The Journey – Mike Humphrey, Tax Lien Advisor
“The hardest part of any journey is the first step.”
I don’t know who coined this, but I have felt its truth down to my very core. I started out with ProSource Tax Liens as a client knowing NOTHING about real estate or construction. Even though I had a great adviser (Thanks Jared!) when it came time to commit to that first investment, I let fear get the best of me. Sound familiar?
I eventually did commit, and it was the best thing I could have ever done. That decision propelled me into several opportunities where I was forced to learn, grow, and find ways to overcome new obstacles. It was both exhilarating and scary all at the same time. I look back and laugh now at some of the moments in my real estate infancy that made me want to run for the hills. Let me share a few of my first experiences with you.
I purchased a tax lien and ended up acquiring the property via tax foreclosure. It was a 3 bed 1 bath home in Ohio (a 12-hour drive from me). I initially tried to wholesale it but couldn’t get ANYONE to return my call or counter my offer. This caused me to assume I had made a huge mistake and honestly would have taken a loss at one point just to get out of my bad investment. After a few weeks of rejection, I was forced to act so I didn’t lose all my money. I called up ProSource Tax Liens and asked if they had a contractor in the area that they could refer to me. It was the best call I ever made! They did have one and a few days later I had a contractor heading to the property.
When the contractor arrived at the home, he called me saying, “Did you know you have a swimming pool on your living room hardwood floors?” I couldn’t even speak I was so overcome with emotions and immediately became sick to my stomach. He went on to explain there was a hole through the entire roof that was about the size of a baseball. I literally had a window to heaven, and it was the rainy season. To make matters worse it was a 2-story home, so the upstairs was just as badly damaged. I was ready to throw in the towel; my real estate days were over. Thankfully the contractor calmed me down. A few days later I received a quote to rehab the house and after checking comps in the area, I realized I was looking at an approximate 90% ROI if I rehabbed and sold the home! I had him proceed forward, and I am happy to say my emotional roller coaster became a kiddie ride after that.
In the end it was such a great investment that I decided to keep it as a rental home. My total investment was $37,370.64 and it rents for $950 a month. After taxes, insurance, and property management fees my CAP rate on this property is 22.37% and I couldn’t be happier with the results.
Taking that first step and overcoming my fear set me on a real path to financial freedom. I currently work part time from home and am on track to earn more in 2019 than I ever have before. I can’t promise you the same success, but I promise you will never know your potential if you don’t take that first step.