Become a Creator today!Start creating today - Share your story with the world!
Start for free
00:00:00
00:00:01
RETRO EPISODE: What's Behind 500 Doors With Caleb Walsh
180 Plays2 years ago
With less than $10,000 in the bank – credit card debt up to his eyeballs, credit scores in the toilet, and his wife pregnant with their first child, Caleb Walsh thought this was the perfect time to buy an $800,000 multi-unit property! This could have been another 99 Homes story (where huge numbers of people got underwater on their mortgage) but Caleb turned it into a story of going from zero to 500 doors.
On this episode of the Uncommon Wealth Podcast, hosts Phillip and Bryan talk with Caleb Walsh.
Caleb Walsh is a leading authority in affordable housing with portfolios spanning over 1,500 units in six states. He resides in Tampa, Florida with his wife Denise and their two children, Lincoln and Noelle. He's an economy of scale advocate, and his story involves jumping from five units to 500 units in a short amount of time.
Listen in and get ready for a spirited conversation. You’ll hear about Caleb’s mistakes and triumphs – and how he persisted until he reached his goals.
What you’ll learn about in this episode:
- How to leverage credit instead of letting debt leverage you
- The value of going all in – making your side hustle the main thing
- Lessons learned from trying to flip homes at the epicenter of a downturn
- How to hold on to a crazy, grandiose idea
- Why establishing passive income can take “sleep is optional” amounts of energy. No such thing as easy money.
- How to capitalize on an investment that brings in a solid return.
- Building economies of scale for even bigger returns
- Going public with goals in order to build in accountability around those goals.
- Creating public momentum increases opportunity through others buying into your vision
Recommended
Transcript
Introduction to Caleb Walsh's Real Estate Journey
00:00:00
Speaker
Hey everybody, this is Ben Foust, the chief knob turner at the Uncoming Wealth podcast. Special treat for you this week. We're pulling an episode back from the archives. We did an interview with Caleb Walsh and it's such a cool story. We wanted to make sure you had a chance to dig on it if you hadn't. Dude goes from no rental properties, less than 10 grand in the bank, first kid on the way, credit card debt up to his eyeballs, and buys an $800,000 multiplex.
00:00:23
Speaker
It could be a disaster. Turns out awesome. It's such a cool story. I hope you enjoy it. Fresh content next week. And enjoy the show.
The Uncommon Life Project Podcast Overview
00:00:33
Speaker
Everyone dreams about living an uncommon life. But how we define that dream is very different for each of us. And for most, it's a lifelong pursuit. Welcome to the Uncommon Life Project podcast. We're going to introduce you to people who are living that life or enjoying the journey to get there.
00:00:51
Speaker
We're going to also give you some tools, tricks, and tips for starting or accelerating your own efforts to live an uncommon life, a life worth celebrating and savoring. Please welcome your hosts, Brian Dewhurst and Philip Ramsey. Welcome everybody. This is Philip Ramsey. And I'm Brian Dewhurst. We're coming at you with another podcast of the Uncommon Life Project. Thank you so much.
00:01:16
Speaker
Let's call her, let's call her Frankie today. Thank you for the intro, Frankie. I really appreciate it. We have a great show for you today with Caleb Walsh, one of my close friends. We met, I'd say nine, 10 years ago.
00:01:32
Speaker
Yeah, at an investment conference. I can't wait for you just to unpack some of the knowledge that he's found throughout the years. I really think that this is going to help some of our listeners who are sitting at a desk job move forward to kind of cast a bigger vision than even they think now. Yeah.
00:01:50
Speaker
Ran off kill with bio and we'll jump in.
Caleb Walsh: Affordable Housing Leader
00:01:52
Speaker
Totally. So Caleb is a leading authority in affordable housing with portfolios spanning over 1500 units in six states. And he has not been out this for 25 years. He resides in Tampa, Florida with his wife, Denise, and their two children, Lincoln and Noel. He's an economy of scale advocate, which we are as well. And his story
00:02:13
Speaker
It just involves jumping from five units to 500 units in a short amount of time. And by units, we're meaning properties or doors. And so his story is seen on social media tracked all over the web with the theme, 500 Doors. So welcome, Caleb Walsh.
00:02:30
Speaker
Thank you for having me on, guys. This is great. Oh, absolutely. All right. Let's just jump right in like we always do. And a guy like you never really had a desk job. Am I right? Oh, I had plenty of them. I probably had one in many different roles, you know, every, oh man, you know, I had everything from a sales job to just a little customer service rep.
00:02:56
Speaker
I haven't had roles where my entire job existed where they actually would be the angry customers that would call in. That's all I got to talk with. You learn to keep a smile on your face or it really doesn't work.
00:03:10
Speaker
Totally. And so did you always have this dream of owning many real estate properties or did this just come in the last couple of years? It's actually interesting. The answer is no. The answer is I think I had a more idealistic
00:03:28
Speaker
I'm kind of like oh you know you kind of grow up and everybody in america wants to be a rockstar right you know or some version of that and i think growing up through the teen years i had some version of that my dad was a contractor i did see some you know first hand i see business transactions go on at a young age.
00:03:46
Speaker
But really i had that realization about those transactions and the education i was getting through that later you know growing up i honestly it was it was kind of a joke i never wanted to have anything to do with anything my parents had going on this is why you know you know no no no you had a dream but i'm.
00:04:09
Speaker
But no, it was at a point, I basically think a breaking point, where I realized it was a necessity for me to have this many properties.
00:04:21
Speaker
Interesting. Okay. Walk us through that, that trigger point and where were you at the time? Like, were you at home? Were you at a best job?
Initial Real Estate Struggles and Strategies
00:04:31
Speaker
Yeah. So, so, so it started out where I had recently got married and I was, you know, you, you, you pitch the girl of your dreams on the life of her dream. And then on the other side of happily ever after you feel out, you figure out you got to pay the bills and
00:04:50
Speaker
Those things keep coming. I don't understand. It's the cyclical nature of life thing. I don't know what it is, but no. And so I was venturing in real estate. I was attempting to flip homes. And this is shortly thereafter the economic meltdown, right?
00:05:09
Speaker
I was in Florida at the time, and in Florida, between Florida and Las Vegas, it was the epicenter for a lot of the drastic foreclosure happenings that happen in mass scale. So what I was doing, I had attended all those fun workshops and all those things where they say, one, two, three, passive income, you've got it. And I was on that bandwagon.
00:05:36
Speaker
I was attempting to flip homes, which I would here or there, but then I found out very quickly it wasn't as one, two, three as they said. All those seminar guys, different guys, you attend a three-day weekend or something of that nature. I found myself attempting to flip properties.
00:05:58
Speaker
And they would always take 3-4 months longer than I thought it would take to flip. And maybe a little bit more money than you thought too. Exactly. Because what ends up happening when you're waiting that long? Basically, it's on credit cards. They had two programs. I remember Lowe's and Home Depot had a
00:06:18
Speaker
Six months and one had an 18 month no pay the program where you it was it was basically like you didn't get any interest during that wait time but if you Didn't pay it off before then it compounded and you got hit. Yeah, you got smacked in the face pretty hard
00:06:35
Speaker
You're playing the options real estate game. If you talk about options, you'll understand it then. I was losing my options really fast. So at that point, so you're trying to hold up such an amount of debt. Sure. And this is where I tell people oftentimes that debt was using me. I wasn't using debt. Like it was not me infinitely using leverage to obtain wealth. This was, I was ensuring I would.
00:07:03
Speaker
You are enslaved. Yeah. newly married and slowly up against this time clock of pressure, stress. Wow. Okay. We can go into that, but let's get started. So it continues on where, you know, my wife and I were doing the HDTV thing where you're
00:07:20
Speaker
You see everybody, the flip or the flop, where they go in and they take this ugly house, they make it this mansion, they flip it, they make $150,000. It just looks also marvelous. And then somewhere in the middle, I found out, or we found out rather that while we're living in this like half renovated home, my wife is pregnant. So we had some compounding reality that put the hammer down.
00:07:48
Speaker
Because now you realize, oh, wow, we're gaining dependence. And so here we are. We're in a half-renovated home, which was supposed to be a flip. You're real flexible when you're just a couple. You feel like, oh, yeah, we're renovating this. She's doing this. And now she can't even handle paint fumes.
00:08:11
Speaker
Renovation and morning sickness never seemed to go well to go. No, no, it really, it doesn't work out so well. And there's actually, there's even a little bit more to it. I'm remembering this now, but when we went off, when we were talking offline, I remembered, I didn't mention this.
00:08:29
Speaker
basically during that time, there was a very famous court case happening in the town where I was trying to flip properties and it put a lot of racial tensions, crime areas at play in a way that it just made it next to impossible to flip properties. And so between that, basically every day it compounded the problems that were building the debt, the payments,
00:08:59
Speaker
I think I remember the city, you know, I had thought, wow, there's all these historic properties that you can renovate. There are these historic areas. You fix them up. They're all antiquey. They're gorgeous. They look at like something out of restoration hardware. And then you find out very quickly that those are the worst places to put properties. The city gives you a litmus test and says, just throwing this out there, you have to restore it to this 1911 code. You have to say, awesome.
00:09:28
Speaker
That doesn't sound expensive at all. Exactly. So I have learned a lot of lessons in that regard and that's where I started. Okay. So it seems like it starts buckling down a little bit on you and Denise because now you're pregnant. So now you're not only fighting the credit card time crunch, you're fighting like a human being being made inside your wife. Right.
00:09:50
Speaker
Where did you go to? Where did you turn? Did you turn to real quick? You were at a, you had a day job too, right? So this is really where I had to stop attempting the day job thing. I had to stop attempting the entrepreneurial thing and jump full head on. You know, I was half doing the side job entrepreneurial thing. This was commitment now. Now we're, we're trading your time for your money at this point. You're going back to this nine to five. Okay.
00:10:18
Speaker
Well, I think this is an important point because we meet with a lot of people and they're making good income. They have an idea and they just want to dip that toe in. And once you dip that toe in, you don't want it to ever come out. But you're also not going to be successful because you're just not all in. So I think you've seen the power of that. So keep going.
00:10:41
Speaker
It is. It's actually a very hard thing because the more and more I do, I realize focus is power. And so what I had and I found myself in was there were about, I believe I got up at that time, I'm thinking five, four or five properties right in there that I couldn't flip that for whatever reason, locally, economically, whatever happened. And I'm strapped, I'm held down with these properties, right? Like I said, with credit cards, everything else.
00:11:10
Speaker
And these properties, I was not able to live, and it forced me into a position where I really had to completely leave all these dreams of real estate, entrepreneurial things, and really just commit to a daily job. But I was trading my hours in. I remember I had to make 88 outbound calls a day.
00:11:32
Speaker
Just to keep a maintained level. That's not the sales you have to make. I was doing that because the quickest thing to jump into when you need money really fast is a sales job. You jump in, here's your base, but then you can attempt to get commissions on top of that. Being the energetic, motivated guy I was, I was like, all right, we're going to do some sales. We're going to get ourselves out of this, pay all this debt down, maybe flip these homes when the economy comes back.
00:12:02
Speaker
Oh, wasn't that, uh, that was, uh, we, we got them for a while still. So when you, I imagine like, I kind of know you differently than I think probably Brian does, but you're a pretty energetic guy. You even mentioned it there. So when you go back to the cubicle of doom, I have a feeling that you thought like this was a responsible thing to do. I'm going to provide for my wife now, uh, newly, newly,
00:12:28
Speaker
I had a son coming. Pregnant, yeah. A newly pregnant wife. So I feel like you probably had a pretty good attitude walking in the cubicle of doom. Am I right or wrong? Yeah. No, you're right. In fact, I remember, it's funny you mentioned that because I remember as I'm walking in, you're the new guy, you're walking in. It literally was a massive expansive room of just these great cubicles. And like chipmunks, you'd see the little heads popping up. Groundhog stay. Literally, groundhog day. Yeah. I mean, it was that. You could think in a hammer, bam, bam, bam.
00:12:57
Speaker
But basically what I saw was I realized instantly all these discouraged faces popping up. And I remember thinking as I walked in, my first reaction was this is where dreams go to die. Wow. Wow. Which is your first dose of reality. Yeah.
00:13:15
Speaker
Because you got managers over you, especially when you're in your first 90 days, you have managers standing over you, ensuring your performance. Even the mental exhaustion you experience, there's no more creative thinking happening. Like, oh, maybe if I created this side business or this side hustle that I could... It's not even there. You're so just trying to survive.
00:13:41
Speaker
Yeah, that's a great survival mentality, especially when you have debt outside of those walls that are bringing you down so much more to keep your job at that point. So what did you do with these properties? You're hustling during the day.
00:13:54
Speaker
Yep. And this goes on, this goes on for a while. It's not like one, two, three, like I was, you know, six, eight months. I'm in these, I'm in one of these jobs and it's just over and over and I'd be attempting side things on the side to, you know, maybe pick up a little night job at a hotel, doing the receptionist role, you know, just a little something I'd worked. There was actually at one time period where I actually was working, I was doing overnights.
00:14:23
Speaker
And then I do another job during the day. And yeah, I remember somebody asking when, when did you sleep? And I said, Hey, you know, we'll work that out. These are just fine details.
00:14:35
Speaker
But the thing is, not only did I have the basic living expenses we have in America, I had these homes and credit cards and things. I remember I was like, oh, and I think of it as the most damaging time period in my life financially because I was doing a good thing. I was being responsible, but because I had gone out a little bit, I had done a couple of homes, I had done a little bit.
00:15:02
Speaker
I was retracting now this was this was i'm on the operating table and i remember i was putting up credit cards at some stage you know like i just in case i you know pay the balance is down i don't wanna use them you know that's how.
00:15:19
Speaker
And so that's where i found myself in the cubicle of doom when was the point when you're like. No i can't do it anymore or was it Denise telling you like no i can't do this anymore yeah exactly why do that with one would follow the other what no. I didn't want that day to come.
00:15:39
Speaker
No, what I found is we were always having discussions, but again, I go back to that mental exhaustion you have. When you are trading your hours and your life hours, the mental exhaustion, the creativity is not there. Everybody makes New Year's resolutions. People make New Year's resolutions. It's typically a diet. It's typically weight loss. It's typically something sometimes financial. We had happy
00:16:05
Speaker
opportunity where family members got together. I was working a sales job again. Different. This was in advertising now. We had an opportunity over Christmas, New Year's, that time period there. Companies give you off naturally. Family got together in Gatlinburg, Tennessee. A lot of family members, they all kind of chipped in, rented a cabin.
00:16:27
Speaker
And for a very short window of time, this is how powerful it is to have a pause, but for a very short window of time, Denise and I had what felt like a very long time, but it probably was only the matter of an hour or two or three.
00:16:43
Speaker
to think and we knew we had to do something or you could see the trajectory of our lives just continuing. No, maybe we get a little bonus or we get a little advanced and now I get a little bit higher in corporate America, but still I'd be just above water. And so we had time to think and we said, what's working? What do we have? All right, here's our finances. Here's our debt. Here's our liabilities. What do we actually have here?
00:17:11
Speaker
And I said, man, we still have those funny four or five rental houses that were
00:17:19
Speaker
supposed to be flips, so they're all over-leveraged, which means any income coming out of them isn't a lot. I think it was $800 or $900 total, like total, and everything else was over-leveraged. It may not have been that much. I bet if Denise was standing here, she'd be like, yeah, $500, not even $500. She's like, yeah, barely half of that.
00:17:44
Speaker
It's something that's not enough income to live off of, not even close. It's just a little bit of something. Teaser. Just a teaser. Teaser. But the funny thing was, all the time, I'm working these day jobs, I'm doing side hustles, night jobs, everything I can do just to stay above the debt
Realization and Focus on Rental Properties
00:18:02
Speaker
cycle. They kept paying, right? The rental properties, these income properties were paying this little, little tidbit.
00:18:13
Speaker
that i turned to the nice and i said you know the only stinking things that have worked consistently without me just willing it to happen has been these properties they don't make a lot of money but what if we had 30 of them and he's like yeah how are we getting 30 of them
00:18:35
Speaker
Yes. So we're there. It's in New Year's. It's in New Year's. And people are making resolutions, blah, blah, blah. And I said, we have got to get a multifamily property. We have got to get a multifamily property. We do that
00:18:51
Speaker
And that will allow me to quit the day job and we can all do every role fix things all red things all knock on doors all clean up whatever that means i'll do it because we'll have enough skill to handle the income now i had never done anything quite like that before i had done a very micro levels i just saw that if you could.
00:19:11
Speaker
We could have a building think about that i mean we could even move into the building there was all sorts of ideas going right now we don't have to pay rent now we do yeah so at this point. One of our where really hit home is one of our tenants moved out of the homes.
00:19:32
Speaker
And we were met with a vacancy. So we were like, heck, why are we paying rent? Let's move in. There's still a mortgage payment on that property. Let's move in. And we moved into that house. And so now we're moving into a rental property, right? So now income's getting less, whatever that $800 or $900. Now it really is cutting down. It's getting real, but now we have this thing where we
00:19:58
Speaker
And this is, this is the next phase where, all right, so we made a commitment. We're like, we're doing whatever it takes. I don't know how this works. By the way, my credit was not that good at this time. Um, like I'm talking probably, uh, 500 something. Yeah. If you think about that, it's, it's those credit cards. It was your interest that have got a little hand and up. There it goes.
00:20:20
Speaker
Yeah, we had my income and then they saw my dad and no more. So that's where I find myself. And I'm at this stage where we made a commitment and we got to do something. We're going to do something drastic. Back up. So you get this realization over new years and then, but you're still at the nine to five. You're still a cute little doom, right? Okay.
00:20:41
Speaker
Yeah, so you have to go back there and then but you have this grandiose idea. Yes. Yes. We had a second to think and now we're going back. Holidays are over, right? Yeah. So now what you go to do and again, you find yourself. I had no time farther it was from New
Ambitious Acquisition Attempt and Success
00:21:01
Speaker
Year's. The farther I found myself like, oh, we were just being, it was
00:21:04
Speaker
It was, it was the one I'm cheered for you. Yes. I'm cheered for you. Like you got to get out of the time suck over there. Yeah. I mean, really, and that's the thing you feel you're in this time vortex. And I, I said the only time I have to attempt somehow magically to get these, get a multifamily property. Um, and by the way, I didn't have like,
00:21:28
Speaker
money to put as a down payment or anything like that. I basically had eight or nine grand that I somehow had scratched everything I ever had. I probably sold a car or this type of thing. That's it. You had an idea, right? Yeah. I had an idea. It was an idea. So basically I had our lunch break and I had this completely unrealistic goal that I was going to call 150 listings.
00:21:53
Speaker
real estate listings in an hour. If you think about it, it mathematically does not make sense. Right. Totally. It doesn't even compute. But what I love about this is that you were supposed to make 88 calls on your regular job, which you wanted to double that for who?
00:22:08
Speaker
You, right? It was for you, finally. I actually have never put that together. But it's for you now. And so this double unrealistic goal now seems like I can get this done for me and Denise in my new unborn child. Yes.
00:22:26
Speaker
Powerful. We find ourselves here and I start making calls and you guess what happens. I'm laughed off the call almost every phone call. I get questions like, well, yeah, I know we have a 30-unit apartment for sale or a 38-unit apartment building for sale. Send over your proof of funds and then we'll send you more information. I'm like, okay. That's a protection to try to handle.
00:22:59
Speaker
The thing that was somewhat exciting was there was a couple brokers, there was a couple realtors, and there was a couple for-sale-by-owners that, for whatever reason, probably Compassion did send me over their financials. So I had a couple 30-unit apartment buildings or thereabouts
00:23:15
Speaker
that sent over financials, profit loss statements, different things that said, okay, this is how much to... So over this course of time, which is going on for a little while now, this wasn't like immediately, I was becoming familiar with what a 30 unit passive income real estate property looked like income was.
00:23:38
Speaker
Yes, you were like getting an education Yeah for free and give the listener an idea of like how much money was the purchase price on some of these? Just just just just like there was nothing under like 800,000 and I was looking at some really crummy stuff, right? I'm trying to look at like well, maybe it's not so good, you know You know
00:24:06
Speaker
So I know I'm looking I was actually looking really only in Florida Which is something I learned about later and I'll go into but basically I'm looking and I'm looking it started eight hundred thousand couple million You know, these are numbers. I can't even compute at this point. Yeah, this is crazy but let's just I gotta keep and the longer I kept getting rejected rejected I I Felt farther from that original idea. I really did like was this real here I am I'm making the sales calls doing this and this is
00:24:37
Speaker
I'm calling and where i had a shift and i started getting some positive results was i found a seller.
00:24:47
Speaker
who was desperate to sell. They were absentee, landlord. They were out of the state already, so they were not in Florida. I believe, if I remember correctly, their management just changed. Their manager quit. Something had just transpired that added urgency. I think it was on Craigslist. I found some ad for a 30-unit, but here's the catch, mobile home park.
00:25:15
Speaker
So I don't know about you guys, but in American culture, that's not the hottest topic to talk about. Yeah. I mean, if you're looking at the apartment complex in Detroit, you're kind of like, well, we're off speaking to go here, you know? I guess, you know, you start fighting. It is true. I mean, I think there is that stigma, unfortunately, you know? And now that, you know, Phillips family obviously owns a mobile home park and it's, that's right. And you get around it and it's like, whoa,
00:25:44
Speaker
Not only are these human beings and real people, but it's real money. True. True. And that's what I found out at that point. I asked for, uh, what little paperwork they had to prove their financials, which ended up by the way, being a lot more like bank statements versus profit and loss statements where these fancy apartment complexes had profit and loss. I was getting raw bank statements and Denise and I were sitting at a kitchen table, piecing this together at night, trying to figure out heads from tails.
00:26:11
Speaker
And then we would drive by the property. And it was a 30-unit mobile home park. It had room for expansion, but it was 30 units that were on location. 30-track. Yeah, 30 trailers. And I was like, ugh, gross. I think pimps, prostitutes, drug dealers. You're thinking, the place is going to be raided every day with police. This is my thought process. But when I put the apartment complex and I put the trailer park or mobile home park side by side, it was bringing in more money
00:26:41
Speaker
And this was in the absentee owner condition. Yeah. Wow. Less overhead. A lot of other factors I can go into, but I very quickly took a second look and didn't pass over it. And I usually, it was kind of funny because I don't know if the guy wasn't getting a lot of hits or what was going on. I actually kind of blew the seller off a little bit.
00:27:01
Speaker
Like I was like, Oh yeah, no, I'm still looking into that, but not so interested. And, um, and so what ended up happening is I kept driving by it, driving by it, driving by it. And I, you know, I, I, I remember Denise and I actually went fairly late at night, which is not a very good idea. You want to hit that thing fresh in the morning early. Don't go like eight, nine, 10, you know, okay. And when we go there late at nine, we're like, okay, there's something to this, you know, we can figure this out.
00:27:30
Speaker
And so I said alright now let's get to the stage of where we're at so I just started I mean I'm black and white I've got nothing to prove at this point I'm telling the guy I'm like hey what can we do with $10,000 you know I'm doing everything trying to put some down and he was just like oh wow you know he was now he's back and
00:27:51
Speaker
And, you know, I was using, I was doing sales. So I'm using my sales bill. I said, you know, I said, Hey, listen, we got a rental business, you know, I'm not going about my daily job, not talking anything like that. And in full, full, like disclosure, Caleb, you and I met in a conference who would kind of teach us how to do different things in different deals.
00:28:10
Speaker
traditional financing and so this stuff probably didn't scare you as much but now it's real life like now everything we've learned is now like seminar to the streets you know and there was it was interesting because the thing that was a disconnect is the rejection you get
00:28:28
Speaker
So there was truths in a lot of these workshops and similar than we were at, but they make it sound like it's easier to get these things financed. It's easier. There's a lot of things, but you're right. My synapsis gaps were opened up to the possibility that there must be something outside the possibility of walking into Wells Fargo. I am awesome.
00:28:50
Speaker
Yeah, I'd say, listen, my debt's up here. I have got this, but finance me, right? So the property, by the way, was in the 800,000 range. Okay. So on the lower end of your range of the stuff you're looking at. It was. And so that was somewhat attractive as well because the debt service was not nearly as high as some of these apartment complexes. And by the way, there was no way I was getting these apartment complexes. They were turning me down. These were traditional brokers. Nothing was happening.
00:29:20
Speaker
But at the same time, it was kind of awesome because it went side by side, mobile home parks making more.
00:29:26
Speaker
I start going into it and I'm trying to figure it out. Out of sheer desperation, I start looking for private lenders. My concept there was, I think I had that American version of something you'd see in a movie surrounding the tech bubble or something where Steve Jobs is sitting in his garage and some guy shows up with $100,000 and offers it to him right then. See, I'm looking for that angel investor's next cash.
00:29:56
Speaker
They were in my circle of influence. I had no relative that would loan me money. I had no parent, uncle, and nothing of that nature that I could draw on to get financing.
00:30:13
Speaker
I found myself in a position where I was looking, how can I get this purchase? I've got a seller who wants to sell. I'm the buyer. How do we make this happen? And so I started looking and I found pretty much the only remote rare possibility was very high interest shark lenders who essentially would put a lead against the property and use that collateral
00:30:39
Speaker
Instead of looking at my poor financial setup because they had something to take when i went belly up in fact, it almost seemed as if they were planning on me yeah dude plan b was planning for them yeah right right so so so i put a second mortgage on my house.
00:30:59
Speaker
The house I was living in, remember, it was a rental property. It's like a mortgage on my house. And that's how I financed the actual acquisition. And all of a sudden, I have this 30-unit mobile home park. Wow. Now what?
00:31:16
Speaker
So I find myself doing every single role. And by the way, I kept my day job at this point because I had this, not only did I just have all this debt service, I have a newborn child. There's a lot, there's a lot at play here.
Balancing Day Job and Property Management
00:31:29
Speaker
And so I am doing every role, which really essentially turned into me being gone on weekends. So I'm working all during the day, sometimes late at night after work, I drive up to the park. And this park isn't,
00:31:41
Speaker
across the street, right? It's not, it was actually about three and a half hours from my house. So, you know, you think about that. So you're doing six hours both ways. I really didn't have the budget to stay in a hotel and not even a budget hotel. And so I would be doing that trek, but when I did that trek, you know, so for the first time ever, I was forced to learn property management in, in a way that was,
00:32:08
Speaker
I'm cleaning up units, I'm showing units, I'm figuring out repairs or getting someone to do a repair in budget, not just opening up the book and calling the first guy. I did that initially, you get these massive quotes to redo the plumbing here and I was like, oh no, we're not even bringing that in a month. Yeah. You have shark lenders as your investments, your investors. You'd better think differently.
00:32:34
Speaker
And that's the whole thing, right? So the income, there was income coming in immediately, which felt cool by the way. Like I had never quite had where you saw income coming in. It all went back out because I'm playing a shark lender. I'm paying the debt. Totally. But you got that taste.
00:32:49
Speaker
I got that taste. I saw real people writing real checks paying for rent. And at that point, I realized I said, Wow, there is something to that. Basic needs are the real thing like food, water, shelter. If you're in one of those big three, there's always a need. And so I was so at that point, I do everything I learned I did everything wrong.
00:33:13
Speaker
And then later learned I could do everything right. But I had the property for eight months. And during that course of eight months, I tripled the existing rent roll. And it didn't happen right away. It actually more happened for the tail end of that year period. And so we tripled the rent roll. And even though that sounds great, it still wasn't enough for me to financially be able to be lighted out of my day job.
00:33:42
Speaker
Cause cause you know, I'm carrying this, I'm doing that. It was, it was a little bit, you know, we got a little slither or something coming in and that hit me to my next step where I was going to try something a little bit different. And I said, just out of curiosity, I don't even know if there's people that buy mobile home parks other than me. I was the one guy that got suckered into it. Cause I mean, it's a lot of hassles when you have 30 units calling in like, Oh, and by the way, they had my cell phone number.
00:34:12
Speaker
You're the guy. You're the guy. It's me, right? You know, at two o'clock in the morning, all of that. And it was always being able to deal with that was something that I really got taught through this time period too, because I get, you know, I was taking advantage of, I was people, you know, I, I found out that everybody dies between the last week of the month and the first of the month. Ah, crazy.
00:34:39
Speaker
Yeah, amazing. It happens in a month though. Same people. So anyway, so you find all these little tidbits out and I listed the property for sale because I said, Hey, we did some real value here. I wonder if there's a buyer out there. And I got all the other guys calling that went to the same seminars.
Major Milestone: Selling the Mobile Home Park
00:34:59
Speaker
And I knew they were in the same setup I was. And there really wasn't any deal to be had. And so I'm sitting there and I was just about to take those ads down. It was actually, it was a Saturday morning. I'm in the parks. I'm driving through the parks, going through units. I think I had some showings showing up and someone called me and it was a cash fire.
00:35:22
Speaker
I actually almost laughed him off the phone. I almost said, Yeah, right. Sure, buddy. I've heard this already. I know. And you're just flipping a contract or you know, there's some catch here. And he inquired and he didn't quite like my asking price and he was getting off the phone. But what I did was
00:35:39
Speaker
I sent him some more information and really that day I had an offer sitting in front of. And what was that offer compared to how many times you paid for it? Yeah, so the offer I got it was well well over six figures over what I had purchased it for. For eight months, mind you.
00:35:59
Speaker
Yeah. And so, and a large, and a large bit about that was verifying whether I was telling the truth about my rent role. The great thing is my wife, prior to getting married to me, I did seven years of public accounting. There you go. So my books were clean. There may have not been a lot in the books, but they were very clean. They were clean, squeaky clean.
00:36:20
Speaker
And so that was very easy to represent that. And within about 13 days, it was somewhere in that range, the property sold. Wow. Wow. That is such a sad story. I gotta ask a Phillip question here because we're going off script.
00:36:38
Speaker
You just went through a ton. You're working two jobs, three and a half hours away. You have a newborn child. We need to talk about your wife for a second. Cause like, what was that like to have her? She obviously was supportive of this path, which is, you know, like most women probably wouldn't be. Walk us through that. It's interesting because
00:36:58
Speaker
We actually didn't see each other that often, if you put together the chronological amount of things I was doing. And we did, but it was, oh, hey, it's eight o'clock at night. How's it going? Or, oh, it's six o'clock in the morning. I'm heading off to work. Because you have two kids, right? Oh, come on. Yeah. If you did see a little bit. You messed it at some point. Come on, buddy.
00:37:22
Speaker
Basically, and really what it was is, the more I was into it and the more I had put on my plate, I had this desire to own time. It wasn't even really about the money. I just had this almost dream in my head to have some utopia.
00:37:39
Speaker
time was possible. And so I had stacked the odds, right? I mean, we're either going down or it's going to happen. And at this point,
00:37:52
Speaker
So this happens, the property sells. I remember that wire hitting my very, very dry bank account and, and, and like sitting there hitting refresh, refresh, and all of a sudden I had six figures for the first time, really in my adult life. I was looking at it and I said, Oh, wow.
00:38:12
Speaker
Pause. I can breathe. Yeah. Oh, by the way, I quit on my day job. Give a good Jerry McGuire moment. All the groundhog stood up and watched you walk out.
00:38:36
Speaker
There was. And then, so here I am, this great thing happens. You know, I'm trying to not tell too many people because I'm waiting for all the family members to hit me up with loans or something. Wow, this is awesome. A couple of days past kind of thinking what's next. And I got hit in the gut so hard. And this is what I got hit in that way.
00:39:00
Speaker
I basically get hit in the gut with the back that, oh man, all those years, all those shadows. I had a pay down fest, which was kind of cool. Yeah. That's like one of the most fun things to do. Okay. Thousand credit cards. So I had a pay down fest, but at that point in the gut saying,
00:39:23
Speaker
I cannot go back now. I cannot go back. The shadows haunt me. I literally cannot go back. And so here I am at a point where I said, we have really done something. We've made mileage. We've made some ground. And it scared me so bad that
00:39:41
Speaker
We moved on to the next step, which was kind of an all out. Um, I said, we gotta find another one of these. We've done it. We can do it again. Sure. It was a lot of hassles. It was kind of cool for a couple of days to not have those tenants calling in, you know, all of a sudden it's like, wow, just transferred the number and there you go. And, and I don't have to deal with the hassles, but
00:40:02
Speaker
Now I said, Oh man, we got to do this again because this has worked.
The '500 Doors' Concept and Public Commitment
00:40:09
Speaker
And quite frankly, in a big way, this is the only thing that has, right? Like this isn't just getting a bonus at work. This was like altering. And, and I could see myself being the happy lotta winner who's right back at it in, you know, 40 seconds. Yeah, exactly. Exactly. And I was like, no, no, no option here.
00:40:29
Speaker
I think you're unique because we have lots of clients that own real estate. I think, you know, I was the last people around the country were all owned real estate, but where was the Genesis free idea to kind of put a brand around or a name around what you were doing? Because I think that makes you really uncommon, uh, not to be cliche with podcast name at all. I think it's really important distinction about, you know, your path forward.
00:40:52
Speaker
Yeah, no. So at that point, what I started doing is in a very short window of time, I had bought my next mobile home park and I had a little capital. I didn't have to borrow as much. So it was making more money. And I realized that my, the entire, and this is why I refer to myself as an economy of scale advocate. And what I mean by that is I realized that the more units I had,
00:41:17
Speaker
things like repair costs, things like utility bills, things like landscaping at the property became cheaper because I could use the same manager to go over to the next property. I can use the same manager to go to the third property if it was in the same vicinity. And with more units, remember, I had started off with the four or five units. Those units were working well. There just wasn't enough to even... And so at that stage, I said,
00:41:46
Speaker
I want it to be known what my direction is and where my path will lead. And I said, I have to do it publicly because I got to marry an idea. I mean, that's what we had done in the past, right? That's where I got the 30 units. And now instead of us having a goal where we're going to somehow magically get a multifamily property,
00:42:08
Speaker
I'm going to take that same commitment level and say i will have five hundred doors of passive income real estate because i'm married to that idea i say we're committed to doing this and i do it in a public way where people know about it. Guess what happens people.
00:42:28
Speaker
Yeah. Yeah. Where, where are you at? Where are you at with that goal, by the way? Yeah. So it keeps you on, it keeps you accountable, but it also allows people to buy in to where you're going and help you, which is something that I think people, people love to help people. And so when they know where you're going and you're clear about where you're going, no, definitely help you. Did you find that?
00:42:49
Speaker
Did you find that in your idea? It's actually more true than you know, because I actually started getting people, they were becoming familiar with the 500 doors slogan, kind of the brand, the social media hashtag that I had put out there, they started becoming familiar with it. And I'd have complete strangers, people I did not know that knew somebody that somebody that somebody that knew me reaching out to me.
00:43:11
Speaker
And at one point i got a five unit apartment complex because someone had tracked this five hundred doors brand and they were backed up on taxes they did not know where to turn it was an inherited property so it was a property by which.
00:43:30
Speaker
you know they didn't know what to do with it. It was about to be sold at a tax sale and they said we have seen your 500 doors thing on social media. I just wanted to reach out to you. Is there anything you can do? And I got ridiculously amazing deal on a five unit apartment complex because essentially they
00:43:51
Speaker
saw my brand. So it took on a monetization of form. And then there was also just the mere fact that everybody always asked me, Hey, how many doors you're up to? And so I'm not going back. And I'll tell you this quite honestly, it
00:44:12
Speaker
even more than just it being something where, okay, this is my goal. I wanted this to be something where I said, this is my mantra. I see freedom on the other side of 500 doors. And what I mean by that is
00:44:30
Speaker
I had done the math at some point. We got to 30 units. That worked. I started getting more units. And I said, if we get to 500 doors, this is a different level. We're reaching something where we can be operating with fields at a very different level because at that point,
00:44:49
Speaker
You just do the math. I don't even care if they're rented below market value. There's a certain amount of scale that's happening that we can take back our life and own time. And that is really what was the motivation there.
00:45:04
Speaker
How do you feel like you use debt now versus how you used to use debt or how you say debt used you?
Evolving Understanding of Debt and Financing
00:45:15
Speaker
Yeah. So debt used me and it used me really bad. And so because truth be told,
00:45:20
Speaker
I didn't even look at the credit card agreements most of the time when I would sign on the dotted line. I don't think most people do. They make it so easy nowadays, click to agree or a loan or whatever else, everything. And I truthfully believe this. A lot of times, going back and reading through those documents, even if you're not doing anything with it, whether it's a mortgage, whether it's a credit card statement,
00:45:49
Speaker
is such an education in and of itself because you'll hear all these fancy terms like view on sale clause. You'll hear adjustable rate mortgage. You'll hear all these things, which by the way, were a major factor in the 2008 financial crisis that
00:46:08
Speaker
Essentially, you may not know the answer, but you start looking it up on the Internet. You start getting books out at a library and you start seeing, wait, what does this mean? You start piecing it together. And so where I found myself is I said,
00:46:23
Speaker
I wasn't in a position originally, credit profile way, FICO score, to ever use it. So I had to look outside of it, which made me find this whole other world of asset-based lending. And so what happened was I was opened up to the idea of looking at debt in such a way that I realized that I may be living at a home,
00:46:51
Speaker
and in a home, and a home can be an asset later if I resell it, but unless that home is generating income for me, that home is, I mean, for lack of a better word, a liability. So I look at my residence and I look at that as a liability. It's a really nice liability, but that's the way I view it. Now, there's other things that go into that, but making that distinction that appreciation does not mean
00:47:18
Speaker
it's always good made me think differently how does that confidence when you walk into a bank now looking at asset-based lending what is the confidence that you now have in the bank when you ask them for a long how does that. So it's really interesting when i talk to lenders and i i talked to all different types of lenders i talking to lenders in traditional banks institutional banks but.
00:47:43
Speaker
Quite largely, I talk to hedge funds and pools of money where they are really talking to you to test your financial intelligence. Oftentimes, what has happened is in the past, they would start with, hey, what's your FICO score? Let's see if we can even carry on this conversation farther. I realized very quickly that
00:48:07
Speaker
FICO scores were for employees. I found myself where I wasn't in that category anymore. But the FICO score was really a way the lending institution could damage you.
00:48:22
Speaker
if you didn't do what you said, and that would be the last time you'd ever be able to buy an asset. You'd be leasing cars and renting apartments for the rest of your life, and probably not very nice apartments because they would damage your credibility. That's what the FICO score did.
00:48:38
Speaker
The difference in the distinction was when it comes down to serious commercial real estate of any kind where you're doing any sizable transaction, the banks are not looking about damaging your reputation. They're looking at what they can take away from you. When you realize that and you build your financial statement that you present to them,
00:49:00
Speaker
which is really kind of the past just to get the conversation going. It's like, you know, fill out a financial statement, let's get somewhere. And they're testing to see how, you know, right down to even if you fill it out sloppy can mean a whole lot. If you're, you're scribbling it on here and you don't add up the liabilities and the assets and you don't balance that out correctly and the total is inaccurate and right there you'll be disqualified. But my whole thing was,
00:49:30
Speaker
Learning how to talk by just being rejected and learning how to talk to lenders correctly about the fact that no no no no no we're not talking about my credit score here i said that that is nothing to do with this i got paid off and i got fifteen hundred units here's my schedule of real estate own and take a look at it.
00:49:52
Speaker
put together what my net worth is and let's play musical chairs and figure out how we can find this thing and that is what that distinction right there when i realize that the big banks.
00:50:03
Speaker
You get a developer in New York City or Chicago or someplace like that, right? They want to build a skyscraper, skyscraper that's almost a billion dollars in value. How can one person ever qualify to finance almost a billion dollars in value? Sure. I'll tell you, they very much can't do it with their FICO scores, so there must be another way.
00:50:28
Speaker
That's a great point. I don't think, you know, a lot of people appreciate that, you know, and I think even a lot of our clients that have real estate and they have assets, they don't appreciate the scale with which they could operate. Yes. You know, it's this kind of... I think they actually follow up on that point. I don't even think they realize what they have sometimes. Yeah, exactly.
00:50:51
Speaker
I'm not even saying that they have an enormous amount. Obviously now I'm at a stage where I have a portfolio of properties, but even a couple properties represented correctly on your financial statement, actually realizing what's an asset, realizing what's a liability and putting that on there correctly and getting past the whole approval process, which is really a class system that has been created for a solo income person.
00:51:22
Speaker
That's the biggest. A solo income person with no assets. Yeah, because they've got nothing. I mean, that's fundamentally the whole thing because they assume the employee has no assets. They have to base it on the reputation. And essentially the FICO score is to ruin the reputation so that they will never be able to pay in play. Sure.
00:51:47
Speaker
So we've got to wrap this up pretty soon. So in regards to kind of we've sent you our piece on seven sources of income. Yeah. Real estate isn't your only asset. And so can you kind of talk to the listener about just the different channels that you're generating passive income now and kind of where your passion is looking forward.
00:52:07
Speaker
i would love to so i operate on a couple different levels on number one i own the real estate but number two i manage all my own real estate and that's very important to me because that you know in and of itself becomes that's a separate entity right so i'm managing my own properties but it really is a separate company that operates the properties to keep sure i'm lying to keep better profits that's very important the other thing too is i
00:52:36
Speaker
I am doing more and more to take my real estate brand, not because I want to create a seminar. In fact, I never really would like to share the secrets in a Broadway beyond what I blood sweat tears. Now, let me bundle that up and give it to you in a little packet. I would hate to do that.
00:52:53
Speaker
But really, for the reason that when I had a $30 million deal that I was dealing with recently, that deal I ended up rejecting because the numbers didn't add up. But because they looked me up, that was the credibility because they found my real estate brand was a way of putting a subject matter on my everyday dealings. And that's how I really utilize that. The other thing too is,
00:53:22
Speaker
In America, at the 2008 financial crisis, there was 55 million Americans that could not qualify for a bank loan. That number is drastically, drastically higher now. And so what we do so often is provide now, on the other side of things, we've almost flipped and become those lenders in a way where we will provide alternate forms of financing for someone to own their own home, for someone to be able to
00:53:50
Speaker
Uh, yeah, have a piece of the Americana last part is, um, is the fact that then I take those securities, those actual, uh, you know, those that we've created and those in and of themselves, we can have an additional stream of income. So, you know, it can be part of the same subject real estate, but there's, there, there can be a lot of streams that are divided that actually become different businesses and independently stand as bill is on their own.
00:54:20
Speaker
Wow that's a great point so if you guys wanna hear more about Caleb Walsh you can look him up at his Facebook page which is Caleb Walsh official and if he is Twitter handle is Caleb Walsh that's C-A-L-E-B-W-A-L-S-H
00:54:38
Speaker
Caleb, it was a joy to talk to you. Thank you so much for the way that you're uncommon, for how you help people. And I think the audio might have cut out. You do drive a Lamborghini paid off. Is that correct? That is correct. I love that. I didn't just lease it.
00:54:56
Speaker
So if you have any questions for Caleb or us, please feel free to reach out, like us, subscribe to this channel, and give us a good rating so we can get out to more people and we can help people have this uncommon path. This is Phillip Ramsey. This is Brian Duers. And you've been listening to Uncommon Life Projects. Thanks a bunch and we'll be throwing out some more content. Thanks, guys. Thanks, everybody. Bye. Thanks, guys.
00:55:19
Speaker
That's all for this episode of the Uncommon Life Project, brought to you by Uncommon Wealth Partners. Be sure to visit uncommonwealth.com to learn more about our services. Don't miss an episode as we introduce you to inspiring people who are actively pursuing an uncommon life.