My Background – How I Got To Where I Am Today – Real Estate Investing
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Read Transcript for “My Background – How I Got To Where I Am Today”
In this video, I’m going to tell you a little bit about my background and how I got to where I am today.
Joe: I started investing in 1986 in Los Angeles, California, so I started with a very high end market in a market that was very rapidly appreciating. The reason I got into this was I was working in the movie industry at the time and I was working as a grip and wanted to be a director. I wanted to write movies, and I had had some limited success with that, but mostly I was making my living as a grip (which is in lighting).
Joe: When I went to the set, everybody was talking about their investments. They were talking about their houses and about how their houses had gone up in value. Most of the people that we were working with were making more than they were making annually on the job, so it got me very interested in real estate and I started buying houses.
Joe: Within the first three years as a real estate investor, I had bought over 17 million dollars’ worth of property. This was a very exciting time. I was using loans and down payments. I’d run out of money so I was leveraging the heck out of things, but I still had a heck of a lot of equity and we were building properties and I was doing new construction (which is crazy – don’t ever get into that).
Joe: So, things were going pretty smoothly and we were hanging out there. I was young and anxious to make a lot of money. We were doing well, but then the big downturn came and the values in the Los Angeles market in 1991 dropped 30%.
Joe: I lost everything. I lost all of the houses I had. I lost all of the property. I lost all of the deals that we were working on. We were building on a hillside, so we had foundations that were costing me, the foundation alone, the concrete and the steel pilings were costing $300,000 – just to put in a foundation, and they stopped us in mid construction on those deals saying, ‘Look, you can’t have any more money. The values have dropped. You don’t have enough equity. You’ve got to put more money up in order for us to take this risk.’ Then, they take this property back with a half done foundation and say, ‘Yes that’s what we have to do. That’s the way this process works.’
Joe: So, I lost all of those properties, I lost my bulldozer, I lost my dump truck, I lost my concrete forms and I lost all of our construction equipment. It was really unpleasant. I had people coming to my house in the middle of the night serving lawsuits. I had people threatening my life because they weren’t getting paid because we weren’t getting any money and we weren’t getting any of our construction draws. So it was a very unpleasant time.
Joe: I remember walking around. I lived up in the Hollywood hills up in the Laurel Canyon area. I was walking my dog up in the hills and my wife was six months pregnant with our first child. We were going to lose our house. We were going to lose all of our cars. And so, I’m walking around looking out over the city of Los Angeles, and the whole city was on fire. This was during the riots, so that sort of just threw gas on the flames.
Joe: I’ll tell you, it was a tough time, and what I ended up doing was moving back to Indiana. I didn’t have any other place to go but I had family in Indiana, so we ended up moving in with my parents. So, I’m 35 years old, an ex-millionaire, completely broke and I managed to walk away with a couple thousand bucks and start all over again.
Joe: I got into becoming a real estate agent and started selling properties. It took me a year or two before I got into the top level as a real estate agent because I understood that process, but it also forced me to learn sales. And I learned a lot about marketing through the real estate company. That was a great way to learn this process.
Joe: But I also knew that I could do real estate investing, and real estate investing was a lot more fun and a lot more profitable than being a real estate agent and I wanted to advance that. But I also had bad credit, and I didn’t have any money to invest, so I had to find a way to do that.
Joe: All of the stuff that I’m teaching came out of that time. I learned how to do this process by being forced to do it, and by using the techniques that I used early on in California. I modified those so that I could do it without credit, and it was just a matter of learning how to make deals and learning how to bring motivated buyers and sellers into the process and do it in a simple way.
Joe: Now, over the years since then, I’ve gotten even better and better with the process that we use, and that’s what we teach. Then, when the internet came along, it got a lot easier as well, and since then, we’ve kind of come roaring back and made this business work, and now, we have a pretty good lifestyle again. Life has certainly turned positive again.
Joe: Anyway, I guess I just want to give this example for all of you who have been through this process or lost everything or who have tried so long and not succeeded. It doesn’t take long to succeed in this process if you have the right knowledge and you take action on it.
Joe: One thing was that, even though I had no money and no credit, I was willing to take action on the things that I knew and I was willing to try to figure out the things that I didn’t knew. There was no failure involved; it really was just a test. The loss of the 17 million dollars? – it wasn’t a failure – it was a test – just a process, a step to get to the next level.
Joe: And now, this process that I’m doing now, these videos – this is just a process, just a test to see if I can get to the next level and the next level, because for me, it’s a game. It’s no longer stress surrounding it. No longer do I feel that if I don’t make money today, I’m going to have a problem (and I know a lot of you are in that situation).
Joe: So, don’t let that get you down. Take the focus off of yourself, because you’ll succeed on a much higher level if you stop thinking about yourself.
Joe: I remember when I was living with my parents, we had a brand new baby in the house and I had very little money coming in and it was really very tough, very humiliating; it really brought me down a few notches, the only way I could really accomplish anything was by not paying attention to those problems, but instead, focusing completely on the people that I was trying to help. As a real estate agent, I was trying to help people find properties or trying to help them sell properties. I focused on those things and stopped focusing on myself, stopped whining and stopped worrying about poor little me and I did a lot better.
Joe: It actually became fun, and I got good at it and I got good at it fast, and I started making money. And it wasn’t long before I got out of that situation and we took over and we got our own property and we moved forward.
Joe: Now, we’re living in a much nicer property over the years. That’s been a few years back, but I’ll tell you, it doesn’t take long to get back on your feet once you’ve had a loss, if you have the knowledge to be able to do it.
Joe: I want to encourage all of you who have been through what I’ve been through or who are going through what I’ve been through to keep moving forward, keep taking action, keep looking for the solution and stop whining about and complaining and start worrying about helping other people rather than worrying about how bad your situation is. If you’re eating and you’ve got a roof over your head, then you’re half way there.
Joe: If you don’t have those things, then go work at McDonald’s. Get some way to get some money coming in. Go clean people’s houses. All you have to do is put some flyers out there and clean some people’s houses. Make a little bit of money. Make enough money to live on and get a roof over your head.
Joe: You need a telephone and a classified ad in the newspaper in order to do the stuff that I’m teaching, so if you have those things, you can make money in this business. You don’t need anything else other than a telephone and a classified ad and you can get both of those things pretty darned cheap.
Joe: So take action, move forward and don’t lose hope. Things aren’t going to be black forever. Good luck to you.