The Real Estate Mogul

By Domico and Robert

When I got out of the service at age 21 ,I decided I was going to make my fortune in Real Estate , so I purchased with my discharge pay a large house with 7 bedrooms and two bathrooms and made my fi rst rooming house. I converted the porch and the Dining room into 2 more bedrooms, making a total of 9 bedrooms which I rented out in whose days for $50.00 a week each. I didnt give anyone use of the kitchen and I didnt allow anyone to have company, you just went directly to your room and basically went to sleep and that was it. I allowed no food in rooms or any loud noise after 10 PM. It was a great place if you had a job and you were making minimum wage.

My mortgage payment was $250.00 a month , my electric bill was $165.00, My gas bill averaged 150 a month year around and because I had a well and septic tank , even getting them pumped out and serviced a couple times a year, only cost me an average of $35.00 a month. My Insurance ran me only $50.00 a month, about $25.00 a month for maintenance, so the expenses were $ 670.00 per month. My Income was $1330.00 a month on my first property net.

There I was back in the late 1950s making over $17,000 a year ,not working for anybody. It was very important to get a lot of information about your tenants such as next of kin, Mother and fathers name and address, social security #,Employers Name, Landlord history, last job ect. I always had an application ready for them to full out. That way if they do any damage to your property you can chase them down.

• Language: English
• Publisher: Xlibris US
• Release date: Jul 18, 2012
• ISBN: 9781477141120

Domico

My friends and clients up in New York tagged me with the name the “Master of Mirrors” because only I can put a deal together when the odds on making the deal are totally against me.

Book preview

CHAPTER 1

Putting Together A Rooming House.

When I got out of the service at age 21, I decided I was going to make my fortune in Real Estate, so I purchased with my discharge pay a large house with 7 bedrooms and two bathrooms and made my first rooming house. I converted the porch and the Dining room into 2 more bedrooms, making a total of 9 bedrooms which I rented out in whose days for $50.00 a week each. I didn’t give anyone use of the kitchen and I didn’t allow anyone to have company, you just went directly to your room and basically went to sleep and that was it. I allowed no food in rooms or any loud noise after 10 PM. It was a great place if you had a job and you were making minimum wage.

My mortgage payment was $250.00 a month, my electric bill was $165.00, My gas bill averaged 150 a month year around and because I had a well and septic tank, even getting them pumped out and serviced a couple times a year, only cost me an average of $35.00 a month. My Insurance ran me only $50.00 a month, about $25.00 a month for maintenance, so the expenses were $ 670.00 per month. My Income was $1330.00 a month on my first property net.

There I was back in the late 1950s making over $17,000 a year, not working for anybody. It was very important to get a lot of information about your tenants such as next of kin, Mother and father’s name and address, social security #, Employers Name, Landlord history, last job ect. I always had an application ready for them to full out. That way if they do any damage to your property you can chase them down.

I remember growing up that the Kennedy family who never sold anything they ever bought, they just kept passing real estate down from one generation to the next, This is the theory I used my whole life to obtain great wealth. I heard so many of the old timers saying if only I never sold anything that I ever bought I would be rich today, I always remembered that old rule of thumb and it kept me going for years.

The average income in the late 1950’S was about $10,000 a year, here I was barely 21 years old making almost double that amount. It was a good thing I had my shipping out pay from the Navy to buy this property.

To make my property even more secure I put 3 locks on each door, in case someone didn’t pay the rent on time I would lock the other 2 locks, so that they wouldn’t be able to get into their room, because they only had the key to the middle lock, not the top and bottom one. I then installed an old drop safe in the foyer so they would drop their rent in at the end of the week, So I didn’t have to be there every day.

This system is a good way to get started in the real estate business because in today’s market where real estate isn’t to good, you can buy cheap, like may be do a short sale and with first time home buyers discount put 3% down or less and be able to create your immediate income by purchasing a home now.

Today’s income would be $100. A week for that room instead of $50.00 a week, which would give you for that 9 rooms $900.00 a week or $4,050 a month, it would net you over $3000 a month or $36,000 a year. That’s as much as half of the people in the United States are making, On your first Real Estate deal wow. Just go into the multiple listing service and start looking for a short sale on a large house today. Begin your journey into the world of real estate today, you won’t be sorry.

CHAPTER 2

Converting Residential Zoning Into Professional

Zoning Or Highest And Best Use.

The next thing I did was to purchase a large house next door to a large City Hall in a small town in New Jersey. I decided to make it a law firm by pulling out the two bath tubs and making them powder rooms and taking out the kitchen and making it a conference room. I converted a 5 bedroom house into a 5 office law building. I advertised in the newspaper of the local Law School and got two young Lawyers to come in and rent this house-office building for their new law offices. I decided to form my own law firm.

I formed an LLC (Limited Liability Company) and started my own Law Firm, with the two Lawyers as partners. I was the General Partner and they were limited Partners. I owned 51 % and they owned 49%. I contacted two Young attorneys who had just graduated Law School, I told them that down south in Virginia and Maryland the Law Firms are all located close to court Houses and every week that they have court, all they have to do is go in and give out their cards.

They took my advice and now they always have several hundred cases going all the time. Every Thursday night there’s always 150 traffic tickets given out on the nearby highway and always domestic cases and criminal cases going on. Last year the rent was 30,000 as opposed to the 12,000 a year if it were a house. The net was over $100,000 to me alone, using a 10% capitalization rate it makes the building and business worth over a million dollars compared to a $100,000 house which it was before. We actually increased the value of this property 10 times what it was before. The ideal of a Law Firm next to a court house is an excellent way to increase the value of Real Estate.

This type of a Real Estate deal is called highest and best use, taking something that is worth one amount and making it much more valuable by changing the use to a higher and better use, we will get into this, in another chapter of this book more so. We will teach you how to turn many different properties into highest and best use.

If you are good enough to find highest and best use proprieties for other people you will have the best and highest paying job the world. If you can find a property and change the use and make it worth 5-6 or 7 times more valuable you can just imagine what can of worth you would have, here in this book we will show you how to do it. To be able to purchase a piece of real estate and make it worth so many times more then what you bought it for, is the most wonderful feeling in the world, so read on and we’ll tell you how it’s done. We will take you from the basics of land and buildings and show you everything there is to know about everything were real estate is concerned. Learn all you can about highest and best use, and you fortune will be just around the corner. You must find you niche and pursue it to the ultimate. People have been for many years taking something that somebody else thinks is not valuable and making worth a fortune.

Just remember it only takes one of the deals that I am talking about in this book to get you off to a good start, then from there everything is coming up roses. To define highest and best use take a restaurant that takes up a whole block down town, say it’s worth 3 million dollars. On all four sides are high rise buildings that are worth 40 million each, what would you do with that restaurant? Knock it down and build an another 40 storie high rise what else. Surely you can find a warehouse or a building that you can see a higher use in its place, you only have to look and use your imagination.

CHAPTER 3

Putting Together A Shopping Center From

Scratch Is Easier Then You Think.

You are riding down the street one day on a highway and you see a piece of land about 5 acres, you pull over and close your eyes for a moment and you see a 50,000 square foot shopping center all built there on the large lot. You start to wonder how I am going to make this happen, what can I do next. Depending on location the land is probably worth between $300,000 and $500,000, you call the owner up and ask him if he would like to sell the property and how much he would want for it.

You tell the owner that you would like to bring the property to the highest and best use which would probably be a shopping center, but you won’t know until you do more investigation in the area. You will tell the owner that you must do some borings on the land and run some demographics to see how much work is needed and what the area is like. You tell the owner that he has to give you the property for a year to find out what can be done on it.

You tell the owner after all Mc Donald’s doesn’t purchase a piece of land unless they can build a Mc Donald’s on it. The owner convinced that you have to get approvals to do what you want on the land, gives you the land for a year to get it approved. The work that you do on the property, the survey, the topographic, the borings, the setbacks the conceptual etc. Tell the seller you will put on his desk as you go though the approval process, all received approvals. If for any reason you don’t purchase the property from the owner he will have a much more valuable property here is why.

A property that is just land is known as the first value, after all its just the price of the unimproved land. But start getting the land though the approval process and each time you get anything done, it increases the value of the property. For example say a piece of land is worth $350,000.Then you are going to get borings done, setbacks, topographic studies done and so on. An empty lot is worth say $350,000, an approved lot is worth $25.00 a square foot under roof. For example an approved 50,000 sq ft shopping center is worth $25.00 a square foot or $1.250,000, just an approved site, without cutting down a tree.

So you can see the increase in value you’re dealing with here. The next step you’re going to do is to draw the blue prints (a picture of what the buildings are going to look like when it’s finished. Once you do that you can package the deal and either send it out to developers to purchase for $25, 00 a foot approved for $1.250, 000 or hire a contractor and build it yourself. The next value you will achieve is the value of the building built, it’s worth empty about $75.00 a square foot or $3.750, 000 dollars, rented more like 6 or 7 million. So you see if