My Dream Come True
Hands sweating, doubt creeping into my thoughts and a feeling of euphoria coming over me. Really, am I really going to make my dream of real estate investing come true within 1 year of graduating college, months after getting a real estate license and weeks after drafting a business plan?
Sitting at the table with Jack talking about investing in Arizona was one of the most euphoric moments of my life. It was the first time I felt like anything was possible. Don’t get me wrong, I had some great moments in my athletic life, personal life and with my family… But, this feeling was different. I dreamed about becoming a real estate investor, I planned for it and now I had a chance to make it a reality. “Hey Jack, so now that you have convinced me you’re serious about investing in Arizona real estate, how are we actually going to make it happen?” I asked. Jack responded, “First off, you are going to tell me the plan in more detail. How will we find property, how much cash will be needed, how does Derek fit into the equation, etc….” After walking him through the mechanics of how I saw this working, Jack responded with, “Murph, you are not messing around. You have really thought this plan through.” “Hell yeah Unc, I don’t mess around when I’m motivated and passionate about something. Plus, if I was actually going to make it happen I had better have a plan or we’ll go flat broke. This is no joke” I shouted. “Perfect kid! Let’s get started.”
Step one, I put together a list of properties in the Chandler & Gilbert, AZ area. Why there? Because my buddy Derek lived there while attending a golf academy. Kids from all across the country and even a few from outside the united states went to Arizona Golf Academy. These kids were going to be our built in renters. They were perfect! Wealthy parents paid the rent and we had a constant stream of new kids coming in every 6 months. So, when we lost a renter we could pick up another quickly. Derek would always be working the field. At least that’s what we thought.
Step two, work with Derek to hunt down a good real estate agent in the area. At the same time structure financing to buy a property which would give us around $2,500—$3,500 per month cash flow. To top that off, at the time, we were getting around 10% – 15% appreciation because the AZ market was so smoking HOT! So in a year a $150,000 home would add $22,000 in appreciation plus $9,600 in cash flow. That is a total ROI of around $31,600 per year (if we SOLD after 1yr). Get 2,3 or 4 properties and it’s not bad for a broke college kid making $12/hr slaving away on his Uncle’s Lakeville house :-).
Step three, schedule the trip. Damn, I’m flying to AZ so we can make money plus, I get to play a few rounds of golf! Really? Does life get any better than that?! Not at 25 it doesn’t. I scheduled up the trip after completing steps 1 & 2; we were all set to go. I kept thinking to myself as the day got closer. Is Jack really going to pull the trigger on a house—are we just flying to AZ, going to check some homes out—then Jack will get cold feet and we fly home empty handed? I hated thinking that but, I really couldn’t accept a reality where this all comes together. My last name is Murphy (Murphy’s Law! hello).
Excitement is mounting. The night before we are scheduled to leave for Arizona I pop the topic with my girlfriend at the time, Sarah, and my old man, “Big Murph.” “Hey pops guess what!!” I yelled out. Now if you have ever been to my place when my old man Murph was in the house you’ll know one thing…he’s like a bull in a china shop. Quiet is not a word he ever learned. Shy is a sign of weakness and he always used to say, “Son, if you are shy in life you will never get anything. Grow some balls and ask for what you want. What’s the worst thing that can happen? They say NO.”
Little did he know… his oldest son had grown a set of balls. So I gave it to him, “Listen to this Dad!” “What do you got for me kid.” he responded. While Sarah was sitting very quietly not saying a word but, knowing something BIG was about to go down. She had been around me long enough to know when I was like a volcano, about to erupt. Plus, she knew my old man was like mount Kilimanjaro and that always made her nervous. Shit it made anyone nervous. “I’m going to buy a house in Arizona Dad.” “HAHAHAHA!! That is funny Tim. If you have money to buy a home in Arizona why in the hell are you living with me?” he replied with a huge smile on his face and a belly laugh that was contagious. ”HAHAHA! No shit right!” I responded, just knowing how he is going to be floored when I tell him the news. “So, Uncle Jack is going to buy them.” I said, while he was still recovering from his laughter. He then said, as he just realized what came out of my mouth and really couldn’t believe what he heard, “What Did You Say!!” I responded, “Jack Colvin, Mom’s brother, is going to partner up with me to buy one maybe two and if I show him I can manage rentals in AZ he may even buy a few more homes with me.” The room went silent, I really couldn’t tell what was going through my dad’s head.
Note: Pops was a poker player you really didn’t want to sit down at the table with. He could turn your mind in 7 different directions before you even realized he took your money. The best part… he would keep taking your money and you would keep buying him drinks. At the end of the night, because you loved him so damn much, you would be saying to yourself, “I love this guy!!”
After what seemed like 10 minutes of silence. Which I absolutely loved 🙂 knowing I essentially knocked him on his ass and he was shaking his head free of stars. He responded, “You mean to tell me Jack is going to finance the purchase of not one but two homes. Then he is going to trust you to manage those homes from Minnesota.. how in the hell are you going to do that?” “Good questions” I replied, “As you know Derek (who I grew up with, so Dad knew him very well. Needless to say as kids we pushed boundaries a little) lives down there and he will be filling the properties with tenants and collecting rents. I will be managing the finances, contracts and Derek.” After laying out the plan he took a deep breath. “I really thought you were bull shitting me. You actually put this together, got Jack to agree, lined up Derek, put together financing, found an agent down there and now you are going to make this a reality! Son, I am damn proud of you.” he said with a smile and a small (he would not admit) tear in his eye. “You took me seriously when I said grow some balls. Didn’t you!” He said jokingly. “Well, there is one thing I know about you kid! When you put your mind to something there is no stopping ya. I have seen it your whole life.” These were his last words before yelling at the top of his lungs and I mean the top of his lungs (like at the ice rink boys), “Jeannne (my mom) guess what!!!!!! Tim’s buying a house in Arizona!!”
Knowing I had just blown the socks off my old man, gave me a sense of accomplishment. Once he landed, he never for a second doubted what I said as fact. He saw it in my eyes and felt it. The confidence that moment provided was similar to 4 NASA rockets strapped on my back as I was shot to the moon. Look out world. Here I come!
The next day we landed in Arizona. Only there for 3 days we got moving and started looking at homes. After seeing well over 15 homes on the first day we narrowed it down to 2 or 3 homes. Now buying homes in AZ is really simple. The homes are all one-level and they either have a pool or they don’t. Jack said, “Let’s keep this simple and go with a place that doesn’t have a pool. Less maintenance.” Obviously, that was a logical and simple decision. Jack then said, “Let’s sleep on this.” I won’t lie…. I was doubting he would do it. For no other reason than I just couldn’t come to terms with it actually becoming a reality. With my adrenaline pumping and the rush of everything — it took me 12+ beers just to relax and eventually fall asleep at 1am.
BAM! 6am Jack is up and yells, “Let’s do it!! We are going to write an offer and buy our fist property Murph! How do we go about negotiating the deal so we steal this property?” There was one thing Jack knew, that I didn’t even know, I was a born negotiator. How did he know this? Big Murph. My old man was a top salesmen in the ink business both in Minneapolis and Chicago. This was confirmed by everyone in my family. Both my Dad’s side and Mom’s side. I had several uncles on both sides who were selling ink or the paper ink went on. As I was growing up they would lean down and say, “Your old man could sell ice to Eskimos.” Since, this was my idea and I was hustling real estate deals back in MN I took charge. This was it!
After a full day of back and forth. Multiple offers and strategizing about how we were going to make it to the top of the pile of offers. WE Did IT! We got an accepted offer. The house was ours. We can now officially say, “This is for real!!”
Jack laughed,” HAHAHA! You young bucks. We are not done.” “What?????” I yelled out. “Fellas, I came down to buy two homes not just one.” “Holy Shit!” I said, feeling like I just got done boxing 13 rounds with Mike Tyson. “Bring It On!” I screamed as Jack, Derek and I gave each other high fives…….