Member Success Spotlight: Real Estate Investing at Any Age

Jan 20, 2020

 Real Estate Investing for Any Age

Every so often I get the question, “How did you get your start in real estate?” The start for me was when I was very young, I then let it idle, and started again 30 years later.

In the beginning, my mom separated from my father when I was three and divorced when I was five, so it was the two of us for many years growing up together. Realizing at a young age that we had an uphill climb, and having been born an entrepreneur, I always found ways to accumulate cash: yard work, babysitting, snow shoveling, paper routes (Warren Buffett’s start too), selling candy in school out of my locker, returning school cafeteria trays for a dime each, etc.

After moving various times between apartments, an opportunity came up: a large complex of apartments and townhouses was selling off the complex as condos. Mom and I had been struggling and discussed this as a joint venture and decided to take a stab at it. Mom had the credit and a job and I had several thousand dollars saved as a 15-year-old. In September of 1976, we stepped out and bought a townhouse for $33,210 in Northern Virginia. We struggled but made the payment each month with help from paper route money (up to five at one time) and renting out a room. Two years later, Mom remarried and we rented out that unit for the next 29 years. It achieved slow, steady growth over those three decades.

It was only that property for the next 10 years until I was 25. On a Christmas trip back home, we discussed buying a second property together with Dad. So I gave them a blank check and power of attorney. After looking at several units, the deals all seemed to fall apart. I was in the Air Force, living in Germany and on duty in Spain when I called home to check in with them. They informed me that one of the houses had the contract fall apart and we had a second shot, so we ended up with property number two. We rented it out shortly after closing and they managed both properties while I continued my military career. A few years later, they bought me out so I could use the cash to attend college full-time.

At age 44, we still owned the first townhouse and retirement was in front of me. Here’s the restart! After trying to find the perfect second career, I drifted back to real estate. My wife had suggested I start a handyman business and after a year, it was time. I started three businesses: handyman, flipping houses, and tax lien investing. The latter two were from too much HGTV and a late-night infomercial on John Beck’s "Pennies on the Dollar for Real Estate".

The flip went well and with cash in hand, the market was shifting, so I transitioned to buy and hold. I bought a foreclosure for less than ½ of comparable house values, but it took a lot of work. It was renovated and cash flowing in six months. We saved up and two years later bought two more foreclosures. Those “lipstick on a pig" houses starting cash-flowing in week. We continued saving and would buy deals slowly for cash: foreclosures, estates, or tired landlord properties. The growth was slow but steady and all procured with no debt.

The handyman business brought in cash too and gave me skills for rehabbing. In one year, the tax lien investing grew from 7 parcels to 769. We usually make interest income but have also received numerous properties over the years. We sell many lien properties but have kept one house that we bought for only $1,479. It is lease optioned out for an over 400% annual return from our original investment. We have made over $50,000/yr between interest and capital gains. All for a few weeks of research and buying each year. One of our forfeited properties was bought for $8.99 and sold for $4,500. Another parcel, an investment firm bought back for $8,000. We have sold many parcels back to original owners, including a graveyard. This line of work is never dull!

Real estate has been a lifelong venture with education and rewards along the way. Mom became a realtor and a broker. My parents had five rentals for a long time. Mom has since passed and the original townhouse was willed to me with a stepped-up cost basis to $250k. Dad sold off their remaining rentals to downsize and simplify things for his 91st birthday.

A few years ago, while we were doing genealogy research, we discovered that my grandfather was also a property investor and his parents owned a boarding house during the depression. It turns out that I’m a fourth-generation investor and it's in my blood!

After a lifelong venture of real estate investing, I can tell you that you are never too young or too old to start. As long as you work hard and stay determined, you can be successful at any age.

 

Darron D. Stewart resides in Mississippi with his wife Sharon. They have 3 children in various stages of "adulting". Darron plans to continue in real estate for a few more years, with the assistance of his wife--as long as it stays enjoyable.

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