souls. They have been married
for 20 years and they have weathered the storms of matrimony. Julie works at a
real estate office as an office manager. No real estate license, but she works
at an office that sells a lot of waterfront property. So we are talking about
location and being in the right place at the right time, and here comes a seller
in the door of the office stating she is going to sell her older waterfront
home. She is willing to take $180,000.
Julie tells Brian, they look at it and sure enough, this pearl is right on the
water. She’s a gem waiting to be polished up, so Brian and Julie sell their
condominium and move in. Well, they aren’t making any more waterfront property,
so Brian goes to work polishing this jewel up.
Now, they have bought this house under market value in an appreciating market.
So about one and a half years later, this property is worth over $350,000 and
still climbing. Well, Brian is no dummy, so he gets to know his neighborhood. He
strolls, takes walks and notices, you guessed it, a vacant, neglected jewel on
an inside double lot. He tracks down the elderly lady, who is living with her
sister, through the county records office and buys the house, including the
extra lot, for a total of $120,000. Now Brian can walk to his new “jewel” and he
starts polishing it. The neighbors start noticing and are amazed at his deal. He
has offers of $180,000, $200,000 and $60,000 for just the lot. You name it. Now
that the exposure is there, everyone wants a piece of it.
Well, this is what Brian did. He rented his first house out, moved into the
second one and used plans that I gave to him to build a third house on the
vacant lot, using the equity he accumulated from the first house that went up so
much. And here’s how this thing shakes out: $180,000 for his first house and
it’s value goes up to $365,000; he picked up the next jewel for $120,000 and he
paid cash using the equity from the first house. Now he takes out a new mortgage
on his second house for $120,000 and builds a third. The value at last count was
$815,000 and he owed a grand total $300,000. That’s a half million-dollar profit
in 5 years!
Now what does this story tell us?
1) – it says, “work hard”;
2) – keep your eyes open;
3) – use equity lines;
4) – don’t sell;
5) – learn how to be a landlord;
6) – be in locations that appreciate;
7) – buy things that are limited in availability;
8) – know how to research owners and repair property;
9) – get your partner’s help (spouse);
10) – use knowledgeable friends to help you see potential (I gave him the
plans and advised him not to sell anything!).
Can you get any more lessons out of this story? I’m sure you can. Just read it
again and think on it. Jot down your ideas and put them to work. Real estate is
not that hard, folks! You can do it. With a few magic bullets, some spark plugs
and a good mentor to show you how, you can do it too!
Let’s you and me talk for just a minute here, OK! Have you ever been really good
at something and been able to step back and see the whole thing for what it is
was? You just know exactly how to do it and you can see the end result clearly
in your mind before you start. It’s predictable to you. It’s almost second
nature, so you are comfortable doing it. It’s almost become boring to you; your
comfort zone is such that you can do it in your sleep.
I’ve gotten that way with certain types of real estate and I see people everyday
that are so afraid of taking the first step that they are literally paralyzed.
They make excuses and put it off, and rationalize and live a quiet life of
desperation. They don’t trust themselves and as a result of the unknown they
can’t trust anyone else either. This is a vicious cycle because the longer they
wait the more it reinforces their beliefs.
I just want to grab them by the collar, take them to the bank and make them tell
the banker, “Pre-qualify me!” Then walk them out the door and show them how to
do something that will change their life forever, and that is to buy the first
property, and then a second. Then their fear is gone and they grow to be of
service to everyone who is ready for their assistance.
Let me tell you this: After you finish reading the rest of this report and you
read the “Magic Bullets” book, your fears will be subdued and you will do
something and your life will change. If you cannot succeed with what I am intent
on showing you, then something is not right. I believe your desire would be your
major obstacle, so if that’s the case, read “Think and Grow Rich” by Napoleon
Hill and come back to me then.
Let’s get back to real estate education, shall we? Do you know who the largest
commercial real estate owner in the U.S. is? It’s McDonalds Corporation. Yep,
and on top of that, they also have the most valuable locations for their type of
business. The research they do on demographics and traffic counts is
unparalleled!
If you were ever going to open a fast food restaurant, just put it near a
McDonalds. You would survive just on the volume of people who flock or pass by
the location that McDonalds has already decided meets all the critical data to
support their restaurant business. Your restaurant, if you had good food and
service, would flourish. Just sell something a little different than McDonalds.
That’s leveraging someone else’s expertise in evaluating a location for a
certain type of real estate.
Now that is a principle and principles are like natural laws. A natural law
always works in every situation in its own way. It’s like gravity – it always
works! Here on earth, anyway.
So in real estate it doesn’t matter what type it is, whether it’s commercial,
residential, industrial or recreational. Look for signs that serious market
studies have been undertaken by major operators and buy things that can flourish
in the presence of those concerns.
For instance, let’s use Home Depot as an example. If Home Depot decides to build
on a site, every residential lot within a mile of that new center will be bought
up as soon as the Home Depot commits to build! Why? Because smart investors know
that Home Depot has done the market study and the area will be a prosperous one.
On top of that, it will provide jobs, it will pay taxes, it will provide
materials to actually build the neighborhoods with, and people will shop there
once their houses are built. The same goes for Wal-Mart, Lowe’s and other smart
business concerns.
You may or may not have noticed this but take a look the next time you are
driving around. Here is what you should see. As you drive into cities from the
suburbs, you’ll notice donut shops, gas stations with convenience coffee
centers, bagel shops, and etcetera, on the side of the road that people travel
to on their way into the city to go to work. These are morning activity business
centers.
Now on your way home, out of the city, you will see restaurants that cater to
the evening meal crowd: KFC, Taco Bell, Subway and Pizza Hut. That’s because
people don’t go there for breakfast. They get it on their way home, outbound
from the city at night. If you put your restaurant on the wrong side of the
road, you could be making a huge strategical error. Think!
Location, location, location as they say, are the 3 most important things in
real estate. That is a very true statement. With residential property, that
boils down to safety, security and convenience. So buy homes in good
neighborhoods, cul-de-sacs preferably. No noise or through traffic, no escape
routes for thieves, and a private setting, where kids play in the street without
getting run down.
Security = close to hospitals, police and fire protection for obvious
reasons.
Convenience = stores, gas stations, restaurants, small businesses, parks
and recreation and access to major highways to circulate or evacuate if
necessary.
You might get a great deal on a piece of properly but if it takes you a half
hour to get a loaf of bread. What kind of resale will that great deal offer?
Another great deal may back up to or face a busy street. That’s often a poor
choice as well…noise, pollution, the loss of privacy and curb appeal are all
factors here.
The Two Best Types of Property to Buy Are
1) Property that no one else knows is for sale! Why?Because you have no
competition.
2) Property no one wants! You just have to figure out why people don’t
want it.
If you can turn that lemon into lemonade through some problem solving,that jewel
may just shine because you used the right magic polish.
In Real Estate, You Get Paid When You Solve Problems. That is a Fact!
Here is a golden nugget for you. If you do this, it will catapult your real
estate investment career. I guarantee you will gain more insight to real estate
by doing this one thing than just about anything else you could possibly do. The
golden nugget is this: Take a real estate appraisal course. It will fly
by, a few weekends and it’s over, but the perspective and the information you
gain from the class is priceless. It gives you vision, ideas and understanding.
You will have an edge over every other investor who has not done it.
I had an instructor, who by some stroke of luck, I was privileged to be taught
by. His name is Steven V. and he is truly a genius. This guy could make millions
if he applied himself to real estate investment but he chooses to teach and give
back to others in that way. He is very comfortable in life and money is a
by-product for Steven. When I finished the class, I had appraisers wanting to
hire me to go to work. Now I don’t want to work as an appraiser. I just want to
think like one and that is why I took that four-weekend course. That class
taught me more than both of my real estate licensing courses combined. The
reason for that is real estate classes deal with state laws, contracts,
regulations and ethics. Appraisal focuses on evaluating real estate and that is
what you want to learn as an investor.
A real estate license can actually hold you back from being a savvy investor and
here’s why:
1) You have to announce to every seller that you are an agent. It’s an
ethics rule and a disclosure law. Well, now the seller is on guard for all kinds
of reasons and you waste precious time overcoming negative reactions.
2) When you go to sell your real estate, the same things apply but add to
that scenario the fact that if you make large profits on property that you sell,
people can come after you, saying you took advantage of them because of your
expertise. And they win!
So you don’t need to go to college for 4 years and you don’t need a real estate
license. What you do need is a guy like me to convince you to go to appraisal
school and read books like the one you have now.
Then go out and do it, using a lawyer to protect you every step of the way.
Again, here is a good point to make. Simply weave into every agreement or offer
you make the following statement: This entire agreement is subject to my
attorney’s approval. I can’t stress that enough. That’s one line of text. That
covers it all. It gives you time to investigate deals. It protects your
interests and keeps you from getting burned in this business.
Here are a couple more beauties that I use to protect myself and you should too.
These are used with initial purchase offers:
1) Willing to pay X amount of dollars or appraised value, whichever is
less. (That says, “I’m only going to pay so much but if the appraisal is lower
than what I offered, than I am going to get it for the lower price. I don’t get
burned!)
2) Subject to my partner’s approval. (My partner was always my wife, and
if she didn’t like it, the deal was null and void, cancelled, over, kaput,
finito.)
Now nothing says my partner wasn’t my dog, so if there’s no fire hydrant, well
the deal could be off.
Those are examples of escape clauses that could be abused to the point of being
called “weasel clauses.” Don’t be a weasel! They give you a short period of time
to have the option to buy something first with the right to cancel the deal,
contingent upon something or someone else’s decision.
I use them to protect myself and to get a little time to do my research on the
property. Don’t use them to unfairly tie a seller’s hands. Be fair and try to
move quickly when you do employ them.
What you are doing is creating a short time, zero-cost option to buy real
estate. Here is a little trick and I don’t use it very often but it can be used
in a fair manner so I will give you the nugget. When you write an offer to
purchase property, on the top line of the contract is a line that indicates who
the buyer is. On that line in certain cases, I will write my name plus the words
or assigns, like this: Buyers: Dan Auito or assigns
What that word “assigns” does is this: it allows me to sell by assigning my
right to buy the property to someone else. Dirty dealers will take advantage of
people with that word if they can get away with it.
Here’s where I would use it. In real estate, a lot of bargain hunters look for
distressed property. You know, the fixer-uppers, the abandoned, condemned,
fire-damaged stuff. I go a step further and look for distressed sellers such as
death, divorce, relocation, but a lot of times I don’t specialize in that type
of property.
That’s OK because if it’s a steal and I get it for 40 – 50% off, I will assign
it to someone who does deal in that type of property and make a profit by
assigning it.
I’ll always ask the distressed seller if that is a problem and if it is, I will
buy it outright, then flip it but it costs more to do that. So I’ll explain this
to the seller and get their permission to use it. I don’t slip it in on them.
You will have a miserable existence if you practice real estate by deceit.
Natural law will crush you; play fair! Purpose, passion and desire cannot be
achieved or acquired by deceit. That’s a quotable quote. I hope you remember it.
Let’s get on with another story. This illustrates another fine example for you.
This story is about a family who had business interests outside of real estate
investing and as a result of the successes of their other businesses they had
fairly large sums of money to play real estate like a monopoly game. Power can
be dangerous in the wrong hands!
So here we go. This flush with cash family sees an opportunity to take advantage
of an overlooked or left alone market. That market is the old-fashioned trailer
park, or shall we say Mobile Home Park.
Anyway, the way most mobile home parks came into existence was this: Usually a
man of integrity and strong work ethic coupled with a love for his fellow man
would buy a piece of land suitable to the placement of mobile homes. As people
moved in, he and his wife would welcome them and the neighbors would greet them
and the community would become established.
The private owner would dig his own sewer lines and cut his own roads and
landscape the park. Maybe put in the clubhouse complete with a swimming pool,
shuffleboard, pool table and meeting hall. As time marched on, the residents
bonded with each other and a family-friendly community took root. Well this man
of integrity had a problem. Since all of his tenants are his friends, he is
pressured not to raise the lot rents with inflation.
So the rents over the years are kept very low in the park and now this man and
his wife are getting old. Perfect timing for our investors to come knocking and
offer our private aging park owner a 2 million dollar price for his 10 acres of
mobile home lots. This is a once in a lifetime offer and many park owners cashed
out.
What people didn’t see was these investors were systematically and methodically
doing this all over the place and once they cashed out as many mom and pops as
they could, they lowered the boom.
Now they the investors had control of many parks in the same areas and they
started raising the lot rents. You see, they didn’t have any emotional ties to
the residents and they didn’t live there, so it was a straightforward business
deal: either pay the new higher rent or move.
The residents said, “To hell with you new owner, we are moving.” “Well, fine, go
ahead,” they said. Now the residents started calling around to find another park
with low rents but guess who owned those? Yep, our investors did, and those lot
rents were going up too. So the mom and pops who didn’t sell were full and it
would cost on average of about $7,000 to relocate to another park even if they
could find a vacancy.
The old folks who had it so good for so long were faced with a new reality and
that was that they had no choice but to pay up or move, and moving, in many
cases, wasn’t an option. These investors exploited a complete segment of the
market and made millions and millions in profit and continue to do so today.
It wasn’t long after this happened that you started seeing signs saying, “This
is a resident owned community.” People eventually got smart and started buying
that little lot that their trailer was sitting on and they began paying
association dues for the clubhouse and security and grounds, maintenance and
road repair. The good ole days are nothing but a fond memory.
Life goes on but America did not change for the better as a result of these
types of people. Their only purpose was to make money; I believe they will die
alone and in misery as a result of their way of life.
So I ask you again, can you be passionate and put your heart into investing in
real estate by investing the way our corporate investors did? I think not. Money
is no good when you get it by deceitful ways. I encourage you to work at
balancing your objectives. Lease optioning, flippers…you are walking a fine
line.
Here’s a flip side to communal living. This story is a happier scenario, so
let’s have a little joy here. I once lived in Key West and I lived off base.
Well, I thought I lived next door to Noah, and it sounded as though he was
building another ark. All summer long, hammers and saws seemed to be making some
type of racket, so naturally being the neighbor I was, I got to know the man
next door. He never went to work and I asked him one day, “Don’t you have a job
and he kind of grinned and put his hammer down and this is Mark’s story.
Mark and his brother were from the Northeast and they had a 30-room boarding
house for college kids there, at something like $300.00 a month. That was about
$9,000 a month and they made the parents responsible for the rent payments. Mark
would spend his time with his family in the Keys for the nine months that school
was in session. His brother was a local up North and he took care of the
toilets, faucets, doors and windows. Yes, they had their very own animal house
going on there, but Mark factored in the abuse and would spend 2 – 3 months a
year, putting the animal house back together while the animals went home for
summer break.
Mark only worked three months a year and the house (ark) that he built next to
us was a masterpiece; it was beautiful. He was a master craftsman and he loved
his work and spent a lot of his time with his family in a wonderful climate.
Makes you kind of jealous, doesn’t it? Well, don’t let it because you can do it,
too, but you must get started. Mark was 45 when I met him. I believe he was 25
when he got started, so my advice to you is to get started now!
Bio:
Dan Auito is a dual-licensed real estate agent and appraisal assistant. In
addition to being a 20-year veteran of the United States Coast Guard, Dan has
also founded a non-profit drug prevention corporation, a real estate consulting
group and is the author of “Magic Bullets in Real Estate.”
Dan lives with his wife Kimberly and their two children, Brandon and Briana, on
the emerald isle of Kodiak Island, Alaska.