I recently talked about how I got started in this business—and how although I had read super-helpful books and taken REI courses and even paid big bucks for a coaching program… fear held me from acting on my new-found knowledge.
I failed to take action. I discovered that I was scared to do the marketing, because that meant I’d have to talk to sellers and make offers. :-/
So, what do you do if one course (or coaching program) doesn’t work out? You buy more. And I did. (Sound familiar?)
So, I finally started buying houses. But I bought them all the wrong way… based on appreciation (dumb) instead of looking at the cash flow. I had manipulated my spreadsheets to make the numbers show what I wanted. (Dumber.)
As a result, I painted myself into a corner with foolish and costly mistakes.
I owned about 14 homes at this time, but it was all wrong. I had subject-to properties, a bunch of private money and also bank loans. I was wayyyy overleveraged, and when the crash hit in ‘08, I went down with it.
It was an incredibly stressful time in my life. I was faced with vacant houses and foreclosures, plus one actually had a fire, and others were trashed by the tenants. Because of all of this, I was late on my own mortgage payments for the house my family and I lived in. Awful.
I struggled through this painful time. It was a disaster. I won’t spare you with all the nasty details, but somehow I continued on.
And here’s what I realized…
Yes, I was analyzing the properties wrong, my numbers and cash flow sucked and I wasn’t getting the houses at big enough discounts. Yes, I wasn’t getting only well-qualified tenants. Yes, I borrowed stupid money…
But the major mistake I made was that I had ignored one of the key foundations of this business: wholesaling.
I thought wholesaling was just for beginners. And I wasn’t a beginner… no, sir. I was an advanced investor, I owned 14 houses and not one was wholesaled. Wholesaling is for rookies and I’m a better investor than that.
I shunned wholesalers. So stupid.
See, even in the crash, wholesalers were still making money. They just had to get properties at even more of a discount. Which was totally doable.
So, I bought another course. Well, 2 courses, actually. About wholesaling. But these would be the last. One was from Steve Cook and another from Cris Chico. I did exactly what they said to do.
Among other valuable lessons, I learned 2 important things very quickly:
- If you’re failing, it’s your fault.
- If you’re not doing deals, it’s because you’re not making enough offers.
To make offers, you have to market. This is the marketing business, not the real estate business.
No marketing = no deals.
On my first wholesale deal, I made $13k. Not too shabby for a strategy I thought was only for beginners.
I was hooked.
Then I learned about lease options, which meant I could bypass ownership. The concept of wholesaling lease options fascinated me. But unlike my first foray into investing, I learned to do this strategy the right way from the beginning, just like I’d done with regular wholesaling.
And that’s when everything turned around and my investing career really took off. All because of learning to wholesale the right way.
Wholesaling is NOT a rookie strategy.
Soon I had other people doing all the work, and the money started rolling in. In just 3 months, I made more from investing part-time than I made with my full-time job. It was finally time to quit my J.O.B. Eventually, I had so many people asking me about my system, I started my podcasts and my coaching program and now these emails.
If you learn anything from my emails or podcasts or courses… I hope you learn from my mistakes and always remember: Wholesaling can make you rich… IF you do the marketing and make offers every single day.
Maybe someday, you’ll have a success story that’s less painful than mine. I sure hope so.
