Six months to Victory

As many of you remember, I was invited to resign from the Boise Police Department the first week of March of this year. We moved to Boise from Provo six months earlier and had bought a house as part of our plan to settle in for what we anticipated would be a least a few years of hard work and adventure on the Boise beat.

Well, that didn't work out. We found ourselves living off of savings and struggling to figure out what to do with our lives. At first I thought I would get a "pay the bills" job somewhere to buy some time until I figured out a new master plan. My efforts were only half-hearted as I came to realize that I really wanted to have a go at making it on my own using the real estate investment training I had received the previous summer. As I began to commit myself to this new direction I happened to see an advertisement for the same training program here in Boise. I knew that their policy was that I could re-attend the training for free within a year of my initial date of attendance. I took Mitzi along with me to the intro to allow her to familiarize herself with what I was proposing and to hopefully feel more comfortable with the uncertainty of self-employment.

While attending the refresher I decided to go whole-hog and sign up for the deluxe training package (complete with a deluxe price tag) in order to gain every advantage I could to "ensure" my success. This included three days of investment field training in Salt Lake City, as well as several other programs. By my calculations we had enough savings to meet all of our priority obligations until the end of July. So I made that my goal: Make $10,000 as a real estate investor by July 30, 2008. By this time it was about the end of April and so I had about 90 days to make this work. Fortunately, I had something of a safety net in case things didn't work out; my dad had offered me a job working for him on a branch of his real estate business that he had been wanting to develop and launch but for which he did not have the time himself. I told him that I would be happy to do some work for him on the side for the next 90 days but that my priority was going to be making that $10,000 on my own.

Well, to make a long story a bit shorter, I worked very hard for those first 60 days (plus the 30 days of of April I had already worked): building a network, writing offers, finding deals, researching, learning, studying, setting up a business, buying my first fax machine, using a day planner for more than a week, calling the support line incessantly, etc, etc. During that time I had taken additional training specifically on short sales. In that training, the instructor said that the most proactive method for finding business is by knocking on doors. All of the other ways, advertising, putting up "We Buy Houses" signs, sending letters and postcards, all rely on business coming to you. I didn't have time to wait, and the instructor said that you have to knock on about 20 distressed homeowners' doors to find one deal. Well, I went door knocking for the better part of four days, knocked on some 90 doors, and only talked to about 5 people. Only one of those looked like it had any potential, and the homeowner seemed impossible to get a hold of.

This is the house. I knocked on this door sometime in early/mid June. I finally got the homeowners' signatures around the 10th of July.

At this point, the wind was very much going out of my sails. Business expenses, along with all of our other bills, were piling up, and it was becoming increasingly clear that I was not going to have anything to show for my efforts besides empty bank accounts and a whole lot of debt. By this time it was July and I felt an increasing urgency to get some kind of money coming in. I went to my dad and told him that I was ready to make his business my top priority while I moved my solo efforts to the back burner. I had already been working for him on a few things for which he gave me my first paycheck early in July, but now that I was being paid I committed myself more fully. We felt supremely grateful to him for allowing me the opportunity to work via e-mail, telephone, and video conference while staying in Idaho in our house we loved.

Through all of this, there was still one glimmer of hope. I had been able to get a tentative commitment from David, one of the homeowners I had spoken to on my door knocking campaign (oddly enough, he was the third door out of the 90 I knocked). The house was in foreclosure and was scheduled for auction the first week of August. I got all of the documents signed, told him and his wife what to expect and that I would buy the house from the bank if I could get it to agree to a short sale, thus saving them from having a disastrous foreclosure on their credit. Things progressed and I fumbled my way through, all the while trying desperately to act like I knew what I was doing. There are far too many details to go into here, but after a lengthy, complicated, highly stressful and challenging process, I got a "Yes" from the bank.

The bank had agreed to sell the 1900+ square foot house to me for $112,800. I estimated that it's value, after about $30,000 of repairs, was between $185,000 and $215,000. I then turned around and put an ad for the house on Craigslist at $128,500. I received about 20 responses (and I'm still receiving some) to the ad and one lady made me an offer on the house three days later. We settled on a final price of $127,000, signed the contracts, and I scheduled the closing. My title agent, whom I had met through an interview with a professional investor, knew all of the ins and outs of non-traditional real estate transactions. He was great to work with and took care of everything. The homeowners showed up at 4:15pm on Thursday, we signed documents, and they left. My new buyer showed up at 4:25pm on Thursday, we signed documents, she wrote out a check, I gave her the key, and she left. I asked the title agent when I could pick up my check and he told me to come by Friday. Friday afternoon I drove out to his office and walked out with a check for...drum roll please...$12,946.40! I did it! Sure, it was about 45 days late, but ask me if I'm complaining.


Before you get too jealous let me just say that almost all of this money (after tithing) is going to pay off training and business expenses. (And it won't even cover all of them!) Of course, we did have to use a little bit of it to celebrate the conclusion of our six months of poverty and desperation. I bought myself a PS3 so I can now watch Blu-Ray movies on our HDTV, not to mention have a PS3. Mitzi also finally has some money to spend on whatever she wants that I've been telling her we couldn't afford for the last six months. She's been so patient, supportive, and trusting; it feels wonderful to be able to tell her to go shopping for herself with more than $20. The wind is back in my sails again, and while I'm still working for my dad (we just closed our first deal with that business too), I'm also out knocking on doors again, and this time I really feel like I do know what I'm doing and know that there is a check from the title company at the end of the rainbow.

* For anyone interested in a more detailed account of my first successful short sale, feel free to e-mail me or request one in the comments. I will be working on the account over the next few days and hopefully it can help any of you whose interest this may have piqued to determine whether or not this may work for you too. I'll be happy to share the experience, what I learned, mistakes I made, and how to do it better next time.