When I was newly married for the second time (and young and naive, I might add), I took a calculated risk that almost backfired on me big time. It was 1986 and Rich and I were expecting our first baby. We were also wanting to purchase a home for our "starter family." I had saved $3,000. but we needed quite a bit more than that for any kind of a down payment.
My friend and co-worker, Steve D., told me about a quick-turnaround deal that he had just invested in. Steve grew up in Japan, and the guy whose company he was investing in was a friend from high school. He assured me it was legal. In fact, they had a whole circle of friends from Japan who had already invested and profited in round one. This was round two of the deal, and my $3,000. could triple in three months if I decided to take the risk.
I weighed my options and decided that if I really wanted to be moved into our own home by the time our baby was born, my only hope was to invest in this deal. I knew that Steve wasn't a rash person, and in fact he was one of the investors who had already profited in round one. If he trusted his friend, then I could trust him too.
Well, three months rolled around and there was no word on the money. Steve started inquiring with his friends, and found out that things may have gone south on the deal. Nobody had gotten any money yet. I was getting anxious and asked Steve for his friend's number so I could call him directly. I called the guy daily. Sometimes I'd get an answer, sometimes not. I chatted him up, explained my goals and what I planned to do with the money. He promised me that he'd at least give me my initial investment back, but kept putting me off as to when that would happen. I was starting to lose hope of ever seeing that $3,000. again, and Steve was feeling guilty for getting me in on this fiasco.
Finally, one afternoon the guy called me at Contel where I was working and arranged to meet me there in the parking lot. I remember taking a co-worker with me, because at this point I wasn't sure what to expect. The Japanese mafia, perhaps? Well, not only did he show up, but he gave me $9,000.--my original investment plus the profit I had hoped for from the beginning! I could hardly believe my luck. Steve couldn't either!
Rich and I went house shopping and ended up buying a small 2-bedroom, 1-bath home in North Long Beach. It cost $94,000, so we added an additional $400. to my investment money and we had 10% down. We bought the house in November 1986 and our daughter Michelle was born two months later in January 1987. We lived in that little house for just two years, but it was the perfect "starter home."
To this day, I don't know why I was so lucky. I'll chalk it up to good karma. Steve told me that nobody else he knew got their money back on round two of that deal--I was the only one. The investor friend disappeared into the woodwork shortly afterwards. Knowing what I do now, would I invest in a similar deal ever again? Not on your life!
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