with all these real estate deals whenever you're selling a piece of
property do you put all the money into a new piece of property because if you
don't you end up paying massive taxes on it yeah yeah
i never pay taxes if if there's a way not to pay i never pay okay so you're
constantly basically flipping your money into other
reels yeah exactly so i never have the money right i can never actually touch
the money you know in a real estate transaction as
you know if you touch any of the money then it's going to get taxed so what i
would do is i would just trade into another deal
and uh i'm not avoiding the irs i'm just deferring
to the future some future like who knows when that is
so so that i can get my money to work and this is where i really started
learning about money because they don't teach you this in college
five years of college they didn't teach me look keep
growing the nut like the the the the value of the property the the
equity in the property it went from 350 grand 3 million to 9 million to 12
million i can't spend any of it this is what this is what so many of
your listeners need to understand is that like i'm not buying gucci belts
i'm not buy i didn't have a a a european car until i was 45 years old
i was worth millions of dollars based on the real estate but i didn't have any
nice stuff nobody knew my life had changed
but as this this this equity is growing it's paying me every month in
passive income so let's say it was 10 or 8 percent whatever the number is it
goes from 350 to 3 million to 12 million dollars
i can actually receive less money every month
and my incomes come going up this is money for the first time in my life i
was starting to earn more money from my passive
investments than i was for my earned income and i
never took i never took uh any attention off of my earned income i
was still pounding on my businesses i had two little businesses
and the real estate and then the other two businesses i just kept pushing on
and as i would accumulate more cash we'd go buy more deals
so then 2007 hits and you know and i remember leading up
to 2007 they were giving loans to anybody and
everybody it didn't matter you could work at a grocery store and you could
get approved for a half million dollar house
how many loans do you write each month ah about 60. what was it four years ago
10 maybe 15. yeah i was a bartender now i own a boat
like they had option arm loans where you start out and your mortgage payment is
nothing and they say well don't worry about it
it'll just refinance when the house goes up and you'll
it'll still stay low forever and then everything unraveled in 2007. how did
that hit your business look a lot of property the the whole
environment was insane right even even before the
bus a guy like me i'm trying to i'm trying to do this business
very practical very conservative investments
i'm putting a lot of money down to buy a deal so if a deal is
uh eight million dollars i'm putting 2.4 million dollars down
i got my buddies my buddies are buying a 8 million
deal taking 800 grand out i'm like what are you guys doing man
this is insane well you should be doing it too i said dude
there's nothing about this that makes sense except that it's too easy
and so you know everybody was doing this okay now this reminded me of the drug
days my drug days when i couldn't say no to something
and to me it's like you have to say no if you want to
create wealth for yourself there's things you have to say no to
i didn't lose one piece of property in 2007
8 9 10. i never lost anything every one of my friends that did this
nonsense lost everything they had i had a bank i owed 50 million dollars to a
bank uh the bank went under okay because they did they participated
in the foolishness now here's the problem with that
uh when you're in a bar and the place goes insane
it doesn't matter whether you're carrying a gun or drinking or
doing foolish stuff or not if you're if you're in the
the mass hysteria of insanity you're gonna get beat up
and i was in i was in all this right so first thing that happens is
the bank collapses new bank comes in and says we need our money
i'm like the money's not due for a couple years yeah no no no
you violated this agreement and that agreement i'm like what
technical default i never even heard that term it's a technical default on
the loan uh because your net worth changed i'm
like what he's like the value of the properties
are down i'm like dude the value of the entire universe went down
so they're just trying to they're trying to squeeze people that had money
because the people that didn't have money were folding
so fast the banks couldn't keep up with it
i owe 50 million dollars to the banks you can't sell anything
my other two businesses have been like literally cut in half
maybe cut into by two-thirds i was living in los angeles about to
have a baby my first baby just got married told my wife i said we can't
spend one penny on anything and i have no idea
how long this is going to last so it didn't financially it just
terrified me right because because i realized
how much it takes to really be protected in society
today because you don't know these things are going to happen
you