My life lessons learned

The real estate blues

I've been recently on my real estate investment mission.  I've run into many unexpected obstacles.  All of my frustration came from the Realtors that I was dealing with.

I've started my business in 2001 as a landlord while still working my day job.  I've been learning some of the ins and outs of real estate and admit that I'm still a rookie in the business.  My goal is to purchase more investment property to add to my portfolio which will provide for my lifestyle.

I already knew of the obstacles of finding financing and I hit many walls, but I did receive a mortgage loan.  The easy part was supposed to be getting a Realtor to take me out to review property.  I figured I'd make the realtor's job much easier by doing my own real estate research.  I looked through ads, read descriptions and selected addresses near my own home.  Guess what?  It didn't happen that easy.

I called one Realtor from a Realtor referral service and another from the yellow  pages.  A little 80 year old white man politely returned my call and began to explain the basics of a home purchase. I thought it considerate at first for him to take the time to explain the home buying process, but I tried many times to cut him off and not continue to explain info I already knew.  His real estate 101 continued for another 20 minutes until I began to finish his sentences. I then began to give him the real estate 101 info before he could continue.  He began to understand that I had a grasp of a home purchase process.  Finally, I asked when are we going out to see some property?  He told me to get my financing together first, then we go out.  I told him that I was already talking to some financial institutions.  I just needed confirmation.  So days later i got my loan.  The condition of my loan was that it was for residential property, not commercial and it had to already be occupied.  Commercial property is considered larger than 4 units.  So what, I had to down scale.  My loan would be $200,000 if the total rents received were at least $1650 a month.  If more rent was received, they'd give me a larger loan.  If less rent was received, the loan would be smaller.

Well I got the runaround from Realtors that I contacted for 3 weeks.  I emailed, called and left messages.  Finally, I get a return call from the old white man saying,"oh, I punched in the amount $200,000 and the only thing that came up was a condo and a townhouse, sorry.  I told him don't tell me anything other than the info on the addresses I emailed you.  He said, "Oh you can't see those properties sweetie because they are more than your loan."  I corrected him and told him if he paid attention that the asking prices ranged from $175,000 to $399,000 and the owners were motivated sellers.  A motivated seller wants to get rid of the property NOW and is willing to negotiate. 

In my research, I found out that the properties that i was interested in had declined in price at least twice.  If an asking price has gone from $295,000 to $240,000 in 6 months, my $200,000 buying price will be considered.  The Realtor didn't disclose that info.  I assume the Realtor didn't want to cut his commission.   The Realtor told me i couldn't see the property in a way that would make you think the police would be called.

That had me thinking.  How many other people did he tell that to?  How many of them were black people?  (my racist thinking peaked)  Why would he be preventing me from making a purchase?  Even if his commission was $3,000, wouldn't 3k for one hour's worth of time be enough to say it's worth it?

I've talked to many people on the importance of home ownership and I've gotten back many negative responses on why they don't own homes:  " I'm too scared to buy a house." , "I don't make enough money to buy a house." , "The white man won't let me buy a house so I don't even try."   "People keep telling me that I'm not a house person, so I guess I believe them."

I realized that many people don't know how many options are available to them. Fear and a lack of knowledge will stop you in your tracks every time.

LESSON LEARNED:

My advice to everyone is to not rely on the opinion of one person, even though that person is supposed to be the expert in the field.  Always question authority.  They are human just like you.  Just because you asked 3 or 4 people and they told you no, don't say you asked everybody and everybody told you no.  There's a billion people on this plant and 3 or 4 people don't constitute everyone.  Do your research and be prepared to throw it in the face of your expert. If you have a goal, don't stop trying to reach it even when no one else wants you to reach it.  If you are constantly finding yourself banging your head against the wall from all the negative responses, put on a helmut and keep going until you get that one yes.

Myth about DC real estate

I'm sick and tired of black people spreading the erroneous information amongst each other about buying a home in Washington, DC. For at least 10 years, I've heard it said that when you buy any type of property in DC that the owner only owns the building and not the land underneath it.

I don't know how this story started. I can only image that some white guy was trying to scare off a black guy from home ownership with this lie or some black guy was scared off from the home buying process because of all the tedious paper work involved and he gave himself an uneducated excuse to validate his mental defeat.

I, myself am a home owner in DC and Baltimore, MD and can vouch to knock down this lie. At first, I thought it was the rantings of a few ignorant people who were not home owners. But many years later, I'm still hearing this same myth being passed along to the next generation. I've asked many white people have they heard of this and all of them were baffled by the myth. Of all the white people I've asked, they have never heard of it. But, when I ask black people, they all agreed that it's a true statement. This goes back to the historical stigma that black people don't read. The information is now more accessible than ever because of the internet, but black people would rather be defeated by information they don't have. For any home owner, look at the deed of your home. It clearly states how much the government considers the worth of your home and the land underneath it. Usually, the land is worth 25% of the total amount you paid to buy your home.

I recently bought an investment property in MD, but I was searching in DC first. I found a fixer-upper in DC and asked my uncle, a contractor and DC home owner, to estimate a renovation dollar amount on the property for me. As we stood there with the Realtor, my uncle gave me an estimate and a disturbing comment. My uncle said he didn't think it would be a good investment deal because of the large amount of money I would have to put in to it and after that, I still would not own the land under it. I noticed the realtor's eyes bulge and then lower his head. I was stunned while trying to politely thank my uncle for his help. My uncle left and I then turned to the Realtor, a black man, with a question. "Have you heard of not owning land under your house in DC?" He said he's heard this myth ever since he moved to DC 20 years earlier. He also questioned where it started. He said that when it has ever become the topic of a conversation he was in, he'd then ask the person, "If you can't own land in DC, then why is it that its always been bought and sold? You can look at any real estate listing and see land for sale in DC. How can you not own it but you can buy it?"

I then went back to many people who I've had this conversation with years earlier and asked them, "How did you hear about not owning the land under your house in DC?" All these people basically told me the same thing. They heard that the government can take your house if they wanted. OK! people please let me clue you in on the government taking your home. This is not a DC thing. This is a United States thing. The government can take your home anywhere in the U.S. under a clause called eminent domain. (the power of the state to take private property for public use with payment of compensation to the owner). I believe there are 13 rules under eminent domain. One way I do know is that the government can take your home if it lays in the way of building roads or highways. Another way is that it can be taken because your property is so blighted that it brings down the rest of the area and prevents dollars from coming into that area. There are other reasons, but I can't remember them right now. You should look it up. Another way the government can take your property is if you don't pay your taxes. If you don't pay your federal debt, the government will take every asset you have to pay it off.

Please my black people, stop being scared of the home buying process. I admit it is a long and tedious process, but it will be worth it in the end. It is the beginning of our wealth building. Don't buy those $900 rims for your car, buy a house. Stop believing the lie y'all. Do your homework.