Open Letter to Struggling Newbies: How I Landed My First Deal After a Cross-Country Move & Two Failed Jobs

by | BiggerPockets.com

As I sit and write this open letter to new investors, I am reminded of the struggles I faced. It was not long ago when I confronted a critical decision. I had to decide whether to throw caution to the wind and invest or continue down my current path. I would like write to you today about taking the leap of faith.

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My Backstory

Let me give you the backstory of why I am qualified to write this letter to you. I moved 2,500 miles away to start over. I did not need to start over; I was satisfied where I was, but I felt there was more. I had recently graduated from graduate school and worked for the family business, but my passion was elsewhere. My passion is property, not people, and our family business was built on helping people. The business is great for them, but I wanted to find a way I could help people while incorporating real estate.

To graduate with an MBA, I had to write a business plan. The plan needed to be a minimum of 60 pages along with financials. I took this assignment to heart. I always loved real estate but was never was inspired to follow my dream, so I wrote the plan solely about starting a real estate company. This is the first point I would like to make: Do not let your decisions in life be contingent upon others or money. As I planned and wrote, I became inspired. My wife and I would visit her cousin in Phoenix often, and during these visits, I would notice the growth the region was having. There was nothing similar to this in the Midwest. From that point on, I decided I wanted to be a part of that growth.

real-estate-investing-easy

Related: 6 Easy Ways to Be Taken Seriously As a Newbie Investor

Making the Jump

Since I’d written the business plan, I decided to actually take action on it. It’s funny how things happen—at this time, my wife and I decided that while our kids were young, we would move. Living in Chicagoland all our lives, we both wanted to venture out. We decided we wanted to be south of the Mason-Dixon line. We narrowed it down to three states—Florida, Texas, and Arizona, eventually deciding on Arizona. I could now work to execute my plan. Honestly, it was a joint decision between my wife and me; in fact, I was more scared than she was. After much prayer and deliberation, we decided to make our way.

The Struggle

I knew things were not going to be easy, but I had no idea what I was up against. My wife was positioned well, but I faced challenges at every turn. I’ve always had an entrepreneurial spirit, and coming from my family’s business Chicago, I’d never had to face someone telling me what time to come to work and what I could and could not do. At 36 years old, I was not about to start. I was a critical piece in building a million-dollar non-profit, and I knew I could build an amazing real estate business.

I did try and work for someone else first, but that did not go very well. I was an entrepreneur, and all my credentials and background showed that I either worked for myself or for family. So, you guessed it, finding a job was not easy, but I did land two opportunities.

First Opportunity

The first opportunity was a job working with the Arizona Department of Public Safety. My background was in human resources, and they needed an HR position filed. Although I hated human resources, I had performed this job for my family, but doing this for the State of Arizona was not exactly in my business plan.

Still, I have a family of five, and we had just moved across the country. I needed the money, so I applied. I aced the test, impressed the interview panel, and was offered the job on the spot. Passing the polygraph and background test was all I needed to do. The polygraph test was a cinch, but I ran into problems with the background test. I did a few stupid things during my college days. (I did go to the school that was the highest ranking party school in the ’90s, so I did not make it out squeaky clean, similar to many others I know.) After the background test, the job offer was rescinded.

Related: Newbies Take Note: Why You Shouldn’t Buy Houses for $30,000

Second Opportunity

Eventually, I got a job with the Arizona Department of Child Safety. Working with people and kids was not exactly what I wanted to do, but it would make ends meet. Guess what? I worked there for two months and was fired because the same background check hit from college came up again. I thought this was crazy—I worked in Illinois with kids and families daily, my background check there came back clean. What was the problem? I became very fearful after that. Had I moved my family 2,500 miles away, only to not be able to find a job?

Final Opportunity

After being let go, I took a long ride on my Harley and thought about what was next. With all our credit cards maxed out and our savings dwindling fast, I thought back on what my purpose was for moving to Arizona. Then it hit me: Revisit your business plan and get to work. Follow your dream.

I reviewed many entry level ideas on how to get into the real estate industry. I knew I was a hard worker and a vision builder; I just needed to meet the right people. I put it all on the line, took my last $350, and registered for an intro to real estate investing at AZREIA (Arizona Real Estate Investors Association). I was familiar with wholesaling through the many BiggerPockets podcasts I had listened to, but now I was looking to meet people actually doing it. The class was inspiring, and I met a lot of wonderful people, but no one could steer me in the right direction.

My First Deals

What did I know how to do? I could get started driving for dollars, sending direct mail, and talking with sellers, so I focused on those. I got my tax returns, and I invested money in a small campaign. I wrote out 25 letters a day to absentee owners, and after two weeks, I had a hot lead. To make a long story short, I contracted the house for too much, and it was a failure. Still, I now had some experience working through the process. Because of that experience, I had a title company to work with.

Next, I went to guru workshop, and I met some high level wholesalers and connected with them. One wholesaler I was doing nothing but putting out offers on MLS properties and going to open houses to meet real estate agents. Then, finally, I had an offer accepted and made $2,200. I made another $4,500 from there—and it’s been on ever since.

Persist to Success

In this open letter, I want newbies to notice that I had to make a decision that challenged everything I knew. Then I had to fight adversity with faith. Finally, persistence paid off. Nothing is going to be easy when you’re starting something completely knew. The biggest challenges were not the exterior forces but the emotions within. My mind was telling me I couldn’t do it, and my thoughts were negative. Once I turned those thoughts to positive goals and fought, I succeeded.

Do you have any stories of challenges getting started? Is there anything you need answered or are trying to figure out?

This action plan will help. Also, ask questions in the getting started forum. We are a community that loves to be a witness of success.

About Author

Marcus Maloney

Marcus Maloney G+ is the Executive Officer of Equity Realty & Investments as well as 3rd Generation Management & Holding LLC, both are family owned and operated real estate investment firms. The firms' goal is to provide affordable solutions in real estate while providing exceptional opportunities for community redevelopment for the residents of Phoenix, Arizona and Chicago, Illinois. You can follow Marcus on Twitter

26 Comments

  1. Anthony Gayden

    Let me say just one thing. I did not start down the road to success until I stepped out of my comfort zone. I have moved across country (1000+ miles) twice. I have lived in three different major cities and a small town in the middle of nowhere. I had to go out, make friends, and start with nothing three times and it was the best experience of my life.

    It’s funny to me that you ended up in Arizona, the exact same state where I lived for nearly 5 years. Anyway congratulations to you and great article!!!!!

  2. Mike Snyder

    @MARCUS MALONEY thank you for that post. I that persistence is the key to getting what you want. Numerous things can make that task easier or harder but in the end being doggedly persistent is the best guarantee. Unfortunately as well as I do know that, I have to keep rehearing it. Stories like yours truly inspire and help to recharge. Thank you!

    • Marcus Maloney

      Mike you are right persistence is the key. You never want to give up on something you believe in and strive to be. Daily I have to reaffirm my desires by speaking affirmations. It is so easy to get side tracked and discouraged, especially when a deal does south. You have to pick up the pieces and get right back at it. Thanks for ready man and keep telling yourself I am a real estate investor and that will materialize

  3. Brian Gibbons

    There are 2 things I would like to say,
    1. Read this every day
    ““““““““““““
    Our Credo as Real Estate Investors:

    I am a Real Estate Investor.

    Of all of the occupations I have tried, researched, pondered, and read about over the years, there is none which compares to mine. My work is fun. I take ugly houses and make them beautiful. I help people out of difficult situations.

    I am a Real Estate Investor. I am my own boss. I often work in my pajamas from the comfort of my home. I have no employees to baby sit, no perishable inventory to move, no franchise fees to pay, and no store to maintain. Still, I am in the top 5% of all income earners.

    I am a Real Estate Investor. I now enjoy freedoms I’ve never had before. I am the master of my day. I choose who to work with. I choose my hours, and I decide if I will work 20 hours or 40 hours this week. I can also choose to take the day off, without obtaining anyone’s permission. I can take a month-long vacation. I can sleep in, or take a power nap after lunch if I want. I can review my notes and return my calls while lounging in my jacuzzi. I no longer have to commute during rush hour.

    I have the freedom to spend lots of time with my wife and children. I do not have the stress and pressure of needing to close my next deal by the end of the week, by the end of this month, or even by the end of this year.

    I live in one of the nicest neighborhoods, in one of the most beautiful states, in the best country that has ever existed on this Earth.

    I am a Real Estate Investor. There are many who ‘want’ to be like me; many who are ‘studying’ to be like me; and many more who would be like me, but are just waiting for ‘this opportunity to appear’ or ‘that circumstance to change’… At the end of the day, very few actually are like me.

    I have been very fortunate and blessed. I am finally living my dream. I love doing what I do, and I would not trade places with anyone, nor trade my life experiences for anyone else’s.

    I am driven by the belief that life is short, and we need to ‘make a difference’ in the short time that we’re here, because after all is said and done, it’s really not about ‘us.’

    I am a Real Estate Investor.
    ““““““““““““““““
    2. My story

    “You must be the person you have never had the courage to be.
    Gradually, you will discover that you are that person, but until you can see this clearly, you must pretend and invent.”
    Paulo Coelho

    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 1983. 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 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 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 was 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 will consider a creative offer.”

    I was very confused the first few months working there. I did know what a wraparound mortgage was, or subject to, or subordinating notes, or lease option assignments.

    So I stumbled along.

    What allowed me succeed was Glenn had an awesome direct mail marketing machine, and even had an appointment setter, so I just needed to get my car and go talk to 3 to 4 sellers everyday. I’d use the same presentation with everyone. And I’ve get them all 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 five houses a month grossing between $5-$10,000 per house, and I didn’t make that money, Glenn did.

    The arrangement for pay for me was I would make $500 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 was like 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 to have 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 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.
    Back in 1985 that was a lot of money.
    In the memo I remember what was written,
    “for my good friend Brian.”

    “““““““““““““““““““““`

    With everything I learned over that 2 1/2 years, it didn’t take me long to be profitable.
    I got a modest office space, with neighbors that were white-collar professionals, and attorney and CPA.
    I had a secretary part-time for 3 months, then full time.
    And Glenn even took me to lunch every week, said he missed me.

    That first business was very special to me.
    I have had several businesses since then, but that first one was my favorite.

    ““““““““““““““““““““““
    My wish for all that reads this is I hope you find your “Glenn” and you bust your tail working and reading. And learning.
    “““

    Well written Marcus and from the heart.

    REI is a “people” business, property is just a by product.
    Your people training with your family business experience will assist you to succeed.

    • Marcus Maloney

      Brian,

      Now that was very well written. You always bring another perspective to my post and I really appreciate it. You are very influential and I get inspired when I read your comments. Man keep up the great work and I look forward to meeting you some day.

      I have my daily affirmation and I will implement that letter of affirmation in conjunction with my current affirmations. Again you add so much quality to many of my post that. I appreciate it and I appreciate you. Thank you

  4. daniel Anaya

    @marcusmaloney thank you for writing that. Im 21 years old and trying to get into real estate investing here in Arizona and dont know anybody who is doing it or even anybody to ask questions too so i do get down on my self when i dont know something but this definitely makes me wanna keep pushing for my goals

  5. Timothy Brown

    Marcus,

    I am a new investor and I am very grateful for your article. Thank you! I have one question. You said:

    “Next, I went to guru workshop, and I met some high level wholesalers and connected with them. One wholesaler I was doing nothing but putting out offers on MLS properties and going to open houses to meet real estate agents. Then, finally, I had an offer accepted and made $2,200.”

    What guru workshop were you talking about?

    Also in the next sentence I am not sure what you were saying. You met a wholesaler who was putting out offers on MLS or you were or both? Do you mean you were putting out offers on just regular RE listings, and meeting agents, and learning of properties through networking with them?

    Looking forward to hearing from you. Thank you and God bless!

    Tim

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