Military Pilot to Million Dollar Wholesale Operation in 3.5 Years

[William Allen]

I was recently reminded of a post @Arianne L. did on her success in real estate and when I went to that post again I saw how many people had been affected by it, so inspiring! Then I just happened to look at how many times I had posted on BP and I was at 999 posts since I joined. Well, what could be better for my 1,000 post than to tell my story and hopefully inspire some people to think bigger than they are right now and go for it!

4 years ago I decided to really take real estate investing seriously and try and build a real business around it. I had been a weekend warrior landlord for a few years and flipped 1 house the year before when I committed to taking this leap. I had a full time job flying for the Navy at the time and thought it would be a good idea to start building a business. Essentially, it wasn't long before I had 2 full time jobs! I was actually on the BP podcast shortly after I started getting serious about REI that you can check out here if you want some more details. I think it will be funny for me to go back and listen to that episode now to see how far I have come since then, we always look at what the next milestone is and rarely do we take time to look back and appreciate how far we have come.

I think the best way to lay all this out is to outline what the results are and then go back and state the lessons learned from a lot of it year to year.

Original Plan 

December 2015 – Build a business to flip 12 houses a year netting $30k per deal making me $360k a year. Retire from the Navy at 20 years and enjoy both incomes.

2016 Highlights

Hired my first person as an assistant to handle lead intake and admin support

Jan - Apr: $18k spent and no income yet

April 18: Closed my first deal and made $9,825 on a wholesale fee

May: Did another wholesale deal making $9,900

June: Closed 6 wholesale deals for a total of $55,086.21

…….

Dec (biggest month): Closed 14 deals for a total of $111,767.18

The total in 2016 was 67 deals, 12 flips and 55 wholesale deals for a total gross profit of $667k. By the month of December I had scaled up to 4 people working with me and we did $111,767.18 that month. So, we were on track to be a 7 figure business if we could keep that going!

2017 Highlights

Jan: 14 deals for a total of $105,659.66 – second month in a row!

Feb: We were up and running in a second virtual market that I had only been to once

Apr: We closed our first deal in that new market for a $15,100 assignment fee, had 6 people working for the company now and I LEFT MY FULL TIME JOB WITH THE NAVY. More about this later.

Jul: Biggest month we had ever had, closed 28 deals for a total of $190,898.89 in gross profit

The total for the year was 183 deals and $1,315,795.40 in gross profits. About 20% of them were flips and the other 80% wholesale deals.

Hired a COO to run the company in December 2017.

2018 Highlights

Jan: 8 deals closed and $19,493.61 profit (ouch!) We decided to flip a ton more in 2018 and were trying to flip 50 houses this year.

Feb: Up and running in a 3rd market. 11 deals with $57,400 profit – again we bought more of these houses!

Mar: 16 deals for $237,033.88 profit so we were back in business

Apr: Closed our first deal in new market on the 25th of this month

Aug: Best month ever to date, 25 deals for $359,875 profit

Total for the year was 187 deals and $2,351,452.59 in gross profits. Similar 80/20 ratio of wholesales to flips

2019

Goal at the start of this year was $3.5M. This post is already too long so I will do another one toward the end of the year to tell you all how we are doing! 

Image of all month to month over these 3 years (through Sep 18) so you can see the roller coaster it is!  Something happened each time to make that line go up and down, usually people issues.

This post became way too long so I will post my lessons learned below it...

[William Allen]

Lessons from 2016:

Don’t quit when you are 2” from gold. It took me almost 4 months to do my first deal and see any money come in. During that time I was paying for marketing, paying my assistant, working hard any time I had off from my Navy job, going on appointments, getting thrown out of houses, etc… but I didn’t quit. I set my budgets and did what I was told to do, it wasn’t easy but I didn’t quit even when I started to doubt myself and the process. I see so many new investors right now say that they are really trying, putting in the effort, spending the money, staying the course but they quit just 2” from gold. They don’t do all the things they are saying they are doing because they are scared. I wasn’t going to fail, I wouldn’t allow it. But if I did, I was going to be able to say that I did everything in my power to build that business and it just wasn’t the right thing for me if I didn’t get there.

Another big lesson is that the difference between 0 deals and 1 deal is MASSIVE! Once I did that first one look at how the flood gates opened. I gained confidence and could really believe in the process. That is what you have to do, take as much time to get that first deal as it takes but after that you are ready for A LOT more!

I saw a ton of challenges at this time of my life. My wife and I had our second son in October of 2016 and he had a heart defect. He had 4 open heart surgeries between Nov 2016 and May 2017 all while I was running a company, flying for the Navy and taking care of my family. Lesson here – turn this into fuel instead of making it an excuse. I could have quit and felt sorry for myself but I used it to focus on my WHY. I used any down time I had in the hospital to figure out how to grow. I also had a great team around me that supported me when I couldn’t be around.

2017 Lessons

I said at a meeting of my peers running other companies in October of 2016 that I would be in a new market by our next meeting in Feb 2017. Come January of 2017 I hadn’t done anything to get that rolling but with that meeting coming up I knew I had to implement like crazy. I wasn’t going to be the guy who showed up and didn’t do what he said he was going to do, that IS NOT ME! So I did it, and mostly from the hospital bed next to my son James! Lesson here is that even perceived accountability is important to all of us. You need someone or a group of people to hold you accountable or you will not make it. It’s human nature! Find your people, put it out there, and watch things explode.

2017 seemed to be the story of the bamboo tree. I focused, did what I needed to do, then once we got going in 2016 we could watch it grow in 2017. But without all that up front work in 2016 it just wouldn’t have happened. Also growing and leading a team. I had 7 people working for me this year and we were all virtual. I had moved away from both of my markets to care for my son so I had to have the right people in place before I could do that. I learned a lot about leadership and management this year. Those lessons are way too long to share here.

2018 Lessons

Hired a COO in December 2017 and he started in January of 2018. I expected this to be a 3 month process and boy was I wrong on that! I wanted to be out of the day to day operations in 3 months because I was going to be working in another company at that time and only leading this team as the visionary. That was the plan! It took 6 months but he's killing it for us now a year and a half after being hired. We were also still trying to double year over year while adding in accountability for the staff who seemed to enjoy not being managed. Biggest lesson, growth and accountability is a tough combination to implement at once!

#1 lesson of running a business. Have the right people and know how to lead them to do more than they think they are capable of. This will get you very far.

Don’t underestimate what you are capable of! I thought I was capable of making a couple hundred thousand dollars a year and that’s where I would land. I also thought I should do it all on my own and frankly I was scared to hire someone. That has all changed drastically!

Surround yourself with the right people. What are you putting into your body and who are you following? Are you following leaders or are you following people who are going in the wrong direction as you? Find that person you need to emulate and attach yourself to them! Figure out how to get in those rooms you don’t belong in, that’s what I did and still do!

Don’t be afraid to get outside of your comfort zone. You may like what you find there and may become more successful than you could have ever thought you would be! And it may not take you as long as you thought.