10 Lessons this Entrepreneur Learned from Flipping $100 Million in Real Estate
However, it’s not always sunshine and rainbows. People do lose their proverbial shirts in real estate, just as they do in all other forms of business. Nonetheless, it offers up one of the most future-proof mediums for earning a substantial amount of money. The truth is that people will always need a place to live and businesses will always need a place to work. For that reason, real estate won’t decline, but rather, continue its slow and steady climb.
Of course, the recent housing bubble stings just a little bit. If you’re one of the unlucky people who bought near the peak and were forced to sell, or even let your home go in the bloodbath that ensued the 2007 market crash, then you’ve likely built some aversions towards investing in any form of property. Yet, for those that know how to weather the storm, even the recent downturn isn’t a powerful enough deterrent when you weigh the risks versus rewards in real estate investing.
How to succeed in real estate.
Market ups and downs are to be expected in any indusry. For real estate, the waves come every few years. However, the contrarians know that the best time to invest is when everyone else is selling and the best time to sell is when everyone else is buying. And no matter what the market climate, anyone can succeed in real estate as long as they harbor a few tried-and-true lessons that can only come from the in-the-trenches battle for fiscal survival.
For Justin Colby, a wildly successful real estate investor from California who’s flipped well over $100 million in real estate, success didn’t come easy. In fact, when Colby first decided to enter into the real estate industry in 2007, he had just lost his home to a foreclosure, his car was repossessed and he was living on a friend’s couch in San Francisco. He was a victim to the market frenzy and bubbling valuations that had him in way above his head and he simply let it all go.
If that kind of failure doesn’t stop a person, then nothing ever could. In fact, Colby, while living on his friend’s couch, was so determined to enter into real estate that even though he had no money and no credit, he committed to one simple thing that helped him eventually succeed. He decided to call 100 real estate agents every single day and tell them who he was, what he wanted to do and why they should work with him.
Naturally, Colby got a lot of hang ups. But he persisted. Out of the 100 agents he would call every single day, on average, 90 would hang up on him. Eight would have a brief exchange with him. And two would be interested enough in what he had to say that they would agree to a sit-down. Colby did this every single day for nine months. Somehow, somewhere, deep down inside, he knew he was destined for this.
He would hold those meetings at Starbucks. At the time, around the Great Recession, Starbucks had been offering free coffee refills as long the coffee was consumed in the shop. So he sat there and met with those realtors and tried to convince and sway them to work with him. Eventually, he found one that had agreed. The question was, how was he going to conduct a real estate transaction without having any money or any credit?
Colby’s first flip happened with the realtor’s help. Colby found the property and the realtor lined up a buyer. For the cash, he turned to a transactional lender, which is effectively a hard money lender but charges much higher interest rates. For a 48-hour lend, the company charged him two points in interest. But it worked. He flipped that house in 72 hours and made his first $7,000 in real estate, which he had to split with his business partner.
For the next flip, he did the same thing. Afterwards, out of sheer luck, he managed to meet an old friend from high school who showed up at a 49’ers game. That friend had just come into an inheritance and after a brief conversation, decided to invest $100,000 with Colby. That was the turning point. That’s when he put pedal to the metal and things really took off.
However, surprisingly, with that investment, Colby did something contrarian. Realizing that he needed guidance and leadership from an expert in the field, he invested in a $25,000 real estate mastermind, which, after two phone calls, helped him to hone his direction. That’s all it took. While Colby’s first year had only seen two deals push through, in his second year, he did six. These were traditional rehab flips. The next year, an astounding jump to 46 flips, then 96 the year after. Afterwards, he moved into large-scale real estate development.
After flipping $100 million in real estate, Colby learned 10 very important lessons that any entrepreneur who’s interested in real estate should heed. No matter what your present stiatuion, people like Colby are a true testament to what’s possible when you’re so committed and devoted to doing something, that nothing will stand in your way. Imagine having no money, no credit and no personal network that you can lean on, and turning around and becoming a wildly successful real estate investor. That’s where true champions are formed.
Source: entrepreneur.com
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