Creative Financing

I visited Chris and Seth. They were partners of Advanced Building Solutions, a premier real estate development company with more than $100 million worth of properties under development. Although I’d never met Chris prior to my release from prison, my friend Lee could introduce me. Without a doubt, Chris and Seth were the type of people I had in mind when I thought about avatars. If leaders like Chris and Seth were going to believe in me, they would want to see a record showing that I was different from the foolish young man who began selling drugs when he was 20. I always believed that my adjustment through prison would have a direct influence on my ability to overcome challenges upon release.

When I met with the Chris and Seth, I showed them the record I’d worked hard to build. I was a published author, I had academic credentials, and I could show that I’d been married for ten years. Further, I had support from Lee, and he vouched for me. Any business person in the San Francisco Bay area had enormous respect for Lee.

Since Lee vouched for me, Chris and Seth found it easier to believe in me.

We spoke about a new real estate project they were developing in Petaluma, a quaint city about 40 miles north of San Francisco. Although Chris and Seth hadn’t broken ground on the properties when I met with them, they told me that when they finished the development, each house in the development would list for about $400,000. I wanted to buy one of those houses for Carole and me. Yet since we didn’t have the financial wherewithal to step up to the plate, I needed their help.

Although an initial assessment of our credit score would suggest that we weren’t credit worthy at the time, I asked Chris and Seth to consider us for the growth we would make in the years to come. Besides not qualifying for a mortgage, we couldn’t afford to set aside 20% of the purchase price as a down payment on the property. Despite those weaknesses, I persuaded the developers that we would be a good credit risk for them if they would agree to finance us on a purchase.

To make my case, I encouraged them to consider what we had accomplished under difficult circumstances. Then I showed the plans we had made to grow. If they would extend us financing for a few years, a lot would change that would allow us to qualify for a traditional mortgage. For example, Carole would graduate and increase her earning power. I would finish with my obligation to the Bureau of Prisons and be able to apply for credit. And the business I intended to develop would provide me with more earnings. Despite the perceived weakness of our credit score in the fall of 2012, I made a persuasive case that we would be stronger financially in years to come and qualify for a mortgage.

We came to an agreement

The developers agreed to finance us on the purchase of our first house. Since a real estate agent wouldn’t be involved and they wouldn’t have to pay a commission, they even agreed to drop $10,000 off of the purchase price. We bought our property for $390,000 in the fall of 2012. As a consequence of the developers’ trust, they only required us to write a check for $12,000. Since the Bureau of Prisons wouldn’t authorize me to purchase anything on credit, we initially put the house in Carole’s name. Both of us felt pleased that before I concluded my obligation to the Bureau of Prisons, we’d planted our stake in the ground. We were homeowners.

Masterminds have frequently said “The harder I work, the luckier I become.”

Without a doubt, Carole and I were fortunate. Support from people like Chris and Seth, or Lee, allowed us to purchase our first piece of real estate in the fall of 2012. By signing that agreement, we controlled an appreciating asset in an appreciating market. As I’ll describe in chapters to follow, real estate values increased in the San Francisco Bay area in 2013, 2014, and 2015. When those values increased, our equity increased, bringing us more financial stability.

If we didn’t have support, we would not have been able to purchase that first piece of property. The salient point, however, is that we began sowing seeds for that support long before we purchased the property. Indeed, the decisions we began making decades earlier, before we ever thought about owning real estate, gave us the track record we needed. With that track record, we could persuade others to see us for what we would become.

If you’re inside of a jail, a prison, or in some other type of struggle, I urge you to recognize the importance of each decision you make. The decisions you’re making today will influence the opportunities that open for you in the future. Consider this lesson with every decision that you make, including the friends you choose, the activities you pursue, and the books you read. Every decision comes with opportunity costs. So choose wisely.

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