Here is the story of what led me to become a real estate agent... and why I am still at it...
For the first 17 years of my life, my parents were dirt poor. For whatever reasons, my father was not financially successful in his working years. My family struggled for some of the most basic of needs, even though my mother worked long before it was acceptable for women to work outside the home. Yet somehow we managed to own our own home. When I was nine, my mother's best friend got in over her head in a vacation property, and somehow my parents rescued her by becoming silent partners on a second home in the Sierras. They would not have done this if the conception of my "oops!" baby sister had been known at the time. It was hard enough feeding 4 kids already, the oldest of which was 16. My mom could not even afford maternity clothes. But the die had been cast. At 10, I helped my parents on the phone, as we rented out our shared cabin most weekends. It paid for itself, making it affordable to enjoy it ourselves from time to time!
As far as I can tell, my family was the first poor family in my entire family's history that I can find. Believe me when I say I have looked! My grandparents owned 500 acres in Fairfax, CA, some of the most prime real estate in the country. I spent every Sunday of my life, there, and I loved their house and property! This land was funded with my paternal grandmother's inheritance. My paternal grandfather's family was also well landed, at least from what I can prove, and extremely well landed from what I can speculate. My mother's family was also landed- they were farmers. I was raised with the fundamental value that land ownership is the foundation of wealth, and was clearly intrinsic to my family's definition of success.
When I was 17, my grandparents sold their Fairfax property, and things rapidly changed for my immediate family. Today their land is a protected area, now owned by the state of California. At the time, it was not worth a great deal of money considering its size and location. Its ability to be developed, (the measure of land value to investors,) was minimal. The town of Fairfax had closed the door to putting in utilities to make the property more desirable to potential buyers. So the state bought it at the price they wanted to pay, which was not very much! That particular year the IRS allowed for lifetime gifts of $30,000, and from their proceeds, my father's parents gave my parents same, less the total amount of any previous cash gifts my parents over the past thirty years. Yes, my grandparents had actually kept track of every monetary holiday or birthday gift they had ever given anyone.
My mother was a financial genius once she had a little extra cash with which to work. In the course of the next 2 years, she bought 6 single family houses, five of which were in Albany (aka Real Estate Heaven). She gutted each of the six, and turned them into little craftsman dollhouses. She had a knack for color and design. Mom flipped two to increase her immediate cash flow and kept three for ongoing income. The sixth was with my brother in Oakland, near Mills College, where I was in school, and it was his residence for several years. They paid for his Parsons and Harvard educations with its proceeds when they flipped it, too. She had also sold my childhood home in Albany, and bought a bigger home in the El Cerrito hills. This was not for investment purposes but for her own comfort, and the house in El Cerrito grew in value at about the same pace as the one in which I was raised, so it was a wash, financially. It sure made for a lovely setting during my late teens and young adulthood.
Without the cash infusion from my grandparents, my parents would have passed less than 50% in assets to us kids, than they were able to as a result of their gift to my parents. Each of us inherited our own home from her efforts, instead of sharing in just two. Her timing was lucky, yes, but she was smart! Mom started buying at the bottom of the first really big boom in the past 50 years. Three years later, and she would probably not have had nearly the same success.
My dad was a real estate agent, but not a very good sales person. He did what we call CMAs (Competitive Market Analysis) for a fee, (normally a free product) and contributed a bit that way. He called them a Professional Opinion of Value. I am not sure what he did was legal, because appraisers do this but for a lot more money. But dad was good with the stock market. The first exposure I had to Berkshire Hathaway stock was that my dad owned one share, for which he paid about $3,400. This came from my father's inheritance from his parents, which he only enjoyed for a few years before his own passing. He spent the rest of it, anyway. He was quite the giver of gifts and bought a fancy new car too. Typical windfall behavior. But he enjoyed his generousity, and we all enjoyed it as well!
So when both my parents passed away in 1995, my siblings and I, each inherited a pot of money, mostly in the form of real estate. Between us, there was no financial investment genius in evidence. Some of the brokers who had been in touch with my father introduced me to investments that were designed for high net worth, experienced investors only. I was at that time very naive and they sucked me right in. My only investment experience was in real estate, Nordstrom stock and a couple of mutual funds. I immediately lost almost 10% of my inheritance with poor limited partnership investments. I decided I had better learn how to manage money myself, learning quickly that I could not trust those other "professionals" to guide me. I took most of my share in the form of one of my mother's original investment properties, the one with least value, so that I would have a roof over my head while I took the time to learn, how not to lose everything to vultures. I also exhibited typical windfall behavior.
But I did become a Financial "Professional" myself. What that means is that I decided to become a Financial Planner, and as a beginner, they let me call myself a "professional" without any real knowledge, and certainly without any specific education! All I had to do was pass a 3 hour test, which I did quite easily, being a skilled test taker. I passed a bunch more not so easy tests and made a lot of people a lot of money quickly, only to have it a lot of it evaporate in 2,000 with the stock market crash. I chose early on to become a sector trader, and was able to build wealth for clients investing in oil and gold each before they became trendy, against a very uncooperative market.
During my career, I had developed a generic financial plan which had a four prong approach. The most important one was owning real estate as an investment. I had become an investor myself when I was 26 years old. When I was 38, I had a marital net worth of about 200K, in today's dollars, outside of my personal residence. Not a great deal, but more than most, and this was prior to receiving my parents' inheritance. So I guess I had some innate ability for which I should give myself credit, even then. My husband also had the discipline to do a 401k when we were really young and it wasn't a popular idea yet. I was already trying to duplicate my parent's plan, but didn't have a windfall to really launch me. Yet.
The problem with financial planning as a career, is that unless you grow a large enough business to have a personal assistant, you are totally at the mercy of your clients' whims. My most important birthday to date, was spent catering to a client's need for cash, as was my daughter's 21st birthday. And too many other less significant days. I felt like a complicated 24/7 ATM. I wanted out.
I was walking my "client's " plan's walk, at the same time I counseled my clients about Real Estate investment to the extent that I could without a Real Estate license. My personal investment goal up had been to obtain a certain amount in assets by 1/1/20001. I did this quickly, but that was total value, not equity.
My next goal was to have that same amount in actual net worth, a much larger undertaking! In 2006, lack of real estate licensure continued to frustrate me when working with my clients. Plus, over the course of the previous decade, I had personally generated nearly $90,000 in commissions for other real estate companies and Realtors. THAT frustrated me, too! I was giving away pots of money that needed to stay in my pocket! All i needed was an AA in real estate and a test to be licensed as a broker! I loved the idea of the challenge! Just at the time I entered school to acquire my license, my current marital net worth goal was achieved. It wasn't enough to retire, but enough to feel safe and stable. Only about 20% more and we could actually retire, too... sigh... SO close, lol...
Today, of course, things are not at the level they were 4 years ago, when I became licensed. My husband and I still own 4 acres in the mountains and I have separate silent ownership in two other properties. Learned a few things through mistakes, I have to admit. We bought with negative cash flow, and I would never recommend that today. If I had taken the classes I have taken now, before I invested, I would have made much different choices. Even though I bought no real estate without at least 20% down, the market across the board is more than 20% down..
So why, after losing everything in equity and then some, am I STILL in real estate as a career and as a significant part of my own financial future? Why haven't I lost faith?
Because fundamentally, I still believe in the product!
I want to help others achieve financial health and wealth. I can't rebuild my own with out helping others to achieve their dreams along the way! Let's work together to build a future! I bring to the table the lessons of more than 20 years of my own investment experience; I have owned around 20 properties or more, either alone, with my spouse or other partners. Add in the many transactions I've completed since I began actively selling Real Estate. I actively chose not to take the broker's test, because it changes some liability issues, I don't want changed. However, I did complete all the required classes (and then some) with a 4.0 GPA earning the AA.
I certainly want to help you fulfill your dream of home ownership! Today, all it takes is 3.5% down, (and sometimes less, and less than average credit to buy a primary residence, really! I would only recommend this as a foundational strategy in a home you plan to stay in for the long term, as prices may still decline going forward. This is how I bought my first condo. It was financed at around 14%, and we still made money on it in just a few years. That wasn't in good times, either.
If you haven't dipped your toe in the water, you can work towards becoming a millionaire, by investing in real estate now, while both prices and interest rates are still low. Really, you have no excuse with this combination! It could not be a better time!
Either way, you are, like my mother, getting started at the perfect time.
We can do this together!
