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Episode 11: Caleb Walsh and What’s Behind 500 Doors
195 Plays7 years ago
What an incredible story. 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 Life Project 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
Defining the Uncommon Life
00:00:02
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. We're going to also give you some tools, tricks, and tips for starting or accelerating your own efforts to live an uncommon life.
Introduction of Hosts and Guest
00:00:27
Speaker
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.
00:00:44
Speaker
Let's call her Frankie today. Thank you for the intro, Frankie. I really appreciated 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. Yeah, nine or 10 years ago.
00:01:01
Speaker
Yeah, at an investment conference and I can't wait for you to unpack some of the knowledge that he's found throughout the years and I really think 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.
Caleb Walsh's Journey to 500 Doors
00:01:18
Speaker
ran off kill with bio and we'll jump in 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 entail his story
00:01:41
Speaker
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.
00:01:59
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
00:02:18
Speaker
Oh man, I have everything from a sales job to just a little customer service rep. 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.
00:02:39
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.
00:02:51
Speaker
The answer is I think I had a more idealistic kind of like, oh, you know, you kind of grow up and everybody in America wants to be a rock star, right? Like, 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, firsthand I'd see business transactions go on at a young age.
00:03:15
Speaker
But really, I had that realization about those transactions and the education I was getting through that later.
00:03:24
Speaker
Growing up, honestly, it was kind of a joke. I never wanted to have anything to do with anything my parents had going on business-wise. No, no, no. You had a dream. 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.
00:03:50
Speaker
Interesting.
Struggles and Realizations in Property Flipping
00:03:51
Speaker
Okay. Walk us through that trigger point. Okay. And where were you at the time? Were you at home? Were you at a best job? Yeah. So, it started out where I had recently got married and I was, you know, you pitch the girl of your dreams on the light of her dreams. Yes. And then on the other side of happily ever after, you figure out you got to pay the bills.
00:04:19
Speaker
Those things keep coming. I don't understand. It's like the cyclical nature of life thing. I don't know what it is, but no. I was venturing in real estate. I was attempting to flip homes. This is shortly thereafter the economic meltdown.
00:04:38
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.
00:05:05
Speaker
And 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, you know, all those seminar guys, different guys, you attend a three week weekend, a three day weekend or something of that nature. And I found myself attempting to flip properties and they would always take
00:05:30
Speaker
three to four months longer than I thought it would take to flip. And maybe a little bit more money than you thought too. Exactly. Exactly. Because what ends up happening when you're waiting that long, basically it's on credit cards. It's on the, they had the, they had two programs. I remember Lowe's and Hope Depot had a six month and one had an 18 month no pay program where you, it was, it was basically like you didn't get any interest during that wait time. But if you,
00:05:58
Speaker
did it paid off before then it compounded and you got hit you got smacked in the face pretty hard options real estate game. What exactly will understand it then i was losing my options. That point you're trying to hold up.
00:06:16
Speaker
such an amount of debt. 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.
00:06:32
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 do so. So it continues on where, you know, my wife and I were doing the HDTV thing where you're
00:06:48
Speaker
you see everybody the flip for the flop where they they go in and they take this ugly house they make it this mansion if they flip it they make a hundred fifty thousand dollars it just looks also marvelous and then somewhere in the middle i found out where we found out rather that.
00:07:04
Speaker
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 because now you realize, oh wow, we're gaining dependence.
00:07:22
Speaker
And so, and so here we are, we're in a half renovated home, which was supposed to be a flip, you know, you're real flexible when you're just a couple, you feel like, oh, yeah, you know, this is, you know, we're renovating this, she's doing this, and now she can't even handle pink fumes.
00:07:40
Speaker
It's 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. And this is I'm remembering this now. But when we went off when we were talking offline, I remembered I didn't mention this.
00:07:57
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.
00:08:28
Speaker
I think I remember the city. I had thought, wow, there's all these historic properties that you can renovate.
00:08:36
Speaker
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 because this city gives you a litmus test and says Just throwing this out there. You have to restore it to this 1911 code. You have this awesome. That doesn't sound expensive at all exactly
00:09:01
Speaker
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.
00:09:17
Speaker
Right. So where did you go to? Where did you turn? Did you turn to? And real quick, you had a day job too, right? So this is really where I had to stop attempting the day job thing.
Commitment to Real Estate Success
00:09:30
Speaker
I had to stop attempting the entrepreneurial thing and jump full head on.
00:09:34
Speaker
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 cycle of doom. Okay, okay? This is an important point because you know so we meet with a lot of people and
00:09:53
Speaker
Yeah, they they're making good income. They have an idea and they just want to dip that toe in right and once you dip that toe in You don't want it to ever come out, right? But you're also not gonna be successful because you're just not all in so I think it's right I think you've seen the power that so keep going 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
00:10:22
Speaker
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. And these properties were, I was not able to flip and it forced me into a position where I really had to completely leave all these dreams of real estate, entrepreneurial things and
00:10:51
Speaker
Really just commit to a daily job but i was trading my hours and i was you know i remember i had to make eighty eight outbound calls a day just to keep a maintained level i mean that's not the sales you have to make that's not the
00:11:07
Speaker
And I was doing that because the quickest thing to jump into when you need money really fast is a sales job, right? Sure. You know, okay, you jump in, here's your base, but then you can attempt to get commissions on top of that. And so 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 up.
00:11:32
Speaker
Oh, wasn't that a, that was a, we had 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 Cumacole of doom, I have a feeling that you thought like this was the responsible thing to do. I'm going to provide for my wife now newly.
00:11:56
Speaker
newly pregnant, yeah, 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 know, it's 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.
00:12:26
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?
00:12:43
Speaker
Yeah. Because you got managers over you, especially when you're in your first 90 days, you have managers standing over you, ensuring your performance. And so just 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.
00:13:09
Speaker
Yeah, that's a great survival mentality, especially when you have debt outside of those walls who are bringing you down. It needs so much more to keep your job at that point. So what did you do with these properties?
Scaling Up for Financial Freedom
00:13:21
Speaker
You're hustling during the day.
00:13:23
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, 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 work. There was actually at one time period,
00:13:48
Speaker
where I actually was working, I was doing overnights, and then I'd do another job during the day. Yeah, and I remember somebody asking, when did you sleep? And I said, hey, we'll work that out. These are just fine details. 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. And I remember I was like, oh, and I think of it
00:14:16
Speaker
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
00:14:27
Speaker
gone out a little bit. I had done a couple homes, I had done a little bit. I was retracting now. This was, I'm on the operating table level. I remember I was cutting up credit cards at some stage. Just in case I paid the balances down far enough, I don't want to use them.
00:14:48
Speaker
And so that's where I found myself. You're in the cubicle of doom. When was the point when you're like, nope, I can't do it anymore? Or was it Denise telling you like, nope, I can't do this anymore? We always had. Yeah, yeah, exactly. Well, I knew that one would follow the other. No.
00:15:06
Speaker
didn't want that day to come. So 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. And so we had it's, you know, everybody makes New Year's
00:15:24
Speaker
Resolutions right so people make new year's resolutions. It's typically a diet. It's typically weight loss It's typically something sometimes financial and we had have the opportunity where family members got together I was working a sales job again different. This was in advertising now And we had an opportunity over Christmas New Year's that time period their companies give you off naturally and family got together in Gatlinburg, Tennessee a lot of family members they
00:15:53
Speaker
all kind of chipped in, rented a cabin, 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 a matter of an hour or two or three.
00:16:12
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?
00:16:39
Speaker
And I said, man, you know, we still have those funny four or five rental houses that were supposed to be flips. So they're all over leveraged, which means any income coming out of them isn't a lot.
00:16:53
Speaker
I think it was eight or $900 total, like total, and everything else was over leverage. It may not have been that much. I bet if Denise was standing here, she'd be like, yeah, $500, not even $9,000. She's like, yeah, barely half of that. And so we got the something that's not enough income to live off of, not even close. It just was a little, kind of a little bit of something. Teaser, just a teaser. Teaser.
00:17:20
Speaker
But the funny thing was is they 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 cycle. They kept paying, right? Like the rental properties, these income properties were paying this little, little tidbit.
00:17:41
Speaker
that I turned to Denise and I said, you know, the only stinking things that have worked consistently without me just willing it to happen has been these rental properties. They don't make a lot of money, but what if we had
00:17:56
Speaker
30 of them. And then he's like, yeah, how are we getting 30 of them? So that's where, so we're there. It's a new year's, it's a new year's and where 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.
00:18:19
Speaker
And that will allow me to quit the day job. And I'll do every role. I'll fix things. I'll rent things. I'll knock on doors. I'll clean out units. 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 it on very micro levels. But I just saw that. If you could, man, we could have a building. Think about that. I mean, we could even move into the building. There was all sorts of ideas flowing, right? Within one unit, now we don't have to pay rent.
00:18:49
Speaker
Yeah, so at the at this point one of our we're really hit home is one of our tenants moved out of the homes and We were met with a vacancy. So we were like
00:19:05
Speaker
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
00:19:26
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, five hundredths 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.
00:19:48
Speaker
Yeah, we had my income and then they saw my debt 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 cubicle of doom, right? Okay.
00:20:09
Speaker
Yeah, so you have to go back there and then but you have this grandiose idea. Yes. How do you get 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
00:20:26
Speaker
And as farther it was from New Year's, the farther I found myself, like, oh, we were just being, it was, 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 said, the only time I have.
00:20:48
Speaker
to attempt somehow magically to get a multifamily property. And by the way, I didn't have 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.
00:21:16
Speaker
And I had this completely unrealistic goal that I was going to call 150 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? You. Right? It was for you, finally. That's why I actually have never put that together. Ta-da.
00:21:44
Speaker
Um, but it's for you now. And so this double like unrealistic goal now seems like I can get this done for me and Denise, my new unborn child. Yes. Powerful. Okay. Love it. So we find ourselves here and I start making calls and you, you, you guess what happens. I'm laughed off the call almost every phone call. I started asking, I get questions like, well, yeah, no, we have a 30 unit apartment for sale or a 38 unit apartment apartment building for sale. Um,
00:22:13
Speaker
send over your proof of funds and then we'll send you more information." I was like, okay, that's an objection to try to handle. 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. I had a couple
00:22:40
Speaker
30 unit apartment buildings or there abouts that sent over Financials that you know profit-loss statements different things that said okay This is how much did go over this course of time, which is going on for a little while now This wasn't like
Discovering Mobile Home Park Opportunities
00:22:55
Speaker
immediately. I was becoming familiar with what a 30 unit 30 unit
00:23:02
Speaker
passive income real estate property look like the income ones. Yes. You were like getting an education for free and give the listener an idea of like how much money was the purchase price on some of these? Like what's the ballpark? Just like there was nothing under like 800,000.
00:23:23
Speaker
looking at some really crummy stuff, right? I'm trying to look at like, well, maybe it's not so good. You know, so I know I'm looking I was actually looking really only in Florida.
00:23:39
Speaker
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 get 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 then I I'm calling
00:24:08
Speaker
And where I had a shift and I started getting some positive results was I found a seller who was desperate to sell. They were absentee landlord. They were out of the state already, so they were not in Florida. And I believe, if I remember correctly, their management just changed, like their manager quit. Something had just transpired that added urgency. And I found, I think it was on Craigslist,
00:24:36
Speaker
I found some ad for a 30 unit, but here's the catch, mobile home park.
00:24:43
Speaker
So I don't know about you guys but in American culture, that's not the hottest Talking about yeah, I mean if you're looking at apartment complex in Detroit, you're kind of You know 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 right and you get around it and it's like whoa
00:25:13
Speaker
Not only are these human beings and real people, yeah, but it's real money. Yeah, true, true. And that's what I found out at that point, I asked for
00:25:22
Speaker
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 robbed bank statements and Denise and I were sitting at a kitchen table, piecing this together at night, trying to figure out heads from pails. 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.
00:25:49
Speaker
Yeah. 30 trailers. And I was like, Oh, gross. You know, I think pimps, prostitutes, drug dealers. I mean, this year you're thinking the place is going to be rated every day with, you know, this is my thought process. But when I put the apartment complex and I put the, uh, trailer park or mobile home park side by side, it was bringing in more money. And this was in the apps and key owner condition. Yeah. Wow. Less overhead.
00:26:15
Speaker
A lot of other factors I can go into, but I very quickly took a second look and didn't pass over it. 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. I was like, oh yeah, no, I'm still looking into that, but not so interested. What ended up happening is I kept driving by it, driving by it, driving by it. I remember Denise and I actually went fairly late at night, which is not a very good idea.
00:26:46
Speaker
You want to hit that thing fresh in the morning. You want early, don't go like 8, 9, 10, you know, okay, just throw that out there. And when we go there late at 9, we're like, okay, there's something to this, you know, we can figure this out. And so I said, all right, 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? What can we do with $10,000 and not even 10? You know, I'm doing everything trying to,
00:27:15
Speaker
Put some down and he was just like, oh wow, you know, he was now he's back pedaling 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 baby 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 and true
00:27:38
Speaker
non-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 similar to the streets you know and there was it was interesting because the thing that was a disconnect is the rejection you get right so there was truths in a lot of these workshops and seminars we were at
00:28:00
Speaker
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 synapses were opened up to the possibility that there must be something outside the possibility of walking into Wells Fargo. I'm awesome. Yeah, say listen, my dad's up here, I've got this, but finance me, right? Sure.
00:28:25
Speaker
The property, by the way, was in the 800,000 range. Okay. So on the lower end of your range with the stuff you were 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. Like the way we were talking, they were turning me down. These were traditional brokers, nothing was happening. But at the same time, it was kind of awesome because it went side by side, mobile home parks making more.
00:28:55
Speaker
I start going into it and I'm trying to figure out, and out of sheer desperation, I start looking for private lenders. My concept there was, I think I had that American, almost the version of something you'd see in a movie surrounding the tech bubble or something where Steve Jobs 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.
00:29:24
Speaker
found out very quickly they didn't exist. They were in my circle of influence and 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.
00:29:41
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 lean against the property and use that collateral
00:30:07
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, absolutely. Dude, plan B was plan A for them.
00:30:22
Speaker
Yeah, right, right. So I put a second mortgage on my house, the house I was living in, remember it was a rental property, I had 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. Now what?
00:30:44
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 at play here 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
00:31:10
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,
00:31:25
Speaker
Doing that track but when i did that track you know so for the first time ever i was forced to learn property management in a way that was. I'm i'm cleaning out units i'm showing units i'm figuring out repairs or getting someone to do a repair in budget not just.
00:31:46
Speaker
opening up, you know, the book and calling the first guy. I did that initially. You'd get these massive quotes to redo the plumbing here. And I was like, Oh no, we're not even bringing that in a month. You know? Yeah. You have shark lenders as your investments, your investors. You got to think differently. 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.
00:32:13
Speaker
It all went back out because I'm paying the shark lender. I'm paying the debt. Totally. But you got that taste. 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.
Managing and Selling for Profit
00:32:36
Speaker
And so I was, so at that point I do everything. I learned, I did everything wrong.
00:32:42
Speaker
And then later learned I could do everything right. But I have 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 period. And so we tripled the rent roll.
00:33:02
Speaker
And even though that sounds great, it still wasn't enough for me to financially be able to be lined it out of my day job. Because I'm carrying this, I'm doing that. It was a little bit, we got a little slither of something coming in and that hit me to my next step where I was going to try something a little bit different.
00:33:22
Speaker
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, you know, I mean, got suckered into it, got suckered into it. But because 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. You're the guy, you're the guy, right? And that, you know, at two o'clock in the morning, all of that. And it was always
00:33:48
Speaker
Being able to deal with that was something that I really got caught through this time period too, because I get, you know, I was taking advantage of, I was people, you know, I found out that everybody dies between the last week of the month and the first of the month.
00:34:06
Speaker
crazy, yeah, amazing it happens in a month though, so 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 I did
00:34:27
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. I 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.
00:34:51
Speaker
And 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.
00:35:07
Speaker
I sent him some more information and really that day I had an offer sitting in front of me. And what was that offer compared to how many times you paid for it? Yeah, so the offer I got, it was well over six figures over what I had purchased it for. For eight months, mind you.
00:35:27
Speaker
Yeah, 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, did seven years of public accounting, so our books were clean. There may have not been a lot in the books, but they were very clean. They were clean. Squeaky clean.
00:35:49
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 Philip question here because we're going off script.
00:36:07
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 because 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 we actually didn't see each other that often if you put together the chronological amount.
00:36:32
Speaker
i was doing and we did but it was oh hey it's eight o'clock at night how's it going there was oh it's six o'clock in the morning i'm heading off to work because you got two kids right come on
00:36:49
Speaker
But basically, you know, 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 where time was possible. And so I had stacked the odds, right? I mean, we're either going
00:37:16
Speaker
down or where it's going to happen. And at this point, 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. And I was looking at it and I said, Oh, wow.
00:37:41
Speaker
pause, I can breathe, but by the way, I quit on my day job.
00:38:04
Speaker
There was and then so 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 Yeah, you know something Wow, this is awesome
00:38:20
Speaker
a couple days pass kind of thinking what's next and I got hit in the gut so hard and this is what I got hit in the gut with. I basically get hit in the gut with the fact that oh man, all those years, all those shadows, I had a pay down fest which was kind of cool.
00:38:36
Speaker
Yeah, that's like one of the most fun things to do okay thousand credit cards But at that point get hit in the gut saying I Cannot go back now and not go back the shadows haunt me like I literally cannot go back
00:38:59
Speaker
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 I mean, it scared me so bad that we moved on to the next step.
00:39:11
Speaker
which was kind of an all out. Um, I said, we got to 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
00:39:31
Speaker
Now I said, oh man, we got to do this again because this has worked. 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 I could see myself being the happy lotta winner who's right back at it in, you know, 40 seconds.
00:39:53
Speaker
Yeah. Yeah, exactly. Exactly. And I was like, no, no, no option. I think you're unique because we have lots of clients that own real estate. I think, you know, I was a lot of people around the country world on real estate, but where was the genesis for the idea to kind of put a brand around or a name around what you were doing? Because I think that makes you really uncommon not to be cliche with podcast name at all. Sure. I think it's really important distinction about, you know, your path forward.
00:40:20
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.
00:40:27
Speaker
and I had a little capital I didn't have to borrow as much so it was making more money and I realized that the entire and this is why I refer to myself as an economy of scale advocate and what I mean by that is I realize that the more units I had things like repair costs, things like utility bills, things like
00:40:50
Speaker
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, I want it to be known what
00:41:18
Speaker
my direction is and where my path will
Building the 500 Doors Brand
00:41:21
Speaker
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. Now, instead of us having a goal where we're going to somehow magically get a multifamily property,
00:41:37
Speaker
I'm going to take that same commitment level and say, I will have 500 doors of passive income real estate. Because if 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.
00:41:54
Speaker
Guess what happens? Yeah, yeah, where you at? Where you at with that goal, by the way? So 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. So when they know where you're going and you're clear about where you're going,
00:42:15
Speaker
They'll definitely help you. Did you find that? Did you find that? I did. 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.
00:42:40
Speaker
At one point, I got a five-unit apartment complex because someone had tracked this 500 Doors brand. They were backed up on taxes. They did not know where to turn. It was an inherited property. It was a property by which
00:42:58
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
00:43:19
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. I'm not going back. And I'll tell you this quite honestly, it even more than just it being something where, okay, this is my goal. Yeah.
00:43:46
Speaker
I wanted this to be something where I said, you know, this is, this is my mantra. I see freedom on the other side of 500 doors. And what I mean by that is I had done the math. At some point we got to 30 units that worked. I started getting more units and I said, we get to 500 doors. This is a different level when we're reaching something where we can be
00:44:12
Speaker
operating with deals at a very different level because at that point 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.
00:44:28
Speaker
And that is really what was the motivation there. How do you feel like you use debt now versus how you used to use debt or how you say debt used you? Yeah. So debt used me and it used me really bad. And so because truth be told,
00:44:49
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. I truthfully believe this. A lot of times, going back and reading
00:45:11
Speaker
through those documents, even if you're not doing anything with it, whether it's a mortgage, whether it's a credit card statement, is such an education in and of itself, because you'll hear all these fancy terms like due 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
00:45:36
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 saying, wait, what does this mean? You start piecing it together. And so where I found myself is I said,
00:45:51
Speaker
I wasn't in a position originally credit profile with a 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, 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 and in a home.
00:46:21
Speaker
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, 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 it's always good, made me think differently.
00:46:51
Speaker
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 loan? How does that fit? It's really interesting. When I talk to lenders, and I talk to all different types of lenders, I talk to lenders in traditional banks, institutional banks, but quite largely, I talk to hedge funds and pools of money.
00:47:16
Speaker
where they are really talking to you to test your financial intelligence and so 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 and I realized very quickly that FICO scores were for employees and I found myself where I wasn't in that category anymore.
00:47:43
Speaker
But the FICO score was really a way the lending institution could damage you 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.
00:48:07
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. And when you realize that,
00:48:25
Speaker
and you build your financial statement that you present to them, which is really kind of the path 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
00:48:48
Speaker
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
00:48:58
Speaker
learning how to talk by just being rejected, 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 has nothing to do with this. I've got a paid off Lambert. I've got 1500 units. Here's my schedule of real estate owned. Take a look at it.
00:49:21
Speaker
put together what my net worth is and let's play musical chairs and figure out how we can finance this thing. And that is what that distinction right there, when I realized that the big banks, you know, 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
00:49:45
Speaker
ever qualify to finance almost a billion dollars in value. I'll tell you, they very much can't do it with their FICO scores, so there must be another way. That's a great point. I don't think a lot of people appreciate that. I think even a lot of our clients that have real estate and they have assets,
00:50:06
Speaker
they don't appreciate the scale with which they could operate. Good point. Yes. You know, it's this kind of, I think actually to follow up on that point, I don't even think they realize what they have sometimes. Yeah, exactly. I'm not even saying that they have an enormous amount. You know, obviously now I'm at a stage where I have a portfolio of properties, but even a couple properties represented correctly on your
00:50:32
Speaker
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.
00:50:50
Speaker
That's the biggest. A solo income person with no assets. Yeah, because that's fundamentally the whole thing. Because they assume the employee has no assets, they have to base it on their reputation. And essentially the FICO score is to ruin their reputation so that they will never be able to pay in play. Sure.
00:51:15
Speaker
So go ahead. We've got to wrap this up pretty soon here. So in regards to kind of we've sent you our piece on seven sources of residual 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? I would love to. So I operate on a couple different levels. Number one, I own the real estate.
00:51:43
Speaker
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 bottom line to keep better profits. That's very important. The other thing too is I
00:52:04
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, but really for the reason that when
00:52:26
Speaker
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, right? And that's how I really utilize that. The other thing is too is
00:52:51
Speaker
In America, at the 2008 financial crisis, there was 55 million Americans that could not qualify for
Diversifying Income Streams
00:52:58
Speaker
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
00:53:16
Speaker
to be able to have a piece of the Americana. Last part is the fact that then I take those securities, those actual mortgages that we've created.
00:53:31
Speaker
and those in and of themselves become an additional stream of income. So it can be part of the same subject, real estate, but there can be a lot of streams that are divided that actually become different businesses and independently stand as pillars on their own.
00:53:49
Speaker
Wow. That's a great point. So if you guys want to hear more about Caleb Walsh, you can look him up at his Facebook page, which is Caleb Walsh official. And if his Twitter handle is Caleb Walsh, that's C-A-L-E-B-W-A-L-S-H.
00:54:07
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.
00:54:25
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.
00:54:47
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.