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The two sharply dressed presenters stalked back and forth on the stage in the large hall of the Orlando Convention Center. Along with the hundreds of real estate agents in attendance, I reached under my seat and pulled out a 9-inch by 9-inch square of balsa wood.
“Write anything you’ve ever wanted on the board,” one presenter implored. “What kind of car do you want to drive? What kind of house do you want to live in?” he continued.
“Maybe we did such a great job helping you make money, you want to buy us a Rolex,” the other joked, with just a shade of truth, knowing that he might incept one of us to buy him a $10,000 watch one day.
I looked at my blank board. At a relatively sheltered 23 years old, I didn’t have huge aspirations. It would be cool to have a dog one day. I wrote on my board: “Get a dog.” It would be fun to get in really good shape. And we all know who are in the best shape: ninjas. I wrote on my board “Get ninja fit.” Past those two items, I was kind of at a loss.
Before this conference, my first introduction to the financial benefit of owning real estate came as a student at the University of Maryland. My roommates and I paid a monthly fortune to rent a decrepit house on Knox Road. The math was pretty simple; it made more sense to be the owner than the tenant. Back at my board I wrote, “Buy 4610 Knox Road.”
Now I was on a roll. Why stop at just one home? The whole point of this seminar was learning how to make money in real estate. Back at my board I wrote, “Own $1 million in real estate.” That was good, but maybe not specific enough. Back to my board, “Own $1 million in real estate by the age of 25.” Much better. Now I had a real goal to work towards.
About six months earlier, I sat in a real estate licensing class just outside of my hometown. I moved home after college and got to work on important projects like cleaning my parents garage. Having passed on law school or going right into work on Capitol Hill, my future was a blank canvas. I always thought I would be a good salesman. I had no experience or technical skills upon which to found this belief, but I believed it nonetheless. Maybe I could sell Lamborghinis. I bet those guys make a lot of money.
A friend of mine in college had gotten his real estate license in a two week course. Really? That’s all you need to do and you’re allowed to sell millions of dollars of real estate? I signed up and thought, “I’ll give this a year and if it doesn’t work out I’ll go to law school.”
Towards the end of the two-week class, the instructor dropped some truth on us. Statistically, only one out of every ten people who get their real estate license are able to make a successful career out of it. I looked around the room of about nine other students and thought, “Yup, I’m pretty sure it’s going to be me.” I passed my test and moved back to College Park to start my career in real estate.
Question One: What is a business and how do I run one?
I had never taken a class in business or marketing in college. I could tell you why Plessy v. Ferguson was important to Supreme Court case precedent, but I couldn’t tell you about how to find a lead, manage a client, or close a sale. I did what all great entrepreneurs do; I went to the public library. I read book after book on sales and marketing. I gained theoretical knowledge as I kept looking for clients to work with to gain practical knowledge. My motivation was strong, my success at selling real estate was not. But that motivation was enough to get me hired as an assistant on the Chuck Bailey real estate team.
With the mentorship of Chuck, my library books, a little self development work, and the knowledge from the seminar we were sitting in, I was on track for success.
“Now that you are finished writing your goals,” the presenter continued. “You might not believe you can achieve all of them.”
The other presenter chimed in, “Like having so much money you would buy me a Rolex.”
OK, buddy. We get it. You want a Rolex.
“We are going to prove that you are more capable than you think by having you punch through your board.”
Just like that, real estate agents of all ages and sizes started punching through wooden boards like they were Ralph Macchio. I had a team member hold up my board and, with one swift punch, I snapped it in half like a ninja. “Like a ninja!” I thought. “The board is already coming true!
Chuck gave me two opportunities at the beginning of 2005.
Opportunity One: He gave me my first real home buyer clients.
Gerry was an analyst for the FBI, which means he might have been a spy. His wife, Melissa, was about five months pregnant when we first met. They wanted to move into a home as soon as possible and start nesting.
This was one of the hottest real estate markets in history. A hugely competitive buyer pool used cheap and easy money from dubious loans to drive up sales and prices. Plus the actual temperature was really hot that year. It was a scorcher.
Every weekend, I took Gerry and Melissa out in my tan 1989 Ford Crown Victoria, the same car I received from my parents when I got my drivers license. We looked at six to eight homes and decide which they liked best to make an offer on. It was so competitive that I would see other agents from my office at the homes, then go back to the office to write an offer and see the same agents and clients in the conference room across the hall preparing an offer on the same home. We toured homes eight weekends in a row and made an offer every weekend, only to get outbid by another buyer eight times.
As the weeks went on, Melissa got more and more pregnant. Plus my old car had more and more technical troubles. On our final weekend of showings the temperature was sky high and my car’s air conditioning and back windows were broken. At one point, I looked into the backseat and saw Melissa was breathing heavily. A glassy look in her eyes that she wasn’t totally there.
Oh no, I may have to deliver this baby right now. They didn’t teach me about this in real estate licensing class.
Luckily, the moment passed. We ended up finding a home before it hit the open market and got them under contract. After they went to settlement, I met up with them at their new home to help them move in some things. I carried a drawer full of underwear from their dresser, and it struck me how intimate my relationship would be with people, helping them with one of the biggest decisions of their lives. That Christmas, they sent me a holiday card with a photo of their infant daughter. I kept it on my mirror all year. Happy that I was not the one who had to deliver her, but that I could contribute in my own way to her life.
Opportunity Two: Chuck helped me start my own investment in real estate.
He owned a 1924 bungalow in Historic Hyattsville. It had been home to a big Catholic family of ten children, nine of whom were girls. The home had just one bathroom, try and do the math on how that worked out.
The children had all grown up and the parents had passed on when Chuck bought the home to renovate and sell. He had a couple other home renovation projects going on at the same time, so he made me an offer. I would move into the home and pay the mortgage. He would fund the work to fix the home up. We would split the profits when it eventually sold.
The home was livable, but hadn’t seen a deep clean in a decade. But I was used to decrepit rental homes, so I agreed on the arrangement. I spent hours with a hammer and my bare hands tearing out walls, breathing in God knows what from 80 years of trapped home funk.
When the day came to deliver the drywall to the upstairs, a truck with a crane arrived. Since the staircase had a tight turn, we would have to crane the drywall in through an upstairs window. The crane operator handed me a waiver and asked me to accept liability if he damaged the concrete sidewalk when he anchored the crane. This was one of many times when I realized I was way out of my knowledge depth. But we needed the drywall, so I signed it.
The longer I lived in the home, the more I liked it. I had recruited friends to come live with me, and together we held on to the fun of our college days as long as we could. One of the roommates brought a dog to live with us. Another item crossed off my punch board.
I mentioned to Chuck that I might want to buy the home when it was finished. He made me another offer. We would estimate how much money it would take to finish the home, plus what my split of the proceeds would have been. Then he would subtract that from the sales price and give me another discount because the home wouldn’t need to go on the market and pay a real estate commission.
If you don’t understand that last sentence, don’t worry. I didn’t really know either. But I did my best to figure it out then put together a PowerPoint presentation to show my parents why this would be a good investment. I came back to their home one night and sat in between them in their bed with my laptop on my lap and went through my presentation. They agreed it made sense and said they would help.
It was 2005. I had good credit and a little bit of salary from being Chuck’s assistant. I had no background in the field, no history of financial gain in real estate sales, and no real guarantee I would make any money selling real estate going forward. The bank agreed to give me $250,000. If it sounds like the lending system was flawed, just wait 3 years and then pat yourself on the back. And just like that I was a homeowner. It wasn’t exactly 4610 Knox Road, but the home was full of college age shenanigans, so I crossed that off my punch board.
The day I bought my first home.
I got better at selling homes and running a business.
Eventually, I cut out on my own, grateful for everything Chuck taught me. I said goodbye to the old Crown Victoria and bought a certified pre-owned BMW. (The universe tried its best to humble me by giving me the license plate 3BE V15, which translated to 3 Bevis.) I bought another home, a one-bedroom condo that I renovated and rented out. I started to work more in D.C. and couldn’t resist the allure of city life. In July of 2008, I bought a third home near Adams Morgan in Washington, D.C.
I was 25 years old and owned three homes with a total value of $800,000. I hadn’t exactly reached my punch board goal of $1 million, but I got darn close. I was building a real estate sales and investment empire. Pretty soon, I would be making enough money to buy that presenter a Rolex. The only thing that could stop me was a global financial and lending crisis. But what was the chance of that happening in Fall 2008?
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