Thread: SUCCESS STORY: rugreedy

Nice to find a cool website for a change with like-minded folks. My name is Matthew and I Live in Tacoma Washington. I bought my first house when I was 22 while I was living in my Girlfirend's Sisters basement. I had $3000 from a pell grant that I used as a down payment on an owner contract. I was a broke college student just starting out, and I thought Real Estate was my calling. Luckily my tenant who moved into the house made the entire mortgage payment, because I sure couldn't. I was amazed that I could buy an asset and have someone else pay for it...... I got the Real Estate bug, and that was nearly 17 years ago. My payment was $350 a month, and I rented it for $500.

All my friends thought I was crazy and stupid. They all told me to buy a really nice car that would get the babes. I passed and kept my crappy old honda.

The next deal I found was a lease option on a home with only $500 down. Granted, this was back when Real Estate was not vogue or mainstream yet. I rented out the home because I was still living in my Girlfriends Sisters basement. My payment was $440 a month and I rented it for $700, so now I was creating cash flow, not much, but to a poor struggling college student, it inspired me.

After school, a friend got me a job at a mortgage company. I began making very good money, so I bought a small home to actually live in. Again, I put down $3000 and did an owner contract because I couldn't get a bank loan. A few months later, I bought another house with $4000 down on an owner contract, the payment was $400 a month and I rented it for $650.

At this point, my cash flow actually made all the mortgage payments on my 4 houses, and I lived for free.... nice concept I thought.

I exercised my option on the house I lease optioned and got my first bank loan. I got a check at closing for $21k. My option price was $40k and I borrowed $65k on a house that was now worth $85k.

I took that money and bought an older view home in a really desireable neighborhood..... it was where the rich people lived. That was 14 years ago and I paid $110k for it and its now worth $400k

After working for the mortgage company for 2 years, I decided to start my own mortgage company. That was about 14 years ago, and I was lucky and blessed to be a business owner.

At one point a few years ago, I owned 17 properties and I became nervous about the run-up in Real Estate. I decided to sell 6 properties at the height of the RE market, which now looking back, was a great idea. I paid off my more upscale properties, and now live in a view home with an inground pool, hot-tub. I live for free.

I got my RE license a few years ago to get access to the deals on the mls. My RE broker approached me a few years ago and offered me 2 houses side by side in the Rich mans neighborhood. I had just sold the 1st home I ever bought and was looking to do a 1031 exchange to eliminate the potential capital gains, so I bought both houses for $160k each. I rented both of them out, and I was approached by a builder who was building 2 houses next door to the two houses I just bought. He offered me $50k for the backyard of these 2 houses. I told him I wasn't interested in selling, and I started looking into Short-platting the lots. It turns out that my RE broker tried to short-plat the lots, but he was told there was not enough room between the 2 houses for a road to access the rear of the property................. he got bad advice from an alcoholic surveyor because there was enough room, but only by 1 foot. It took a variance and 2 yrs 1 month and eleven days, but I created 2 more VIEW building lots. It cost me $36k in engineering which was all out of pocket, and it was a gamble, but I got lucky once again. The 2 houses are now worth $275k each and each of the 2 new lots is worth $200k. These four parcels are now worth nearly $1 million, all spawned from a $3000 down payment from my first house. Needless to say, my RE broker was very upset, not at me, but at the surveyor who screwed up.

Right after I bought the houses from my RE broker, I sent a letter to my old landlord. I rented a house from her when I was 19 and left it a mess, and felt serious guilt since I had been a landlord for so long. I sent her $500 and apologized for leaving her house such a mess. She called me a few weeks later and said that was the nicest thing anyone had ever done. We became friends and invited her over for Christmas. She was getting ready to retire and was moving to mexico. She owned 7 acres on an island in the puget sound and asked me If I wanted to buy it. My mom actually lived on the island, and I had great memories of it. She bought the 7 acres in 1965 for $200. I went out to look at the property and fell in love with it...... something you should never do in RE, but I didn't care. The property was amazing with towering old growth trees, a creek where the deer drink out of, and just 20 minutes away from my house. She offered to sell it to me for $30k cash. She had been offered $75k from a logging company, but wanted to sell it to me. I asked her why, and she said "I'm worth 8 million dollars and I want someone to cherish the property llike I did". I ended up paying her $40k cash for it. Some Millionaire from Microsoft has bought up all the large tracks on the island and has driven the prices up for large tracks. I punched in a road, put in a well, and now i'm putting in the septic. My son thinks it's the most special place on earth. He is in awe when he sees the deer drink out of the creek. The Microsoft millionaire sent me a letter 2 months ago and offered me $275k cash for it. I respectfully declined her offer, as I will be putting it in a trust for my son, so his family can enjoy it. We will be building a vaction home next spring after the septic is in. I get letters monthly from logging companies who want to butcher it, and I always toss them. My old landlord was the most plain person you have ever seen. She drove an old beat up car and lived in a modest home. I never would have thought she was worth so much money. It turns out, she had bought tons of land in the 60's for next to nothing. She is a very special person and I cherish her friendship.

I always tell people I am the luckiest person alive. I just happened to own a ton of Real estate during the biggest boom in history. I'm no genius, I got lucky, and I'm not afraid to admit it. I married my girlfriend whose sister let me live in her basement. We have one son, and he is my little man.

About a year ago, my wife came to me nervously, and said " do you know we are worth over $2 million dollars?" I was in shock because I was so busy with work and developing my properties. I asked her to show me and I looked at the spreadsheet and sure enough, she was right. Did I go out and buy a porsche? nope. Did we go out and buy a mega-mansion? nope. I buy my clothes at Thrift stores and drive a mini-van. Granted, I only buy high end clothes from thrift stores and I'm not embarassed by it one bit. My old landlord taught me a very valuable lesson. Be very frugal and live within your means, and if possible live below it.

To all you beginners out there, find your niche, and live frugally. Invest your money and find something you enjoy.

Careful for what you wish for because it may just happen.

Matthew

Originally Posted by rugreedy

Nice to find a cool website for a change with like-minded folks. My name is Matthew and I Live in Tacoma Washington. I bought my first house when I was 22 while I was living in my Girlfirend's Sisters basement. I had $3000 from a pell grant that I used as a down payment on an owner contract. I was a broke college student just starting out, and I thought Real Estate was my calling. Luckily my tenant who moved into the house made the entire mortgage payment, because I sure couldn't. I was amazed that I could buy an asset and have someone else pay for it...... I got the Real Estate bug, and that was nearly 17 years ago. My payment was $350 a month, and I rented it for $500.

All my friends thought I was crazy and stupid. They all told me to buy a really nice car that would get the babes. I passed and kept my crappy old honda.

The next deal I found was a lease option on a home with only $500 down. Granted, this was back when Real Estate was not vogue or mainstream yet. I rented out the home because I was still living in my Girlfriends Sisters basement. My payment was $440 a month and I rented it for $700, so now I was creating cash flow, not much, but to a poor struggling college student, it inspired me.

After school, a friend got me a job at a mortgage company. I began making very good money, so I bought a small home to actually live in. Again, I put down $3000 and did an owner contract because I couldn't get a bank loan. A few months later, I bought another house with $4000 down on an owner contract, the payment was $400 a month and I rented it for $650.

At this point, my cash flow actually made all the mortgage payments on my 4 houses, and I lived for free.... nice concept I thought.

I exercised my option on the house I lease optioned and got my first bank loan. I got a check at closing for $21k. My option price was $40k and I borrowed $65k on a house that was now worth $85k.

I took that money and bought an older view home in a really desireable neighborhood..... it was where the rich people lived. That was 14 years ago and I paid $110k for it and its now worth $400k

After working for the mortgage company for 2 years, I decided to start my own mortgage company. That was about 14 years ago, and I was lucky and blessed to be a business owner.

At one point a few years ago, I owned 17 properties and I became nervous about the run-up in Real Estate. I decided to sell 6 properties at the height of the RE market, which now looking back, was a great idea. I paid off my more upscale properties, and now live in a view home with an inground pool, hot-tub. I live for free.

I got my RE license a few years ago to get access to the deals on the mls. My RE broker approached me a few years ago and offered me 2 houses side by side in the Rich mans neighborhood. I had just sold the 1st home I ever bought and was looking to do a 1031 exchange to eliminate the potential capital gains, so I bought both houses for $160k each. I rented both of them out, and I was approached by a builder who was building 2 houses next door to the two houses I just bought. He offered me $50k for the backyard of these 2 houses. I told him I wasn't interested in selling, and I started looking into Short-platting the lots. It turns out that my RE broker tried to short-plat the lots, but he was told there was not enough room between the 2 houses for a road to access the rear of the property................. he got bad advice from an alcoholic surveyor because there was enough room, but only by 1 foot. It took a variance and 2 yrs 1 month and eleven days, but I created 2 more VIEW building lots. It cost me $36k in engineering which was all out of pocket, and it was a gamble, but I got lucky once again. The 2 houses are now worth $275k each and each of the 2 new lots is worth $200k. These four parcels are now worth nearly $1 million, all spawned from a $3000 down payment from my first house. Needless to say, my RE broker was very upset, not at me, but at the surveyor who screwed up.

Right after I bought the houses from my RE broker, I sent a letter to my old landlord. I rented a house from her when I was 19 and left it a mess, and felt serious guilt since I had been a landlord for so long. I sent her $500 and apologized for leaving her house such a mess. She called me a few weeks later and said that was the nicest thing anyone had ever done. We became friends and invited her over for Christmas. She was getting ready to retire and was moving to mexico. She owned 7 acres on an island in the puget sound and asked me If I wanted to buy it. My mom actually lived on the island, and I had great memories of it. She bought the 7 acres in 1965 for $200. I went out to look at the property and fell in love with it...... something you should never do in RE, but I didn't care. The property was amazing with towering old growth trees, a creek where the deer drink out of, and just 20 minutes away from my house. She offered to sell it to me for $30k cash. She had been offered $75k from a logging company, but wanted to sell it to me. I asked her why, and she said "I'm worth 8 million dollars and I want someone to cherish the property llike I did". I ended up paying her $40k cash for it. Some Millionaire from Microsoft has bought up all the large tracks on the island and has driven the prices up for large tracks. I punched in a road, put in a well, and now i'm putting in the septic. My son thinks it's the most special place on earth. He is in awe when he sees the deer drink out of the creek. The Microsoft millionaire sent me a letter 2 months ago and offered me $275k cash for it. I respectfully declined her offer, as I will be putting it in a trust for my son, so his family can enjoy it. We will be building a vaction home next spring after the septic is in. I get letters monthly from logging companies who want to butcher it, and I always toss them. My old landlord was the most plain person you have ever seen. She drove an old beat up car and lived in a modest home. I never would have thought she was worth so much money. It turns out, she had bought tons of land in the 60's for next to nothing. She is a very special person and I cherish her friendship.

I always tell people I am the luckiest person alive. I just happened to own a ton of Real estate during the biggest boom in history. I'm no genius, I got lucky, and I'm not afraid to admit it. I married my girlfriend whose sister let me live in her basement. We have one son, and he is my little man.

About a year ago, my wife came to me nervously, and said " do you know we are worth over $2 million dollars?" I was in shock because I was so busy with work and developing my properties. I asked her to show me and I looked at the spreadsheet and sure enough, she was right. Did I go out and buy a porsche? nope. Did we go out and buy a mega-mansion? nope. I buy my clothes at Thrift stores and drive a mini-van. Granted, I only buy high end clothes from thrift stores and I'm not embarassed by it one bit. My old landlord taught me a very valuable lesson. Be very frugal and live within your means, and if possible live below it.

To all you beginners out there, find your niche, and live frugally. Invest your money and find something you enjoy.

Careful for what you wish for because it may just happen.

Matthew

Kurt,

Thanks for the kind Words. I checked out your website and love what you are doing. I'm going to place an order for a bunch of Jam. Kudos to you and keep it up.

Matthew

Thanks for the intro Matthew. Welcome to the forum.

Matthew,

That is one amazing story. I actually live in Seattle. We should get together sometime and have coffee. I'm in commercial real estate and maybe we can look at a joint venture on some deals.

Again, Fabulous post.

Welcome. Great story.

It sounds like you have some valuable knowledge to bring to the forum.

Matthew ... great story! Lots of great nuggets of wisdom. One item in your story that I found particularly interesting was how your gratitude and integrity recirculated back to you into a great opportunity -- good karma yields dividends.

Not many people would do what you did with your old landlady. That decision (CHOICE) opened some great doors for you. As for exclaiming that "you got lucky" I will wholeheartedly disagree with that. From what I read, you made good decisions and took some calculated risks. Thats not luck.

Welcome to the board!

I moved this to the "Success Stories" section as this will not get the exposure in the introduction forum.

That is so great that you are preserving that piece of land for your son.

We have a hunting cabin that has been passed down from my grandfather. My kids go there and fetch water out of the creek with the same buckets I used as a little girl to fetch water. They watch my husband build a fire in the same old wood stove my grandfather used to build a fire in.

What a gift you are leaving your son! ~~ a place you will fill with family memories.

Congratulations on your success!

What is next for you?

Rep ++ for that story!

Great story...thanks for sharing! ++

Wow, you all are too kind. I am formally addicted to this website.

Gillepton, My dad actually lives in Seattle, so I'm up there quite a bit. Contact me via e-mail and lets exchange phone numbers. I would love to look at some commercial deals with you. Thanks for the compliment.

Aroundtheworld, Wow, your hunting cabin sounds awesome. As for your question
"What is next for you?"

I'm looking at expanding my mortgage company since so many of my competitors have gone broke. I'll continue to offer my mortgage clients my RE services, but I have no intention of becoming a superstar realtor. I'm looking at some land development deals and some condo-conversion projects. I have even thought about buying another existing business if It pencils and makes sense.

PhxMJ,

I read your story and you are one amazing person. I wish I could bottle up all your wisdom and experience, and sell it in a pill. Everyone on this forum would buy the pills by the truckload, myself included. Keep up the good work.

Thanks again for all your kind words!

Matthew

Wow, great story. Definitely an inspiration. It's good to read a success story of somebody who started so young (at 22). I'm 17 now, and I want to get started as soon as I can. I'll probably get going while I'm in college while I try to run some e-business. Thanks for the post! Rep+++

One question, though: It seems like you think that a good portion of your success is due to the overall growth in the real estate market. While I'm sure the market growth helped you, you definitely did many things right. How successful do you think you would have been if you'd started today, or in a time with the market as it is now?

I don't see where the "luck" played a big part in your success.
You did many many things right and very few wrong so you made it.

Very inspiring story, thanks for sharing.

Outstanding success story, Matthew! Thank you for joining the forum and sharing with everyone here. As an intelligent and obviously humble guy, you will be a huge asset to the community. I know that I'm inspired just reading about you!

Yankee338,

You raise a very good question. When I got started in Real Estate, it was the early 90's , and the market was bad. I had numerous people tell me not to buy real estate.
Much of the media was talking real estate down, just like they are now. 3 years ago, the media was touting Real Estate Investments as the place to be. I was watching CNBC 3 years ago and they had a show pumping Real Estate Investing. All of a sudden everyone was buying real estate. That's why I sold off 6 of my properties. I felt like it was getting too main street, and took some chips off the table.

There are more opportunities now than I have seen in the last 5 years. You can actually buy a rental that pencils again. The media is talking about real estate now as if it is the plague. As long as you buy smart, you will be ok. I think it will take several more years for the healing to take place in Real Estate. On Wall St, the best time to buy is when there is blood in the street. I think the same goes for Real Estate. When everyone is Crying, you should be Buying, and when Everyone is Yelling, you should be Selling.

I think If I started over today, I would do just fine, but had I started at the height of the bubble a few years ago, I would have been hurting. I know of many novice Real Estate investors who have lost everything because they bought into the hype at the top.

You are young, and you have time on your side. Find something you are passionate about, get advice, research it, and if it feels right, run with it. Don't listen to the people who try and keep you down, listen to the people who encourage you. Surround yourself with positive friends, not negative ones.

I remember this one guy I knew about 10 years ago. At the time, I owned around 12 properties. He was telling me I should sell all my RE, and buy into 4 sub Franchises. I remember him telling me that RE wasn't going anywhere, and it was boring, etc. We went our separate ways, and I found out years later, he lost 1/2 million on his Sub franchises. It turns out, the sub franchise put one on every corner, and it killed his profits.

Go with your dream, and don't let anyone decide your future for you.

Good luck to you!

Matthew

Originally Posted by rugreedy

Yankee338,

You raise a very good question. When I got started in Real Estate, it was the early 90's , and the market was bad. I had numerous people tell me not to buy real estate.
Much of the media was talking real estate down, just like they are now. 3 years ago, the media was touting Real Estate Investments as the place to be. I was watching CNBC 3 years ago and they had a show pumping Real Estate Investing. All of a sudden everyone was buying real estate. That's why I sold off 6 of my properties. I felt like it was getting too main street, and took some chips off the table.

There are more opportunities now than I have seen in the last 5 years. You can actually buy a rental that pencils again. The media is talking about real estate now as if it is the plague. As long as you buy smart, you will be ok. I think it will take several more years for the healing to take place in Real Estate. On Wall St, the best time to buy is when there is blood in the street. I think the same goes for Real Estate. When everyone is Crying, you should be Buying, and when Everyone is Yelling, you should be Selling.

I think If I started over today, I would do just fine, but had I started at the height of the bubble a few years ago, I would have been hurting. I know of many novice Real Estate investors who have lost everything because they bought into the hype at the top.

You are young, and you have time on your side. Find something you are passionate about, get advice, research it, and if it feels right, run with it. Don't listen to the people who try and keep you down, listen to the people who encourage you. Surround yourself with positive friends, not negative ones.

I remember this one guy I knew about 10 years ago. At the time, I owned around 12 properties. He was telling me I should sell all my RE, and buy into 4 sub Franchises. I remember him telling me that RE wasn't going anywhere, and it was boring, etc. We went our separate ways, and I found out years later, he lost 1/2 million on his Sub franchises. It turns out, the sub franchise put one on every corner, and it killed his profits.

Go with your dream, and don't let anyone decide your future for you.

Good luck to you!

Matthew

That's a great line. I'm gonna rep you again for that once it allows me too (I have to spread it around first).

Very good answer, too -- thanks again. Look forward to hearing about your progress. Great to have you here! Welcome!

Great story and a real inspiration.

Originally Posted by rugreedy

Did I go out and buy a porsche? nope. Did we go out and buy a mega-mansion? nope. I buy my clothes at Thrift stores and drive a mini-van.

I would love to hear your thoughts on No Lambo for Get-Rich-Slow Folks? Not because I think you are in the slowlane, but because I think you have a different answer than I have received thusfar. When does someone have so much money that it makes sense to spend it on a Porsche or Lambo or whatever?

Great story and welcome!!

Peerless,

I'm not going to sit here and say I don't want a Porsche or a Lambo. I have always wanted a Porsce, but everytime I start thinking about it, another deal pops up, and I utilize the capital on the RE deal. About a year and a half ago, I was considering buying a Porsche, but I ended up buying an office condo for my business, which to me made more sense. I think the key here is not the Car, but rather enjoying your success with vacations, hobbies, friends, family,etc. I have a friend who is a multi-millionaire ten times over and he drives a 10 year old Cadillac. He does enjoy flying, so he also has an airplane. If someone can afford a lambo, more power to them. If it inspires them and doesn't take food off the family's table, more power to them. I guess for me, I don't want to deviate away from what got me to where I am today. I probably will get a porsche one day, but I'm not sure when that day will come. For now, I'll remain low key.