Unstoppable Force

So there's 19 days and one pay period left in the year. I'm still $150 short on my emergency savings goal after finally purchasing the domain name for Thirty&Free and a random poop test for the fur baby. I think those expenses were pretty necessary/beneficial. No? I finally finished my ARM book and I'm passing the exam tomorrow. Extra monthly income has been at least $200 each month. I'm a little worried about this month since Lyft has slown down, but I should still be able to bring home at least $100 from driving. Couple that with my $90 bonus from passing my exam and I should be good to go on the income goal. Maybe Santa will even be kind enough to leave me a little extra. 
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With my goals, I hit the ground running...hard. I've been actively busting my ass to break into real estate investing but have been met with roadblock after roadblock. I know, according to my goals, my first wholesale deal is not to come until beginning of next year, but what's the point of only trying to meet goals when you can annihilate them? So I'm trying and trying and getting no where. Honestly its been more than a little discouraging. Here's a little recap of what I've been going through in terms of my REI. *There's a fair amount of detail in a few of these bullets and if you're not into the whole rich in real estate thing - just kinda glaze over this section and maybe read the last sentence in each bullet point. *

• I've been driving around on my lunch breaks looking for vacant/abandoned properties and contacting the owners with hand written letters. I've written and sent over 50 letters since I started this blog without one call back. Heartbreaking. But I'm me, so I keep pushing....
• I take to Craigslist hoping to find a distressed owner looking to sell their home fast and find two leads:
  • The first home belongs to a retired Marine vet named Tom. I give Tom a call on Wednesday and we set up an appointment to view the property on Thursday. During the walk-through of the property, I notice that its going to need about $70k in repairs. The after repair value (ARV) of his home would have been around $260k. End buyers usually build in about 22% of ARV for profit; so that means there was only $132,800 left for the purchase of the property and for my cut. Problem is, he wanted $135k for the property. I let him know that there was no way I or anyone else would pay $135k and the best I could do was $123,500. So I drew up a purchase contract for that amount, left it with him and asked him to give me a call if he wanted to go ahead and sign. Well that didn't happen. He called me yesterday and let me know that he would not accept anything less than $135k. Lesson learned - not all sellers are as motivated as you want them to be.
  • The next deal I found was almost too perfect. It was a home in the same area. The owner (coincidentally his name was Tom also) was a general contractor and was willing to replace the roof. And get this... he only wanted $65k for the house! I give him a call and let him know that I want to see the property the next day and that I was bringing a purchase contract with me, just in case. I also let him know that'd I potentially be working with a third party investor since contractors are usually hip to these types of deal structures and he agrees to meet with me. As soon as Tom 2 steps out of his car, he lets me know that he won't allow any contract assignment, which is what I let him know that I was planning on doing! So I look at the property any way because I may still be able to make money on the deal via a finder's fee since he won't let me assign the contract. The property needed about $75k in repairs and the ARV would have been around$200k. This would have left about $16k in the deal for me if I could have assigned the contract! After viewing the property, I get back in the car and send details on the deal to 2 investors, determined to make something on this house. One passed because they like to make their money on the $500k-$700k homes and the other still hasn't gotten back to me. Maybe this investor will be the one to launch me from Alex, the underwriter, to Alex the Real Estate Investor. Fingers and toes crossed.
  • Also while on Craigslist, someone was selling a 10 unit apartment building for $380k. Monthly total rents were around $5,500 (this was in a not so good part of town). Didn't even want to think about finding finacing for this because after expenses for mortgage, property management fees, common utilities, maintenance and vacancy; the profit margin would have been very slim. This would be more of an investment for someone with cash money - who only had to worry about the opportunity cost of his money and not a mortgage. BUT there is always something to learn. While researching stuff on BiggerPockets, I came across a strategy of investing call syndication. This is usually used on large commercial deals. It's pretty much where an investor, short on cash, structures a purchase and hold deal on a piece of commercial property such as an apartment building. The syndicator is usually in charge of property management and distributing disbursements. The syndicator will find investors to fund the project and take a syndication fee (usually 1-3% of pruchase amount), a piece of any monthly profits left over after the cash investors receive their required interest, and a portion of the proceeds from the sale of the property at the end of the holding period. Since I don't have the experience most investors require before they even take a meeting with you, I need to be creative and leverage my current relationships. Luckily, I'm engaged to an employee of a prominent property management firm. I'm thinking of using this 10 unit building as a case study to show him I am capable of structuring such a deal. My idea is to create an LLC with him to act as the syndicator in my case study. This way I can leverage his name and experience in finding investors. Maybe setting up a 30/70 split in favor of him for all syndicator proceeds? This would be a HUGE help in breaking me into the world of commercial real estate. More on this to come...
• Fuck it. I'll just call. This is the point I reached yesterday afternoon. After the radio silence on the letters, I decided to just search numbers for the owner's instead of waiting to hear from them. The numbers I called were for 5+ unit apartment buildings I found on my walks/drives. I was going to politely ask them if they were planning on listing their properties in the coming year or if they were for sale now. I called 5 numbers and got 2 people to answer (already a way better response rate than the letters). The first call was not even with the owner. It was just an entity set up to manage the property. They informed me that the owner has held this property for a long time and had no intentions in letting it go any time soon. The second call was with a nice older woman who owned a 12 unit apartment buildung in one of the most sought after neighborhoods in my city. I asked her if she was listing her property soon and she told me that after her husband's passing that she wasn't sure what she wanted to do with the property, but that she would keep my number on hand in case she did decide to sell. No guaranteed deal, but the possibility of one works for me.

You can kinda see where I would become discouraged. Luckily, I've been consuming books like an addict. I've read/listened to 7 books and working on my 8th since I started this blog. These books have provided me with a sense of positivity, urgency, and confidence that my will is unbreakable. I honestly probably wouldn't even be writing this post if it wasn't for this constant influx of motivation. I've said it before and I'll say it again "KEEP READING".

Haven't from you guys in a while. What are your thoughts? This post too long? Too short? Anything specific you want to learn about? Drop a comment and let ya boy know!

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