BiggerPockets Real Estate Podcast

BiggerPockets Podcast 087: How to Thrive After The Collapse of a Real Estate Empire with Nathan Brooks

Expertise:
357 Articles Written
Show 87

Failure is no stranger in the real estate industry which is why we are excited to bring Nathan Brooks to The BiggerPockets Podcast today, an investor who knows firsthand that real estate can be tough!

Nathan is an investor (both flips and rentals) from Kansas who went through a very difficult period during the real estate crash, losing all his properties and filing bankruptcy due to a shady partner and jumping in too quickly.  Nathan has since emerged as a much stronger real estate investor and carries an incredible story with numerous lessons to share. Get ready to learn how failure can transform your life!

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Screen Shot 2014-06-04 at 6.20.56 PMSpecial thanks to today’s sponsors Pensco. Be sure to check them out at: Learn.Pensco.Com

Links from the Show:

In This Show We Cover:

  • How Nathan found his first business partner at lunchBiggerPockets-Podcast-Cover
  • Why Nathan bought two houses as a newbie – and lived to regret it
  • How to find partners through BiggerPockets
  • The opposite of paralysis by analysis
  • How Nathan ended up filing bankruptcy 
  • Nathan’s current (more conservative) investing strategy
  • Dealing with tenants in a $20k property
  • How to make a unit stand out among the competition
  • Dealing with “Cat Ladies” and “Hoarder Houses
  • How Nathan finds deals
  • Finding mentors and lenders on Craigslist?
  • How to find a real estate-minded attorney 
  • And so much more!

Books Mentioned in the Show

Tweetable Topics

Don’t go into business with someone you don’t know. It’s just stupid. (Tweet This!)

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The lessons I’ve learned have made me a better investor today. (Tweet This!)

There’s a deal for everyone, but this deal might not be for you. (Tweet This!)

The job of a Real Estate Investor is to solve problems. (Tweet This!)

Know the answers before asking the questions. (Tweet This!)

Connect with Nathan

Real strategies that work for real people seeking to build wealth through real estate investments. Co-hosted by Brandon Turner and David Greene, this podcast provides actionable advice from investors and other real estate professionals, who chat about failures, successes, motivations, and lessons learned.

    Elizabeth Blazina
    Replied about 5 years ago
    Hi Nathan, Josh and Brandon, I really enjoyed the ” good, bad, ugly” aspect of this podcast. Nathan , I was wondering if you could describe in more detail the way you structured the deal with the woman that you ended up rehabbing and then selling. It sounds like she was still owner while the rehab was taking place.. am I correct on this? I ask because I actually came across this and had considered a simuliar solution but really didn’t know how to put it together. Which leads me to my next question, when you are doing something entirely new ( as in structuring a deal in a way that has never been done) do you first consult other investors or have a lawyer that you run things by before offering it to the seller? And do you REALLY have a 4 hour work week? 🙂
    Nathan Brooks
    Replied about 5 years ago
    Hi Elizabeth, Thanks for taking time to reply here! You are correct, the homeowner did fund everything on the rehab for their house. We used a contract that we wrote up together, but I wouldn’t necessarily suggest always doing that. I have a lawyer that I used for contracts very often who is reasonable … and NO, I am not doing a 4 hour work week 🙂 Good luck!
    Elizabeth Blazina
    Replied about 5 years ago
    Hi Nathan, If you don’t mind,could you outline a few specifics on the way that deal was structured? For example, how did she fund the rehab? I thought you said she was owing more than it was worth and that she didn’t need to bring anything out of pocket? Did you have private money fund the rehab and then how did you recoup this is the house was underwater already? What was your exit on this one… a lease option? Thanks again…
    Elizabeth Blazina
    Replied about 5 years ago
    Hi Nathan, Josh and Brandon, I really enjoyed the ” good, bad, ugly” aspect of this podcast. Nathan , I was wondering if you could describe in more detail the way you structured the deal with the woman that you ended up rehabbing and then selling. It sounds like she was still owner while the rehab was taking place.. am I correct on this? I ask because I actually came across this and had considered a simuliar solution but really didn’t know how to put it together. Which leads me to my next question, when you are doing something entirely new ( as in structuring a deal in a way that has never been done) do you first consult other investors or have a lawyer that you run things by before offering it to the seller? And do you REALLY have a 4 hour work week? 🙂
    Tim Gordon
    Replied about 5 years ago
    Killer podcast! All it takes is one bigger pockets podcast to get me out of any slump I face being an investor, sometimes this can be a very lonely business. Having these to help us remember we aren’t alone, and that others face some problems way bigger than our own (sorry Nathan Brooks!). Great content, great motivation and pretty funny.
    Nathan Brooks
    Replied about 5 years ago
    Thanks Tim, Glad you enjoyed it and got something out of it… that was my hope in doing it!
    Mehran Kamari
    Replied about 5 years ago
    Great episode Nathan! Thanks for sharing your story. Now I don’t feel so bad about the minUte problems (in comparison) that I’m having with one of my first deals 🙂 Hope things keep going well for you now that you’re in Harmony!
    Nathan Brooks
    Replied about 5 years ago
    Mehran … Brotha! We always have some kind of problems right!? Well thanks for listening and responding … yep, we keep after it every day. To Harmony indeed!
    Gretchen
    Replied about 5 years ago
    Great show guys! I’m so glad Nathan went on and talked about the bad and the ugly, because while I love hearing all the great things about real estate investing, it’s maybe even more informative to hear about times when it goes badly. Nathan, I’m curious regarding the bankruptcy: was it personal or through your company? And you mentioned using a private money lender afterwards; is that how you got back on your feet in spite of bad credit? Love your comeback story, man.
    Barry Smith
    Replied about 5 years ago
    When Nathan explain what was in his blog, about the house that could kill you, and he recommended that the owner leave the structure immediately, that was great. However, is there a higher duty for the investor to tell the police, and/or tell code enforcement or the fire department or something that the house needs to be checked out because it is a major accident waiting to happen… with electrical in the SHOWER? I’m just curious what Nathan, and any other BP people think of reporting this dangerous house to some kind of authority to possibly help save their lives. Can you comment?
    Brant Richardson
    Replied about 5 years ago
    Woo hoo! Finally a Kansas City investor on the podcast. Loved it, great warning for the new investor. The electrical panel story reminds me of a shower I used in Panama. The instant hot water heater was in the shower with wires dangling, just caps on them. I was young and dumb enough to shower in it daily for a month.
    Brian Kraft
    Replied about 5 years ago
    Enjoyed the podcast! Where’s that Top 22 Real Estate Books that Brandon mentioned?
    Geoff Bishop Real Estate Agent from Tampa, FL
    Replied about 3 years ago
    Yeah. Where is that?
    Mike Watkins Wholesaler from Powder Springs, GA
    Replied almost 5 years ago
    And the self directed IRA site? I think it was pensco.com
    Burnell B. Renter from Manhattan, Kansas
    Replied almost 5 years ago
    Very awesome show really enjoyed the information that was communicated . Living in Kansas it’s hard to imagine being about to start in real estate in certain areas in our state but I’m learning it’s not a macro but micro thing.
    Jordan Thibodeau Rental Property Investor from San Jose, CA
    Replied almost 5 years ago
    Required listening. Excellent episode. Thanks for sharing Nathan. FYI For Newbs: When you contract our dry wall installation, make sure your monkey is approved by angies list. And whatever you do don’t criticize their work or pay them with mushy bananas.
    Deshan Kennedy Real Estate Agent from Fredericksburg, VA
    Replied over 4 years ago
    Nathan – Thank you for taking the time to share your experience with us. Its great to hear the good and bad experiences of real estate investing because we know that there will be ups and downs but not everyone is comfortable enough sharing their experiences with the public.
    Mario Mormile Investor/ Real Estate Agent from Burton, Ohio
    Replied over 4 years ago
    Nathan- Thank you for sharing. Going into business with others can definitely be a great way to do more deals and gain leverage in REI. But as you said, not going into business with people you don’t know is a great piece of advice. You’re resilient! Congrats on bouncing back and persevering! Sharing our downfalls is never easy and I give you props. Thanks again!
    Don Spafford Investor from Idaho Falls, ID
    Replied about 2 years ago
    I enjoyed this podcast. I visited his website and looks to have some great turnkey listings. Unfortunately it seems his BP profile is not longer available.
    Jim Goebel Real Estate Investor from Des Moines, IA
    Replied almost 2 years ago
    Redemption baby. Good stuff. Congrats getting back into it and learning from your mistakes. Had someone tell me once that ‘success is failure’ Was a little cryptic but as long as we are learning from our mistakes, and we introduce time component to things…. I believe this to be true.