THE TONY SCIMECA STORY

Transcription

1 THE TONY SCIMECA STORY THE ORIGINAL BLUES BROTHER REAL ESTATE INVESTOR

2 Acknowledgements Nothing of value is ever accomplished without the help of others. Even though there have been many people in my life that have come and gone, there have always been those special people who have stayed with me all the way. I am grateful for my parents, especially my father, who got me started on the right path in life, even though I did not realize it early on. Also, I am thankful to my sister and brother, who have helped me out in more ways than I could ever imagine. A special word of gratitude goes out to all my relatives who have each helped me out in their own individual way. I am especially grateful for the three greatest days of my life, the birth of my three children, who have been through the good times as well as the challenging ones. A particular thank you to the countless mentors I have had in real estate and to all the real estate programs and authors that gave me new ideas to try out in reality. Furthermore, I would like to thank in advance all the mentors who are about to come into my life. THANK YOU, THANK YOU, THANK YOU

3 TABLE OF CONTENTS CHAPTER 1- The Beginning CHAPTER 2- Starting Again CHAPTER 3- Building Up CHAPTER 4- Then It Happened CHAPTER 5- Wrapping It Up

4 CHAPTER 1 The Beginning There are only two ways to live your life. One is as if everything is a miracle, and the other is as if nothing is. -Albert Einstein Anthony John Scimeca was born in Chicago, November 27, 1957, to John and Catherine Scimeca. I was the oldest of three children; myself, Theresa, and John. We were all born and raised of Catholic religion. My parents were not wealthy by any means, but were not poor either. One day, my father purchased a 2 story apartment building with my uncle Lyle, which my aunt and uncle lived in at the time. In the early years of my life, I grew up across from what you would call the projects, low income housing. We lived on the first floor, which had 4 rooms, 2 bedrooms, 1 bath and an enclosed back porch, which my father eventually ended up converting into another bedroom. When I was about 7, my father and mother divorced. My father got custody of my siblings and I, which was unheard of at the time. Soon afterwards, my grandmother moved in with us. We stayed there for about another year until we moved into a more suitable neighborhood, on the northwest side of city. Shortly there after, my father got remarried to a woman named Marie. My father and step-mother bought a brick bungalow, 5 rooms, 3 bedrooms, 2 baths with an in-law in the basement for

5 my grandmother. He remodeled the 3 room 1 bedroom in-law for her. He then converted the attic to my bedroom as I got older. To add, he converted our enclosed back porch to a livable den. During the day, my father worked as a maintenance man for a tool and dye company. He would take me with him, as his helper, to do side jobs at night. This helped to pay the bills and get my siblings and me through Catholic school. I truly appreciate what he did for us, even though I was much too young, then, to realize it. During my school years, I was like any normal child. I did the things that most boys did, like watching my favorite TV shows, playing sports, listening to records, in addition to getting up early on Saturday mornings to deliver papers on my bike. When I was 18, I got my drivers license. Although I was eager to purchase a car, my father insisted not to until I first purchased a house. Wise advice today, as it was then, not to buy a depreciating asset, but buy an appreciating asset. During my teenage years, I was working at a local grocery store and making a lot of money. As time went on, I bought that house my father always instilled in me to purchase and my friends thought I was crazy. I put $500 down, and my dad gave me $500 for high school graduation in addition to a $500, in advance, for college. The owners of the 3 story property had it originally listed at $26,000, but sold it to me for $22,000 since they saw how young and ambitious I was getting started on the right path. I later rented out all of the apartments, paid the mortgage, and had

6 money left over, since the tenants paid their own heating and electric. I was making positive cash flow every month. I saved the money from the property every month, since I was living at home and did not have many expenses. After several months of saving the cash flow from my building, I bought a new car. The property paid for all my car expenses. Before I got married, my fiancée Carolyn and I combined our money for a down payment on another 2 story building. We were planning on living in one of the units and renting out the other. I then moved out of my parent s home and remodeled the first floor apartment of the 2 story. Both of the units of the building were 4 rooms, 2 bedrooms and 1 bath. I now had two properties under my name. Imagine having one of your tenants paying a majority of your mortgage each month. Eventually, it became too small for both of us to live in and we than bought a tri-level home, in a suburb of Chicago, with 4 bedrooms and 2.5 baths. Since we purchased in a neighborhood that we could start a family and a school district we could send our children too. We sold our 2 story building and took a studio condo, by Lake Michigan, as a down payment and held a wrap-around mortgage on the 2 flat. We then refinanced the studio condo and pulled some tax free cash out. To add, we sold my 3 flat and continued to live in our 4 bedroom home.

7 After being successful in real estate, I found myself wanting more. Showing my new partner that I could be in business for myself, since I knew early on that being in business for oneself, is better than working for someone else, I quit my printing job and started my own business in multi-level marketing. I attempted many different multi-level marketing companies, but to no success. I had products loaded on the shelves of my heated garage. My wife, Carolyn, worked for her parent s family bakery. At the time, she was the only job producing income we had. After failing multiple times, I took employment at McDonalds so we could have two incomes coming in to make ends meet. It did not sit well with her, although we had money in the bank. To no avail, my wife and I knew this wasn t going to work. We sold our house, relocated back to the city and moved into a 2 flat apartment building that my in-laws owned. "Life's not about waiting for the storm to pass... It's about learning to dance in the rain." Everything happens for a reason and that reason is there to assist you.

8 CHAPTER 2 Starting Again You don t have to see the whole staircase, just take the first step. -Martin Luther King, Jr. I started again by purchasing a HUD property from an auction. It was a 1 bedroom, 1.5 bath condo, a few blocks from where I lived. Soon after, I fixed it up, and sold it 8 months later. I knew it would be easier to find a partner instead of doing it myself. One of my friends, who was also interested in real estate, started looking at properties with me. We got a deal on a corner 2 flat, frame building with a vacant city lot kiddie-corner from a Chicago park, so we bought it. Since my partner wanted to live in one of the units, we fixed it up and just as we were going to rent out one of the units, we found someone who wanted both units and to purchase the property. He asked us if we were willing to hold the mortgage for him, with a small down payment. Since his down payment covered what we had in rehab cost, we did it. What a mistake. I insisted he get an attorney to do his closing, since he was depending on us to do it for him. Initially, we had a real estate contract with him to buy the 2 flat property separate from the vacant lot because we were planning to build another house on the corner vacant lot. He paid rent for

9 a couple of months, and never paid anything afterwards proceeding to take us to court. His attorney urged him to also get the vacant lot with the 2 flat. We spent 2 years without any rent, had attorney and court fees, while paying taxes on both lots and the mortgage payments without income coming in. Can you imagine the strain it puts on you and your partner s relationship, not to mention your marriage? Eventually, we received the property back and the man paid his attorney s fees, and filed bankruptcy leaving us with nothing in return. When we went back to see the judge, he stated that we should be thankful we received our property back. While learning our lesson, we sold the 2 flat with the vacant lot for a shared profit. My partner and I bought our first mix-use, 15 unit building with nothing down. We structured the deal to get a new mortgage, and the seller holding a 2nd mortgage on the property with a 3 year balloon loan. We tied up all our properties, meaning, if we sold anything we would give that money to the seller first. I did not have any properties, but my partner had two. The property we bought had 13 apartments and 2 stores. The money that we made monthly on the property, went back into fixing the apartments. As the apartments went vacant and other things needed fixings, we had to take care of it. After we bought the building in February, we only had to pay the heating for a few months, leaving ourselves with money to fix other things in the building. I kept the building for over 13 years. We paid off the seller, and refinanced the building. Carolyn and I bought my partner out, since

10 my partner and I had disagreements, was going through a divorce and needed the money. Success is not final, failure is not fatal: it is the courage to continue that counts. Obstacles can't stop you. Problems can't stop you. Most of all, other people can't stop you. Only you can stop you.

11 CHAPTER 3 Building Up You miss 100% of the shots you don't take Wayne Gretzky I got my real estate license in January, My real estate broker had a 10 unit building that she did not want and was willing to lease/option it to me. I gave her a payment to pay her mortgage and taxes every month and took over the management of the property. As time went on, I fixed the units, and raised rent on each as they became readily available. After I raised the rent, I fixed the outer landscapes as well as the basement. By doing this, I was raising the value of the building. Furthermore, I forced equity in the building and raised the value to the other properties in the area. The tenants then started appreciating things that were being done to the building. I replaced faucets, washers, toilet bowl shut offs, bathtub hot and cold water knobs to cut water expenses. I cleaned, painted, carpeted all apartments and corrected all the things that needed to be done. When it came time to close, the lender backed out at the closing table. It was embarrassing to say the least. I decided then to give the sellers each $10,000 more on the purchase price, since it did not close on its original date and it gave me time to get another mortgage.

12 It finally closed a couple months later with another mortgage lender. While thinking of buying another 10 unit building, the seller next door wanted me to buy his building. After finding out about his financing, he had 3 personal mortgages on his property. I asked everyone who held his mortgages, if they would take a discount. After going through all 3 of his mortgages, his first mortgage took a $7,500 discount and it closed in two weeks. At that time I was thrilled and naive to ask if this was the best he could do? I bought the 10 unit building and got $7,500 at closing. It was my first purchased property that I got money back at closing. Also, I bought the other 10 unit building next door as well for the same price. I built myself up to 116 units in 19 buildings over time. I sold all three 10 unit buildings to an investor who after we settled, gave me a split-level 6 room, 3 bedroom, 2 bath, 2.5 car garage in a Chicago suburb as part of his down payment. I then leased/optioned the house to a young couple who then exercised their option a year later and purchased it. At that time, my wife and I bought our own home. A 6 room, 3 bedroom, 1.5 bath house, that we completely remodeled after a few years, that just so happened to be next door to my in-laws. We added 2 more baths; a master bath and a ½ bath as well as an office in the full finished basement. We expanded our kitchen and eating area and added a great room. To add, we put in a fireplace and all new windows and doors in the house. We doubled and even tripled the value of

13 the house. The property was appraised and pulled out more tax free money after refinancing the property. I then purchased another 4 room, 1 bedroom, 1 bath, condo in a northwest suburb of Chicago. I fixed it up, rented it and held it for a couple of years to receive the income and then sold it later. I was approached by someone wanting my studio condo. I sold it after owning it for 10 years. Soon after, I bought a house that was in foreclosure which had 5 rooms, 2 bedrooms and 1 bath that was in pretty bad shape. I fixed everything up in a few months and put it on the market. Unfortunately, the market was very limited, but it finally sold after multiple showings. I purchased another house on credit cards. I went to the bank and got cash advances on 5 credit cards. I bought another 2 bedroom house, because I did not learn my lesson the first time. The house was located in a far south suburb of Chicago, because I figured everybody s money is green. I rehabbed the whole house, and leased/optioned the house, refinanced the property, paid off all my credit cards, and put some tax free money in my pocket. This time the couple did not exercise their option, and I sold it to a friend helping him out, by buying his first investment property for a deal.

14 Ninety percent of people quit EVERYTHING. If you refuse to quit, constantly try different approaches, and surround yourself with winners. 90% of your competition will quit from under you and you'll be in the top 10%. Guaranteed! Determination gives you the resolve to keep going in spite of the roadblocks that lay before you.

15 CHAPTER 4 Then It Happened God gave you a gift of 86,400 seconds today. Have you used one to say "thank you? October 1, 1999, hit me unexpectedly. I had a stroke at age 41. The day we were closing on our 15 unit building, I had a stroke. I was rushed to hospital at 5:00 a.m. in the morning. I could not walk or talk, but only shake my head. My wife and I were getting $50,000 down and carrying the mortgage with a 3 year balloon, for an investor. Being in a hospitable bed, receiving a $50,000 check, and not being able to sign the back of the check, was an awakening for me. Where else can you receive a $50,000 check, be in a hospitable bed, and make that kind of money that people do not make in a year? We received a payment of $7,000/ month, paid the first mortgage on our home, our house expenses and had over $1,000 left while I was still recovering. It is very important that you get to a place that your real estate can take care of you. This is why I want to help as many people as I possibly can to get involved in real estate. The passive income is the key. Imagine being told you would need a pacemaker and that you are on a hospital bed, in an operating room, and the nurses are prepping you for an

16 operation. The anesthesiologist gives you two of the five doses to put you out for the operation. The doctor called down and aborted the operation. Think about what goes through your mind. I thank God every single day for aborting the operation. Everything is done for a reason in your life, but little do we know what that is exactly until the time comes. I went from being in a wheelchair, to a walker, to leaving rehab and them wanting to give me a cane. Today, if I did not tell you my story, and you met me on the street, you would not even know this happened to me, because I look and talk, like a normal person. The investor after 3 years cashed us out when the balloon came due. We also sold the house in the south suburb of Chicago. I knew I was not any good to anyone while still being in a wheelchair. After the house was remodeled, we refinanced and pulled out cash tax free, since you do not pay taxes on borrowed money. I set up Carolyn and my three kids with different accounts, while additionally setting up a mutual fund to pay the mortgage every month. Just when I thought everything was going fine, the stock market took a turn for the worst. The tech bubble burst, dot bomb exploded and Carolyn tells me she wants a divorce. It was a word that was never brought up in our house. I could not believe it. I was getting better, and she hit me with this. She knew that it was going to take me a long time to get back on my feet. It was a tough decision to make, but I feel that it was the right decision for the children. It was the lowest point in my life.

17 I was married for 22 years, had three children and been through more than you would ever want to imagine. She wanted me to move into my parent s building, a 3 flat apartment building in a northwest suburb of Chicago. She wanted me to rent an apartment, which I never did in my life. I took my kids to school everyday and was there to pick them up, so there wasn t any way that I was going anywhere. I bought a condo a half block away from my family. It had 2 bedrooms, 1 bath, an enclosed brick garage and its own separate unfinished basement. I finished the basement, to prove to myself I could still do it. I had to get my mind off of what I did not want, to what I did want. I started to read more often to educate myself on life. You get what is inside and it reflects back what is on the outside. Whatever you think about and are thankful about, you bring about. I had to use those tools again that worked for me in the past. After finishing the basement and fixing up my condo, I refinanced it. I pulled out some tax free cash and bought a 2 flat in the southwest suburbs of Chicago with a partner. Someone who I helped get their first property helped me out by selling me a 2 flat. He bought it through a bank REO and had a lot of village violations. I got a partner, a fishing buddy for over 15 years, and fixed whatever violations that needed to be fixed. It didn t have a garage, so we put in a paved parking lot. I put about a third of the rehab money and my partner put in two thirds of the rehab money to fix it up. We sold it, and made over $10,000 a piece net on that project.

18 "We often take for granted the very things that most deserve our gratitude." Winners are those people who make a habit of doing the things losers are uncomfortable doing.

19 CHAPTER 5 Wrapping It Up "The best way to predict the future is to create it." As of today the real estate market is down, but again this will change. Accept it as it is. I have seen the real estate market escalate, but I never thought that the real estate market would depreciate this much. When something is in a downward trend, another investment must be in an upward trend. Although real estate right now is down, the investment trend that is increasing, and has been for a many years now, is gold and silver. The Federal Reserve, which is not Federal, and has no reserves can not be audited, and has never been audited since it inception in With inflation continually on the rise, you see it in gas prices and your food bill every time you go to the grocery store. The more they print the less the dollar buys. Why do they keep printing money? Because they (the government) think that it is the solution. They keep kicking the can down the road farther and farther, until they can t kick it any more. You must own assets. Like real estate, either to live in or have other people live in. You should own some physical bullion like gold or silver. Gold and silver will not go bankrupt on you like Enron, Goldman Sachs, AIG, etc.

20 IF YOU CAN T TOUCH IT, YOU DON T OWN IT! Assets have always been the difference between the rich and the poor. When Jesus was sold by Judas, he was given 30 pieces of silver, which was equivalent to a million dollars in today s society. Assets are a way to protect your wealth. The greatest transfer of wealth is right upon us. We are living in the best of times, and some people look at it as the worst of times on this planet. Have you noticed that time seems to pass by so fast. I am glad to be alive and watching this happens in front of me, instead of just letting it happen. There are those that make it happen, some that say What happened, and those that say What s happening. I think that the BEST is yet to come! Don't wait for the time to be right. Don't wait to get all your ducks in a row. When you see an opportunity to realize your dream, take swift and bold action! God can dream a bigger dream for you... far beyond anything you could ever imagine.