Born in Italy, Carl (name changed for privacy) has had a fascinating career serving in the United States Air Force and much experience in the real estate field. He first became acquainted with Southwest Home Solutions seven years ago when divesting some properties and is now involved as an investor.
Tell us how you entered the real estate field.
When I was in grad school at UC Santa Cruz, I was the manager of an apartment building. Through that experience, I gained valuable knowledge about how to deal with tenants and other managerial lessons. I had two buddies—one in marketing and one with experience in real estate and accounting—and together we decided to partner up and get some houses. We bought a house in Almaden Valley, south of San Jose. That worked, so we got another. Along the way we learned about leveraging other people’s money, refinancing, and cash flow. Eventually, we got a third house. Then IBM decided to dramatically expand its plant in San Jose, so the value of our properties went up.
My friend had overextended himself, and asked me if I could buy him out of one of the homes. I did. It happened again, then again, and eventually I owned all three houses that were worth a ton of money.
At that point, you left San Jose to join the service. Tell us about your military career:
I went back into the service in 1989. When I was 17 or 18, I had been in the military working in an engine shop. Well, when I went back, I thought I would go do that again, since I already had some familiarity in that area. I ended up getting an Associate Degree in Applied Technology and spent 20 years in the Air Force, first fixing airplane engines, then in management, then as the squadron historian.
What is the role of a squadron historian?
Military historians document everything that the Unit is doing. Most of it is pretty routine, but occasionally there were some interesting tidbits. At one point, we had an airplane broken down in every part of the world, which was pretty interesting.
If you remember the story of Private Jessica Lynch, who was ambushed and captured by Iraqi forces in 2003. She was rescued by Navy SEALs, the first successful rescue of an American prisoner since World War II. They flew her back in one of our jets.
Another interesting experience I had was in 1991 on a temporary duty abroad I went to the Philippines to help with the evacuations after Mt. Pinatubo erupted. I went out with military vets and we brought back all the dependent families’ dogs and cats.
After your military service, you wound up in Albuquerque. Tell us about how your real estate ventures continued and grew?
I took advantage of the 1031 exchange process and exchanged the California houses for Albuquerque homes. At this point I was working for a defense contractor here in Albuquerque, so it was easier to manage local properties. I ended up with 9 houses.
Why did you decide to divest of your properties, and how did you end up working with Southwest Home Solutions?
I was retired and didn’t want to deal with this stuff anymore! So I started selling, but I wasn’t in a hurry, I sold a few through real estate contracts. Then I had one property that was really beat up, so I decided to call a few investors. I talked to several: some seemed really sleazy. There was one group of guys who talked to me, but when it came right down to it, they didn’t know how to get financing and actually close the deal.
Then I called Bill and talked to him for a while. He seemed honest. That was the main underlying factor. He bought one of my properties outright, and a few others with owner financing.
You’ve had a lot of experience with real estate, as a landlord, homeowner, and investor. What are some lessons or principles you have learned over your years of dealing with real estate?
Be patient. A lot of folks get into trouble because they are too eager. Don’t take a chance on tenants: you can absorb a month of lost rent. If you get a bad feeling about someone, your instinct is probably correct. Don’t overextend yourself.
What advice would you give people looking to real estate as an investment?
You should have a diverse portfolio: and real estate should be a part of it. There are more people every day, and everyone has to live somewhere. Again, be patient: if home values go down, they will go back up!