Who here has started from scratch?
Fort Worth, TX · Member since 2015 · 76 posts · 13 votes
Who here has started from scratch?
Most Popular Reply
Investor · Sherman Oaks, CA · Member since 2008 · 6k+ posts · 3k+ votes
10yI found my "REI teacher" by crying my eyes out in a bar...
Here is my personal story.
I was in a bar, and I just lost my job.I am 56 now, but at the time I was 25, fresh out of the US Marines.The year was 1984.Interest rates were high, over 10%.
At the bar was this smiling guy, and he said,
"Who just died?"
I looked at him.He must have smelled the self-pity on my face.
Here is what just happened to me.
I worked for a small firm in Constriction Engineering Products, Johnson Controls, that sold air and water control equipment to large apartment and commercial building contractors. My math and science background helped me.
But the "J O B" paid $400 a week and was an advance on future commissions. I had over $10K in commissions due to me, and asked my boss for my commissions to be paid now.He laughed, and said I would get paid when he got paid.
I got in an argument with him and he fired me.
So, back to the bar....
this guy at the bar said to me,
"Tough break.What are you gonna do now?"
"Look for work I guess," I replied.
So he says, "You like real estate?"You like solving problems for people?"
I was taken aback by that comment. Was this guy trying to hire me or what?
I smiled, and asked him, "are you looking hire someone?"
He chuckled, and said, "Well, I'm always looking for great salespeople that hustle."
Here's what happened. The man's name was Glenn, and he owned a real estate investment company.
He never called it a real estate investment company, he called " a place where we solve problems for people."
The thing that was amazing about Glenn as he knew a little bit about everything and I mean everything.
He knew about business, legal issues, tax issues, marketing, sales, promotion, networking, and most importantly he knew about people (psychology).
The first thing he did was tell me that I have two ears and one mouth, and I should listen more than I talk.
Second thing he did was have me read "How to Win Friends and Influence People" by Dale Carnegie.
Then he taught me how to set appointments with home sellers, go out to their home, and write up a "letter of intent to purchase or lease".
He said to me, "your job is to bring me potential home sellers who will consider a creative offer."
I was very confused the first few months working there. I did not know what a wraparound mortgage was, or a "subject to" was, or what "subordinating notes" was, or what a "lease option assignment" was..
So I stumbled along.
What allowed me succeed was Glenn had an awesome direct mail marketing machine, and even had an appointment setter just for me, so all I needed to do was just get in my car and go talk to 3 to 4 sellers everyday.
I'd use the same presentation with everyone.
And my goal would be to get them all signed onto a "letter of intent to buy for cash or on terms."
One of the things Glenn told me was
"some will, some won't, so what!"
What that means is that
some sellers will do what you want to them to do, and some will not.
The law of large numbers cures all problems.
What surprised me even more is that some sellers would call the office, in 3 to 6 to even 12 months later, because they appreciated my first meeting with them.
Especially some sellers that were very angry with me in the beginning, called me names, said things like "you just try to rip me off!!"
In my first six months I must have seen 20 people a week, 80 a people month, almost 500 people in that six months. I think we did three to eight houses a month grossing between $5-$10,000 per house, and I didn't make that money, Glenn the Owner did.
The arrangement for payment for me was I would make $500 net cash every week, that's cash. No benefits and no 401(k). Was it legal, I don't know. I didn't own the business. I was hired hand.
After a few months, Glen said
"you're do a good job keep it up. I'm going to give you a few more duties.I want to be able to travel so you can run the office while I'm gone."
I was scared at first, having never run a business. I liked the security of a paycheck.
But I loved being able to make decisions, being the captain of my own ship.
I think what made me more pissed off than anything though was making $500 a week, and making bank deposits of 10,000, 20,000, even 30,000 a week.
So after 2 1/5 years of making $500 a week cash, and living frugally, I said the following to Glenn,
"Glenn, I've "I learned so much here. You taught me about sellers, buyers, legal, tax, marketing, there is no way I could have learned this in school.
"I saved up some money and start my office. I wont compete with you. I'd like to give you four weeks notice."
Glenn leaned back in his swivel chair, smiled and said,
"Brian, you're almost irreplaceable here. You came to me knowing nothing and now you know everything you need to know. You never asked for a raise or a partnership stake in the business.
I can honestly say that without you over the last two and half years I would not have made the kind of money that I have. I have two things to say to you before you go onto greener pastures."
My God I was really nervous. What was Glenn going on to say?
"The first I want to ask you is, what took you so long?"
Then he laughed.
"I expected you to hang in there for about six months and move on.
You're really smart and you should have started your own business long ago."
"The second thing I want to tell you is I'm going to give you a bonus, (he takes out his checkbook, and writes this check out) "and I don't want you to look at it until you sit down to car and drive away, deal?"
I said, "deal!"
I got to my car, exhale, and take the check out of my pocket.
It was for $15,000.00.
Back in 1985 that was a lot of money.
In the memo I remember what was written,
"for my good friend Brian."
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With everything I learned over that 2 1/2 years, it didn't take me long to be a profitable new business.
I got a modest office space, with neighbors that were white-collar professionals, an attorney and a CPA.
I had a secretary-phone answerer part-time for 3 months, then full time.
And though Glenn even took I had left, he took me to lunch every week, said he missed me.
That first REI business was very special to me.
I have had several businesses since then, but that first one was my favorite.
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My wish for all that reads this is I hope you find your "Glenn" and you bust your tail working and reading. And learning. And implementing.
103 Replies
- Real Estate Broker · Chicago, IL · Member since 2013 · 6k+ posts · 5k+ votes10y
@Daria B. - When you sign up it uploads 90 days of transactions so you can categorize them and see where your money is going. Then we had set budgets on categories and tracked our spending for awhile. After about a year we really didn't need it anymore. But I do check it about once a quarter now.
Second City Real Estate4.821 Reviews @Jon Klaus the answer to that question could fill a book :) most of my 20's were spent trying to recover. It was a brain surgery that erased most of my cognitive and physical functions. I've been asked about what I was doing during 9/11, I honestly don't know and I didn't learn about what happen until many years later. My first goal was to walk and the neighbors had some horses that didn't have water, so I made it my mission to get them water. The nearest water was about 600 ft away and since I could barely function it took a lot of trips back and forth, through this i gained strength and taught myself how to walk. During this time the people that I was staying with stole what was left of my identity and ran up some credit card debt, so I was forced to move from their house. Long story short I moved in with my grandmother and started rebuilding my life. Many years later I became an overnight success ha. Not the end :)
thanks.
I am pretty good with budgeting and have my own spreadsheets for my bills, not many thank goodness. The mint site looks like a good site to still pull everything together and pay bills all in one.
- Investor · Chicago, IL · Member since 2013 · 451 posts · 96 votes10y
I started from scratch - I had to stop spending scratch up some extra cash on top of what I was making and purchase outright (no loan - no debt).
That passive income was divvied between next purchase and current credit rebuild.
Next purchase (outright no loan - no debt)
That passive income was divvied between taxes, current credit rebuild, additional funds towards next purchase, and so on, and so on...
My goal is a multi unit purchased through a loan that will pay for itself and leave me with a nice monthly income.
Wait what was the question? LOL :-)
Originally posted by @Ryan Dossey:
I started with -600.
I put 600 on a CC that I couldn't afford to pay off! That 600 went to marketing some Yellow Letters. I got my first 10k pay check from that mail 30 days later. Not saying it's super fiscally responsible but it worked for me!
Would love to hear more about this approach. Can you point me towards any areas on BP where I can find out more?
- 10yGino BarbaroPro MemberRental Property Investor · St Augustine, FL · Member since 2014 · 2k+ posts · 1k+ votes
@Steven McPherson@Jake Stenziano
Hi Steven
I think people who start with nothing but have a desire to learn the business are at a far greater advantage. As Richest Man says, A fool and his money are soon parted. It does not matter how much money you start with, if you don't have a plan, pick a niche, get coaching and or mentoring, all the money in the world is going to lead to zero results. Sometimes having no money is an advantage because you become laser focused on not making hasty or foolish decisions.
I went into a large deal with limited funds but had the experience and knowledge to leverage that into seeking a partner/mentor that saw the value in the deal and my business plan. Most of us who began with no money found a way to create value in the business and then continued with the momentum created with the small successes created from our first and second deals, making mistakes and learning and adapting our plans.
Good Luck
Gino
- Rental Property Investor · Milltown, NJ · Member since 2014 · 131 posts · 130 votes10y
Hi Steven,
The first thing I did ( and didn't realize I was doing it then) was find a mentor. Luckily my Uncle mentioned real estate at a Christmas party of ours and I was hooked. I bought my first property with him at 16 had my mom sign the mortgage docs to get started. ( I also borrowed all the money from my mom. I didn't make any money on that deal for years but it was the best thing that ever happen to me. So I guess the main purpose is be creative!
- 10yLinda WeygantPro MemberInvestor and CPA · Arvada, CO · Member since 2015 · 2k+ posts · 3k+ votes
This will be a stroll down memory lane. But nobody else's story is short and mine probably won't be either.
At 21, I was young and naive and looking for love in all the wrong places. In strolls this amazing man. A singer in a rock and roll band, hair like David Coverdale and pipes like David Lee Roth (hey - it was 1989... what can I say?) Soon we were living together and I was working my *** off to support his dream of "making it big".
Part way through that relationship, his grandparents died and left him $1000. Rather than send that money up his nose, which is what he wanted to do, I insisted on using that money to buy a house. We bought the crappiest house in town with bullet holes in the windows, a broken furnace and a decade worth of deferred maintenance. It was a HUD home, but it was ours.
In between auditions, gigs in crappy bars and band practice in our dilapidated garage, we worked to repair everything that had broken and hide everything we couldn't fix. While he continued to spend every dime he could find, I found ways to beg and borrow (not steal) money for repairs and upgrades until we finally had a house that was only slightly crappier than everything else on the block.
With the inevitable divorce several years later, I found myself massively in debt with an ex-husband refusing to honor any of it, but a house worth almost twice what we paid for it. In exchange for taking on ALL of the debt (and boy was there a crapton of it), I "got to" keep the house. Unfortunately, I couldn't afford all that debt, so I sold the house, paid off all the credit card debt and had about $6000 left over.
I took that $6000 and bought a condo to live in with my toddler son. We lived there about a year and a half until I moved in with my second husband. I kept that condo and rented it out for about 4 years. However, starting a new business and an extended period of unemployment from my husband left us pretty far in debt. At this point, the condo was barely breaking even on a monthly basis, but the appreciation was pretty good. So I sold it, paid off all the debt and started over with $0.
My husband's unemployment extended further and he and I ended up about $80,000 in debt. We had our house and a bunch of debt, but we were able to keep afloat on my salary alone for a while, but only with some pretty severe budgeting.
A couple of years ago, we ended up divorcing as well. Fortunately, he was working again and doing pretty well. We weren't quite finished paying off all that $80,000 - still had about $10,000 in debt, but the house had appreciated quite nicely. He was able to refinance the house, payoff the remaining debt and payout my equity portion, which was about $32,000.I took that $32,000 and bought a HUD foreclosure. I remodeled it (with some credit lines like Home Depot and Lowe's), put it up as a rental and then refinanced it and got most of my money back out. Used that money to then buy a second property that was turnkey.
My current partner is as much of a believer in real estate as I am and between the two of us, we now own and self-manage 7 properties. My son who was a toddler in one of the above paragraphs now helps us with our 7th property while we're getting it fixed up, so it was kind of a long road. I started in massive debt twice, but was able to get out of it with the help of equity and some smart money management.
While I clearly make terrible decisions for who to marry, I make much better decisions with real estate.
- Real Estate Professional · Salt Lake City, UT · Member since 2010 · 609 posts · 163 votes10y
@Jay Hinrichs My son and I are talking about him getting his license and him starting to learn the business when he gets out of high school this year. I was thinking of making him go to at least 2 years of college to learn about accounting and things like that. I was curious of your opinion of that and what other training you would advise for an 18 year old. I would welcome any opinions.
- 10yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
@Gary Parker tried collage for 2 months did not like it and I could never do well at accounting.. I just hire that out... its important so I do spend money on it.
- Specialist · Huntsville, UT · Member since 2015 · 458 posts · 249 votes10y
I started with nothing. I did it by finding other people with a little money to invest, telling them I had the RE knowledge and would do the work if they put up the money as a joint venture. I also focused on tax deed land lots in my area for $5,000 or less (using my JV partner's money) and I did some Seller Finance deals. Then I tried wholesaling where I needed only an Earnest Money Deposit to get into the deal. All of this worked out well for me.
- Specialist · Daphne, AL · Member since 2014 · 114 posts · 18 votes10y
I've been looking for my "Glenn"! Where are you?
- Interior Designer/Real Estate Investor · Eugene, OR · Member since 2013 · 168 posts · 91 votes10y
Wow! It is great to hear all of these stories.
I was $250k in debt when I "started" in 2013. My debt has lowered... slightly. I work full time. Live and breathe RE education on my commute and look every day for deals. I was divorced in 2010 and left with an upside down mortgage I couldn't afford ( I took it on by choice), which I "house hack" by renting 2 of my 3 bedrooms out. Networking is KEY! That is something I do for my profession anyway and the two are tied to many of the same people - so I get a two-fer on my networking time. I never give up and have no desire to do anything but REI for my wealth building strategy.
Good Luck!
- Columbia, SC · Member since 2015 · 5 posts · 1 vote10y
@David Dey Your story is awesome and inspiring! I am looking to start my career with real estate and like you I don't have a lot to spend currently on the study materials. I had to move back to another state for different reasons. What would you suggest as research/learning material. BTW please anyone feel free to give any advise!
- Charlottesville, VA · Member since 2015 · 22 posts · 5 votes10y
Yes. I know most people have started there. There are discussions regarding what it takes to be successful. I believe there are many different avenues to investing, just because you don't have the typical funds don't mean you can't make it happen. I think creativity and tenacity is the key.
- Charlottesville, VA · Member since 2015 · 22 posts · 5 votes10y
@Danielle Sanders, you bring up a great point. It is the training. I believe you have to find the best way to learn this industry based on what you find important. Are you just looking for reliable information or for mentorship and a community. Unfortunately this is a investment in oneself. I and I'm sure many others have invested in traditional educations because we have been conditioned to think that way, and leave with high student loans, however if we choose to invest in ourselves in learning real estate investing, then people says its crazy to pay for a course.
My opinion is that its best to learn from real people that you can see and hear outside of a seminar setting than to read a book and go it alone.
- Investor · Brookline, MA · Member since 2012 · 20 posts · 4 votes10y
I started my business while I was working a traditional 9-5 that was completely unfulfilling but paid the bills. My first couple ideas failed, but the safety of my job allowed me to learn without worrying about starving. In the spirit of full disclosure, my wife was working also, making a strong salary with benefits. In retrospect, my financial situation starting out had no real bearing on the growth of my business. The key to the success that Ive been fortunate to realize was, without doubt, the three mentors/advisors/experts that I was able to learn from. For the record, 2 of those 3 mentors are people I came to know while I was trying to figure out how to get my foot in the door. I believe that if I didn't have the $80k I started with (primarily a HELOC) I would have found another way but that money helped me get taken seriously at the beginning.
- Charlottesville, VA · Member since 2015 · 22 posts · 5 votes10y
@Steven McPherson are more seasoned investors willing to work with newbie to find these undervalued properties?
- Round Rock, TX · Member since 2015 · 35 posts · 4 votes10y
you replied
"Hi James,
Start with awesome Marketing TX teachers. Get your sales license. Learn a listing presentation. Learn wrap around mortgages. Learn Sub2."
Thank you very much for your reply Brian. I appreciate the help.
Call me a dummy but how does one go about finding Marketing teachers and also where is a good place to start for your sales license? Especially if you wanted to be familiar with other markets such as the midwest where your money can go further?
- Investor · Thermopolis, WY · Member since 2012 · 4k+ posts · 4k+ votes10y
I will try to be brief.
Young dumb country boy, loved to read. Folks moved every few years. I fell in love with a girl in high school, folks moved again when I was a junior, I stayed and ended up living in my $75 car some of that time and off the kindness of good people who would give me work. Thought I would get rich started getting $3.50 an hour when my classmates were only making $2.00 an hour. After graduation I visited my folks in a boom town and got a job that day for $5.00 an hour. Left that for a $7.00 an hour job. My folks were borrowing money from me. Got another job, etc. ended up buying folks house that was about to be foreclosed on after they moved away. Sold house used money for junior college. Bought trailer house for take over payments, after I finished junior college I sold trailer and me and my wife moved to the university town where I bought a piece of land on contract for deed at 10% interest, a trailer house at 18% interest, and paid a guy to drill a well and put in septic. With 3 jobs I managed to get through college and start law school. Graduated from Law School but bad times hit, rented my trailer out and moved to Thermopolis and took a law job paying a third of what I earned in the oil fields 5 years before. Bought one of the 3 foreclosures on the block from the bank with payments less than rent. Had a guy asking for legal advice try to sell me his moms house for the amount of the federal tax lien on it. Also present was a real estate agent who was a contractor gone broke in the bust and starting over again with nothing. When the guy left I said I would love to buy it but have no money, he said same here, and his credit was shot. He had gone from business owner with 20 employees in the nicest house in town, to living in a trailer house and renting it. I said my credit is probably OK, and we decided to try to buy it together. Between the 2 of us we came up with about $1,200 and got a bank loan and bought it. He had some used carpet we put in it.
Eventually we sold it and bought more. Eventually the economy improved, he moved away and started another construction company. I bought him out of our real estate company for $300,000 three years ago. I am trying to buy him out of another company for about that same amount. We worked evenings and weekends fixing up junk properties, despite being more than a dozen years my senior he was tough as nails and could outwork guys half his age. I clearly learned more from him than he did from me.
This story is not complete without mentioning the girl I fell in love with in high school. While in college her parents forbid her from seeing me again. She climbed into my car and we drove away. She married me later and somehow I became the golden child later to her parents, but I think the grandchildren helped. She is not wild about my rentals and has opposed nearly every one I purchased, but we are over 30 doors and she does all the books as her degree is in business. You do not have to have money to get started. You need hard work, you need to save, you need to take some chances, you need the advice and even help of many kind people you meet along the way. You need to learn everything you can, some learning comes easy some comes at a cost. Do not forget however WHY you do it. I am already past the age that I planned to retire at. I could not retire on my rental income at this time, and any new purchases are more likely to benefit my children or grandchildren than myself, but I plan to keep growing. I would expect that the vast majority of folks out there could do what I did if they simply set goals and worked hard at them, most could probably do better. I got serious about real estate only 3 years ago. I dabbled for the last 20 years and it always made me money, but some of that was luck.
Bigger Pockets has played a large roll in my business. I found it as I was researching more information on real estate investing. I gained more knowledge on this site in three years than I did in my first 15 years of investing.
- Realtor · Killeen, TX · Member since 2012 · 19 posts · 5 votes10y
Originally posted by @Jerry W.:
I will try to be brief.
Young dumb country boy, loved to read. Folks moved every few years. I fell in love with a girl in high school, folks moved again when I was a junior, I stayed and ended up living in my $75 car some of that time and off the kindness of good people who would give me work. Thought I would get rich started getting $3.50 an hour when my classmates were only making $2.00 an hour. After graduation I visited my folks in a boom town and got a job that day for $5.00 an hour. Left that for a $7.00 an hour job. My folks were borrowing money from me. Got another job, etc. ended up buying folks house that was about to be foreclosed on after they moved away. Sold house used money for junior college. Bought trailer house for take over payments, after I finished junior college I sold trailer and me and my wife moved to the university town where I bought a piece of land on contract for deed at 10% interest, a trailer house at 18% interest, and paid a guy to drill a well and put in septic. With 3 jobs I managed to get through college and start law school. Graduated from Law School but bad times hit, rented my trailer out and moved to Thermopolis and took a law job paying a third of what I earned in the oil fields 5 years before. Bought one of the 3 foreclosures on the block from the bank with payments less than rent. Had a guy asking for legal advice try to sell me his moms house for the amount of the federal tax lien on it. Also present was a real estate agent who was a contractor gone broke in the bust and starting over again with nothing. When the guy left I said I would love to buy it but have no money, he said same here, and his credit was shot. He had gone from business owner with 20 employees in the nicest house in town, to living in a trailer house and renting it. I said my credit is probably OK, and we decided to try to buy it together. Between the 2 of us we came up with about $1,200 and got a bank loan and bought it. He had some used carpet we put in it.
Eventually we sold it and bought more. Eventually the economy improved, he moved away and started another construction company. I bought him out of our real estate company for $300,000 three years ago. I am trying to buy him out of another company for about that same amount. We worked evenings and weekends fixing up junk properties, despite being more than a dozen years my senior he was tough as nails and could outwork guys half his age. I clearly learned more from him than he did from me.
This story is not complete without mentioning the girl I fell in love with in high school. While in college her parents forbid her from seeing me again. She climbed into my car and we drove away. She married me later and somehow I became the golden child later to her parents, but I think the grandchildren helped. She is not wild about my rentals and has opposed nearly every one I purchased, but we are over 30 doors and she does all the books as her degree is in business. You do not have to have money to get started. You need hard work, you need to save, you need to take some chances, you need the advice and even help of many kind people you meet along the way. You need to learn everything you can, some learning comes easy some comes at a cost. Do not forget however WHY you do it. I am already past the age that I planned to retire at. I could not retire on my rental income at this time, and any new purchases are more likely to benefit my children or grandchildren than myself, but I plan to keep growing. I would expect that the vast majority of folks out there could do what I did if they simply set goals and worked hard at them, most could probably do better. I got serious about real estate only 3 years ago. I dabbled for the last 20 years and it always made me money, but some of that was luck.
Bigger Pockets has played a large roll in my business. I found it as I was researching more information on real estate investing. I gained more knowledge on this site in three years than I did in my first 15 years of investing.
That was a amazing story and appreciate you sharing it with us. I myself have been doing real estate for 3 years and now have decided to venture into acquiring rental properties for residual income for retirement. My husband is a jack of all trades and can pretty much do anything "flooring, sheetrock, painting, etc". I think we will also look into a few distress properties to sell for that reason. Your story was inspiring and really enjoyed reading it.
- Burbank, CA · Member since 2015 · 13 posts · 1 vote10y
Originally posted by @Loreal Amporful:
I am still fairly new, but I started out with about $500. I drove for dollars heavily and sent yellow letters and postcards to vacant homeowners and out of state absentee owners. I also was able to co wholesale with other wholesalers to get a little cash flow. If I could do it all over I would have like to started on a bigger marketing budget, but without it I wouldn't be the wholesaler I am today. :)
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