My lowest point as an entrepreneur
It's always the darkest before the dawn...
I grew up in the middle class so everyone in my network had jobs -- no one was an entrepreneur by any stretch so I was essentially 'trapped' by my network when it came to starting any kind of business.
I had read somewhere that a very high percentage of millionaires owned real estate, so I knew to some extent, I needed to learn about it.
About 2 years ago, I heard about this real estate investing education program from a friend and I decided to go balls out... all in, past the point of no return.
I maxed my credit card and borrowed money from my mom to get into this program.. one of those guru-type seminars.
This was my first venture ever. I had no real estate background, no degree, no business background, no one in my network that understood business that I could look to, and no investing experience.
Just me and my business partner.
I was 21 at the time, he was 20, neither of us finished college. The only 'ace' we had in our sleeve was that my biz partner's grandparents had left him some money intended for his college tuition that gave us a 6 month runway.
We jumped head first into it, started our own LLC and followed this program we bought into as best as we knew how.
Two clueless twenty-somethings trying to learn real estate, a sophisticated business model, seller negotiation, marketing, networking, direct mail, contracts, construction, and real estate finance all while having no background, knowing no one in the industry, or having any kind of track record.
It was a recipe for disaster but we clearly didn't know any better.
We struggled for the next 4-5 months implementing guerrilla marketing campaigns trying to secure our first deal.
I remember skipping meals almost every day, sometimes go a full day without eating, constantly worrying about when we'd run out of cash. I remember feeling trapped because I was completely clueless about the business model and I didn't know which levers to pull.
I was constantly looking for that one break that would change the game for us but I knew I couldn't bank on it and had to plan for the worst to figure it all out on my own.
We had some close calls on securing deals, and one time we actually brought a cashier check to a seller for our deposit. Normally, you bring your deposit to an escrow/title company, not directly to the seller... this shows how clueless we actually were.
We finally got a deal under contract after ~4 months and took the next 30 days to line up all the ducks to get the deal closed. We had a guy that we had been in conversation with for a couple months prior who agreed to finance the deal for us once we had it under contract.
We did all the due diligence he asked -- the appraisal, BPO, and every inspection. We had opened escrow, put in our deposit, and had the escrow officer walk us through the closing process multiple times; I wanted to make sure I did everything on my end to make it as seamless as possible.
The few days leading up to the closing date, I called the guy who was financing the deal to check in to see if he wired the money. He never picked up. I tried calling again the day we were supposed to close, but again, no answer.
The day after we were supposed to close, this guy texts me -- oh wait I still have the text:
All that over text.
This guy tells me that he cannot fund a deal that he had been in the loop with for over a month and he doesn't even have the courtesy to call?
In that one text, my dream to make it in real estate fizzled into near-nothingness. We didn't have anymore runway. We were already 5 months in and could only hold out another month or so. We were near the end of our all-in venture and this deal was our only hope.
Not only that, the seller that had agreed to work with us was an unassuming old catholic lady that was about to default on her home because she just lost her job and could no longer support the payments.
This guy was about to screw over 3 people at once.
I could handle my own dreams being crushed but I could never get over screwing over an old lady's credit and have her default on her home because two 20-year-old schmucks convinced her they were the solution to her problem.
I remember the exact moment.
I remember the moment down to the precise spot I was standing when I became overwhelmed with the feeling that I had every reason in the world to cry, but knowing it would change absolutely nothing. I couldn't afford to be paralyzed by emotion... I just stuffed it down and took action...
The next 2 hours following that text, my biz partner and I frantically called every contact we had in the industry to try to salvage the deal.
We had two investors verbally agree and one of them was willing to meet with us the very next morning.
I remember lying on my pillow that night with lots of disappointment and just hoping the nightmare would be over soon. I mentally prepared myself for a walk of shame because it seemed like it was about to be over and didn't even last for a year.
I couldn't fathom the idea of coming back to my mom to let her know that her investment went down the drain just like that...
The next day, at 11:30am, I showed up at an office 15 minutes away and was met with a life changing, game changing offer.
The guy sitting across the table in this fancy office offered to take over our deal and offered to let us stay on board the project if we wanted.
My head exploded with excitement, but I calmly just said, "Yeah, we'd be interested."
The rest is history.
Because of this crazy fiasco, I ended up finding my mentor and he shortened my learning curve by at least 4-5 years.
You can read about how I went from being the guy just trying to pick up the pieces of a half-dead-deal to being 2nd in command at my mentor's company here:
Brandon Lee's answer to I cold-called a celebrity self-made millionaire for entrepreneurial mentorship (rags-to-riches sort of guy). He agreed and now I'm a bit nervous about it. Does anyone have any advice how to get as much value from this as possible?
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