I have had the privilege of getting to know Michael Jake. Michael is a very active investor and a self-proclaimed “Deal Junkie.” He has bought and sold hundreds of homes throughout Colorado since about the year 2000. He loves working on very creative transactions that allow him to buy all of his houses without ever obtaining a new bank mortgage for the purchase. He has done many subject to deals and has focused on purchasing assets for the long-term. I was very fortunate to have Michael write the forward in my book, “Investing Now.” I recently interviewed Michael and I know you will love this content he has graciously provided. This first blog will be about how Michael got started, struggled, overcame his adversities and kissed his job good bye. He actually called and fired his Boss when he was ready to go full-time into real estate. He used real estate to help him enjoy his outdoor lifestyle including hiking, biking, skiing, mountaineering and enjoy the gorgeous sites of Colorado.
Many new real estate investors struggle to get started. I was no exception and most people that say they started with no trouble may be stretching the truth a bit. Michael Jake was the same way, he did not magically snap his finger, read a book, take a course and start making instant money investing in real estate. But, both Michael and myself persevered and learned a lot from every single experience and every single transaction and then life began to get a lot easier.
He started off going to the library reading all the real state books, then started going to seminars and that lead to quitting his job. He emphasized the imortance of investing in himself by getting the right education. His first seminar taught him to cold call and his first deal was a triplex that looked like it had great equity and cash flow. He experienced bogus appraisals, bad leases and the negative side of his first real estate transaction. He bought it with no money down, but really got himself a pain in the butt property without cash flow and without equity.
The seller created bogus leases. He used this to get a line of credit and bought two bank owned properties. The first one he has since turned it to six figures in rental income over the years. He did not have the systems, processes and training for being a landlord of this triplex and struggled with it. He began buying and refinancing his houses in the early 2000’s. He then lease optioned the triplex to an investor, got it back when investor defaulted and then found an experienced property manager and sold it with owner financing and that allowed him to exit that first triplex. He carried the triplex short term, learned a ton about transactions and property management and then found a creative way to get out of that first deal. He effectively took a very tough first transaction and ultimately created a cash flow stream that will extend past 2011. This first deal helped shape his focus onto single family homes and he has since bought tons of them. He took a hard situation, learned a lot and turned it right into a very positive situation.
Today Michael continues to buy single family homes for cash flow. This year, his 2011 keepers are primarily owner financed with zero interest. You will need to stay tuned to the next blog to learn how he is finding and structuring owner financed, zero interest loans. I love 100% ammortization to get houses paid off fast…
You can find more information on Michael at:
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Happy House Hunting
Jim
