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| Like the game Monopoly, you can grow your money with Real Estate. |
This week, we are going to talk about how we started investing in real estate. It wasn’t an overnight decision, or result, for that matter.
My first foray into real estate investing (REI) was to partner with one my uncles and my cousin (his son) to develop an RV park in the Port Fourchon area. It seemed like a great idea…lots of potential for revenue and extended development. And I knew nothing about evaluating the deal to see if it was going to be a money maker or not. I put up the money to initiate the lease of the land ($20,000) and we proceeded to get a loan from a local bank to develop the park. We had to get permits, evaluations, inspections, etc. The total amount from the bank came to $150,000. Just as the park was about to open, the BP Macondo/Deepwater Horizon oil spill happened and shut down the oil & gas industry in the Gulf of Mexico. The space was leased to a catering company as a staging area for feeding spill cleanup workers and to facilitate a training space.
We eventually opened up the park and began operating. My cousin and his wife managed the operations.
I began traveling around the world a good bit for work and realized that I could not be deeply involved in the deal in addition to my wife not being happy with me involving us in it in the first place. My cousin offered to buy us out for $30,000, paid over time. This worked for us as it got our money back, along with about a 17% total ROI.
While the deal made us money, the stress and aggravation of not being in control left us with a bad taste in our mouths.
Fast forward a couple of years and we decided to remodel my in-laws’ home to set up as a rental. My father-in-law passed away the preceding year, leaving the home to my wife. We got it remodeled after a few false starts and bumps in the road. And started renting it out.
I mostly stayed hands-off of the operations and mainly just helped handle repairs & stuff, since it was my wife’s house (via inheritance).
Towards the end of 2015, I started to get aggravated with my job, (for the nth time), and started a more serious search for something else that I could rely on for income. In January of 2016, I found Bigger Pockets, an online forum/educational platform for real estate investors. It was then that I realized that REI was something that I could do. In fact, in a way, we were already doing it. The thing that appealed to me about it was that successful investors rely on systems and processes to make their businesses run well. WOW! I am a “Systems & Processes” type of guy! It was an epiphany, of sorts.
I started listening to podcasts, devouring forum posts related to my topics of interest, attending real estate investor association meetings, and reading books to learn about how to reach my financial goals through REI. I put together a 30,000 foot overview of what I would like to do and how I could do it. When I discussed my idea with my wife, she was initially skeptical because I repeatedly come up with plans to make money and either never initiate them or follow through on them.
I continued to learn about buying and managing rental properties, along with operating a business. I became more involved in the operation of the existing rental, more or less making it my responsibility.
So, that is how we got started in REI.
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