The one that got away
Posted on April 18, 2006 - Filed Under Philosophy |
When it works correctly, MLS.com is a great resource for finding properties. Of course, I only look at the investment properties. I still try to follow Kiyosaki’s rule: "Never assume debt unless someone is willing to pay you for it."
I ran across an 18 unit complex for $2.5 million. The numbers quickly danced through my head. With 20% down, the passive income would be definitely positive. And observing the rents, they were under the market value for that area of Long Beach. We’re talking 4 blocks away from the ocean. Within the first year, raising the rents to normal levels would have produced an extra $2,500 in passive income.
My first thought was "I’m a long way from having $1M to put down on a property."
I dismissed the listing and moved on.
I recounted the details of this find to my mentor. This was my attempt to demonstrate that there are good finds out there. This demonstration was to bolster his belief that the real estate market is a good market to get into.
"Why didn’t you call me?" was his response.
Suddenly, I felt dumb. The passive income from that property would have been more than sufficient for me to kiss my job good by. It would have been a slam dunk for paying back the mentor on that property. Within ten years I could have purchased the complex outright and retired nicely on $20,000 per month.
Within minutes, mls.com was in front of me. The search was in earnest, but in vain. Someone had already swooped that deal up.
I have to keep reminding myself that I’m working in a team environment. In this game, I’m not alone. The next time I find a deal like this, I’m at least going to raise my hand.
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Comments
3 Responses to “The one that got away”
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Hi,
I think that is my blog? i forget.
anyway, i dont understand how your mentor could have helped you here.
you still needed the downpayment..where does that come from?
also, what about tax, insurance, reserves, repairs, vacancy issues?
gbr
nice post
my blog is in progress.
gbr
GBR, My mentor would have invested the downpayment portion. I would manage the place, take care of all improvements, etc. As far as the tax, insurance, reserves, etc that is factored into my analysis. Easily this would have paid for itself.