Buy Property Early

In between conducting classes on the fundamentals of engineering at Morgan State University, Carl White schools his students on the principles of real estate investing. The college professor says real estate is the cornerstone of wealth accumulation. “I know these students are going to earn good money,” says White. “They are young and they’ll be thinking about buying an expensive car or paying rent in an expensive neighborhood. I’m trying to drill into them not to waste their hard-earned money.”

Indeed, White practices what he teaches. In addition to a 401(k) account valued at $450,000 and a stock portfolio worth $50,000, he owns three homes in Baltimore and surrounding areas. One is his current residence, which has a market value of $400,000. He deposited $60,000 toward a split-level five-bedroom home that appraised at $200,000. Since 1996, it has doubled in market value. White’s son lives in a single-family home worth $135,000 that White owns. Another, purchased jointly by White and one of his students, who currently resides there, is valued at $105,000. He put down $6,000 to acquire it in early 2005. White has more than $300,000 in real estate equity in addition to 15 acres of land in Mississippi that he owns, which is worth $20,000.

The 50-year-old educator, who earned $120,000 last year, says while his career has brought him steady earnings, his commitment to Declaration of Financial Empowerment principle No. 1: to use homeownership to build wealth, has propelled his asset-building program.

White was just a sophomore at Howard University, where he obtained his bachelor’s and master’s degrees in engineering, when he purchased the apartment he was renting. His building became a co-op and renters were given first preference to own their units. The unit was valued at $100,000. “I asked my mother for $1,000 for the deposit and she gave me the money.”

In addition to building equity, White was able to take advantage of the tax breaks that come with owning property. He later sold his unit and made $10,000 profit.

White’s next real estate purchase taught him a valuable lesson: Find properties that an owner is desperate to sell. After moving to Ithaca, New York, in 1984 to pursue a doctorate at Cornell University, he decided to buy a three-bedroom cottage. The property appraised for $80,000, but White obtained it for $65,000 because the owner of the property was relocating to North Carolina to start a new job. “Whenever you relocate and you’re sitting on a house at another location that’s not occupied, you’re paying for housing in two places,” says White. “A lot of people in that situation are anxious to sell and will sell for below market value.” He later sold the house in 1987 for $90,000, netting a $25,000 profit.

White later moved to Baltimore in 1988 when he took a teaching position at Morgan State. Shortly afterward, he structured another profitable real estate deal, this time buying two brownstone townhouses that were next door to each other. He paid $30,000 to form a partnership with