Hustled by a friend and I blame MYSELF!

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Hustled by a friend and I blame MYSELF!

Travis Darden
Rental Property Investor · Indianapolis, IN · Member since 2015 · 46 posts · 16 votes

Allow me to reintroduce myself, my name is Travis and I'm a recovering procrastinator. Which, procrastination seems to be a disease I've been fighting forever. I live in Indianapolis, moved here from the Northern VA area (DMV) a little over a year ago. Reaching out for advice from you professionals out here in BP Land. A few months ago, I connected with an old colleague of mine that I trusted. He's been wholesaling successfully for about two years now (maybe more) and now has a coaching business. I KNOW the guy or thought I did and trusted that he could help me get started in the business. I've been reading and studying REI for about a year or so now (procrastination or paralysis by analysis). Anyway, to make a long story short, I connected with this former friend and he told me he could help me for a low cost of $2,500 ($500 discount) for his starter program. It looked good. He's in the business full time, making a living and has really overcome some challenges that were pretty admirable. I've heard Josh and Brandon say so many times NOT to pay for programs like this but I did it anyway, thinking I could trust a friend that is in the business. Going against what I've been learning on the BP Podcast and on this website, I sent this friend $2,500 via PayPal to get my business going. And boy do I regret that. It started off with a couple of calls from him, video calls and how to get yellow letters out there. He got me some leads in my area that got me quite a few phone calls and inquiries. What I didn't realize is that wholesaling is a JOB and I already have one of those that I work 50 hours a week. So I made some connections with potential sellers, lots of low ball haggling and some not so nice folks on the other end of the virtual line. It felt dirty. So I just stopped. My day job is already pretty demanding and on top of that, I'm married and father of four small children. My time is already limited. I do have a nice home that we were living in in NOVA and is now renting out. Own a nice home here in Indy too. Basically the mortgage is getting paid in NOVA and I'm clearing about $75 a month after I pay the mortgage on it, along with the home warranty I have on it just in case something breaks. I have a handyman back there that takes care of anything for me, luckily the house is only 10 years old. I have EXCELLENT tenants that has just renewed the lease for another year. I realize now what I really wanted to do was be an investor, not exactly a wholesaler... But I get that you kind of have to do both to get some properties under your belt. I'm regrouping now with plans to buy multi-families in Indianapolis as the housing prices are really good here in comparing to where we moved from. I have about $125K of equity in the house in NOVA and I was looking to use it to get started here in Indy. I have a realtor that's been sending me multi's but I'm quickly realizing that this is not her expertise... I've licked my wounds and ready to get back in the game. Any advice?

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Account Closed
Real Estate Agent · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
9y

it sounds like your friend did his part of the deal but you did not like being in the wholesale business. Any one of the leads could have easily made your money back

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  • Account Closed
    Real Estate Agent · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes
    9y

    it sounds like your friend did his part of the deal but you did not like being in the wholesale business. Any one of the leads could have easily made your money back

    16Reply
  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    9y

    S**t happens, $2500 will not make or break your life.

    My advice would be to sell the property in NOVA it is only going to be a series of problems and it is highly unlikely it will ever be cash flow positive long term. Sell before you lose money.

    Next find a realtor that is also a investor. Realtors sell homes to home buyers not investors.

    You must realise that investing is hard work and takes a lot of time when starting out. It can be done with a young family but you must be prepared to give up some family time. Nothing in life comes free. You must also be prepared going forward to take great risks, investing is high risk, and you must go in prepared to lose it all in a worse case scenario. If you are not comfortable with that you may want to wait a few years till your family is older. There is no reason to race through life and money is really not that important if you already are happy with what you have.

    Why do I give this advise as a investor.......because it is not for everyone and most beginners have no concept of the commitments required...most in fact never start. It is hard work, high risk and long hours if you want to do it right.

    6Reply
  • Travis Darden
    OP
    Rental Property Investor · Indianapolis, IN · Member since 2015 · 46 posts · 16 votes
    9y

    Steven Picker, you are right and I completely blame myself for not following through, the crazy thing is that I'm still getting a few calls from the leads I got from him.  I "feel" like he wasn't as straight forward with me but I have gotten over that.  I own it.  I still plan to work those leads and make my money back and then some.  Prioritizing the time has been my issue... 

    1Reply
  • Travis Darden
    OP
    Rental Property Investor · Indianapolis, IN · Member since 2015 · 46 posts · 16 votes
    9y

    Greg S, thanks for your advice sir, you are 100% correct S**t does happens and most of the time, we created it. I'm kicking myself b/c I didn't follow up as I self reflect. I'm 100% sure this business (REI) is for me. I work very hard as a GM for a major retailer and help make them a lot of $$$, growing the business about 5% a year on $20,000,000. I've been a successful GM over a decade. I'm 40 years old and have come to the conclusion that no matter how much I grow this company that I work for business, I'm not going to be able to control my schedule and destiny as the bar keeps getting higher and I'm getting paid the same and sometimes less (bonus), depending on what my monthly sales budget is... I have a good salary as well as my wife. I believe I can replace my salary in REI along with becoming an agent and my wife will keep her day job as she is climbing the corporate ladder. I'm a bit nervous about doing that but it has to be done as I want to have the flexibility to be able to be there for my kids when they need me. I'm going to keep working on my wife about the idea of selling the house in NOVA as you suggested. It is rented out now through next fall but I better plan to move (sell) on it as you said before we lose real dollars. Thanks again for your response! You guys are awesome!

    0Reply
  • Mark Holencik
    Investor · Coplay, PA · Member since 2015 · 404 posts · 315 votes
    9y

    $2,500 to get over procrastination is cheap. Plus all the calls you are getting the investment was a good one.

    2Reply
  • Patrick Desjardins
    Real Estate Investor · Amherst, VA · Member since 2015 · 386 posts · 400 votes
    9y

    It sounds like you're looking for something more passive. I'd look into one of 3 things if I were you:

    1- Buying turnkey properties, possibly in Indianapolis since you live there

    2- Become a private lender/hard money lender

    3- Become a note investor and focus on performing notes

    Those are all closer to passive and that seems to be what you're looking for.

    1Reply
  • Edward Rhoads
    Rental Property Investor · Indianapolis, IN · Member since 2016 · 200 posts · 87 votes
    9y

    To add what Patrick said, you could also go fix and flip.  Do 1 or 2 houses at a time for about 10 hours a week.  Go to INREIA and CIREIA meetings to network with wholesalers to buy the properties or use the yellow mailers to get them.  Then have the real estate agent do the work of selling them.

    1Reply
  • Lee Smith
    Residential Real Estate Broker · Indianapolis, IN · Member since 2009 · 477 posts · 304 votes
    9y

    @Travis Darden Anything that will make you money is going to require work...  A lot of guru's preach that wholesaling is a quick, "easy", way to make money... It's still work though... 

    Unfortunately, you need to ditch the Realtor friend who doesn't understand the business.. That's going to get you in even more trouble. Give @Patrick Desjardins suggestions a try. Maybe even partner up with an investor and be a passive investor.

    I work with investors who just want to sit back and collect payments, and I also work with guys who want to be in full control.. You need to figure out how you want to fit into that sliding scale. 

    Most of all you need to realize that you control your destiny, not someone else... I hope you didn't lose a friend over the perceived bad deal...  You may be able to use him for information down the road... At a minimum a second set of eyes and a second opinion when you are looking at a deal.. That will probably be worth MORE than $2500...

    1Reply
  • Travis Darden
    OP
    Rental Property Investor · Indianapolis, IN · Member since 2015 · 46 posts · 16 votes
    9y

    @Patrick Desjardins yes, you are correct, turnkey or close to turnkey is more my speed right now.  Houses in Indy are not that expensive and it seems to be a solid rental market.  That's what I'm currently looking for.  I don't know enough about private lending or note lending but plan to put my money to work b/c right now, it's not doing anything.  @Edward Rhoads I am going to attend a CIREIA. I recently signed up for an email letter and have the new meeting schedule.  Great suggestion.  Plus, my wife is a GC and runs a construction company here locally (more commercial though).  Flipping would be a natural fit for us.  She's more the builder and I'm more the sales person... @Lee Smith I'd love to connect with you if you have the time!  With you being local, I promise not to waste your time.  I'm very serious about getting going.  You all have given me great insight and I'm glad I reached out on Bigger Pockets! 

    0Reply
  • Jerry W.Pro Member
    Moderator
    Investor · Thermopolis, WY · Member since 2012 · 4k+ posts · 4k+ votes
    9y

    @Travis Darden, before you sell the place in NOVA I would run the numbers on it.  If you want to be a real estate investor/landlord why get rid of a great rental if it is making you money?  Now on the flip side if it has been your primary home for 2 out of the last 5 years you can sell and avoid capital gains taxes if the profits are under $500K for a married couple.  I work a full time job and currently own over 30 units.  Now 12 of those are managed by a management company as they are apartments and require a lot more attention than my houses.  If your other house is making you money you might just keep adding more properties.  You need to consider the number of outstanding loans you have, as that will affect your ability to grow your business as well.  Small multi units can add more doors with fewer loans.  You can eventually move into commercial and portfolio loans, but the rates are a bit higher and usually you get much shorter terms, so your payments are higher.

    2Reply
  • Dan D.
    Investor · Shakopee, MN · Member since 2014 · 219 posts · 88 votes
    9y

    If you aren't happy with the contact, and you knew him before, I'd call him and talk to him about where he over-sold you.  If he's a legit dude, he would probably want to make sure you were satisfied.  If he's just another guru, then good luck with that.

    But based on the fact you knew him before and he seemed legit, it would be worth having that conversation.

    From what he trained you on, however, it seems like he was living up to his side of the bargain.  Only you and him can discuss where there was a difference of understanding.

    1Reply
  • Travis Darden
    OP
    Rental Property Investor · Indianapolis, IN · Member since 2015 · 46 posts · 16 votes
    9y
    Jerry W. great advice. I'm afraid the rent is a bit on the higher side in the house we were living in but still own. However, the rents tend to be higher out in the DC/NOVA area and I very well could be looking at it all wrong... I'm definitely going to reassess to check if we should keep it or not. By not living there any longer, I'm going to need a solid property manager soon. I feel like I got lucky with the tenants I currently have. A realtor in the area found them for me and they pay early every month! I'm grateful for that.
    0Reply
  • Travis Darden
    OP
    Rental Property Investor · Indianapolis, IN · Member since 2015 · 46 posts · 16 votes
    9y
    Dan D. Yes, I plan to reach back out to him. I still believe he's a good guy. He gave me some good tools. I was expecting a little more about the how. He gave me the basics but I feel like I was lead step by step and needed to have the whole story upfront. That's what got me more than anything. I believe if I called him or emailed, he'd connect back. I want to buy houses for cash flow more than anything. I will wholesale where I can but the idea is to replace my income eventually with rental income. Thanks for your point of view!
    0Reply
  • Justin B.
    Investor · Gaithersburg, MD · Member since 2013 · 659 posts · 441 votes
    9y

    Travis,
    It doesn't sound like you got a bad deal or anything.  What you should stay away from is paying $500 for the weekend "seminar" that pitches the $5k seminar, that then pitches the $40k coaching program.  Paying $2,500 to get a friend to help you and generate the kind of results that he did is not like a lot of the stuff you hear on BP that people say stay away from.  People sometimes pay a lot more than $2,500 for lead generation.  The obvious point is that you paid for something you didn't know you didn't want to do.  Now you know wholesaling is not what you want to do.

    I am in a very similar situation.  I have small kids, a full-time job, and not a lot of time.  Therefore I set my goals to buy houses and properties that didn't require any large renovations up front.  I actually bought a few turnkey properties that are doing well and the rest required maybe $1k-$2k to get them ready (some less).  That strategy has worked well and taken me to 18 units.  After unit #5, I was spending 5-10 hours at most per property I bought once I got the hang of it and knew exactly what to do.

    Unfortunately, there is no secret sauce.  I put the word out that I wanted to buy property, I look online, and even used a realtor for a few.  It took 6 years to get to 18 units, but I'm here and probably will have 30+ before 2017 is over.  Hang in there and don't lose hope :).

    1Reply
  • Travis Darden
    OP
    Rental Property Investor · Indianapolis, IN · Member since 2015 · 46 posts · 16 votes
    9y
    Justin B. Thanks for your words of wisdom. I take 100% responsibility for my loss on my situation. I've just never put out money like that for "coaching" and it still feels weird but I'm getting over it. The approach you took is exactly what I'm doing now. I have one property here in the Indy area that I'm on the cusp of buying to get into the game. Securing financing right now and making an offer this week. Realizing the road of a thousand miles begins with one single step. Here's my step, keeping hope alive! Thanks again!
    2Reply
  • Drew Kessler
    Harpers Ferry, WV · Member since 2016 · 13 posts · 3 votes
    9y

    It's nice to say to continue to buy properties but that's not an easy feat.  Buying rentals to hold costs a considerable amount of capital and I have yet to find a way around that.  I still don't understand it, considering you have to put down 20-30% for a loan and then have 6 months of mortgage payments liquid per property.  

    0Reply
  • Travis Darden
    OP
    Rental Property Investor · Indianapolis, IN · Member since 2015 · 46 posts · 16 votes
    9y
    Drew Kessler I hear you. As I stated earlier in the post, I own a house in NOVA that has quite a bit of equity. I'm using the BRRR method. I guess without using the "rehab" part... Being a pro member, I'm sure you've heard Josh & Brandon talking about it. The class c properties in class b neighborhoods are very affordable around here in Indy; from what I can tell. I won't be offering more than 75% market value and will see who bites. That's the only way I can see myself sustaining the business I intend to grow. The answer is always no if I don't ask. That's what my career in sales have taught me...
    0Reply
  • Ian WalshBusiness Member
    Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
    9y

    Live and learn.  Take away from it what you did learn and move forward.  You are right in that it is a job.  It is a lot of work to get good at it.

    1Reply
  • Thomas Wever
    Rental Property Investor · Fort Lauderdale, FL · Member since 2016 · 13 posts · 4 votes
    9y

    Sounds like your friend put in some work to put you on the right track but probably pitched you a dream that it was going to be easy money. Seems like your idea of pulling that equity from the NOVA property to invest in Indy is a good way to get the ball rolling, keep us updated and good luck!

    1Reply
  • Christopher Winkler
    Specialist · Dallas, TX · Member since 2014 · 900 posts · 392 votes
    9y

    @Travis Darden It sounds like you got what you paid for, decent advice that worked. Sadly most do nothing with it. You need to start inside your head, reprogram your thinking with constant uplifting, motivating books and audio, turn off the boob tube, 86 sports, and other distractions, and listen to some BP podcasts as there are plenty of people making it part time. Yes it is work, and nothing is free or cheap, so make your decision and let us know how it goes. Good luck!

    1Reply
  • Travis Darden
    OP
    Rental Property Investor · Indianapolis, IN · Member since 2015 · 46 posts · 16 votes
    9y
    Thomas Wever You are right. I listen to BP Podcast faithfully and constantly educate myself thru reading. Gave up tv a long time ago. Time for action now. Thanks for your thoughts on the matter. The more I look at it, I def know enough to get started which hopefully my offer on a small multi will get accepted this week. Thanks again!
    1Reply
  • Travis Darden
    OP
    Rental Property Investor · Indianapolis, IN · Member since 2015 · 46 posts · 16 votes
    9y
    The equity in the NOVA house is close to being put to work. Will keep you all posted! Thanks!
    0Reply
  • Shawn AckermanPro Member
    Real Estate Entrepreneur · Mid West, East Coast · Member since 2015 · 3k+ posts · 1k+ votes
    9y

    @Travis Darden you just got a $2,500 education.  You should thank your friend for showing you the pitfalls early on and for under 10K.  Pick your self up and dust yourself off my friend.  Persist and you will win!

    0Reply
  • Andrew Jones
    Investor · Los Angeles, CA · Member since 2011 · 242 posts · 61 votes
    9y

    Your friend's program sounds like a good one.  It generated leads and was on the cheap side.

    Since you are still interested in RE, but not really another job look more into buy and hold investing and using a property management company.  Flipping, wholesaling, rehabbing, etc is a job.  The 50% rule is a good place to start with research.

    0Reply
  • William Lewis
    Investor · Jenkintown, PA · Member since 2016 · 32 posts · 23 votes
    9y

    @Travis Darden,

    Consider the $2,500 as your cost for the education that you got out of it. Take note of everything that worked and didn't work, then learn from both. Wholesaling may not be the best fit for you, but you'll know how to better work with a wholesaler on the next occasion.

    Here's a free lesson from my past: sell the property in Nova.  If there's any modification that can get immediate profits, do it.  You can reinvest the proceeds into a property in Indi. 

    Good luck.

    0Reply
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