well, and Bill finally decided to sell the first properties he purchased. Luckily the bubbles in the laminate countertop didn’t turn off the buyer and he was able to get it sold. He had bought the house for $60,000 and sold it for $70,000. All told he broke even. After a few years of floundering in Portland, Bill gave up for the time being on real estate. It’s worth noting as an aside that the house that sold for $70,000 in 1984 resold for $950,000 in 2013! Buy and hold real estate can be very powerful. FINDING ANICHE In the late 80s, Bill and his wife Teresa moved from Portland, Oregon to Eugene, Oregon, the home of the University of Oregon and that goofy football team that wears a different uniform every game (although that tradition hadn’t started yet). After a bout with the flu, Bill had some time to think and read. One piece of advice he found radically changed the way he thought about business and real estate and convinced him to give it another go: Treat real estate invest- ing like a business, not a hobby. Bill took this advice seriously and first stopped buying in his own name and started a company: Stewardship Properties. He even went so far as to make the Wendy’s a few blocks from his home his “office” in order to ensure he was maintaining a professional relationship and ONLY a professional relationship with his tenants as well as contractors and other vendors. Bill also found that “the riches are in the niches.” In this case, it was university housing. Campus housing usually rents by the bedroom and not on the whole and thereby usually rents for more. So whereas a three-bedroom house
might rent for $1000 to a family, it could rent for $400/bedroom to stu- dents; i.e. $1200. Most of the properties next door to the university were already student housing, but Bill realized that stu- dents were also willing to rent prop-
erties a bit further away, say a mile. In effect, Bill could arbitrage these properties by buying from a family at the single-family residence price and then converting the house into a student rental that would both rent for more and be worth more.
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