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I remember reading something somewhere that all of human behavior derives from two basic tendencies: “seek pleasure” and “avoid pain” or on a more basic level, move towards something, move away from something.

Yesterday, I posted a link to Catherine Lawson’s excellent collection of resources for entrepreneurs. She saw it and came to my blog and read my Escape! posting from last week. This prompted her to make the following comment:

“I know that motivating yourself because you want to leave your job seems like a good idea at the time, but it’s a good idea to set yourself a list of goals and motivate yourself towards them. It’s a lot easier that way and you’ll be concentrating on something positive instead of something negative.”

She is, of course, right.

My job has been grinding away at me, eroding my moral, and all I could think of was pain avoidance. I have seen this happen to my coworkers, where they basically can’t take it anymore, jump ship and take the first available job offer that comes along. This inevitably ends up in something similar to a “rebound relationship” that most every one experiences at least once in their lifetime, after breaking up with a significant other. It rarely works out in the end for either party…

I have been focusing on the obstacle, instead of what lies beyond it. I do have a list of goals, but I have not looked at it in a while. Between my day job and getting the house in shape, I have been too preoccupied. So I am setting aside some time tonight to go back over my goals and get myself back on track.

Thanks Catherine…

So, this weekend we had a family emergency, and I had to get my wife up to New York City to tend to her ailing mother. (I had to pay through the nose for a last-minute airline ticket…arrrgh!). In the meantime, I am spending the week between work (and a very important project) and being Mr. Mom at home, this in addition to finalizing everything so I can close on my investment property by December 14th.

Now, I have two daughters, 13 & 17, and as I mentioned in an earlier post, my eldest now has a driver’s license. To make my life easier, it sure would be nice for the older one to chauffeur the younger one back from her after school activities, and in fact, to drive herself to and from school and her own activities. This way, I don’t have to leave work early or get in late. (By the way, props to my wife for making the whole scheduling thing seem effortless, because I’m stressing…)

The only problem is this, my daughter got her driver’s license well into the school year so she never got a parking pass. Now I could buy a parking pass, but it costs $50 a semester, and of course, the semester is ending in a couple of weeks. Oh, and they don’t prorate. So me, being the cheap SOB that I am, dropped my eldest at school this morning and went to the school office to see if they can issue me some sort of temporary pass until Wednesday, when my wife gets back.

Of course, the front office was closed…Great.

Now, I could have turned around and headed for home to get my other daughter ready for school. However, I saw a Sheriff hanging out by one of the doors at the other end of the hallway, so I thought, what the heck, I’ll ask him about the temporary passes.

I walked up to him and asked him where the staff was, and when would they be back; he told me they were in some sort of conference and they’d be back in another 45 minutes…Great.

I then asked him if he knew if they issued temporary parking passes, and if so, how can I get one? He asked me why. I explained the situation with my wife and my scheduling nightmare. He asked me for the license number of the car my daughter drives. I gave it to him, he wrote it down, and he said…no problem…just like that. Apparently he is also the one who patrols the parking area looking for violators. I thanked him profusely, and left.

Here’s the moral kids…If you want and/or need something…ask for it! Overcome any initial fear and do it.

This is such a basic lesson, but few people ever learn it; admittedly, I still have reservations sometimes…but 8-9 times out of 10, I usually get what I need. This is especially true when you are negotiating prices. Always ask, “Is this the best you can do?”, usually they will come down from their initial position. Then ask again, “Is this the best you can do?” Again, they may come down even further…or not, but you never know unless you ask.

What is the absolute worst that can happen when you ask for something…you get a “No” for an answer. Cool…at least you tried.

When I get home from work tonight, I will recount this experience to my kids, and make sure this lesson sticks.

I have been catching up on my blog reading lately and saw this over at 43 Folders. The post is about Don Miguel Ruiz’s book “The Four Agreements”. Basically the Four Agreements are as follows:

1) Be impeccable with your word.

2) Don’t take anything personally.

3) Don’t make assumptions.

4) Do your best.

Yeah…the words “Common Sense” spring to mind, but I look at my dealings with other people and find that I may occasionally skip one or two of them (usually #2 or #3, but honestly, never #1).

Bear with me, this is probably going to be a long entry…

Back when I first decided to get into real estate investing, I read a book by Robert Allen called “The Challenge”. Basically it’s about him taking a group of ordinary people and teaching them how to buy investment property in the period of one month (kind of a “Buy a man a fish, he eats for a day; teach a man to fish and he eats for a lifetime” sort of thing)…

Anyhow, in the book, he mentioned the story of “The Blue Vase”. It is about a young man who is given a seemingly simple task, purchase a specific blue vase at a certain store, but in fact, he faced seemingly insurmountable obstacles at every turn; yet he persisted. (You can view a movie of the story here; it’s a little campy and runs about 20-30 minutes, but it gets the point across). The thing is, for me the story “stuck”. It was the one major thing I really got from the book, and I always remembered it.

Flash forward to April of this year.

A friend of a friend had twelve houses going into foreclosure. He bought them in a package from another investor (there were nineteen houses altogether, he managed to get rid of seven). Three of the houses were just too far away for me to be interested, which left nine houses. So I plotted the locations on my map book (yeah, I know there’s a thing called GPS; what can I say, I’m an Analog guy in a Digital world…but I digress…)

Starting from the house furthest away, worked my way back home, looking at each of the houses.

Here is where the serendipity part comes in…

In trying to find the last house I got lost; I turned up the wrong road. I followed it a bit and realized I made a mistake and decided to turn around and head back the way I came. So I found a spot where I could turn my car around - right in front of an abandoned house.

For a real estate investor, an ugly, abandoned house can be a potential goldmine. Something else pretty cool, next to the house was a very large undeveloped lot. I got out and took a look at the house from the street. I could not find a house number so I went to the house next to it and wrote that number down.

I finally found my way to the last house, but all the while, I was thinking about the abandoned house. The other houses I looked at did not fit my investment criteria, but the abandoned house showed promise. So I went home and began my search for the owner.

The really cool thing about the county in which I live is that pretty much all of the records are online, and free to access. I went to the county property tax database and looked up what I thought was the house address. I got a name, Fran (names and addresses changed to protect the innocent). I looked up her name online, found her, and called her. I asked her if she owned the house at 123 Oak Street. She said there is no house at 123 Oak Street, just a vacant undeveloped lot which she owned.

Turns out I was one lot off on the address; the abandoned house was at 124 Oak Street. Something else she admitted to me, even though the property at 124 Oak Street was not in her name, she owned it as well. I asked her if she was interested in selling either the house or the lot and she flatly said no. I gave her my number and told her to please call me if she changed her mind, and she told me she doubted that would happen, that she’s trying to acquire the property around the house…click…

This really got me interested. I looked at the plats (the county maps that show the lots in a particular section of a county) and saw that what I thought was two lots, was really three lots. And in fact, there were three vacant lots behind these three lots! So, looking at the land from street level where I had parked, I saw a vacant lot to the far left (122 Oak), another vacant lot in the middle (123 Oak), and a lot with an abandoned house on the far right (124 Oak). And then, behind these three lots were the three other undeveloped lots.

After digging a little deeper, I saw that not only did she own 123 & 124 Oak, she also owned the lot behind 122 Oak. I then went to look for the owner of 122 Oak, and here is where things got a little strange. The address of the owner was care of the County Tax Assessor…hmmm… The owner was a guy named Hank. I called the county tax assessor and they were a little perplexed about this as well. They put me on to someone else who told me that the taxes on the property were unpaid since 2000. Most likely, Hank was dead. Why the property didn’t go through probate, I don’t know, but there it was. I asked how much was owed in back taxes, she told me: $580! Now I was REALLY interested. I looked up the Social Security Death Index and saw there were two Hanks with the same last name that lived in the same town. Both died a while ago. So I was back to square one.

I decided to look up the deed for the property using Hank’s name and something funny happened. I didn’t see the deed for 122 Oak, but there was a deed for 121 Oak (which had a nice house on it). There were three people on the deed, a woman named Mary (same last name as Hank) a woman named Eve (different last name) and a guy named Hank Jr. (with the same last name). It turns out, Hank’s family owned two plots of land, one that his wife and kids owned, that was later sold, and the vacant lot that Hank Sr. owned. The two Hanks in the Social Security Death Index were Hank Sr. and Hank Jr. So that left Mary and Eve. I assumed that Mary was Hank’s wife, and that Eve was his married daughter (explaining the different last name).

At this point I did another search on the Social Security Death Index for Mary and Eve. I got a hit on Mary - she died in 2005, but no hit on Eve. I tried both her maiden and married names - nothing. This meant she could be alive. So I went through every resource I could to find Eve. I was able to find old addresses and phone numbers, but nothing current. Back to square one again.

I was beginning to lose hope, when I stopped and re-thought the problem.

Mary died pretty recently, maybe the local paper had her obituary. I went online to the AJC (Atlanta Journal Constitution - our newspaper) and looked in their “Stacks” section (this is their Archives). I knew the exact date of death, so I looked a few days after and sure enough I saw a brief entry with just the mention of her name. To get the full entry cost me $3.

I paid, got the full obituary, and saw the words that even today bring tears of joy to my eyes…“survived by daughter Eve” followed by a new last name…(turns out her husband died and she re-married).

I did a lookup of the new name and sure enough, there was an Eve of that name living relatively near to the vacant lot. I called her, introduced myself verified that Hank and Mary were her parents, and asked her if she knew that her father owned a vacant lot. She said no, she didn’t. I then explained to her about the lot and how I found her. I asked her if she would be interested in selling the lot, she said yes.

We closed in late June.

I then called Fran (remember her?) I told her I was the new owner of the vacant lot next to her property, and if she was interested, I would be willing to sell her my land (at a nice profit of course). She told me she was not ready to do anything yet. I gave her my contact info (again) and told her to call me if she’s interested.

I haven’t heard from Fran; I will probably call her this month and see if her situation has changed. I may even offer to buy her lots if she’s wiling to let them go. In any case, I am the proud owner of a .25 acre lot in a nice area of town that I can either develop, or sell, and I got it at a really good price.

The point of this particular tale is this, never give up. Never.

A lot of times, we run into an obstacle - real or imagined - that causes us to quit. I am convinced that there is always at least one solution to every problem we encounter in life. It may not be pretty, it usually is not easy, but it’s there if you are willing to look for it. If you are stuck, stop for a bit, sleep on it. Our minds are amazing at solving problems, if we just take the time to use them.

End of Sermon… :o)

In late November, 2006, a guy saw one of my bandit signs and called my answering service regarding selling his house. This was the beginning of the sub-prime fiasco, and he got caught up early on. He lost his job and could not afford his payments. After meeting with him and his wife, I initiated a short sale with the bank.

A short sale, for those of you who don’t know anything about real estate investing, is when you offer the bank an amount much less than the outstanding balance owed. If you can prove to the bank that the house is worth substantially less than what’s owed (possibly because of neglect), and that the owners were in a hardship situation and could not meet their obligations, the bank may take the offer rather than initiate foreclosure and take ownership of the house.

Banks are in the money lending business, not the real estate business, plus they have to put an large amount of money in reserve for each house they take back; that’s money they can’t lend.

The practice of short selling is usually common with second mortgages when the first mortgage is foreclosing, because all junior liens are wiped out after the foreclosure. There is a big incentive for the holder of the second mortgage to settle (usually 10 cents on the dollar) so they get something- anything back. What’s great is that you automatically build equity into the deal, which is why you see “No equity, no problem” on all those bandit signs in your neighborhood.

The problem was, there was only one mortgage on the house, which makes it harder to deal with the bank. Sill, I went ahead because it looked like a good deal.

Now, keep in mind, the process usually takes a couple of months, three at the most. In the initial documentation from the bank, they even said it takes approximately 30 days.

Six months later, mid-May, I heard from the bank…”Sorry, your offer was too low”…crap…I re-ran my numbers and I figured I might be able to sweeten the offer. I did, by $10K (which should really have been $5K but I wanted to make the deal happen). When I made the offer to the bank, I asked them if it was going to take a long time for their response, they responded that they will fast-track the analysis.

Five months later (last week) they finally called me back. They are “conditionally” accepting my offer…yea! (conditionally :o)…

Now…a lot has happened in the last five months, including a penalty on an unpaid property tax bill, and of course that nasty little sub-prime business. So I am going back to the bank to negotiate another $5K off the price. Yes, I can afford the higher price, but it’s the principle of the matter - and I need to practice my negotiating skills.

So, the moral of this convoluted story, is that sometimes you just need a little patience…