Front Loaded Efforts. Loaded Back-End Profit.

Last night after dinner my wife and I loaded up the dish washer in our new house. These past few days have been pretty hectic. It was nice to finally have some semblance of sanity after the chaos of a move. And the payoff for our efforts is very rewarding. My commute has been cut from 2 hours to 15 minutes. I get 3-1/2 hours of my life back every day. Maybe I’ll start getting some sleep.

As I looked around the house last night I saw several parallels between my move and Real Estate investing. They both are front loaded with days and weeks of activity that culminates with the rewards of careful planning. It’s usually difficult to appreciate the effort until long after the work is complete.

Excluding REO’s and the occasional foreclosure, I do not typically work with Real Estate agents. Most of my purchases come from direct interaction with the property owner. I’ve developed extensive marketing campaigns to generate calls from motivated sellers. That’s where my deals come from.

There are a lot of benefits to working directly with an end buyer. They’re the decision maker. Negotiation is easier without a middle man. Building a common ground with a seller allows for more options when structuring a deal. Yes, there are several benefits. But there is also a lot more chaos.

I could write a book (and maybe one day I will) about all the crazy and funny characters I’ve run into over the years.

I bought a house once from a guy who didn’t own the property. He had the same name as the owner. He lived in the house. He had the original title and was making all the payments. But it turns out (I found out a few months later) he wasn’t the property owner.

A woman I bought a house from refused my offer for over 2 years. She finally called me and accepted my offer after she won the lottery.

But the story that takes the cake comes from a man who had a change of heart at the closing table. All the documents were signed. The title company was cutting the checks. He got up saying he had to use the bathroom, and never came back. A week later I got a letter from his attorney contesting the sale.

This business sure can be crazy, but I wouldn’t trade it for the world.

Friday morning I have a closing scheduled for 10am. It’s a wholesale deal I’ve spent a total of 3 hours working on. If the settlement takes an hour, I’ll have a total of four hours invested in the deal. My profit from the transaction is $6000. That’s $1500 per hour. Not a bad rate.

Even though times can get hectic and crazy, it’s those moments after the heavy lifting is done that make all those efforts seem small. In the end, the prize is well worth the cost.