INTRODUCTION I purchased my first property in June of 1998. I was twenty-five years old and working as a stockbroker at the time. The 1990's were terrific times to be a stockbroker; I was fortunate to be doing very well for myself financially, plus I was really enjoying it! The downside to this career, like most other sales jobs, is the fact that if I were out of work for a day or two on vacation, my income-as it was entirely commission-based-went to zero. That's right, no sales means no commissions and that means no pay for that day! From a very early age I was always fascinated by businesses and investments where you could earn money "in your sleep." I became obsessed and started reading books and going to seminars, even watching infomercials late at night all so I could learn how this is done. I came across everything from selling pay phones and ATM machines to franchised businesses and even trying to invent something and patent it. None particularly caught my attention, except one- investing in income-producing real estate. In fact, this was something right under my nose-I'd been interested in this business for years as there were three generations of real estate investors in my family. My father, my grandfather and even my great-grandfather all had owned investment properties at some point in their careers. I was determined to learn this industry and become a real estate investor. This certainly was a proven model to provide me consistent with the idea of cash flow even while I was asleep. When I think back to my very first property purchase, I can recall each detail like it happened yesterday. I was certain this was the right choice for me, but that did not lessen my initial fears. While preparing for my first property closing, the feedback I received from the so called "experts" was not too reassuring. It was the late 1990's and real estate was not exactly the hot investment choice it has been lately. The United States was just recovering from the savings and loan crisis of the late 1980's and people lost fortunes overnight in real estate; many felt it was no longer a good investment. From lawyers, accountants, real estate agents, friends, and family, the advice was mostly the same "stick to being a stockbroker and save your money in the bank." I heard too often that I should not invest at this time, and if I did, I could possibly lose everything I invested. The feedback was so negative and frightening from every person I talked to about this property I planned to buy. Thankfully, I followed my gut and not their advice. I invested every dollar I had to get my first deal closed. The purchase price was $575,000 and although I was able to get a loan (I borrowed 50% of the purchase price - $287,500) to fund the purchase, I needed a lot of cash to close. This was 1998 and banks were not eager to lend on commercial properties. The bank had the same attitude as many others, they saw real estate as very risky and needed substantial down payments for them to make any loan. After the closing I was the very proud owner of a 12,000 square foot multi-tenant commercial warehouse with seven units, four of which had tenants. Now, please keep in mind I bought this property out of foreclosure, the original developer had invested well over a million dollars into the building alone just a few years prior (not even counting the investment in the land) and I paid $575,000; yet I was still being told it was not a good idea. Even the banks would only offer 50% debt on the new purchase price. In addition to all the negativity I heard regarding this deal, I had also drained my savings account of several hundred thousand dollars and now I had a balance of just about $50.00 in my account. Fun fact, today I still have the check register from those days where I went from a few hundred thousand dollars to fifty bucks. Truthfully, I was not all that worried about this as I was twenty-five years old and single with a great job to support myself. As I said, I just knew in my gut that this property was going to turn out well and I would reap many benefits for years to come. Fast forward six months from the closing and I was able to not only renew leases with the four existing tenants, but also able to find new tenants to fill all the vacant units. I spent nights and weekends with my friends and anyone I could find to help me clean the property. I would go early in the morning to Home Depot and beg people to work for me day to day. Whatever it took, I was going to get it done. I had to bring new life into this property and so I painted and landscaped as much as I could afford. I changed signage and pressure cleaned everything to create a better and more beautiful place for tenants to operate a business. I had no experience in any of these tasks but learned so much from needing to get it done. From picking paint colors, to renting and figuring out how to use very powerful pressure washers and even to what types of plants I could use that could thrive with the irrigation I had. It sounds like a lot, but truthfully once you get going, with people's help, you learn on the job very quickly. I am not suggesting everything worked out so great as if a professional had done the work, it hadn't, but it did get done and I made it happen! That's how we get experience-by doing. It was December of 1998, just six months from when I bought the property, and I was able to refinance for $600,000. Talk about a great Christmas present! That meant I would not only be getting back all the money I originally invested, (my $287,500 down payment) but I would also have the funds needed for closing costs (more on that later, but think appraisals, surveys, title, and legal work). The appraisal we had to do for the new loan valued the property at $800,000 now that it had been cleaned up and leased to 100% occupancy. On paper, I already had a $200,000+ profit, in only six months! In addition to that, with the new rents coming in, after all expenses were paid, I still had over $5,000 in positive cash flow each month, as well as the fact that I was paying down the principal loan balance with every loan payment. I was hooked! I knew I could make this happen despite all the naysayers and I also knew I could and would do it all over again. But first, who am I, and why did I ever want to do this? I was born in Staten Island, New York in the 1972. We were not a rich family, but we weren't poor either. I loved my upbringing-I could not have asked for more supportive parents. They let me win doing it my way, but more importantly, they also let me lose sometimes, too. I learned the value of a work ethic and loved working from a very early age. Because I grew up in the "lifestyles of the rich and famous" era, the 1980's, I wanted it all and was energized by the thought of making money. To their credit, my parents let me act upon my excitement by allowing me to really do any job I wanted. My first "job" would be selling planting seeds and magazines door to door. In winters I would shovel snow, and, in the fall, I would rake leaves all around my neighborhood. When I say I started young, I was out door to door at four - or five-years old knocking on neighbors' doors asking them to buy anything I could find for sale in magazines. Back then, all kids' magazines had businesses for us to try and sell things, and in return we kids got either money or prizes. As I got older, my teen years, I became a telemarketer and every night after school, from 5:00 - 10:00 PM while most of my friends were home watching tv, I was on the phone selling cruise packages to total strangers all over America. I found my absolute favorite job and what probably led to my passion to "get rich" when I was fifteen years old. We were living in Miami, Florida in a development called Turnberry Isle. Turnberry was the "it" place at the time. I started a business of washing cars and boats for my neighbors. Not just any cars or boats, I was 15 years old and taking care of Ferraris, Rolls-Royces, and Cigarette race boats. Not only did I get to drive all these amazing machines, but I also got to learn priceless information from their owners. This was when I also learned people really like to tell their stories and offer help to others, especially when the other person was me, a teenager, and their neighbor. My parents gave me the freedom to work and experience things where most kids would be told "NO." My mother was and still is my "rock"; she is part mom, part therapist, part family peacemaker and 100% amazing. She sacrificed so much for my brother and me to become who we have today. My father always worked very hard and led by example. More importantly, no matter what I did, win, or lose, so long as I was happy, my parents would be (and are) proud. I am blessed to have had parents who encouraged me to accomplish my dreams; I owe all my success to the lessons my parents taught me and the freedom they gave me. This allowed me to experience and appreciate the value of hard work, both from a character-building standpoint, as well as monetarily. It's because of my parents that today I teach the same values and work ethic to my kids. What I witnessed growing up: I remember when I was maybe 9 or 10 years old, my dad lost his job as an engineer from a large supermarket company. It was the early 1980's and...
