Who here has started from scratch?

[Steven McPherson]

Just a question for other BP members: who all on this board have started their RE business from nothing?  That means you had no money and no personal savings to put in to marketing, down payments, etc.

Follow-up question.  If you were in this situation, how did you specifically start out?

[Brian Gibbons]

@Steven McPherson

I found my "REI teacher" by crying my eyes out in a bar...

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 1984.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 to be paid 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, back to the bar....

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 with 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 who will consider a creative offer."

I was very confused the first few months working there. I did not know what a wraparound mortgage was, or a "subject to" was, or what "subordinating notes" was, or what a "lease option assignment" was..

So I stumbled along.

What allowed me succeed was Glenn had an awesome direct mail marketing machine, and even had an appointment setter just for me, so all I needed to do was just get in my car and go talk to 3 to 4 sellers everyday. 

I'd use the same presentation with everyone. 

And my goal would be to get them all signed onto a "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 eight houses a month grossing between $5-$10,000 per house, and I didn't make that money, Glenn the Owner did.

The arrangement for payment for me was I would make $500 net 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 liked 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 2 1/5 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 almost 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 $15,000.00.

Back in 1985 that was a lot of money.

In the memo I remember what was written,

"for my good friend Brian."

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With everything I learned over that 2 1/2 years, it didn't take me long to be a profitable new business.

I got a modest office space, with neighbors that were white-collar professionals, an attorney and a CPA.

I had a secretary-phone answerer part-time for 3 months, then full time.

And though Glenn even took I had left, he took me to lunch every week, said he missed me.

That first REI business was very special to me.

I have had several businesses since then, but that first one was my favorite.

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