What You Missed October 2014 General Meeting
by Rob Earhart
Buying is Still Possible--The Show is Not Over
Presented by: Clyde Wilson, Investor
October 7, 2014
My mom had 5 kids, two husbands who had died, and she was only 25 years old. We had to keep wood in the box or there would be no cooking. We had a two-holer outhouse and had to pump our own water.
When our father passed, we inherited $11 each and momma wanted to buy a cow. We pitched in and bought the cow. We rented a house but a year and a half later the landlord said he had to sell so we could either buy it or move. He gave us a deal of 10% down and make monthly payments. All we needed was $250 but we were a little short. “I was in hedge funds…I cut hedges for a dollar,” proclaimed Clyde. We sold our cow and were still $120 short but my sisters came up with it. We bought the house and still own it. For 70 years that $250 grew into a lot more income.
At 4% growth, even 5%, and you keep it up, it will make you rich. When the Korean War broke out, I was in the National Guard and they told me to be 17, not 15, and they signed me up. “We went to the Columbia Restaurant and I had my first beer,” exclaimed Clyde. “It was good and I’ve had a lot more beer since then.”
I found the Marine recruiter and my mom co-signed for me to go in. I went to Paris Island in 1951, then to California and served 3 years in the Marine Corps. I never got to go to Korea and I never got to shoot anyone.
When I got out of the service in 1954, I borrowed a truck, went to the produce market and started to peddle the produce. Business was good and I ended up with 3 trucks. I wanted to rent a barn but they wanted $300 per month and I found a great barn I could buy for less. Then I bought a house with my GI bill. We found we were both 8 miles away from work and were spending a lot on gas so we traded in for another house closer to work.
Then we got another house in 1964 on a quieter street. With the produce company I was supplying 45 different McDonalds restaurants their potatoes. I offered $48,000 for the house for all cash, which I was borrowing from the potato supplier. The barn was confiscated by eminent domain and I negotiated to get the house separated from the barn on the land. I still own that property today and rent it out for $5100 a month for a car lot.
I found out that there was more money in real estate than potatoes. I got some tapes from Jimmy Napier and listened to them over and over. I went to one of his classes, learned a lot and have gone to many more since then.
I then found trailer parks were in high demand. We bought the first park 35 years ago. We now get $495 per lot, per month in California. We bought the park for $275,000 and the tenants made all the payments. We then bought some land in Southern California and put up some townhomes. We did not want to sell but people wanted them and would pay more than what we thought they were worth, so we sold them for a tidy profit.
Then we bought a couple of mobile home parks in Paradise, California. They offered way more than what we thought they were worth and we 1031’d them into a couple of IHOPS and Jiffy Lubes. We have one Weinerschnitzle restaurant and it brings in good money.
We bought a trailer park with a gas station in front that was leased but went out of business. Then a builder wanted to buy it for a restaurant and we would only lease it. It was 100 feet deep by 35 feet on the highway, and they built a Carl’s Jr. and wanted to sell it for a $1,300,000. We then bought it and own it today.
We then 1031’d a California park and bought a Lakeland park that makes money. We just refinanced the park from 7% to 5.25% and saved $175,000 over the term of the loan.
Clyde then recommended Jimmy Napier’s book Invest in Debt.
“I bought a pink house in California for $1,000 down and borrowed $10,000 from a friend. It had a peach orchard on it and was 20,000 square feet. I sold it for $4 per square foot and got a 6% commission. I then 1031’d that into another property in the same neighborhood. It had a duplex, a gas station, and a couple of businesses.
The duplex had guys not paying but growing marijuana on the roof. A week later the Sherriff raided it so they were effectively evicted and I re-rented it. I rented the gas station and the other businesses all generated $20,000 a month in income from a $1,000 investment and moving some mortgages.
I looked at a property that had 10 houses on it. They had owned it since 1945 and did not want to fix anything. Most people were on dope and they wanted to sell it for $545,000. There were 3 houses not fit to live in. I gave the realtor a check for 10% down and they carry the balance. I even asked the realtor if he would carry his commission. I gave him $10,000 down and $200 per month for the balance of $12,500. We owed $405,000 and had the money to fix up the three houses and rented them right away. One lady was nice but had a young guy on dope. She ended up leaving and I cleared out the rest of the houses of the dopers. Today we get $1,100 per house or $11,000 per month leaving $2-$3,000 per month cash flow after expenses.
You have to get creative to be able to put little down and have others carry the notes. You just have to be honest and make your payments.
Clyde then talked about several other properties and deals he had done in Arizona, California and Florida. He also bought 3 farms in Idaho over a period of years from one individual.
Clyde then gave examples of how the present value of money is important by using a financial calculator. He stressed using one and practicing how to evaluate deals. “Make sure your arithmetic is right. Buy only if it is in a good area at the right price and the right down payment."
Clyde then announced his classes that are in November. “It costs you a little money to go, but it costs you a lot more if you don’t.” If you grow some income property, it will take care of you and your heirs.
I’ve made a few mistakes but I’ve done OK. Clyde said, “I want to invite you to our classes to teach you how to make and keep your money.” “Jimmy Napier will be here in February, so I encourage you to take his class. I have a doctorate for ‘Jimmy U.’”
Clyde guaranteed that “if you go to the three days of training and don’t think it’s worth it, we’ll give your money back.”