In August of 1973, Bonnie and I moved to Arlington where I began teaching history and Industrial Arts (shop) to eighth grade students in AISD. After teaching for three years an opportunity opened up for me to try something else. An Elder where I worshiped was a custom home builder in Arlington . His business was rapidly growing and he thought it might be time to hire a field superintendent, so he made a proposal to me.
His proposal would be that I would come to work for him for the summer on a trial basis. At the end of the summer, if either one of us decided that it would not be a good fit, then I would go back to school and he would go back to managing his own construction. But if we both liked the marriage, we would make it permanent. That sounded like a good plan to me so we gave it a shot. After three weeks we knew it was right so we made it “permanent”.
Over the course of the next three years I supervised the construction of about one hundred homes. It was a great learning experience which has impacted my life significantly since then. In fact, that is where I learned most of what I know about all phases of construction. I took advantage of the opportunity to continually ask the subcontractors why they did things the way they did. I developed great relationships with them and they became my mentors. It was wonderful.
Part of my job included taking care of any call back warranty service for the first year following the sale of the homes. I didn’t particularly like this part of the job, but this responsibility helped me to become a better superintendent because it taught me some things to watch for during the original construction. If you do things right the first time, it saves you a lot of work on the back end.
Even though the people I was dealing with on this warranty work were the actual owners of the homes, in some ways I felt as if I were a landlord. And this gave me half of an idea. I got the other half of the idea from the fact that the house Bonnie and I had purchased shortly after moving to Arlington had increased about 15% per year for the first three years we lived in Arlington . We had put five thousand dollars (borrowed from Dad) as a down payment when we purchased it and when we sold it three years later, we cleared fourteen thousand dollars.
Being the ponderer and the analyzer that I am, I was thinking that if I had purchased five houses when I purchased that one, and if I had rented them out for the three years to cover the payments and expenses, then at the end of the three years I could have cleared forty-five thousand dollars instead of the nine thousand that I did. Since I was only making eleven thousand per year at the time, forty-five thousand sounded like a small fortune. So I decided to go for it---at least on a small scale of one rent house. I figured that would be a good way to gage the feasibility of my plan.
So, I bought and devoured every book I could find on rental property and I attended every seminar I could find. I really wanted to learn.
Since I had no money (I had used all my cash as a down payment on another house for us), and I basically had no credit, I knew that I was going to have to be very creative to be able to purchase a rent house. One really doesn’t have to have money if he has the right kind of knowledge and intestinal fortitude. (I have actually experienced purchasing a house and putting money in my pocket that I got out of the purchase closing. You can afford a lot of houses using that formula.)
So I looked and looked and offered and offered and I finally purchased my first rent house. It was scary to do that. I kept thinking “What if I can’t make my payment?” “What if the tenants tear up the house?” All of these negative thoughts kept trying to get into my head, but I kept reviewing what I had learned and I decided to give it a try in spite of my fears.
Sure enough, I made some mistakes with my purchase. I paid too much for the house. Because of the high interest rates (12-15%) of the day, the rent would not cover the note payment plus the taxes and insurance. I should have bought an older house that would have cost quite a bit less but would have rented for only a little bit less. Then I could have at least broken even each month on the cash flow.
In spite of these mistakes and others, I was able to survive. And I was able to see without a doubt that if I did it better, I could make it work. So, I set a goal that one year from that day I would own at least 10 rent houses. At the time, that goal felt and sounded impossible to me. It sounds the same as ten thousand houses do to me now. It just seemed so unrealistic. I had no money and was making less than a thousand dollars a month and Bonnie was staying home with the boys. But I decided that this was what I wanted to set as my goal, so I started looking at houses.
I would call on newspaper ads every week. I would call on realtors every week and spent a lot of time looking for “deals”. Honestly, I felt like such a hypocrite. I kept thinking to myself, “Who do you think you’re fooling? You can’t do this. You are just a scraping by worker with no money.” I really didn’t think I could do it. It just felt too big.
But instead of giving in and giving up, I employed my “what if” strategy. I thought to myself (on a daily and sometimes hourly basis), “If you really thought you could do it (accomplish this goal of buying 10 houses in one year) what would you do next?” Whatever the answer to that question was---I would do it. Even while feeling like a total hypocrite, I would execute the next step. It was such a horrible, uncomfortable feeling to make myself do it. But I was willing to stretch my comfort zone rather than be guaranteed failure.
I would make ridiculous offers that would have the realtors shaking their heads. One realtor told me, “You’re not going to find many sellers that will agree to those terms.” I told her, “I just need one right now.” And she would present the offer. Most offers were rejected---most. But then one came back that I could work with, so I counter offered. Eventually we came to terms and I was able to purchase a second house. It was scary to sign those papers, but I signed them anyway. And now I had two.
I continued on that way and eventually found a seven house package. The seller was willing to carry the note so we worked out the deal. That was a big one. And I signed all those papers. That made nine. Then I found another house, worked out the negotiations and purchased it. That made TEN. Can you imagine how awesome I felt at the end of that year knowing that I had purchased ten rent houses? It was incredible.
The way that people looked at me had now changed. The way that realtors looked at me had now changed. The way that my friends looked at me had now changed. And even the way that I looked at myself had changed. I had credibility. I had busted through the obstacles and self-doubts and fears and had accomplished my goals.
I still made a lot of mistakes, but that was just a part of the journey. I’m still making mistakes, and I will continue to make mistakes until the day I die. But I didn’t make the biggest mistake of all. And that mistake that I didn’t make was to let fear keep me from launching out toward a goal and a dream. It’s like the old saying, “It is better for someone to try something and fail than it is for them to fail to try.”
I have purchased quite a few more houses since those early days. I’ve also sold quite a few and have even lost a few through foreclosure (when the economy went into the tank during the 80s--- (that was grueling)). But now, because of experience and knowledge about real estate and about life, and because of a much expanded comfort zone, not many things scare me as much as those early leaps of faith. And because of my willingness to take those risks, my life has been much richer and fuller than it would have been had I stayed safe. For that I’m thankful.
And now, my dear reader, I want to encourage you to dream a dream and to set a goal. Do not let yourself give up easily on that goal but start taking baby steps toward that goal today. Use that "as if" principal to move yourself forward. Act "as if" you thought you could accomplish it. And before you know it, you will. Don't let this opportunity get away from you! I mean it---for real. Make it happen.
May God bless you as you bravely move forward into the unknown. I encourage you to not let fear be your deciding factor. Trust in God and move ahead. Sincerely, Dennis
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This is Dave Berkey.
Have you Facil
Well said Annie. Amen!
When I