After a few great years working at the Irish Bank, I decided it was time for a change. I didn't know what I wanted to do next. I just knew I wanted to make more money and not have to work nights for the rest of my life. Late one night, I came home from work and put on the TV. It was about 4am and there was an infomercial on with some cheesy dude talking about how he made millions from buying real estate with “Zero Money Down.” As cheesy as he was, I was blown away listening to what he had to say. So I ended up buying his CD's (“Real Estate Riches”).
This was around 2004/2005 and everybody and their mother were talking about real estate. So I decided to get my real estate licence and jump on the bandwagon.
I ended up getting a job through a craigslist posting as a “Loan Officer” for a Mortgage Brokerage. The brokerage was called Specialty Funding - it was run by three Jordanian brothers, George, Faris and Fadi. These guys were super cool, extremely knowledgeable, very down to earth and extremely ambitious. Great people to be around. My job as a Loan Officer was to find potential home buyers and people who wanted to refinance their existing mortgages.
Even though I was working for a broker I was basically working for myself. To say the least, it was a bit nerve racking at first. I had to find all my own customers and it was 100% commission based. This was completely new to me. Like most folks in real estate, I was thrown in the deep end and after some mortgage finance training, I had to hit the streets on my own and find customers.
I started off the traditional route by calling all my friends and also going to networking event after networking event. My goal was to become friends with CPA’s, Real Estate Agents, Real Estate Attorney’s and Financial Planners in hopes that they would refer business to me. It was tough. Most events I went to were full of other mortgage brokers all on the same mission. And I never felt that comfortable trying to befriend Real Estate Agents/CPA’s etc... who didn't really have any interest in talking to me either.
The networking approach wasn't working very well for me, so I decided to take the fight to the streets. Proper guerrilla marketing style. I used to print up 3000 fliers per week and hit the streets with approx 500 flyers a day. I put them on cars behind windshield wipers, in mail boxes, anywhere and everywhere I could. I used to wait outside the front door of large apartment complexes and when someone came out I’d walk in and start on the top floor and put flyers under every door from the the top floor to the bottom floor. Sometimes I’d get chased out by property managers. I also nailed 24” X 24” ugly yellow signs to lamp posts on all the major intersections around San Francisco with the words “3 Bed, 2 Bath House For Sale, $2500 per month, Zero Down Payment, Free Recorded Message”. I had a free 1-800 number with a recorded message with me talking about how you could buy a house with no money down - the message lasted about two minutes long. I could then see on a software program called “call capture” how long someone listened to my message. If they listened for the whole duration and left me a message I knew they were somewhat serious. I would then follow up with a call and then a meeting. Yet again, it was a complete numbers game.
I used to have all sorts of weirdos leaving me messages, especially over the weekend in the early hours of the morning. Obviously people on the way back from the bar drunk. Some were sincere and some would shout crazy abuse down the phone. The ones who shouted abuse down the phone never expected me to call them back, and I would. It used to really shock them when they would get a call at 11am on a Monday morning asking them what their issue was. Even if you pressed *67 trying to hide your number before you called, call capture would still get your number.
By law, I had to put my Brokers License number on all my marketing material. After a few months of me blanketing the city with ugly yellow signs and flyers, my broker called me into his office and told me that he had gotten quite a few complaints from the City & County of San Francisco and I had to stop with the flyers and signs.
It worked for a while so I couldn't complain, I’m still friends with quite a few people that I met through my ugly yellow signs and flyers. I then teamed up with a Russian guy named Vlad who worked in the same office as me and had the same vision which was to to build a real estate empire. Our only obstacle was, we didn't have any money. So, we put the the Zero Down thing to the test. We bought two houses in San Francisco at the same time with no money down. We then rented them out and refinanced them after a few months after we did a new paint job and maybe some new flooring if needed. Then we took out a line of credit on each of them and used that money to purchase some commercial properties in upstate New York through a lender called Greenpoint. Greenpoint would allow you to buy commercial property with only putting 10% of the selling price down, then allow the seller to finance 10% and the bank would lend us the remaining 80%. This was unheard of in commercial property. This was 2006/2007, and the real estate market was very different back then. Not long after, Greenpoint went bust with lots of other banks.
Vlad and I had big visions. Our goal was to buy distressed commercial properties all over the US do some work on them, bring them up to scratch and positive cash flowing and eventually have one property manager run everything. Things went great for a while. We had some commercial property in upstate New York that paid us enough passive income each month to pay our living expenses and travel. During my free time, I did some courses on how to trade the stock market and started day trading futures, that was an eye opener.
It actually seemed like our plan was working, until.... We cashed out some money from our buildings in New York and bought some more commercial property in Huntsville, Alabama. Our goal was to fix it up, rent it out and then refinance again, pay our creditors off and still have enough money left to go again. Naive and silly, we left the remodel of the Alabama property in the hands of a young property manager who talked a great game and didn't deliver on his word. And like many people all over the world, we got stuck in the middle of the credit crisis and couldn't get the bank to refinance our new property in time. We were left with a pretty big monthly holding cost that we couldn't sustain for much longer unless we got the refinance sorted out.
Lessons I learned from this Chapter in my life.
1. Guerrilla marketing really works :)
2. Don’t ever leave your business in the hands of someone else to look after. Nobody will care for it as much as you do.
3. Yet again, sales is a total numbers game.