the owner of the buildings. White agreed to complete the renovation of one of the buildings and find tenants for both in exchange for all rental profits from one building and a portion of the rental profits from the other. “Each building was worth $30,000 and the legal contract we signed said that I would manage the properties and guarantee the owners that I would pay $1,500 a month for 15 months. That way, they would recoup their money,” he explains.
White entered into the partnership in 1989. He sold the buildings four years later for $175,000. Three years after that deal, White found a detached home in Baltimore with a market value of $95,000. Instead of buying the home and making a sizable down payment, he opted for a year-long rent-to-own program. “I paid $500 [per month] for rent plus $200 extra for a year,” says White. “Then we took the extra funds that were built up over a year and used them for my closing costs.” That option gave White the opportunity to save some of his real estate profits.
In 1996, he sought larger living quarters for his wife and three children. With each property purchase, White is realizing his dream. He says, “If I did not teach, I would [pursue] real estate all the way with the goal of having $1 million in equity by the time I’m 55.”
White shares three important tips for building wealth through real estate:
Buy real estate as early in life as you possibly can. This way you can start building equity and assets early. White says many young people don’t understand the concept of owning property that will appreciate in value.
Know your options when purchasing real estate and take real estate courses to learn more about the process of buying property. White explains that there were times when he bought real estate by negotiating with the owners to arrange a payment plan for purchasing the property over a period of time or he would purchase through a rent-to-own program. “What that did was help me to save and plan my money, rather than depositing a large down payment,” he says.
Develop a network of clients. In White’s case, the students at Morgan State have been his clients. White is quick to point out that as a property owner you need to find good tenants and have a well-written contract that protects your position as a landlord.