Is it really possible to quit your job and become a wealthy real estate investor? Here are the first of several stories of actual people that I know personally, who are wildly successful real estate investors in their own right. I avoid mentioning their full names in order to protect their privacy. But the details are true, and illustrate the creativity, drive and persistence that enable major success as a real estate investor.
Investor number one: Gene
A down home country boy from north Georgia who is about as smart as they come. I selected Gene out of literally dozens of investors I could have chosen because Gene is one of the most successful investors that I’ve ever met, and has one of the more unusual investing strategies that you seldom hear about.
Gene told me this story himself during a casual visit to his office a few years back. Gene’s main strategy is keeping up with what state and local governments are planning to do, especially as it pertains to development of new projects.
Back in 1975 Gene was at a Department Of Transportation meeting when they decided to put an extension of an expressway system right through his small town. Through this public process, which anyone can attend, Gene discovered exactly where the new exits would be located for this expressway. Though the area was totally undeveloped, and at that time had virtually no value for immediate commercial use, Gene raised $86,000 and bought 100 acres surrounding the area where one of the planned exit ramps would be located.
During the ensuing years, Gene kept that land and paid very low property taxes, and waited for the expressway and the exit ramps to be built. It would be about 15 more years before the area became highly desirable for commercial use. But it eventually did. Today Gene prefers to offer 100 year leases to commercial clients, and has gas stations at this exit, restaurants, hotels and several other businesses, with land left over for new clients. If someone wants to buy an acre of this land, Gene’s asking price is $1,000,000 per acre. Not bad for an original investment of $860 per acre.
The main keys to his success are the ability to be very foresighted about what would happen in the future, and the patience to take advantage of it. In the years since that original purchase, Gene has duplicated this model many times over and owns a wide variety of commercial properties with tenants that include every one from mom and pop businesses to oil companies to fortune 500 retailers. He is a buy and hold guy all the way, and prefers to hold and lease rather than sell outright.
Investor number two: Mary
I had to get at least one of the ladies in here. I chose Mary because she too has a very unique storys as well as a creative approach to real estate investing.
Mary’s parents emigrated to the U.S. after barely surviving World War II in eastern Europe. After losing everything they had during the war, they arrived in the U.S. with nothing, to start a new life in America. Mary was born some years after their arrival in the U.S.
Today she is a highly successful real estate broker, who has her own realty company in addition to her investing activities. Mary owns apartments, buys and sells single family houses and has a typical investing business. But she did a deal once on a mobile home park that was very clever and something that you don’t hear about every day.
The mobile home park was one that had a reputation for drugs and trouble. The previous owners had allowed the park to run down, and because several of the tenants were involved with using and selling drugs, most of the better tenants had moved out, leaving the park half empty as well. But Mary is a bold investor who knows the real estate business inside and out. She saw something in that park that no other investor saw.
After closing on the park she promptly informed all of the current residents that there would be a crackdown on drugs and drug dealers. Using the legal tools at her disposal, she quickly rid the park of all those who had been identified as problem tenants or involved in drugs. Then she cleaned up the park to make it more desirable for future occupants.
Mary also had a creative idea up her sleeve that was truly a stroke of brilliance. While doing her due diligence on this park, she discovered that each of the individual mobile homes also had their own septic tank. Many communities of this type have several units sharing one tank, but in this case, they all had their own.
Because of this fact, Mary was able to get each of the units in the park rezoned as individual residences, with each lot partitioned into an individual parcel. As a result, Mary was able to offer the units for sale with owner financing. People could come in and buy their own unit instead of renting.
It worked like a charm and Mary sold the units off to owners instead of renting to tenants. The result was a higher cash flow per unit, while avoiding headaches and costs of maintaining the units. A run down, drug infested park was transformed into a major cash cow. Mary never stops learning, and considers all of the strategies that may be employed when looking at a potential investment.
In my next article, I’ll feature two more professional investors who have been wildly successful.
Donna S. Robinson is a real estate investor located in Atlanta, GA. Follow her on twitter at donnaconsults. Her facebook page is facebook.com/realtybizconsulting Her latest book, Basics Of Real Estate Investing” is now available on Amazon.com