I was an investor long before I became a real estate broker. My husband and I had various rentals, developed land, remodeled and built new homes.
Our first purchase was in 1973 for $80k with $6k down, seller financed at 8% fully amortized. This property consisted of 3 Victorians on 2 lots, in Santa Clara, across from a cemetery and on a busy street (4 lanes). The lots were 120' deep. Actually, when we purchased these from a Realtor "friend", no disclosure had been made that one of the homes had been condemned due to a fire in the past, and that the home would also require a new foundation (including the basement). The first mistake, trusting a friend, and not checking out the property at the City offices.
The second mistake we made in this investment was to mortgage great performing rentals for cash out for purchasing a business. That was in 1982..... High interest rates! Businesses have peaks and valleys, and sometimes they never come out of the valleys. Real estate eventually comes out of the valleys. To eliminate the mortgage, we sold it in 1986 for $256,000. The buyer/developer built 6 town homes.
Then there was the 3rd mistake, not getting professional advice on taxation. Most of you should know what that means.
I can name 4 specific transactions in which the Broker, in all cases the listing Brokers, because you know, the buyers think they can get a better deal through the listing broker, where we were so badly mis-represented and were not given good advice, nor given full disclosure, that I make it my mission as a real estate professional to be the exact opposite. I do not want my legacy to be anything but above board. And that my goal is always to act on my client’s behalf as if it were my transaction.
They say experience is the best teacher. I have horror stories after horror stories. I tell my agents and my clients, if there is a mistake to be made, I probably already made it. I also have many success stories.
We purchased in 1999 a partially completed home against a hillside for $265k, financed with private money. The only work we completed was upgrading the engineering plans, and pulling permits. We resold it in 2001 for $475k.
Another was a purchase in 2003 of a commercial building for $165k. Again we did no actual work and sold it in 2008 for $380k in the middle of the real estate crash (we carried a 2nd note just to get rid of it). The mistake we made was not selling it in 2005 when we had 2 offers above $600k, we were holding out for $700k. A word to the folks, don’t be too greedy. This one mistake had a snow ball effect on other investments along with other mistakes and cost us dearly. We made money, but we could have made more by being less greedy.
Holding on for maximum profit is not my current policy. Don’t be greedy, take less profit, and get out quick!
Private funding has always been an integral part of our acquisitions. I have always preferred the speed I could obtain funding from my regular money sources and they always trusted me to find a great deal with the capacity to repay them either through refinancing from institutions or at time of sale.
My motto, If the end justifies the means, then I look at the private source first.
Real estate is a “today” issue. It is not about the comps last month, or last quarter. It is what is going on today and tomorrow. That is why I encourage every investor to have a good real estate professional on their team. There are so many variables to consider.
They say location, location, location. Location includes specific neighborhood, specific schools, demographics, walkability, transportation, shopping and market fluctuations.
In Silicon Valley, location has become extremely expensive. I suggest looking at other markets where your return is very good. There are other markets where you can invest much less and make better returns in other portions of the state and neighboring states.
Just remember, there are no silver bullets. You don’t get rich on one deal. Slow and steady. Have a good team-funding, Realtor, project manager, contractor, etc. And never assume everyone is doing their job. Follow up, and follow up again. Nip problems in the bud, not when they’re overwhelming.
I continue to invest today both with my husband and also with an investor portfolio of which I manage. That portfolio has included fix and flips, non-performing notes in bulk, performing notes, and rentals, some local and some out of state. I did not and do not like the out of state units.
Here’s the thing. We can’t get emotionally caught up in a project or property. That’s why it is best never to represent yourself. Others can often see what you cannot or do not wish to see. And remember make a profit, and get out quick. The market moves fast, and also be open to other markets.
My husband always urged me to become a Realtor; but I rejected that. I believed that the general public was unable to make decisions and I didn't have the time to waste. During that time, I had a 15 year career at IBM, worked through the ranks and ended as a planner, designer, and project manager for several data communications projects. In 1991 I left the company to free myself to pursue success on my own terms and not that of the company I worked for.
I went into lending until I stumbled by accident into a real estate transaction to assist a buyer I had worked hard to qualify. I was sold, the feeling of having introduced the family to exactly the home that not only fit their needs for today, but fit their personalities, and their future financial goals (whether they could see it or not, I could).
So I have been a Real Estate professional for the past 24 years and pride myself in putting my client’s needs first as I become acquainted with their dreams and desires. As the recipient of a variety of EXIT Realty International and Santa Clara County Association of Realtors awards, I work daily to live up to the designations I’ve attained. I am the Broker and Franchise owner of two successful EXIT Realty franchises located in Morgan Hill and San Jose.
I’ve created the EXIT Realty Keystone’s vision to reflect my feelings about how Real Estate should work: “Empowering agents to provide impeccable service to their clients by inspiring teamwork, networking, and the use of cutting edge technology to find the perfect fit for homeowners. And to strive for excellence in our dealings with buyers and sellers, putting integrity, truthfulness and reliability at the forefront of our values. We follow the golden rule of treating others as we wish to be treated.” I’m overjoyed to know that we find and employ the best of the best, and work daily to live up to our company vision.