Preface: A mentor of mine urged me to write this article for several reasons, but as I write this I see nothing incredible about what I did. The following story is a shortened version of how I got started in this business, and the fact that no matter what obstacle got in my way I refused to accept no for an answer.
I’ve been lying in bed awake for a few hours waiting for the pain killers to kick in. The sun has filled the house, I can hear cars passing as everyone is heading to work. As the hydrocodone find their way to the fire burning in my lower back, and eases the edge off just enough that the jolting pain doesn’t leave me huddled in the floor, I begin my trip. It takes me about a half hour to make the 30 foot crawl to the bathroom, and sometimes this is just were I stay to avoid having to make the journey again. This has been my routine for several months now, bills are overdue, and my savings are gone. Nineteen years old. This is where my hard work has gotten me.
My father got into an accident when I was 13 that shattered his pelvis, permanently disabling him. A single parent, sole income, unable to work, and now facing the foreclosure of our home he paid on time for 13 years. Here I am, similar situation, four years later. What happened? When he got into that accident I was entered into a work release program from my school allowing me to work every other day and I was granted a provisional license from the state so I could drive. A teacher of mine, Mr. McClain, who had once worked as an electrician pulled some strings and got me a job working in a fabrication shop for an electric company. Barely 14 I am now working as an electrician, going to school part time, and trying to help my dad the best I could. We lost the house.
Fast forward to 2001 and I am now 18 working as a residential mover. 105 degree Texas summer, three story apartment, 3 bedrooms and a living room set to carry to the truck, and not even the subtle hint of a breeze. That is my job. Never willing to say no, a year later my back was destroyed. Lying in the bed over those next few months I had a lot of time to think. How did other independently wealthy people make their fortunes? That question is easy to answer. Next time you’re near a book store walk through the investing section and try to find a book that doesn’t have real estate in the title.
It’s now November, 2006 and Josephine St. had my name written all over it. I had never bought a house before, but if I wanted to cash in on all those books I read then I had to take action. Looking up and down this secluded street just outside of downtown Dallas almost every house had a for sale sign in the yard. It was strange, almost eerie, an entire city block built back in the 80’s was completely vacant, yet just one street in any direction was a thriving community. The blue and white sign sitting a little crooked in the front yard of a vandalized town home said Coldwell Banker on it with a phone number written directly below that. Without hesitation I called the number on the sign to see what I needed to do next. Andrew answered the phone sounding a little rushed, and on the other end of the line was a kid eager to buy this house knowing absolutely nothing about what needed to be done to make it happen. Andrew asked me a small list of questions, and when he realized I wasn’t working with any other agents he immediately cleared his schedule and was on his way to escort me through the flooded remains of what was once somebody’s home.
This place was bad. One investor owned 28 homes on that street, financed through 28 different banks, and with a few bad decisions he lost everyone of them to foreclosure. Now you don’t have to live in Dallas long to know that if you leave a city block vacant outside of downtown overnight it will be destroyed. An abandoned street – or at least on paper. Behind every boarded up window on that street was the darkest of dark. This city block had become the haven for people looking to get away from the eyes of the general public. Prostitutes at work, dealers pushing poison, addicts huddled into the corners, and this was about to be my new home. Every plug, switch, and light in the house had been ripped from the walls to gain access to the copper. Electric panel, hot water heater, all of the cold water and hot water piping – gone, and to make it even worse the city’s water meter failed. The water was just seeping into the house from where the copper pipes had been ripped from the ground by thieves, soaking into the moldy walls, and slowly working it’s way out the back door. Crack pipes, brillo pads, needles, used condoms – this wasn’t my dream home – but it was my dream. It was the cheapest one available of the 28 vandalized homes on the block, and I knew the tax roles had the house valued at just about 100k. I had no clue what I was doing, but I signed a contract that night for $42,000.
I was 23 years old and working in a niche area of the electrical field called automation & controls making about $12/hr. Andrew suggested I get in touch with my banker to see if I would qualify for a loan. Remember this was during the peak of our market where anybody who could fog a mirror got a loan. I spoke with Gretchen White at Bank of Texas, an older lady who took great care of explaining the different loans, and she was able to qualify my income for up to a $76k uninsured conventional loan covering 100% of the purchase and 3% of the closing costs. Talk about a happy dance! I could barely sit still I was so excited. She informed me that I would need to order an appraisal and I happily handed over a check for $300.
I was completely oblivious to how this next meeting was going to shape the course of my next few months. When the appraiser pulled up to the house in his $60k benz, probably no more than a few years older than me, you could see the disgust in his face. As I pulled back the sheet of plywood that was covering the hole where the door used to be he just stood outside the entrance reluctant to proceed. As he grudgingly moved through the house, his footsteps sloshing through the water soaked carpet, I cheerfully proceeded to tell him about all the plans I had for my new house, and how different it was going to look once, I added the granite and hardwood floors. He just glared at me from under his designer glasses. “Obviously you intend to have all of this done before closing I suppose?” commented the appraiser. I kinda laughed at such a stupid question, “Of course not, but once I close I will do it over the next year” I said, wondering who would be stupid enough to do all that work to a house they didn’t even own yet.
Little did I know I was about to eat those words.
The appraisal came back to the bank declined for not meeting lending standards. Yes you might say hard money, but at that time I didn’t even know what it was, and even if I did, affording or qualifying for it was outta the question. The books I read told of the author’s story from rags to riches and took more of a narrative approach versus the nuts and bolts of getting started. So here I am facing a dilemma; I know this is an opportunity to change my life and the bank will not loan the money unless it can pass the lenders inspection. What did it need you ask? Hmmm… Let’s see…. Just to add a little insult to injury, after contracting the house, the unit next door caught fire, and I now had a smoke damaged, flooded home, with no electric wiring, plumbing, windows, or air conditioning, that had a 4ft x 4ft hole cut through the roof so the fire department could gain access to the attic preventing the spread of the fire through the town homes…. So now what? I am a 23 year old “kid” making $12 an hour living in a rental almost an hour away, with little to no money in savings, and just had his dream snatched from his hands. What did I do? What any rational person would have done in the middle of a nasty ice ridden winter. I defaulted on the lease at my current house, put everything in storage, and moved into the closet under the stairs of a house I didn’t own hugging my Coleman lantern to stay warm as I tried to sleep at night. No electricity. No water. No heating.
Hmm… Rational? Well I couldn’t afford to pay rent and fix this place at the same time, definitely didn’t have the time to drive there between shifts at work, and wasn’t going to let some smug spoon fed guy in a Benz tell me I wasn’t going to get my house. Well I now had the list of required repairs provided by the bank, and I started fixing my hopefully soon to be new home. Over the next 3 – 4 weeks I went to work from 8-5 and then straight to the house picking up my tool bag and fixing anything and everything I could on the list before going to bed, often around 5 AM. I would then show up to work the next day a little early, shower in the bathroom sink, and then proceed to repeat the events of the day before. After working well over 100 hours a week for several weeks straight I had nothing left in me, and if it had not been for my dad and a few friends lending a hand it would have never been finished. With just 4 days left before closing I had finished the bank required repairs. All that was left was final inspection to confirm repairs and the house was now mine….. or so I thought.
I informed my loan officer, Gretchen, that I was ready for the appraiser to come back out and it was scheduled for the very next day. The appraiser was in and out of the house in just seconds, and as I recall his exact words was “I wouldn’t live there, but if it’s what you want then fine. I need to see all of your permits for the work done.” Permits? I did all the work myself; after all it was going to be my house. So here I am 3 days before closing homeless in the middle of winter, and dead broke after borrowing $3k from my Uncle to help get the supplies for the house. I just rehabbed a home I didn’t own and was quickly realizing the reality of my loss. I was absolutely exhausted, had no fight left in me, and just looked at the ground as the appraiser drove away in his Benz.
One day till closing. I had been on the phone with just about everybody I knew seeing if anybody could pull me a favor. Not possible in that amount of time. Just wasn’t possible. My poor loan officer probably had me call her a 100 times in 24 hours. She politely explained that I was warned of the risk I was taking, and as unfortunate as it was the chips didn’t fall in my favor.
Devastated & Homeless
With nothing new to say I still called Gretchen again. Maybe if I just sat on the phone with her long enough she would say okay. Nothing had changed. It’s close to 3 PM and I am sitting on the phone with Gretchen in an awkward silence. I was supposed to close the very next day. All the paperwork was in place. Everything was just waiting on the final inspection to be completed so we could move forward. Still on the phone. Still dead silence. I think she understood the emotions I was going through, and just letting me stay on the phone was her way of saying sorry. I have no clue how long I sat on the phone before a grin started to show up on my face.
“If I paid $300 to hire that appraiser whats stopping me from getting rid of him?”
After a moment of internal debate Gretchen came back with a stuttered “nothing”. “So what you are saying, is that if I pay another $300 I can get a new appraiser?”…. ” I don’t see why not Daniel”
Over, Under, or Through – Let Nothing Stop You
People find excuses all the time for why they don’t take the next step, and all I can say is that their “why” isn’t big enough. I spent a lot of time on the wrong side of the “tracks”. My brother and sister both passed away at an age younger than I am today from separate drug related incidents, and yet I didn’t fall into the same path. For those who are willing to carve their own path in life, this post is for you. For those who are reading this and continue down a path that they never wanted to travel, ask yourself, “Is overcoming my fears and risking a few stumbles worth changing the future of my family forever? Or, should I just stay were I am, and live with the regret of someone who let obstacles stand in the way of a dream?” Find your why, and make that burn so deep inside it can’t be extinguished. It’s that burning desire that keeps you going when you have nothing left.
The appraisal was done the next morning before closing, and in August of 2009 I sold that house for $157,150 putting a $97,648.15 check into my bank account at 25 years old forever changing my families future. My dad and wife are my why, and I owe this to them.