The 3 Rules of Real Estate Investing

I recently visited my friend Danny Williams. Danny’s a great guy. He runs a very successful third generation family-owned hardware store. Danny’s granddaddy, Louis Williams, opened the store back in 1928. During World War ll, the business served as a collection place for people to bring their scrap metal for the war cause. Today, the business is still going strong as a hardware store. Even with stiff competition from the nearby giant chain hardware and building supply stores. One reason Danny’s business is success is that Danny loves people and always goes out of his way to give great customer service. Everyone that comes in the store is made to feel welcomed and appreciated. The day I was there, Danny was all excited and telling me about a nearby house that was for sale at a ridiculous low price. He’d heard about it from Tony Bell, one of his plumbing contractor customers. Danny hadn’t seen the house, but he was pretty sure he was going to buy it as an investment.

Several weeks go by and I’m back in Danny’s store.  I asked him if he bought the house he was telling me about.  He said he had, but he was beginning to have second thoughts about it being a good investment.  He said he had to hire a crew of 4 men to haul off the junk and trash that was in and around the house. Everything from a front porch harvest gold Whirlpool refrigerator, to a Ford Econo mini van lawn bench, to the Walmart shopping buggy that had been modified into an open fire BBQ grill. They lost count of the beer cans, somewhere around three hundred fifty. Filled up five dump truck loads, not pickup loads, but dump truck loads of junk.  They started working at 6:30 that morning and at 4:30 that afternoon, the head cleanup guy called Danny and ask,  “What you want to do with your dog?”  After a long silence, Danny’s reply, “What dog – I don’t own a dog?”  “The one that’s in the backyard chained to a dog house,” answered the head cleanup guy. Danny instructed them to take the dog to the County Humane Society Animal Shelter and Adoption Center, and to hurry, because they close at five on Fridays.”

Danny told me, he’d learned the 3 Rules of Real-Estate Investing,  “First, don’t buy a house after sundown. Second, don’t buy a house that’s cheaper than a motorcycle, and third, don’t buy a house that comes with a dog.”

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