Cliff Hockley - Successful Real Estate Investing: Invest Wisely, Avoid Costly Mistakes and Make Money

CLIFF HOCKLEY

CPM, CCIM, MBA

INVEST WISELY,
AVOID COSTLY MISTAKES
AND MAKE MONEY

NEW YORK

LONDONNASHVILLEMELBOURNEVANCOUVER

SUCCESSFUL REAL ESTATE INVESTING

INVEST WISELY, AVOID COSTLY MISTAKES AND MAKE MONEY

2019 Cliff Hockley, CPM

All rights reserved. No portion of this book may be reproduced, stored in a retrieval system, or transmitted in any form or by any meanselectronic, mechanical, photocopy, recording, scanning, or otherexcept for brief quotations in critical reviews or articles, without the prior written permission of the publisher.

Published in New York, New York, by Morgan James Publishing. Morgan James is a trademark of Morgan James, LLC. www.MorganJamesPublishing.com

ISBN 9781642793208 paperback

ISBN 9781642791570 eBook

Library of Congress Control Number: 218907422

Cover & Interior Design by:

Christopher Kirk

www.GFSstudio.com

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W hen I graduated from Willamette University with an MBA in 1981, I never expected to work as a property manager or commercial real estate advisor. But one thing led to another, and in 1986 I joined my in-laws in their business. My goal was to run a company, and my father-in-law, mother-in-law, brother-in-law, and wife allowed me to grow within the framework of S. Bluestone Realty. We had fewer than ten employees at the time, but today there are over eighty great people who work with me at Bluestone & Hockley Real Estate Services and SVN Bluestone & Hockley.

The purpose of this book is to help teach both the novice and the experienced real estate investor how to make money and avoid mistakes that I have encountered over the years as a property manager and real estate investor. This book gives concrete examples of good and bad decision making when it comes to investing, giving the reader an opportunity to learn from those successes and failures. Investing in real estate has enabled me to become successful and accrue millions of dollars in real estate assets.

Investing in real estate is often portrayed as an easy way to get rich, but that does not work for every investor or with every investment. Real estate investing involves many variables: location, cash flow, upside, opportunity, quality of products, financing, good management, the economy, and last but not least, your emotions.

This book is designed to help you learn through various short stories, or tales. These tales describe common decisions that real estate investors makeand not all of them are good decisions. Use these stories as a road map to chart your future real estate success.

Finally, this book would not have been possible without the support of my wife, Julie and our children, Ellen and Lily and my parents. Additionally, the following people were instrumental in getting this book to press: Heather Hill, Annie Leung, Ali Shaw, Dehlia McCobb, Allie Ross, Shannon Mattin, and Vanessa Van Eaton.

I was also fortunate to have and greatly appreciate the help from the following: Diane Danielson, COO of SVN International; Joe DeCarlo, Principal at JD Property Management Inc.; Joe Weston, Managing Member of Weston Investment Company, ; Doug Marshall, President of Marshall Commercial Funding; Paul Challancin; Ralph and Carolyn Hockley; and Pat Coanall of whom took the time to read this book and make valuable comments and additions. Any factual errors are my own, and I take full responsibilityenjoy.

T he advertisement screamed from the TV: Invest $39.99 for an introductory kit that will teach you all the tricks to buying real estate. The well-known pitchman claimed he was involved because he believed all Americans should share the American dream.

Mitch leaned over and picked up the phone. At thirty years old, he was still living with his parents, bouncing from one low-paying job to another, and all he really wanted was a get-rich-quick solution to jumpstart his life. The ad said he could buy the program with no money downperfect! It promised that he would make money from every real estate transaction and become a millionaire, even without investing any of his own cash. As Mitch dialed, he vaguely heard the salesman mention that the program focused on foreclosures, but he never stopped to think about why this might or might not be a good idea.

Mitch charged the $39.99 on his credit card, and one week later he received ten CDs and a textbook that provided a step-by-step approach to buying foreclosed real estate.

As directed by the kit, Mitch planned to start making phone calls and visit sheriffs sales in his county. At his very first auction, he listened as the announcer described a quarter-acre of land in his county with a three-bedroom home on it. The bidding started at $50,000, and to Mitchs surprise, no one else spoke up. Whats wrong with them? he thought. This was clearly a perfect property at a fantastic price. He vaguely remembered the textbook advising he sit through one whole auction before ever bidding on anything, but this was just too good to pass up.

Mitch eagerly raised his auction paddle. Ill take it!

The auctioneer asked if anyone else wanted to bid against Mitch, and the room was eerily silent. Mitch didnt carehe was on track to get rich quick. When the auction was finished, Mitch was directed to a cashiers line and handed a stack of paperwork. Hed expected that somewhat, but what he didnt expect was the top form demanding 20 percent down within twenty-four hours. Hadnt the program promised he wouldnt have to spend any of his own money? Mitch was puzzled, but when he started to ask the cashier about it, she said firmly, No exceptions, and informed him that hed have thirty days after paying the deposit to arrange financing to close the deal.

There was no turning back now.

Mitch quickly borrowed money from his parents to get a $10,000 cashiers check ready. They seemed hesitant to hand over the money, but Mitch knew they also wanted him to move on with his life, and this seemed to be the only way. Even though the kit had promised no money down, Mitch didnt see a problem with paying a $10,000 down payment. And since it was borrowed money, it was essentially none of his own money down.

After paying the deposit, Mitch ran out of the sheriffs office with a broad smile on his face; he was on his way to being rich. He jumped into his car and drove out to look at the property. The sheriffs office had given him the legal description of the property at the auction, so he figured he would have no trouble finding it.

But five hours later, he was still driving around lost, so he called the sheriffs office for directions. He finally found the property in a desolate part of the county on a gravel road. There was no sewer service, and water came from a well. The nearest neighboring home was ten miles away.