• Home

The Rose…

The rose is a beautiful creation. Full of fragrance and beauty, given with love to those we love. I had the chance to meet a dear man whose impeccable reputation as a RE Investor impressed me. He was 65+/- years old at the time of our acquaintance. He had worked RE his whole life and had acquired a small empire. This was a man I needed to meet!

After phone pleasantries, I pushed for a meeting at his office. He obliged. My first impression after arriving at his office: How could a man of plenty work in such quaint quarters (Small strip center S. Lamar, needed paint, to say the least). No receptionist either…just a bell to ring. Before I could ring, a small stature. crusty natured older man called out from the back corner….”Are you Otto? Come have a seat, I have a present for you”. In his hand was a red rose. With many of my predispositions now faded, I awkwardly accepted.

Little did I know that class was about to begin…a class that I would not pay much attention to…a class that was priceless, far beyond my lofty UT degree. “So Otto, you want to be in the RE business, good. Can you tell me why I gave you a rose this morning?” No sir, I can’t. He proceeded, “The rose is beautiful to the eye, full of fragrance, seductive to the dreamer”.

Then he did something very strange…he asked me to hold the rose with both hands as he commenced to squeeze my hands very tightly with his. He said, “What do you think of the rose now, Otto?” As he squeezed more, my reply came, “The thorns really hurt”. Class dismissed.

Eight years later, (1987) while on my honeymoon with my new bride, my business partner packed up and left town with all the money, graciously leaving me all the property and debt. Real Estate values were falling fast and about to free fall till 1991. I owed +/- $1,000,000.00 on assets worth $600,000.00. (Did I mention values were still falling?)

It proved to be a turning point in my investment life. It was in that darkest hour and I finally grasped the depth of my mentors wisdom:

“Otto, I meet guys everyday who have fallen in love with the fragrance and beauty of the Rose, but scarcely few understand the pain of the thorns”

A few lessons learned….the hard way:

• Debt is debt until you pay it off with after tax dollars
• Real Estate Values go up in the long run,and go down from time to time.
• From time to time the majority of RE Investors go out of business!
• Staying power means healthy cash reserves in relation to debt.
• Patience Pays
• Facts not Feelings
• Wisdom and Experience are priceless.

I will be forever grateful for my graduate course in RE that day, even though I miserably failed the class. To think about what I could have gleaned in wisdom that day still haunts my soul. Can a woman fully understand the pains of childbirth prior to her first child? Probably not. Can a teenagers fully understand the depth of love their parents have for them? Probably not. Can a RE Investor who has never gone through a pronounced downturn understand the penetration of brittle biting thorns? Well, I couldn’t.

My mentor: Joe Perrone, a great man who did his best one day to prepare me for RE investing…and life. May you rest in peace my good man.

---

Did you enjoy this post? Why not leave a comment below and continue the conversation, or subscribe to my feed and get articles like this delivered automatically each day to your feed reader.