Still trying to get the hang of this blog thing! My mind goes in so many different directions about what I might want to share first, second, etc. But, as a reader I always think it works best if someone starts from the beginning so I will get you up to date with a summary of what has gotten us to the base of our mountain of a dream.
Many years ago, before we had our son, Ed invested in real estate and then a restaurant. They say hindsight is 20/20 and that is very true. Getting the restaurant caused us to need to many resources too fast. Ed and his partner spent so much time there that their business of 30 rental properties suffered in high vacancy rates and the bills were hard to pay. Eventually, after having our son, we needed financial stability so Ed handed over the business to his partner and we both went back to traditional jobs. We both did well, climbed in promotions, salaries, etc. We rebuilt from probably our lowest financial point in our marriage.
Fast forward about 14 years, and we felt ready to try again. Walking away never felt right to Ed, as he knew we would have owned most all those properties by this time. Some people thought we were crazy going back to something that seemed to fail so badly. But, if you live long enough you can know that our greatest education is in our failures and we can often start again more intelligently.
At this time, HGTV was all the rage. Flipping looked like a blast! I love doing interior design and most people in my life would compliment my choices. This seemed like a no brainer that we were cut out for this! Sometimes we also have a lot of unfounded confidence and naivity! Ed loves doing educational programs on anything and everything so he started learning all he could.
Through his education, we learned some people find their flips through mail carriers. It just so happened Ed had a good friend in his Judo class that was a mail carrier in a perfect starter neighborhood. He told her to look for abandoned places that needed work. She led us to our first flip. It was a 3 bedroom, 1 bath, 1000 square foot house. The kitchen didn’t have a floor! We were looking at the ground in that room! We had no real money to invest, we had two kids in college. But, we had good credit and low debt to income ratio. So, we went to a community bank and took out a loan. It was over $50,000 to fix that little house up. Our goal was to at least break even because we were really just trying to get some idea of the process so we could create systems that would work for future flips. We exceeded our goal and made around $8,000 which wasn’t a terrible return on investment at 10%. Here is the little house that started it all:
So, as you can see, it was such a tiny little place. But we kept going and flipped 2 more that same year. We joined a local investors association to learn more about what others were doing. A few were establishing themselves in our areas as flippers, and they were doing 5 or 6 at a time. At first, we thought that was what we were shooting for – to grow a business. This meant having several contracting teams, people to do lead intakes and marketing, people who go out and view the properties and build budgets, bookkeepers, etc.
We were not on the road to that too long when we looked at each other and said – this is not our goal. Our goal is to have our time back, and have freedom to do with it as we wish. I was already running a company in my career. We needed to look at more passive ways to get income. My husband calls it Mailbox Money! WE LOVE MAILBOX MONEY!
We still flip houses – 2 or 3 a year. We use that to generate capital. But, most of our ventures are to get that mailbox money. I will tell you about that next!