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
- Burbank, CA · Member since 2015 · 13 posts · 1 vote10y
Do you mind explaining wholesaling and what the post cards are for?
- Investor · Dartmouth, Nova Scotia · Member since 2015 · 4 posts · 3 votes10y
I love reading some of these stories which inspire me and also inspired me to share my own.
My wife and I had no thoughts of buying real estate, but because we are frugal by nature and always wanted freedom to travel beyond anything else, we borrowed our downpayment for a house from our parents and then paid off both the mortgage and the loan on the house we bought in Canada in 4 years, 5 months and 4 days.
HOW - We leveraged my wife's gov't job and having children by moving to a new province every time we had another child and she went on mat leave. Then we would rent out the house, me find a job and working my *** off (60-70 hour weeks avg) in the new province, live on this salary and use my wife's maternity salary to pay down the house. Then once the mat leave was over we would move back to the home province, she would go back to work and I would stay home on employment benefits raising our kids. So if you can stomach moving every year for 6 years while having 3 kids and one of you has a good job with maternity benefits of up to a year or some months anyway, you can have only one of you work but earn two incomes AND have kids. Disclaimer - we didn't plan this system, it just worked out with job prospects in the different markets we tried that it was always better to go back and stick with her job with benefits once the mat leaves were over.
WHAT NEXT - a month after paying off the house my wife was reading a Kiyosaki book on how to get rich. It said buy apartment buildings. We got up off the sofa, walked to the computer and googled apartment buildings in the province we wanted to live in. The first one (24 units) to come up I got on a plane and saw 4 days later - we moved really fast as I thought the things on the papers the realtor sent were promising and it had already been under contract 3 times in 4 months. After looking at all 24 units I knew the only reason half were renting for 100-200 $ per unit less than the others was because the owner lived in the building and let rents slide with long term tenants who didn't complain. I only thought I could get another 2000 $ per month net income out of the building - I didn't know then what that would mean in terms of equity creation.
NOW - I write this from the gorgeous sunny south of France between mountains and the Med, we moved here two months ago and are retired ages 39 and 41. Our 3 kids attend French schools and two weeks ago we went on vacation to Sardinia in Italy. Real estate set us free.
ANYBODY can do this. It just takes the discipline and work necessary to gather that capital however you do it - and then PULL THE TRIGGER!!!
Sorry for the long post - and God bless everyone trying to change their lives with their own hearts and brains and guts.
- Investor · Dartmouth, Nova Scotia · Member since 2015 · 4 posts · 3 votes10y
I forgot to mention that the $$$ for the 24 unit apt bldg came from refinancing the house we had just paid off to the hilt - we took that 180K and put it down on the table and stuck to our guns. It was life on the edge, having worked so hard to pay that house off and then risking it all on one shot.
Which is another valuable lesson - banks don't care if you misjudge price on a house because YOU are the guaranty and they are mostly judging you and your income. They care a lot however if you misjudge price on a large apt bldg or commercial bldg because you aren't going to be able to keep it afloat if you got it wrong. Never underestimate the value of a second unbiased set of eyes that wants to make sure they get their money back!!! Especially after the mega crash in the US.
- 10yPeter MckernanBusiness MemberResidential Real Estate Agent · Irvine, CA · Member since 2013 · 2k+ posts · 1k+ votes
I started two years ago with a downpayment and a partner, it has been slow, especially with the changing market in my area; however, we did have savings with no money placed towards marketing.
I believe real estate is about calculated risk that is reduced by increased equity. With the ability to have more equity in on the property/properties it reduces the risk, but still gives you the advantage to make more deals happen without depleting all your capital.
I would network, and market well. Once you get out there and people see that you have work ethic you will be able to partner with someone on a deal, or multiple people, which will reduce your portion of the investment. Eventually you will not have to partner with anyone because the cash flow, savings, and capital you have from all the other deals.
The McKernan Group4.958 Reviews - Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes10y
Originally posted by @Steven McPherson:
Just a question for other BP members: who all on this board have started their RE business from nothing? That means you had no money and no personal savings to put in to marketing, down payments, etc.
Follow-up question. If you were in this situation, how did you specifically start out?
That would be me.
Answer: OPM :)
- Realtor · Decatur, GA · Member since 2015 · 74 posts · 18 votes10y
Originally posted by @Tabitha K.:
Do you mind explaining wholesaling and what the post cards are for?
This article will explain everything about wholesaling https://www.biggerpockets.com/renewsblog/2015/01/3...
I send post cards to people who have bought properties for 100% equity in the past year. These were cash transactions. I am trying to qualify them as buyers to add them to my list.
- 10yKim HandelmanPro MemberReal Estate Agent · Guilford, CT · Member since 2014 · 193 posts · 88 votes
I started with a $1000 which relatively speaking is no money. I am still working at it. I began last fall and i bought business cards ($9.99 on Vistaprint) and then designed a big ugly postcard (yellow "We Buy Houses") and bought a list of absentee owners in my home town ($66) went back to vista print and sent out a mailing to 376 people ($189) got no responses sent it out again and got one call. Nurtured that relationship for 8 months - yes 8 month later I wholesaled that deal for $15,000. I now have the seed money I need to properly promote my business. So if anyone says it can't be done on a shoestring, they're wrong. THERE'S ALWAYS A WAY!
- Professional Auctioneer · Baltimore, MD · Member since 2015 · 1k+ posts · 1k+ votes10y
Over 40 years ago I started because of fear of poverty. I fear no more.
Take it one day at a time, look at three properties per day, keep a journal keep a list of the cost per square foot for every property looked at, make comparisons.
Read everything you can about real estate investing, find a local mentor.
Charles
- Cape Town, Western Cape · Member since 2015 · 61 posts · 13 votes10y
This is incredible, I really loved your story and how motivational it was!
- Full time on acheiving my goals! · Dallas, TX · Member since 2015 · 17 posts · 1 vote10y
WOW, it is a blessing to read all of your stories! As Napoleon Hill said, everything starts with a BURNING DESIRE, ACTION and DETERMINATION. Then what we need comes to us. I could recognize those elements is each story you shared. Thank you everyone for sharing, and thank you Steven McPherson for asking this question!
- Investor · Sherman Oaks, CA · Member since 2008 · 6k+ posts · 3k+ votes10y
Originally posted by @James Lindsey:
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?
Hi James,
Learning TX REI is a great start. Look local for training in TX RE Legislation. Get your real estate license. See
http://www.trec.state.tx.us/licenses/salesapp.asp
Texas laws
http://www.trec.state.tx.us/formslawscontracts/def...
Why do you need a license in TX? You live there. People respect you more with the license. You can buy on your account with the license (act as a principal). There are states that reciprocate licenses.
See
http://www.trec.state.tx.us/licenses/OutOfStateLic...
You can look at listed houses with the license. Attorneys (divorce, bankruptcy, probate) will respect you more with the license.
Marketing Teachers on BP
These men have the best track record of guiding you in your marketing for motivated sellers.
The very best adivice I can give you is this:
1. Don't be a one trick pony, be a transaction engineer.
2. Learn Sub2, Wraps, Lease Options, Lease Purchase, Wholesaling, Joint Ventures, and Private Lending, along with classic listing presentations for sellers and buyer presentations for buyers.
3. Hang around people that are doing many deals.
4. Get your mind right.
"If you believe you CAN or If you believe you CAN'T, you are right, and that will be your future.
- The best gift I can give you is this.
Best of luck to you,
Brian
- Real Estate Agent · Weatherford, TX · Member since 2011 · 726 posts · 284 votes10y
I started from scratch right here on BP. Found this site when reading @J Scott's blog 123flip.com from top to bottom. I connected with @Jerry Puckett almost by accident. I had been lurking for awhile. I read something he wrote somewhere here about playing music, and I had read about mail marketing from different sources. One day I gathered up the nerve and offered to trade out some sound/recording work for some mail. I had never talked with him before. That conversation didn't get me any free mail, but it did turn into a relationship that still "pays me" today.
I went to a BP meetup, met Jerry in person, as well as @John Chapman, @Greg B., and probably a few others. Jerry said he was impressed with my ability to talk to people I didn't know, and offered me a "job" taking calls from someone's mail campaign. 2 years later that turned into a full time job with @Jon Klaus. Which now, a year later has morphed into me being licensed here in TX. Working to build my own business. And still doing some mail campaign work on the side.
- Investor · Sherman Oaks, CA · Member since 2008 · 6k+ posts · 3k+ votes10y
Originally posted by @Warren Bright:
This is incredible, I really loved your story and how motivational it was!
Thank you Warren, very much,
Brian
- Levittown, PA · Member since 2015 · 3 posts · 0 votes10y
Sorry it is actually free for every thing to be an affiliate is free but I actually pay for thr the other things
- Real Estate Agent · Winter haven, FL · Member since 2011 · 572 posts · 336 votes10y
@Steven McPherson It is the most difficult thing to do, start with no money, no mentors, no credit, no parents with equity lines of credit. Absolutely nothing then through in being you and a minority in an environment that is mostly elder white men did not make things any easier. The one thing i got out of it all is to learn how to leverage you free tools and maximize them to the fullest. I use free websites builders to make a sight, Craigslist, backpage, oodle, postlets, twitter. all to market(back then Craigslist actually produced results). Bandit signs well people think I'm crazy every time I mention that i would steal people bandit signs clear them off with rubbing alcohol and simply write my own messages on it. It was not the most honest but to be honest if I didn't take them code enforcement eventually does. Then you have Vistaprint.com for business cards 250 cards for $10.00. for leads i would drive for dollars and sent letters for each individual property that I found with an out of state owner instead of spending $1,200 on a yellow letter campaign I would send about 10 at a time for $6-$10.
I am very Anti-Guru and I don't believe in all these courses and programs spending $2,500-$40,000 on coarse. We live in the age were information is free youtube and google taught me mix with taking action and learning through trial and error making an *** out of yourself is just apart of the journey don't be afraid to mess up.
- Investor · Chicago, IL · Member since 2015 · 40 posts · 24 votes10y
I agree with most of the post here. You need education, a relentless drive, and either some type of start up capital and/or a descent credit score. I started with 5K and a 670. I've been doing it part-time but have over 10 rental units that includes a mix of property types. I will be selling my first condo that I bought for 8K (only needed 3K) at closing and netting 50K (Was getting 850 rent, no mortgage) after putting in under 10K of work. Lots of hard knocks learning getting started but I never quit, even through the crash and losses. Started in 2015, only have a mortgage on one property, the one I live in, and plan to quit my 6 figure job in about 2 years, unless I fear missing the kids too much and stay longer (As an educator I have a direct touch on shaping the future and I enjoy working with students and teachers.)!
Don't spend too much on gurus, there is a lot to gain in old school books. Then just start! Somewhere!
- Investor · Philadelphia, PA · Member since 2015 · 101 posts · 28 votes10y
I had no money when I started, a bunch of credit card debt, and no idea what I was doing. I did have a job that paid 50k for two years so I was eligible for a bank loan. In 2011 I was rear ended twice and instead of having my car fixed I pocketed the money and had someone patch it up so I could at least close the hatch. At that point I had enough to put down 3.5% for an FHA loan so I bought a house for 180k in 2012. A year later I moved and rented it out and moved in with my fiancé and her parents and built a separate entrance to their house for privacy. That's sacrifice. I saved up for a year and bought our next house for 30k with cash and fixed it up myself. You can get started with little money but you must have a JOB. If you don't have one the bank will not give you a loan.
- Washington, DC · Member since 2015 · 12 posts · 2 votes10y
Another newbie for you! This will be my story too. I'm currently at the learning phase. Looking forward to sharing my first success with BP.
- Houston, TX · Member since 2015 · 98 posts · 24 votes10y
- Real Estate Agent · Richardson, TX · Member since 2014 · 511 posts · 161 votes10y
@Ned Carey Most people who have invested after 2008 have been able to make great profits but not too many of us have gone through the ups and downs like you did. In your opinion, what are good indicators of a recession or housing crisis approaching? Also, When you say "Know your market", what are the metrics you use to evaluate/study your market?
- Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes10y
@Account Closed Knowing your market happens on at least two levels.
- Knowing today's market, what buyers, tenants, other investors expect and what they are willing to pay for it.
- Knowing the future prospects of a market. Is there expected growth, is the area pro growth, is the population growing, etc.?
When I speak of knowing your market, I mean knowing what the expectations and prices are. Expectations are important. If buyers want granite, hardwood floors and expensive imported Italian tile, you can't expect to get away with composite counter tops and vinyl flooring.
Personally I would be much more concerned about the later if I was in a very small market or a far away market. This is what I think you were referring to when you said "Metrics" Here are some ideas, populations growth and forecast growth, Permits issued, new employers coming to the area, Rent vs price ratios, rent vs income ratios, Price vs income ratios, home affordability index.
So how do you predict the next significant downturn. Just pay attention. Warren Buffet said "When others get greedy, I get fearful, when others are fearful I get greedy. Humorist Dave Barry gave the best financial advice I have ever heard and it has been 100% accurate.
While Dave was referring to the stock market it was just as accurate for real estate. Warren and Dave's approaches I think are a lot more accurate that metrics than are often conflicting.
- Investor · Austin, TX · Member since 2015 · 222 posts · 58 votes10y
I made a post on BP marketplace looking for a JV partnership, since I have been abuilder for 10 years and I also study the market it made sense and it gave me s way of having "skin in the game"Anyway, the post said "looking for JV as I am showing 75k and higher in projected returns."
The next day I had 7 messages and 3 phone calls. Sunday, the day after we made an offer of 395k for a south Austin property. Monday the offer was accepted and I quit my job 3 weeks later. It has been 3 months and we have 4 properties with two more coming shortly!
Thank you Bigger Pockets!
- Phoenixville, PA · Member since 2017 · 7 posts · 0 votes9y
Originally posted by @David Dey:
Originally posted by @Brie Schmidt:
@David Dey - In my opinion it is all about the sacrifices. Do I want to retire at 35? Yes! Well then I can't be drinking non-fat soy mocha double shot with foam drinks that cost $5 a pop.
My husband was a little harder to convince. But as long as the budget isn't completely cutting you off from enjoying life and the things you like to do, then it is a small compromise to make.
There's a saying, "if you are willing to do for two years what most people aren't willing to do, you'll be able to do for the rest of your life what most people CAN'T do."
I love that quote....
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