3. First Boners

From that day, I had one main purpose in my business life. I wanted to acquire enough property to give me the income and lazy life. That was my goal. There were a few more digressions into other fields of endeavor but these were tried mainly because I could at the moment find no available means to further my main purpose—the completion of my real estate portfolio.

The very nature of real estate owned for income and pyra­miding is that:

As Each Day Passed, You Make Money

You do not have to DO anything to create the income. It just happens by itself. Not that I am implying for a moment that it is entirely work-free. It isn't, of course. But it goes on making money for you, day in, day out, month by month, year by year, by itself. In that respect it's just like having blue-chip stocks. Of course, in stock investments, the income is being earned daily without your slightest attention. But it's rarely over five or six per cent. That means you've got to have some $200,000 to make $200 a week at five per cent. Stocks involve another factor. All of your dividends are fully taxable. That makes your chances of multiplying and pyramiding practically impossible. Not so in real estate investments. We shall learn in a later chapter the amazing and unique tax advantages that real estate owners and operators enjoy. These special tax exemp­tions and benefits, combined with the other advantages, are what make it possible to make your million here as in no other field.

I resolved that I would keep an eagle-eye open for more in­vestments and try to build up a down-payment from the income of the buildings I had.
One day I phoned Mr. W. and asked him what else he had for property in Brookline. Well, there was the 18-apartment building on Pond Avenue. How much? Oh, about $9,000. I hurried over to look at the building. In retrospect, I fear that I had sold myself even before I saw it. You see, I was looking at the building through the eyes of a man who wanted very badly to own a lot of real estate. It was that anxiety that be­clouded my judgment. What's more, I had never been burnt. Everything I'd bought was making money, some more and others less. But all were doing well. After a cursory examina­tion of the building, and a hasty reckoning of the potential in­come with the projected rent raises that I would make, the in­vestment looked like a gold mine. In a matter of hours I had made an appointment with Mr. W. and had settled on a price of $8,500 with 10 per cent down. The balance was a very easy mortgage plan and I was aglow.

Now I was really on my way. But just what I was on my way to, I did not yet know. I had a delightful orgy of figuring. Life looked good. My heart sang, "Dear old million of mine, here I come."

No sooner had I gobbled up Pond Avenue than I ran into a woman who was treasurer of the local Cooperative bank. Did they have any reasonable property of this kind? Yes, the one on Brook Street. I hurried to Brook Street and saw a brick 3-decker that seemed a steal at $4,250, and the terms were terrific. Just $250 down and the rest on mortgage. A few minutes with the pencil and I could hardly wait to close the deal. Now came my first and biggest spanking. I hope that here you will take my bitter lesson to heart and avoid this mistake as you would the plague. It is my biggest single "don't." If you will only learn the lesson here, rather than by making the mistake I did, you will have absorbed the most basic and inviolable truth in Real Estate.

Let me say it in still another way for emphasis. The factor that I overlooked in my enthusiasm is easily far and away the most important single factor determining the price, value, de­sirability, profit, headache—and just about every other thing that counts in the choosing and holding of a piece of real estate. This applies to every piece of real estate. It includes everything from a little 3-room hut to the biggest development tract in the country. It is impossible to over-emphasize the importance of this most vital factor.

It is LOCATION.

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