Today we have an interesting question because someone was asking me about how I got started. So I got an email from Addison and Addison asked me, what was your first step into the door? How did you get started in the realm of real estate? Not sure what he was asking me, I replied and asked him for clarification, and he came back. He said – I was asking about your start in real estate investing. I’m 19 and just got an internship and I was just thinking about how successful people in the business started. Thanks.
Well, Addison, thanks for asking the question. And it is a great question. So essentially what you’re asking me is how did I get started in real estate investing? Well, let me start by sharing my story in brief. I’ll just give you the short version of it. But this episode ultimately is going to be more so an episode of inspiration and motivation over instruction, but I will leave you with some tips and it’s not just for you, it’s anybody listening to this, but this is universal and this will apply to everybody. So real quick, my story is basically this. I knew at an early age, I was an entrepreneur. I had a desire. I wanted to have the freedom and I wanted to make money. And probably I felt like I wanted to make a lot of money. And I felt that I knew this at an early age, like eight or nine. I was probably observant and looking around and just seeing that there were a lot of people and families that had more than we had when I was growing up.
And it’s not that I grew up poor. We were just very frugal and we didn’t have any extra money. My parents both worked. In fact, my mother worked two jobs for a good part of my upbringing and early on my brother and I actually had to sleep in the living room of our house because my grandparents lived with us. And so it was only a two-bedroom house and my brother and I never had a bedroom for a very long time. There was always this desire to have freedom, time freedom, and make money. But my story was basically this. I started learning about business and entrepreneurship and investing in my teens, my mid-teens. And it was just something that was always of interest. And I wanted to learn how. And so I taught myself by ordering books and binders and courses that I would find typically on TV through some early infomercials, but wherever I can grab some information, I would just kind of pick it up and devour it.
I remember ordering a course on entrepreneurship and business and one on real estate investing. It was from the same publisher. So it was kind of easy. They probably up-sold me from one to the other, but I taught myself what I could and just learned what I could over the years as I was in school and going through school. Now, when I turned 18, that was when I bought my first rental property. And I’m kind of condensing my full story and background just to answer your question of how did I get started. I knew what I wanted to do before I was 18. I knew I wanted to invest in real estate and I knew I wanted to start a business of some kind. I didn’t know what, but when I turned 18 when I could qualify for financing at the time I could get a mortgage at that age.
I saved up enough for my job that I started when I was 16, which was working at a grocery store, stocking shelves, bagging, groceries, taking groceries out for other people. I saved up enough for a down payment on a relatively inexpensive property in a less expensive area of the city I lived in. And I don’t remember the numbers. I wish I remembered those numbers, but I want to say that at that time, many years ago, like we’re talking decades ago, I bought an end unit townhome, two-story townhome for about $40,000 and the down payment wasn’t all that much. And I probably used subsidized financing where you weren’t putting a full down payment of, let’s say 20, 25%. It was probably more like along the lines of 5% down. So I don’t remember what kind of loan that was, but I was able to get in, get financed with a relatively low down payment, and get started.
The property needed some work. So I brought my uncle who was a carpenter to help me with some of the work. So he relayed the flooring, helped me with some of the cabinets in the bathrooms and the kitchen. And we did not a full or extensive renovation, but I did a renovation well enough that the property looked good, smelt good, showed well, there was no internet back then. So I put a sign on the lawn that it was for lease. And I think I ran an ad in the newspaper. I don’t remember if I did that part. I probably did had some paper applications in the unit. I took some applications and I interviewed some people not knowing what to do in an interview, but I just basically met them face to face, ask them questions, got a gut feel, and ultimately just pick somebody and place them in the property.
So I think what I did, I did well, it was probably close to the textbook. Part of it was instinct. Part of it was just reading and learning and gaining some knowledge. But again, I had some of the knowledge I needed, but not the experience. So the experience came with actually taking action and moving forward and doing what I did. And that was nothing difficult. But now I had some experience and I can keep building on that and gaining more and more experience as time went on. So I actually managed that property myself because it was close to home and collected rents every month. And I held that for a number of years and the market was appreciating rapidly enough, but not incredibly fast. So I gained equity over time and I kept that property for a number of years. The biggest mistake I made, which I tell this story all the time is I sold that property.
Knowing what I know in hindsight I never, ever, ever should have and would have sold that property. I don’t know what that property is worth today. I’m going to guess. In fact, I should look it up on Zillow, but I think it’s probably around $400,000. This is, you know, many, many years later now, of course, but think about that. A $40,000 investment that was generating positive cash flow held for a number of decades now being paid off if I wanted to pay it off, but also being worth $400,000, maybe 10 times, what I bought it for is incredible. And that’s just the power of real estate, but that’s how I got started. So if I was to summarize my condensed story, do you, now it would be basically the first and foremost, it starts with a desire. This is where it all begins. And some people might say, well, this is the big question of why answer the question why for me at the time it was because I wanted to make money. And I wanted to build up to having personal freedom. And I felt that that that was the way to do it. The second thing is you need some know-how, a little know-how, but some know-how, and that means you need to educate yourself. Just like I did. I took the time to educate myself. I spent a little bit of money buying those courses, those books, they were binders. And I took the time to read and understand and learn what I could about it. And the other part of the knowhow piece of it is asking questions, ask questions of people who might know the answer or that, you know, know the answer and gain knowledge just by talking to people who have prior experience, or maybe they don’t have the experience, but they have the knowledge and that’s fine too.
But what you’re doing is you’re educating yourself by asking questions and getting, and the information that you don’t actually have at least not yet. Yep. And then the next and final piece of this is really the part that I think surprises a lot of people. When I tell them that I bought my first property when I was 18 years old, I think it has a lot less to do with age and a lot more to do with taking action. Like what you actually do. Don’t just think about a dream about it, wish about it, actually do something about it. And so, you know, Nike, I say has one of the best slogan’s in the history of the world. And that is “Just Do It.” That is such a great saying because you get that to the point where you know why you want to do something, you have the desire, you probably have the motivation and you’ve built up some know-how enough knowledge to move you forward, but you need to pull the trigger.
You need to take action. So just like Nike says in their commercials, “Just Do It.” And you know what, if you need a little nudge, get some help, ask someone to just help move you along or hold you accountable, or maybe partner with you, whatever it takes to get you to move and take that step. Even if it’s a baby step, but just take a step forward. So you can take a second step forward and a third, you just need to keep moving forward. Don’t stop. In fact, don’t freeze. That’s the last thing you want to do is just freeze in your tracks. Sometimes it is a little scary because you’ve never been there. It’s unchartered territory for you, but don’t forget. There are tens of thousands or hundreds of thousands of other people who have done exactly what you’re thinking about doing. So don’t be afraid.
And in wrapping all this up and in the theme of taking action, I will just tell you a couple of quotes that I like here. One is from Sally Berger and she said, “The secret of getting ahead is getting started.” I love this one from Winston Churchill, “I never worry about action, but only about inaction”, Napoleon Bonaparte said “Take time to deliberate, but when the time for action has arrived, stop thinking and go in.” And last but not least, Dale Carnegie said “Inaction breeds, doubt, and fear, action breeds, confidence, and courage. If you want to conquer fear, do not sit home and think about it. Go out and get busy.”
All right. Well, I hope that has helped you. That is my quick story of how I got started in real estate investing. So thanks for the question, Addison.
And that’s it for today. If you have a question about real estate investing or finance, go ahead and shoot it over to me. Just go to AskMarco.com or passiverealestateinvesting.com. Remember to subscribe that way each and every week. You are notified of our latest episode and that’s it. Thanks for listening. I’ll see you on the next episode,
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