- Profit Strategy: Rehab and hold
- Number of Units: 18
- Personal Money Invested: $110k
- Prior Experience: Gene had prior experience with some single family real estate investing and with owning a sod farm
Gene is 68 years old. He’s been through a thing or two.
He grew up on a farm in Northern California, and farming has always been “in his blood.” When his brother invited him to invest in a sod farm in central California, Gene and his wife quit their jobs and moved. The business was successful!
With the farm’s success, the couple started investing in homes. They bought their first house about two weeks before they were married. It was a fixer, and they rehabbed it while they were living in it. He remembered the chaos and declared, “my wife is a saint.”
A year later, they sold that house and bought two others that needed rehabbing. They moved into one of the homes. It had 16 broken windows, and all houseplants froze the first night. He laughed, “my wife is a saint.”
Once that house was repaired, they moved into the second one to rehab it. After five years, the real estate market was collapsing. They had to sell the house and lost about $20K (factoring in rehab expenditures).
They bought and sold some more homes. In 2009, they lost the sod farm. It was an economic disaster for them.
Sadly, the challenges weren’t just financial. Also, in 2009, Gene found out he had prostate cancer.
He avoided radiation treatments and continued to work. He owned landscape-related businesses, but they barely made money. Gene went through most of their assets just to survive.
He delayed having radiation for too long, and his cancer metastasized. In 2019, he went to Mexico for Nobel-prize-winning experimental treatments.
This added to their financial problems. Gene shares, “I couldn’t afford to pay for the ongoing medications. The doctors were kind and let me return with them because they knew that I would pay for them eventually. Financially we were in big trouble.”
The news of stage four cancer created an urgency for passive income to support his wife and son. While in Mexico for treatments, he saw an ad for Lance’s Small Apartment’s Course and Bootcamp and signed up immediately. His son joined him at the Bootcamp. They launched their real estate business together.
They found an 18-unit complex in Ohio. They flew there to do inspections and investigations, landing in Pittsburgh — the closest airport. While there, they discovered a property in Pittsburgh that was such a good value they made an offer. He describes the deal, “the offer was accepted for $44,000 — for a duplex! I’m from California. You can’t buy a dog house for $44,000.”
Financing was tough. Ultimately Gene’s partner suggested paying cash. They did, and now they own it free and clear. It needs rehabbing, but they are waiting because it is fully occupied.
Gene and his son also pursued the Ohio complex. They liked this deal because it was 18 apartments with 42 storage units. It had been on the market quite a while, so they offered significantly less than asking. The seller agreed to the price.
However, the closing was a nightmare. As Gene described, “I neglected to follow one of Lance’s rules — not to buy anything outside 30 miles of a population center. This property is about 45 miles from Pittsburgh, Pennsylvania. There were no comps. I couldn’t even interest private money investors because they couldn’t find comps.”
He tried approaching the local bank that was carrying the current paper on it. The bank had an appraiser visit the property to send photos and refused to refi based on the appraiser’s pictures.
Gene elaborates on his frustration, “I couldn’t believe it. They backed out of the financing based on a couple of pictures from an appraiser. Talk about fiduciary irresponsibility. I couldn’t believe it.” However, a banker told them about a competitive, competing bank that might provide financing. This new bank did agree, but not before six extensions over six months.
This building was nowhere near fully occupied. Of the residents, five were registered sex offenders. Others were “only a step above homeless.” He provides an example, “when I took over the building, I raised the rent by $35. Five people moved out in the middle of the night.”
In addition, only 10 of the 42 storage units were leased. The property was a mess. It needed a lot more work than they anticipated. But the renovation is finally completed. Happily, Gene announces, “we now have a cash-flowing 18-unit apartment building with a 42-unit storage facility.”
His goal is “to have $100K coming in passively.” He wants the investments to run smoothly so his son can continue them while doing his other work.
Gene no longer has a “sunset clause” on his life, like he did when he started Lance’s program. However, he recognizes that everyone faces impending mortality, so his ambition is still strong.
Gene revealed that his ultimate dream is to serve God. He explains his calling, “God has called me to start a ministry of healing as a result of my healing. Because of this, financial targets and traveling are no longer on my bucket list. I have a different bucket list. I dumped that old bucket list out when I was in Mexico because I thought there wouldn’t be any time for a bucket list to be fulfilled. My bucket list has changed significantly since my health and finances have improved. My new bucket list is far more poignant than I had before.”
He defines his new priorities, “my revised bucket list is to bring people closer to God and to salvation. Sure, my wife and I have always wanted to travel. If we are blessed enough to do that, we will. But my travels will be to visit holy places.”
Gene’s most significant obstacles were internal ones — the belief in himself. But Lance’s coaches helped him through that. He elaborates, “I had some tough times early on in the program with attitude and mood. My coach, Hoku, was my rock. She didn’t buy into that. She said, ‘you need to move forward here, and this is how you do it.’ Lance and his coaches are excellent.”
He suggests, “you need to follow your heart. And if your dreams match your heart, they will come true. Real estate is one of the most flexible ways to develop independent wealth that I know about, and I’ve tried a lot of different strategies. I’m nearly 69 years old, and I’ve been through a lot. I get excited about things. But if the structure isn’t there, it’s easy to stop. With real estate, whether the economy’s going up or down or flat, it’s always cyclical, and money can always be made. Especially if you have a coach like Lance who has been in it for a long time.”
All. Obstacles. Can. Be. Overcome.