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BlogArrowPersonal DevelopmentArrowHow I Went From Broke Poker Player at 25 to Millionaire at 31
Personal Development

How I Went From Broke Poker Player at 25 to Millionaire at 31

Gus Ross
Expertise:
7 Articles Written
real estate-investing

It’s a strange thing to think back at going broke and realize it was handedly my greatest lesson and an overarching asset in my life. At this time of this writing, I own 83 rental doors. I’ll begin by telling you how things went wrong, how I turned them right, and how I became a successful real estate investor.

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The Fall

I attended the University of Central Florida with a full academic scholarship, but lost that scholarship in year two, after taking a hiatus to day-trade stocks. My natural linear progression at the time ultimately led me to the online poker craze. At 23 years old with $100,000 spread across the internet, I was invincible. I was never going to work a regular job.

To poker fans, or to those who remember the movie “Rounders,” I was a “grinder.” A grinder is risk averse and generally waits for strong cards, relying on his opponents to make that assumption. My strategy was to be calculating and to play the endurance and position game to outlast my opponents.

But I never learned how to lose well. I was too competitive and immature to immediately compose myself when I lost. Poker players call it going on tilt when players become emotional and reckless. I couldn’t handle the tilt. I tried to make my losses back at higher-stakes tables. In hindsight, it was a terrible idea. It is the real estate equivalent of adding to an over-leveraged position with more bad debt.

The online poker world changed when payment processors froze player funds. My world changed as well, and in time my bankroll vanished. I distinctly remember sitting in my apartment in Orlando, Fla., wondering what I was going to do in life.

At 25 years old, and with $35 in my bank account, I had to watch what I was buying for dinner in fear of an overdraft fee. It was time to go back to college, get my degree, and get a job. First, though, I had to figure out how I was going to pay rent.

Related: The True “Get Rich Quick” Scheme: How Being Broke Allowed Me to Succeed in Real Estate

Learning Humility

work-grind

The same guy who had been buying bottles of liquor at the night club now had to fill ice for the bartender. Working as a telemarketer by day and restaurant barback by night, I went back to school with two jobs to pay the bills. This was a profound lesson in humility, and one I’ll never forget.

Over two months went by without a single day off. I can still recall the pain in my feet after a long shift and remember rubbing them in agony. If I had another chance at business, I needed to make it count. The chance finally arrived one day—day 70—when an old friend called and offered me what would become a life-changing opportunity.

Having to Hustle

My friend had built and owned a marketing company and had recently fired his manager. He needed someone to help with the day-to-day of his business. The past few years had humbled me.

I went back into grind mode and worked 70-hour weeks. My goal was to become irreplaceable. In the second month, I realized a way to tweak his business to increase profits and offered a suggestion that ultimately doubled his revenue.

I was later tasked with analyzing and negotiating most deals. Two more of my ideas were implemented over the next few years. His business was now thriving, and I was rewarded handsomely. From scooping ice and sweeping floors to managing operations at a thriving business, I went from borrowing to pay bills to investing disposable income. I was about to discover my new passion for real estate.

My First Real Estate Purchase

My first real estate deal was not far from what people call house hacking (at the time, I didn’t know the term). I bought a condo with cash on the intracoastal in Boynton Beach, Fla., for $95,000. Rent in Orlando was $1,000 per month, and I was collecting $950 in cash flow from the property.

In full disclosure, I bought the condo without knowing the potential of real estate investing. Now I know. I was able to save money and hoard cash at a pace I had never experienced. I was hooked.

From 1 to 83 Units

apartment-home-condo

After the intracoastal property showed me the power of cash flow in tangible terms, the mission became to scale. Eager to never feel broke again, I was running away from that fear and running toward cash-flowing properties. My wife and I purchased a home in Delray Beach, Fla., and I had already started looking at investment properties to purchase in the area for more cash flow: another condo, but this one with significantly lower HOA monthly dues.

So I bought a real-estate owned property (REO) from a bank for $85,500. This unit rented for $1,450 and would appraise around $200,000. These two units essentially paid the mortgage for our home, and I was already saving for the next investment. A bit tight on cash, I sought out a partner to split the purchase of a distressed six-unit building.

Related: How to Get Rich: 7 Awesome Ways to Build Wealth Today

Anyone who is familiar with Southeast Florida knows the stories of rampant abuse of rehabilitation facilities. I had lofty aspirations. I wanted to get a property that was near a terrific park next to the ocean and convert it into rental apartments.

We purchased the property for $355,000, spent $40,000 on rehab costs, and turned the building around. It has doubled in value and cash flows phenomenally. We self-manage the property and take immense pride for playing a role in gentrifying the area. Over a three-year period while operating the rentals, I went the Dave Ramsey route and paid off any debt possible.

At the time of this writing, I own the rentals outright with no debt. With the current structure in place, we decided to seek out larger mutlifamily properties. With minimal debt and significant equity (I had also been investing in the stock market and alternative investments) securing agency debt was a challenge and an excellent learning experience.

Freddie Mac took a fine-tooth comb through our lives, financial track records, and the deal on a 74-unit apartment complex in Memphis, Tenn., just outside of Germantown. It was an amazing experience operating at that level, and I now have bigger plans of expanding to other regions and larger deals. But I'm still a grinder. I don't want to go broke ever again.

Who I Am

I’m a husband and a father to a son with another baby boy on the way at the time of this writing. I have goals for the next three to five years to acquire 1,000 doors, and I will relentlessly pursue the goal to completion. Then I’ll pick a new number.

Constantly striving toward personal growth, I try to get through a book per week on business, investing, or self-development. I’m a true believer in building bridges and trying to add value wherever possible. But regardless of the financial success, I know I have a lot to learn and approach life in a humble fashion.

I still get dirty and do physical labor at properties to stay grounded. I’m still a grinder, worried to lose it all. People often consult me to analyze properties, and I am more than willing to help in any way possible. Anyone can feel free to reach out at any time for objective real estate or business advice and I look forward to sharing my thoughts with this community.

How has real estate investing changed your life?

Let me know with a comment!

By Gus Ross
Gus Ross is a managing member of Ownup Capital. An accredited investor with goals of expansion, Gus is always evolving strategies for acquisition and analysis of properties throughout the country. ...
Read more
Gus Ross is a managing member of Ownup Capital. An accredited investor with goals of expansion, Gus is always evolving strategies for acquisition and analysis of properties throughout the country. An avid reader and seeking to learn and grow everyday, he has ultimate goals of philanthropy, business, and personal growth. A visitor at local REIA meetings, he is always seeking to network and meet investors and align goals and interests. Ownup Capital
Read Less
102 Replies
    John Ferrughelli from Union, New Jersey
    Replied over 2 years ago
    I also agree, awesome story. Although some of the details have been glossed over, like how you went from 1 to 83 doors so quickly and the original condo was bought in cash for 95K and rents at 950 per month – you still haven’t made your money back on that original property because it would take over 8 years at 950 per month. Perhaps I’m getting too hung up on the numbers, but I’m fairly new at this so I am trying to figure out how the numbers work.

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    Derek Savage
    Replied over 2 years ago
    Great post great story… 31/yr old millwright by trade here finally realizing my cash flow is in the wrong direction… currently building equity so i can invest in my first rental property

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    Megan Hirlehey from Pittsburgh, Pennsylvania
    Replied over 2 years ago
    I love stories of people who “made it” starting with immense debt/nothing at all. I’m heavily in student loan (by my standards at least) and recently took the plunge into RE full-time, leaving my day job and therefore my W-2 income (and subsequently “easy” access to financing) so these stories give me hope and keep me focused to grind through and meet my goals too. Good luck!

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    Nima Mohajeri Investor from Santa Monica, California
    Replied over 2 years ago
    Hi Gus, really great post. I currently have two properties I rent out, one condo in CA that breaks even but I assume will appreciate over time, and a triplex in Tucson which is pure cash flow. I’m short on cash now though, but really want to get to the next level. Any recommendations besides saving? At the rate I’m able to save from my current job, it’ll take me a couple years to be able to buy anything else…and I’m sure you understand, I simply can’t want wait that long!!! Thanks in advance.

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    Alex Ramirez
    Replied over 2 years ago
    Thank you Gus for putting your story here, and for being an inspiration. I have many takeaways, but something practical I’d love to hear more about: What does your day to day life look in order to aim for reading one book a week? (Audio books at the gym, an hour reading every morning, etc.) I’d love to pick up any of your tips / hacks, because this would be a very worthwhile habit for many of us on BP!

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    Jesse Palmer from Georgetown, Kentucky
    Replied about 2 years ago
    Gus, Phenomenal story of hunger and drive. I love the goal of a book a week. Thanks for the inspiration from a new guy in the middle of his first deal!

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    Christopher L Hall Specialist from Yakima, WA
    Replied about 2 years ago
    Love the story Gus! I am a 41 year old looking for my first deal, reading anything I can find in the internet. Getting ready to hit my first REIA group meeting in my area. I have worked for someone else my whole life, and as a cook it is usally some guy who thinks his way is the only way, so I have made the decision in my life that working for others is not what I want. Love how you pointed out that “Rock Bottom” can be a good foundation to build success on. I hope that one day I can help someone out with their goal as you have with me. I WILL NOT GIVE UP ON MYSELF! If I could I would love to read that book you have offered to send people. with that thank you very much for sharing your story. Chris

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    David Wong Investor / Operation Manager from Seattle, Washington
    Replied about 2 years ago
    Love this! I’m currently in this grind and have somewhat of a similar story. Thank you for the motivation and I look forward to grinding and hopefully running into you to share stories! – David

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    Ezequiel Castellanos Rental Property Investor from Poughkeepsie, NY
    Replied about 1 year ago
    Inspiring story! I just recently graduated from college. I have school debt. Would you recommend, paying off the school loans first? or house hack and use that money to pay off my student loans?

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    Tim West
    Replied about 1 year ago
    This is why I don't read bigger pockets anymore. T

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    Tim West
    Replied about 1 year ago
    This is why I do not read bigger pockets anymore! Great story, but left out a lot of details such as the how he did it. It is not different that stating I got rich by buying low and selling high and you can too!

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    Cedrick Gabriel
    Replied about 1 year ago
    Thank you so much Gus for inspiration and motivation, these stories let people know that anything is possible as long as you effort into it m, appreciate you.

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