Real estate has played a big role in my life over the past 17 years. I thought I would share some of the story that got me to where I am today.
In 2004 Mandy and I lived in the San Francisco Bay Area. I had graduated from seminary the year before, and we had moved just outside Oakland so that we could be closer to the school where Mandy taught. We had been told by several people that if we were going to put down roots here, we needed to buy a house. So we began looking. Our good friends Ryan and Marian were told the same thing, and being that we were looking for intentional ways to practice community together, we decided that we should buy something together.
After looking at several properties together, one Sunday afternoon we went to the island of Alameda for an open house at a duplex. That thing was so tiny, but we decided to put on our big boy britches and make an offer. If I remember correctly, our offer was around $30k over list, and the sellers still countered us another $30k. We walked away sadly. Side note: that place wouldn’t have worked for very long, as we soon had two kids and they had four!
After that Mandy and I felt that perhaps the timing wasn’t right to buy. But now we had to decide what to do with the rather large amount of money that we had set aside as a down payment. I decided to talk to my friend Dax about it. He now had three rental properties in our hometown, and after talking for awhile he asked if I’d like to buy 50% of those properties and go in as partners. After a week or so of thinking about it, we said yes.
At that point I felt like it could be a good thing to continue to rent in the bay area but to own real estate in Tennessee. Here’s what the numbers looked like. We were renting a 2BR/1BA home just outside of Oakland for $1450/month that would have cost us over $400,000 were we to buy it. In my hometown, we were getting around $850/month for homes that cost $100,000. Big difference.
Things changed for us less than two years later when we decided to move to Memphis. Adam had been born six months earlier, and we decided it was time to come closer to home. We wanted to be closer to family, and we wanted to start a church.
During those next few years I learned more and more about real estate. I wanted to own more properties but I wasn’t sure how to go about getting started. One day in 2008 I met with a local investor named Joe over coffee to learn more. He and I were both board members of our neighborhood association. He had been flipping quite a few properties in our neighborhood. I told him that I had seen some white stickers on a house on my street, and he said we should go check it out. We got there, he looked at the sticker, and then he took out his phone and dialed a number. Next thing I knew we were buying the property together. I had no idea what I was doing, but I’m an Enneagram Seven so it was no problem! One week later he said that he was going to need to get another investor involved, and he asked if he could buy me out. I asked how much and he said $7000. I said YES!
You can probably imagine that at that point I was pretty much hooked. Over the next year he and I bought two properties together. The problem was that now it was 2009, and things with the economy were about to get rough. Joe ended up moving before we finished the last one, and I was stuck figuring out how to get out of the mess I was in. It was one of most difficult times of my life, but I grew a ton. Fast forward a decade and that house is one of my best rentals.
That’s all for this phase of my journey. Next week I’ll share part 2, which deals with the years 2010-2016. Spoiler alert: it was quite the bumpy road.