It's never too late to start a real estate empire
By JEFF LAZERSON / CONTRIBUTING COLUMNIST
If you ever thought it’s too late in your life to prosper by investing in real estate rentals, you might think differently after you learn about Marvelous Mabel.
Armed with a home economics degree from Cornell University but no background or experience when it came to real estate rentals, she built nothing short of a real estate empire that she started at 52.
To protect this Orange County family’s privacy, their identities are disguised.
As told by her son, Gregarious Gary, Mabel died a few years ago at the ripe old age of 96. In 44 years, she had amassed 569 units, which included residential properties and office buildings, worth $100 million and generating $8 million per year in revenue.
Marvelous Mabel started out by purchasing a Newport Beach duplex in 1969 with an inheritance from her parents’ estate.
As Mabel’s experience grew, so did her confidence. Eventually, she became a fearless investor and manager. She embraced being a landlady, coming to work five days a week. She couldn’t wait for Mondays.
Mabel’s secrets to success are simpler than you might suspect.
“She chose the right husband. Together, they were trouble,” said Gregarious. He explained that she would bounce things off him on their daily walks, receiving sage advice and counsel, morphing into a sense of a joint mission.
Mabel had a keen sense for dialing down on the details and validating information on properties before she bought.
For example, if the brochure said the rents are X, she’d want to review the actual rent rolls. For inspections, she’d check out every unit, every nook and every cranny.
“A well maintained property and quality construction (are key),” said Jon Wilhelm of Valley Home Inspection Service, who has 30 years of inspection experience (no affiliation to Mabel).
Mabel was able to grow her real estate fortune through leveraging – putting enough down to buy, and when values went up, pulling out the equity through cash-out refinances to buy more real estate.
She stayed close to home, investing in Orange County, Los Angeles, San Diego, Riverside and San Bernardino.
She also did 1031 exchanges, which is a way to defer capital gains taxes by reinvesting proceeds from a sale into like-kind properties.
Perhaps most important, she watched the money. Mabel was inspecting the bills and writing the checks for anything from utilities to repairs, always questioning if something seemed out of line. Yes, she was very frugal.
All you need to get started on your investment empire is 20 percent down, some decent credit and some income (if the rents aren’t enough to qualify for the mortgage).
Jeff Lazerson - Mortgage Columnist since 2011