0:00 I convinced my dad convinced them convinced him he finally said do it I took out $250,000 I invested it a year later the business went down the drain on your dad's house on my dad's house damn sh Lo your own money how did you pay your dad back and he was so depressed bro oh my [Music] God welcome back to another episode of careful boys today we have fing win with us hey's oh you're pretty good at like I mean if someone were to go to your Instagram they're going to see a ton of like really big stories about you succeeding in real estate a lot of great examples of awesome moves that You' pulled and you do actually I have seen videos where you do talk about some stuff that you've lost money on but let's get to the really big L's that you've taken in your career in your road
0:50 to real estate and then how you were able to navigate afterwards yes uh of course when you're small you start small yeah and you lose small and then you do bigger deals then you bigger deals you lose big so the small one is I remember buying this house it was on uh Lu Street when I was younger I know all the streets right never forget never forget I bought the house as a fixer like $150,000 put money in it and by the time I got done it was December and it's the worst time I sell a house in Seattle cuz it's raining it's snowing and I put it on the market like beginning of December and and I'm getting ready to go out of town I remember Vietnam and I needed to get this thing sold before I leave I put it on the market beginning of December and it didn't get no offer the first two weeks I'm like oh my God the market I
1:41 knew it too and then to make it worse I didn't know this either it was across street from an elementary school so when kids get out of school traffic is busy everywhere that was a bad mistake you don't learn until you make mistake by the time I end up selling it by the end of the month I actually had to come out of pocket ET to sell this house after 4 months of fixing this house how bad out of pocket I think it was like it was early on you know 20 grand 20 grand is a lot of money when you starting out small right you know but worst part you spent four or five months working on the house to lose money and you had to pay money then you got to pay money to get out with the deal yeah that hurts bro why why why was it again that you said you had to sell it right away before I'm going out I'm going to Vietnam you know what I mean and so I want to get these inventory off my books it doesn't do any better they linger over to the next year
2:32 yeah so i' rather just you know what I mean Plus usually Seattle and probably La maybe Seattle pretty much November December January February are the slow months of the year of real estate is it raining a lot and snowing all that stuff yeah right and it's you know during the holiday people want to spend money on other things and so that was that was a loss right so that's one loss yeah 25th Avenue Southwest in West Seattle I about this dude this house and then in the back I went built two tow houses in the back same thing I bought the house spent 8 months getting permits a year to build this out by the time I got done bad timing and I'm now selling these houses and also lost money I think I lost probably maybe I don't know 50 7500 Grand on all of it
3:24 yeah and the front house didn't have much Equity at the end of the day either I lost on it I didn't want to come out of pocket so much cuz I didn't have enough money to come out of pocket so I now keeping this property so I kept the property I still own this property so now it came back the other way now so I can sell it here next year but that was a big loss what was the timing part that messed it up same thing see the thing about people don't realize is that if you ever buy it to sale you always exposed to the market mhm when you buy or rent it's not exposed to the market as much right yeah so my biggest deal I lost the biggest one and each one of these deal that I lost I learn from it and that's why today when I teach student have such a high standard and I can see new student they trying to buy anything anything I just want to buy yeah it's across the street from the
4:14 elementary school but it's just a nice house do you understand what it mean across you from middle school they have no understanding I thought that would have been great because a family would want to move in plus pro you know depend depend who's buying it right yeah don't buy on a busy intersection M right these are all and I can see students coming in and they want to buy things on the cliff you know what I mean on the slope and they're like oh but it's great that I'm like do you understand so I've been building houses and town houses and one day I get a phone call from my friend he's like yo um you want to invest with us in doing this 251 unit apartment building at that time it was condominium first we got to build 250 unit 20 51 unit economy in downtown Seattle right we like okay
5:04 right how much does a project like that cost it cost eight uh it cost eight uh no the land was um the land was like 5 million and the construction was like 40 million it was almost a $50 million project God damn it's a lot bro and um and you need to raise the bank went 8 million dollar down payment and then they'll lend you the money to buy it and then construct the project right the people got me involved they were the contractor and then they wanted me because I had money and then they also know I have relationship with people that had money so I'm like I was excited I'm doing big projects I'm like okay this is 2006 when we started the project oh okay I know where this is going wow okay ouch so we got the bank and everything we're rolling begin 2006 we built out the
5:56 sales Center show people all the condos you can buy how much they go for like the model Like the Model Homes and all that the weekend we had line out the door and they all bought it we bought we sold 251 unit in literally like 2 weeks damn pre-old and that was like Peak Market too yeah 2006 yeah yeah Peak Peak I mean like anything you built people are buying them and what was the size of the units and how much were they selling for it it was uh average like 350 ft condos yeah right and they selling for like probably you know 400 to 600,000 somewhere in that zone right so then we had it all pre-sold then we start construction construction is going to be projected be done by by the end of 2008 and construction never is on time right and on
6:49 budget the bigger the project the worse it is so you have to put buffers in them and you some the buffer doesn't make it right yeah so I'm all excited man this is going to pay out $10 million I'm going to get 5 mil my these partner going to get 5 mil I am swinging to the fence this is it I'm going bigly now all of a sudden 2008 comes around and all of a sudden the market start to and then the middle of 2008 one call after another come in um we like to withdraw our offer please and can I have my earnest money back and what you can you can have your earnest money back yes because what happened in cond early when you buy a house you put a deposit good faith yeah like when it hasn't been built yet okay okay even if you buy a house today sub to inspection you have
7:39 to put it you know but the difference in condo is that when the time you close you sign the exra pwork and you sign this thing called a POS public offering statement and that's where you get all your final that and paperwork Boom the public offering statement cannot be fully done until the building get fully done and then they F in a bunch of other blanks and then now the full public office statement is complete plus you the dock is closed you can go sign it boom yeah so the bill ain't done yet you're not locked in until it's done done done so nobody everybody had a way out they all had intention to buy but the market did this so they're getting the plane is rocking and ████ I'm like oh my God so we get one phone call in Can we cancel okay we no we think no big deal bro it literally like 60 days one
8:32 phone call after another phone call cancel cancel cancel cancel and we're like what the ████ and as every one of these cancel we'll put it back on the market and try to sell the one that people turn back right yeah in six months what if you don't pick up the phone what if you unplug the phone uh he ain't gone no money back guarantee we went from 251 units sold 200 withdraw in 60 days wa what the ████ bro my heart ████ sank dude sank I mean it's bad ass ████ like all right Mr this is ████ scary but was this happening across the board to all kinds of different places everyone you knew that's in this business everybody everybody everybody getting affected yeah Paul Allen one of the biggest developer in Seattle right the
9:22 co-founder of Microsoft he's building whole bunch of stuff and everybody everybody you know at that time remember it was hot everybody buil condom medium yeah just cranes everywhere MH everybody's building the thing is whoever was 6 months ahead would have Clos on the deal I'm right at the end of the tsunami wave oh no and everybody want their money back and out of the 8 million I put up a million dollar and then I raised the other 7 million from France 500,000 300,000 200,000 and family and they all put money in and now we are 6 months away from POS wow and we have only 50 sale left what's up guys if you do not know we have a patreon I want you to click in
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11:04 and click the link below to get all the details there's so many different tiers you can see it when you click that you can try to put it on the market but you and everybody else is trying to do the same thing the whole Market is flooding our inventory yeah and the Crash happened and the Crash happened that's when the crash happened 2008 and we got personal guarantee of 50 million my whole net worth is literally be wiped out wow I got 7 millions of friends and family money and I'm like what the ████ do I do that's crazy bro it was it was lights out yeah and what happened was my smart wife Cammy was sitting at a light on boring and Olive Street and there was a sign sitting on the corner a a sign it was
11:54 carbon 56 that's the other building owned by somebody I knew and that building was for sale too right I mean was for rent but he had a sign on the street and he was Innovative he was quick mover and it says for rent and I didn't even notice it Cammy notice it honey that's Jim Potter's Building look what it says yeah it says for rent what's the big deal no that building was for sale just like us he's trying to rent it now we should try to rent our building so we can save it the whole thing and we're like what and we're like okay so go back talk to my partner guy we got this idea let's rent it and the partner was like no no no no no that's
12:44 embarrassing what does that mean to rent the whole thing like so inste of sell e to the unit you keep as an apartment building and then rent it to like a property management or or individually individually right we will we will we will uh we have to individually we have to go 251 251 people why is that embarrassing because to my partner like oh we're this developer we're building this new project right we're selling it and all a sudden we're losing money the market crash and we had to turn into rental in his mind it was embarrassing in my mind was I'm trying to save my friends money yeah I got friends and family got s who cares about Pride yeah that's what I'm saying bro yeah I'm like ████ my money I give up my million dollar I want to ████ face the choir to my friend and family like yo bro uh your million like
13:35 gone so it took my partner man about two to four weeks just come to the realization this is the smartest thing to do yeah or else you're losing the whole thing the whole thing cuz time is the essence yeah that's even more of an embarrassment right yeah so we go we talk to this property management they big prop man company and I remember sitting in the room like yo can you all manage our building they're like yeah and then my partner like I think we can do it on our own he's a contractor stick the building yeah a contractor you're popular manager you're a chef in the kitchen in a Chinese restaurant what the ████ oh he's Asian he said everyone always trying to cut the middle man and then do a half ass job half ass job trying to do everything oh matter of fact I can get your hair too you want to that's enough right they're trying to do
14:25 everything to save a dollar bro no ████ that we need professional yeah yeah finally we hired the private manager uh we went to the bank we said we got this plan this company's a big company they think we can get this thing leased up within a year don't for cloes on us give us an extension on this construction loan for one year let us fill it cuz I know you don't want it back either but we already at the Finish Line everybody else they not there yet we finished yeah and they we convinced them convince and they say fine we do it right we reached it all up took us one year we leased all 251 unit up oh wow now we got to 2010 and then there's another Cris that happened you know what the N crisis was right no I didn't know it was another one yeah so first you have the you the whole market crash then you have the bank being bought out oh
15:17 2010 all these Bank was going out of business that's like Washington Mutual and like everything right so the bank that was doing this loan was basically going broke so another bank had to come in and buy them is that the B out yeah okay so this Bank come in and go I don't know you we don't have no relationship you got a $45 million loan on our book we trying right now everybody's hurting we're not trying to hold a $45 million loan we trying to clean our books too so you know what sorry we can't give you permanent financing you're going to have to sell the building you got 90 days to sell the building oh I'm for closing on your ass ████ ████ up bro is that and then that's what happened so so you lost it anyway or what so what happened was everybody's in and the bank won't
16:08 give us permanent financing so we're like what the ████ man we did all this work for nothing so we went back to the bank come on guys just give us permanent financing nope and at that time nobody was giving permanent financing unless it's your own bank right and they said no we want our money so then what happened was we go and talk to this professional commercial broker toy trying to sell this as an apartment building cuz it's an apartment building now right my partner like I think we can sell by oursel for S by owner now he's an agent too to what the ████ bro I'm telling you this is realing hats right do you still do you still work with this guy or no him a to a hotel this guy name was John and Frank they still know their name they're from CBA right regroup they came
16:58 in they're like yeah we can sell this and at that time the market was just turning just turning it was the for sale B was going bad but the apartment was just turning right mhm if we would have waited 12 months and sell it we could have killed the apartment gang too right but we didn't have we had no option days 90 days you got 90 days put it on the market days and we went to offer building for sale brand new building fully Le da D D D D D D D da right all offer is going to be review on like I think it was like 30 days we had hundreds and hundreds of people looked at it and we had like 20 offer and I 20 offer they looked at looked at it and they picked the top three and the top three looked at they go okay these are the top three we're going to count these top three right and the best we got we
17:48 all in on this project for 50 mil with late fees and everything the bank was dirty too okay they would even give us a break on The Late feed they tax us late fees all the way till the time we sold just the late fee was like 3 four 5 million bucks you know what I mean damn and they still tax us and they know what we're going through you see what I mean so we end up selling the building for 49.5 million oh wow they're Equity residents right they came in they bought it we counter and they came back and they said okay the most we give you this and we will do this term this ter and we did that's the best and we was 50 mil so basically every investor um took a haircut they only got 75% of their money back so you asked million bucks you made no profit but you got 75% of your million dollar back so they
18:39 took a haircut better than zero better than zero right I took a haircut I had my own money in there but the whole time four year of this I made no money cuz you're so focused on this project you get it first I made no money out this project cuz remember I never sold it yeah so it was we 50 what 49 there's no profit at the end of the day so it's time that you spent labor and then you also lost like a quarter Mill or something and I lost qu a mill we not done yet I lost quar a mill my money I didn't pick up my 5 million on this project cuz remember put to be 10 million I would sold it I lost in that but I took my whole focus and I took the gas my foot off the gas P of my residential while I was making close to a million bucks a year and I took all my energy I was working on this project
19:29 and then the last year and a half I was trying to save this project so I stopped selling real estate making a I'm selling maybe 100 Grand so I lost you know let's call it even four 8 900,000 Time 4 yeah plus the 250 plus 5 mil yeah my biggest loss ever in the history of real estate right there damn but you said that was four years and that was your biggest loss but you said you learned from every single loss what was the biggest lessons I'm sure you lot learned a lot of lessons but what would you say is number one and even today and you got notice when I soon I say this it's hard to find the right partner when you do have the right partner you stick with them and the partner has to be aligned with everything aligning value as in
20:19 money aligning value as in contribution uh you know greed or not greed you know what I mean and I realized in that the partner I was working with on that project doesn't have the same core value as me so you were busy trying to fight him to agree while you're trying to keep the business alive yeah because out of 8 million he had maybe of his money and his friend's money maybe a million oh yeah and the bulk of the money of the investor with my friends and my family's money yeah so his skin in the game was like easier to up yeah right but he was thinking about himself most of the time yeah want to be the broker want to be the property manager right and so for me I think the biggest I learned there is um one the most important thing is when
21:11 you do partnership with people you have to really do you due diligence and I didn't do much due diligence and I didn't really know how they function under pressure and today if I was ever to do something again with somebody I would have to do a lot more due diligence I have to do a lot of investigating yeah before I partner with somebody and if I do partner with somebody right they have to put in as much skin in the game as I did which was what was that in that situation yeah number two sometime going big isn't always better hitting a grand slam sometime isn't always better than hitting singles and doubles and triples cuz people who win World Series and baseball is single
22:02 double and triple consistently than grand slams and I thought coming up Grand Slam are the big buildings no that's just a bonus I swing a lot of grand slams but I miss them all at least hit the damn ball give me a little bit of like even a a skim you know yeah my partnership bro is a big deal that's why partnership with spouse we talking about that with the wife Business Partnership is the worst bro yeah what are some of the core values you guys were like off on uh my core value today right I have it and I want to be actually you got like super clear on it yeah oh you have it written down I have it written down it's I'll remind me all the time cuz I I know it you don't have your no I too I only have one I want to eat later right now I'm one value I ain't even got a
22:53 core value my number one core value is abundance abundance of just anything air life money there's always going to be more right like that contribution is my second core value in life right I the reason why I think my mentorship grow rapidly because I look out for all the students I tell more student not to buy a deal than buy a deal and they get disappointed oh but they appreciate it cuz when they find out why they go man I'm glad I didn't buy that property under mid intersection now I understand why right my third core value is freedom anything I do I got to make sure that there's Freedom around it I don't want to be boxed in anything I do it got to have joy in it I gotta be happy I got to have excitement about it I have inspired about it everything I do it has to be simple Simplicity is one of my core
23:44 value I don't that big building I did it was not simple you know the other big deal I lost on was 250,000 my own cash in Costa Rica investing in a casino I had no business investing I lost 250 Grand cash it disappeared on me in 60 days wow ████ 60 days my friends said bro this guy's building this there's a casino in uh San it's in a city called San Jose in Costa Rica it's a hotel with a casino and there was a piece of land next to it owned also by this group and they was going to put the part two of this hotel and they wanted investors and my friend like I know this guy down at that that's coordinating it you want to get in my friend didn't make no money off me they was telling me so I said all right Bob all right and introducing to this guy and then again I didn't do my due diligence so the the guy tied up the
24:35 property said we need to tie the property and the owner says it cost $250,000 to Tire the property earnest money right and they none of them have the ████ money which at that's how I was stupid as a rock why the ████ nobody have money other than me so I put in the 250,000 earnest money yeah right we did all due diligence right I didn't do due diligence I don't know anything about that right the guy down there do due well the timeline came up and he didn't get done he asked for an extension the owner says I'll give you another 30-day extension but it's going to be non fund of my earnest money and I'm thinking to myself okay well ████ I mean like I'm thinking to myself we built this out we can make good money on this building right and and L and that I'm thinking of that the money I have no idea what if this guy don't meet the deadline so guess what he did meet the deadline and that owner
25:25 took my money oh God yeah oh yep so Simplicity creativity anything I do has to have creativity in it for me otherwise it doesn't inspire me growth everything I do got to have growth I don't like to be staggered anything I do I got to have balance I don't want to be a workaholic and I have no balance and then Integrity so so anytime I get in partnership with somebody I got to check do they have these that's really cool yeah so this is like my chck that's really can you text that to me so I have I have to do I had to do a checklist on BART that Bart had abundance contribution freedom God damn it Bart you got no Integrity out here took you three years to get it so now I'm finally hear he's lacking in Integrity we we lost we lost 3 million in 24
26:15 hours D like what the ████ definitely did that for real but it was inspiring uh we we got into C Pretty Simple Abundance how how did how did you invest what happened well it wasn't it was that's like the the what do you call it like the value yeah that was the value how much money did you put in to get I put in 300K oh that's still a lot and then I put in like 70k yeah so you you got put in 34 uh 370 and it was value at 3 mil yeah total yeah and then it disappeared in 24 hours cuz it crashed um oh it got attacked and then yeah whatever but if you would have cashed out you would have get it I I cashed like a a little bit out but like 150k cuz I got lucky but everything else was locked up um because we couldn't
27:06 pull it in what 30 days or something so it was locked up yeah that was probably one of my U my biggest losses ever how did it feel for you know ████ we just lost it felt great that we lost it together cuz we made a big joke if you add all the people up I think we probably lost like almost 5 mil total within our network of friends but because it there's like suffer trauma bonding yeah yeah yeah I think if I was alone I I would have been like really destroyed yeah it would have been really dark times yeah but all of us kind of made a story out of it and laughed about it and um I don't know I think I just have a weird way of looking at money sometimes and it's I just can live on very little so then it'll come and go
27:56 and it'll be painful for a small moment but then I think I have a problem with um treating investing like gambling so I just put too much money into things and get too excited when I hear your story about the casino I probably would have been your friend that would be like all right you putting 250 I'm going put 250 let's do this and do no due diligence yeah also I think like everybody knows that like money isn't everything but you don't know it until you lose everything exactly cuz now we're thinking about you know what we could have done with that we could have got this but in the moment you don't think you just think of the upside no so we need to be like bar kid like no man I I need to wait till my birthday before I can cash out you think at the moment you have it you don't realize how hard you took you to get that goddamn money bro took years and sweat this to get that 250 and I
28:48 lost it in 60 days like gone and then later you're you're just like you feel sick and you're like I can't believe I did that like what why was I thinking like this you know you know the worst one I think one of my worst one dad I got this great business I want to start gold plating it's hot dad all the dealership they want people to go plate their emblem cuz that's the hot thing right now right people want to go plate their wheel the car you know go plating it's a hot thing my friend he does gold plating and you know we can make good money we got dealership that we're going to you know give us all the emblems we can go play them we can make money Nationwide yeah what are you telling me I need to borrow some money from your house my house yeah let me do a line of credit on your house and then let me use that money to and open this business and
29:39 I give you some money with it h no hell don't touch my house don't touch my house I convinced my dad convinced them convinced them he finally said do it I took out $250,000 I invested it a year later the business went down the drain on your dad's house on my dad's house damn oh ████ W so ████ Los your own money oh my God how did you pay your dad back ████ he was so depressed bro oh my God hurt hurt like ████ and you know what thank God I know how to focus and go make money yeah so I made money and I paid it all back wow I think that's the game though your mind goes oh now that's like $20 well it's not really $20 but you know what I mean but then you you you your number gets bigger and bigger my ████ dad was depressed B so bad bro I mean think
30:29 about it they work all their ████ light dog yeah he escaped the country for me right he escape the country son can go gold plate things
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