This is the story of my journey to find real estate deals, or rather, my journey to understand the importance of finding real estate deals in solving the puzzle of being a successful real estate investor. The best way I know how to tell this is through a story that begins with my first real estate transaction.
Early morning anxiety attack
A lot of people may not know this, but I closed my first real estate deal 90 days after having a panic attack. I had a panic attack in the middle of the night because I realized that the poor financial decisions I made as a single man were now having a negative impact on my new wife. We can’t buy a house together because my credit is so bad. I couldn’t even get a loan to buy a house, and we almost missed out on our first home purchase because of my credit issues.
As I grappled with the fact that I had no control over buying our first home, it dawned on me that we had so many dreams for the future—like having kids, buying our dream house, living in a great school district, and going to Vacation – all considering our finances, it was out of reach. This realization led to a 3 a.m. panic attack
Desperate for a solution, I started googling ways to make extra money. This search led me to articles on BiggerPockets where I saw ordinary people buying and owning real estate to build wealth.
my action plan
At that moment, I made a decision: No matter what, I had to figure out how to be a successful real estate investor. Even though my credit was terrible (less than 600) and I only had $1,000 in my savings account, I felt at peace with it. I’m sure if others on BiggerPockets can figure it out, I can too.
I knew I needed to surround myself with other real estate investors to push myself down this path, so I started attending parties, being very intentional about which parties I attended, how often I attended, where I sat, And how can I provide value to others so that I can learn from them. I also started telling everyone that I was an investor. Even though I don’t yet know how to be a human being, I understand that in this world you get what you give. By showing that I am a real estate investor, I hope the universe will reward me.
my first transaction
This approach led to my first sale. A friend called and said that he heard that I wanted to buy a house. He had to sell his house within 30 days in order to purchase the property from his church and offered to sell it to me at a significant discount – $116,000 for a house valued at $165,000 to $175,000. I agreed, even though I didn’t know how to proceed. I googled “how to buy a house” and learned how to sign a contract.
With the contract in hand, I went to the nearest bank, a small community bank, for help. The commercial loan officer in the lobby saw what a good deal it was and offered to provide financing if I could put up 15% down. I don’t have the $15,000 I need, but I think this is good news. That means I only need $15,000 instead of $115,000.
Keep my financing safe
I reached out to my network of real estate investors through meetups for advice on finding funding. I understand how to borrow against a 401(k) without incurring penalties and taxes. My wife has a 401(k) and agreed to borrow against it so that we could purchase a property. We got the money, bought the property, and rented it out within two weeks. Cash flow repays the 401(k) loan.
This experience taught me that if you have good deals, you can get good funds. The bank later offered me a line of credit against the equity in the property as a down payment on a future transaction. This allows me to focus on finding good deals because I now have financing.
I began studying the art of real estate investing, learning from successful investors and wholesalers how to generate leads and find deals. While I didn’t want to wholesale, I employed this strategy to generate leads for myself. I focused on direct mail as my primary strategy, but also learned various methods of finding deals both off and on the market.
final thoughts
Finding the right strategy requires balancing your resources (time or money) with your personality. For me, direct mail works best and I use it all the time to find good deals. Every deal-finding strategy works; you just have to find one that works for you and stick with it.
The foundation of a strong real estate business is finding good deals. A good equity deal gives you a variety of options – whether it’s selling, renting, flipping or wholesaling. This is your safety net in the real estate industry.
Thank you all for being a part of my journey. See you at the closing table.
Find and fund incredible deals, even in tough markets.
exist real estate dealmaker, in the market Podcast co-host Henry Washington shows you how to close incredible deals, expand your network, and enhance your investing approach. Learn from him on over 130 rental properties and take your trading skills to the next level!
Notes on BiggerPockets: These are the opinions written by the author and do not necessarily represent the views of BiggerPockets.
