Welcome to Chez Cliff!

Even though I don’t have the property yet, someone posed an interesting question to me.

She was wondering if her friend, who had recently broke up with her boyfriend, could possibly rent out the back house if it became available.

That was very weird.  I’m coming purely from an apartment-living background and I’m not accustomed to people asking me if they can live on my property.  I had a cat once who kind of squatted in my yard from time to time.  But that was about it.

I admit that there was a bit of a thrill there.  Someone’s future had been placed in my hands and I had the power to impact someone else’s life.

I told her that we would have to wait and see.  I wasn’t even the owner yet of the property so I couldn’t make any judgment calls right now.

But then that begs another question:  Do I want to rent to a friend of someone that I know?  If the renter turns out to be bad, will that wreck my relationship with our mutual friend?  She is willing to vouch for her friend but does that really make a difference when I should be looking at credit scores and income statements?

Wow this is going to get nutty.

I took a friend of mine, let’s call him Engineer X, to the houses.  He’s been excited to see them and I’m quite excited to show them off.  After all, I bucked the trend and bought houses where it’s suppose to be impossible for a normal working single person to buy.

He looked at me and said, "I would have never bought these houses."  We were standing in the front lawn.  By the expression on his face, I could tell that he was being serious.  He wasn’t joking around or "ribbing me".  He was serious.  If someone had shown him these houses, he would have passed on them in a heart beat.  Most people only want houses that are ready to move into.  Afterall,
who wants to be standing at a cocktail party and say "Yes, we just
bought the crappiest house!  You must come over and see it!"

No one that I have met.

I knew the first time I saw these houses that they were exactly what I needed.  Within these houses, I could see the possibility.  I envisioned what they would look like if the yard was cleaned and there was a new coat of paint on the outside.  Then things started clicking.  Upon seeing the interior, my mind started racing with all kinds of ideas for renovations and improvements.

Yeah, this is going to be fun!

I remember the first time my dad let me drive a snow-mobile.  I was terrified.  But I grabbed the handle-bar and punched the gas.  I nearly wiped out but at least I was driving.  After a few minutes, my hands were glued to the throttle and you couldn’t get me off that beautiful machine to save your life.

I remember the first time I drove a four-wheeler.  I was scared out of my mind.  But I figured that it was no different than a snow-mobile.  So I punched the gas and away I went.  My parents weren’t too happy when I called them and told them that I had run out of gas 3 hours later, 10 miles from home.

I remember the first time my mom took me driving in a car.  It was a full-size, 1980 Chevrolet Malibu.  I was really flipping out.  I had never handled something that big before.  But, I got into the driver’s seat and took the wheel.  After a while, I relaxed and started to enjoy this taste of freedom.

Now here I am again.  I am getting ready for my first time at owning investment property.  I’m going to be an investor.  I’m a little freaked out because I’ve never been entrusted with so much money before.  This property isn’t cheap.  But these people I’m working, they believe that I am ready.

I’m curious as to whether I’m going to be this excited when I go after my next piece of real estate.

I can only hope.

This morning, my mentor called.  In celebration of getting the houses, he wants to celebrate.  He’s invited me and Tony over to his house.

I’m bringing a bottle of champagne.  If you’re going to celebrate, you might as well celebrate.

I found out that my escrow will be 45 days.  That puts me at taking posession of the houses at the beginning of August.

The loan I qualified for is for first time buyers.  The caveat is that I must reside at the residence.  That’s a bummer because it’s not following the Rich Dad plan.

My intentions were to rent both houses out.  I figure between the two, I might be running at a negative cashflow for a few months.  But after the first refi went through, I could lower the monthly payment and at least break even.  And with the rents I’ve seen in the area, this is entirely feasible.  Because these are houses and not apartments, I can always ask for a few hundred more and get it.

Provided the tenants are willing to pay.