My phone doesn't ring often, but when it does, it usually means something very important is about to happen. This time it rang during a workshop that I was attending. I needed to keep my phone on since I am attempting to sell a house. This process has taken about 2 ½ years, and I was going to finally arrive at the closing table. Knowing that an actual closing was taking place gave me much needed relief. After I hung up the cell phone, one of my colleagues commented that oh that will mean big bucks. I looked at him, ?Not necessarily sometimes it means breaking even.? My contract in which I signed with full agreement stated that I was to receive $3,000.00. This sounds like quite a bit of money, unless you know the whole story. Real Estate is somewhat riskier than mutual funds, CD?s and stock. In fact the few things that are more risky are valuable minerals such as gold or silver. This information came to me from my financial advisor who was helping me with my retirement investments, and borrowing money to help me become debt free.

I purchased my first home for $55,500.00 and it appraised for $66,000.00 which gave me nearly $11,000.00 in equity. This is good according to the real estate brokers, agents and my mortgage company. The house was a cute little cottage style brick and wood frame house in a small town in Oklahoma. This is one of the reasons the purchase price seems so good. Everyone told me that this was truly a great investment. I purchased the property with a nervous tick inside my gut, and all the time believing it was a case of new buyer's jitters. In reality, this house became a true money pit.

From the moment I moved into this house till the day of closing this property has only taken from me. I spent quite a bit of money replacing the main water line, to fixing a leak inside the house, and adding a French drain to help with diverting water away from the back door, and the side yard when it rained. When the main water line had to be replaced two huge Sycamore trees had to be removed. I even took time to upgrade the bathroom, which was not an easy chore.

Six years of blood sweat and tears, and I felt like I could break even, so I placed the house up for sale, and finally moved away. I received a really nice offer for the place which was almost $20,000.00 above my original purchase price. Everything was a go, until inspections. I was told that it needed more piers, and my potential buyer backed out of the deal with no negotiations. Piers in Oklahoma are a part of real estate, and shouldn't be something to be feared. Clay and sandy soil are the norm, and with that type of soil the ground renders exerting pressure and movement on the foundation. Companies go in and use steel rods, cables or concrete piers to lift the house back up from the depth of bedrock. Usually these piers are placed on the outside of the home; however some are drilled and placed inside the house. Eventually I was informed from my own hired engineer that I needed to place eleven piers inside the house and another seven outside. We are talking lots of money to me; another $15,000-$18,000. This money isn't just for the piers but also for the rebuilding of the inside of the house.

What was I going to do? I decided like normal folks to become a land lord and rent the house. I did everything I was supposed to do in being a diligent land lord and protect my investment. After six months of renters who could barely pay the rent, I had them evicted. I made them leave and they owed me in back rent approximately $1600.00. My renters were worthless. In this day and age I do not understand how humans could live in filth that will attract cockroaches, mice and other infestations. The beautiful bathroom tile floor was broken in hundreds of pieces. Filth was everywhere, and in fact the house was so dirty that I couldn't find anyone to clean it up for a price I could afford. So, I cleaned the inside of the house, the outside of the house, and fixed the tub, and retiled the bathroom floor. In the meantime I find out that the roof needs to be replaced. That's another major cost, but I do it, because I?m a good steward of my property.

So, no matter what the house sells for, I can't get my hard earned money back out of it. I?ve spent too much time, energy and money on the property to recoup from any type of sale. But I truly believed I would break even at the closing table and receive at best a little over $1000.00. Real estate investments are risky; the mortgage, insurance and tax payments are the known factors. One must consider the upkeep of the property, the investment itself ties up your money, and isn't liquid. Add to that the ups and downs of the housing market must also be taken into consideration. The neighborhoods are also to be considered. Is the neighborhood stable? Is it being rundown? What is happening with the houses in that neighborhood, and what are their fair-market values? All of these questions relate to the risk of investing in the real estate market.

For me just purchasing this property for myself as a home was a great risk. Selling it was risky too. So, I put the purchase price just slightly higher than the price I paid for the house. I sat the contract for sale as an as is property. I didn't have any more money I could give to it. I had to leave on the utilities so the house could be shown properly. This added to my cost of the upkeep. I became property rich and cash poor. My cash flow became non-existent. At one time I had to borrow some money to pay for two months rent. I eventually had 5 contracts pending on this piece of property, and all five backed out at exactly the last moment. However I did have one potential buyer who wanted the property, and even claimed it as her own. But a problem with her arose because she had to sell her mobile home on five acres. As she found out it is very hard to sell property with a mobile home. Mobile home mortgages are harder to obtain than a regular house mortgage.

I began the process of loss mitigation with my mortgage bank, and asked for a Deed in lieu of Foreclosure. This process takes weeks, and is not easy. To make things tougher I wasn't allowed to talk with a real person. The Loss Mitigation department would call me, and in the meantime foreclosure proceedings would resume. As you can imagine I was please with this process. Anyway, while allowing the Loss Mitigation department to handle my affairs, the first potential buyer had sold her mobile home, and wanted to purchase my property. I was thrilled, and ever so glad. The contract was written, and I was to gain almost $3,000.00 or so.

Closing time is arriving, and closing was moved up one day from original date. No problem, I can be flexible, but an hour before closing I was informed that I would need to come up with nearly $7,000.00. One hour before closing. Can you believe it? This wasn't working out right, and it certainly wasn't working out in my favor. So, closing was postponed. I even tried to call my mortgage bank to find out what I needed to do to acquire a short sale. They sent me the paperwork, and I was told it would take approximately three weeks, and maybe two. I didn't like that option, but I went forth with it, and had everything they needed right in my hands.

The bottom line for me was that I needed to rid myself of the property; it was costing me emotionally, mentally, and monetarily. The very next day, I went to my favorite bank and they allowed me to borrow the money. I waited one more day, and called my real estate agent, and we got the ball rolling. All parties involved rolled so fast that we closed on that very day.

As I stated earlier Real Estate is risky, and on the pyramid of investments it is just above stocks, bonds, mutual funds, CD?s, and money markets. Only precious minerals like gold and silver are above in the risk taking factor. I expected to at lest break even. I had no idea that so many errors were going to take place that this money investment was going to cost me money. My cost of the $7000.00 and my emotional and mental state was great. If you have a decent cash flow then I would suggest Real Estate as an investment. But for me, without that cash flow, I wouldn't invest in Real Estate again. For me this real estate endeavor was way too risky, and did not create wealth, it created more debt. The good news is that I no longer have the property, and it will no longer take away from my personal goals.

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