Chapter 2 – Going Broke

In case you didn't see chapter 1, then go here to read the beginning of the story.

I was rolling and on a high – I was living my dream free from Corporate America…

And of course along the way – I would face several obstacles.

But I really wasn't prepared for them to come so soon-

My first real challenge involved getting denied by 3 banks within a month after quitting my job.

It's kind of hard to buy houses without a bank backing you or so I thought.

See it was right after the 9/11 attacks and now many of the banks were taking part in a lending freeze until they saw what was happening in the marketplace – especially for real estate investments.

It was really weird because I had more money  in the bank, perfect credit and the deals were really solid.

But – it had nothing to do with me though…

The financial markets were completely upside down, so I had to find more creative ways to do deals.

And that is what I did – I started focusing on how to get into deals with little to no money and said “screw the banks”.

And I got damn good at it.

As a matter of fact, it got easier to buy a house using these techniques than it ever was going to the bank…

As time rolled on,  even the missus was able to quit her dreaded job.

That was one of the happiest days –

Knowing my wife was able to quit and stay home with out little boy..

I felt I had actually accomplished something when she finally quit – she was  now a believer and my confidence was super high.

So, I began a real estate blog and wrote a ebook about my experiences in an effort  to try make a few hundred bucks a month.

I didn't really think of the site as being a big money maker initially and really  had no idea what I was doing.

Just took some action and began to get some optins and making a few sales along the way – nothing real big but making a few hundred dollars to a thousand a month from my book and my blog…

However, several months later my real estate business began to really struggle as  the local economy was going down the tubes and it was sinking fast.

All the jobs were shipping out.

“800 Jobs Lost, 250 Jobs Gone” was a regular on the front page of the newspaper.

At this point I had somewhere around 15 houses I had accumulated…

And 10 of 'em were vacant which means I was having to shell out monthly payments on 10 empty houses along with fixups on the ones that I was in the middle of trying to sell.

And I couldn't do anything with 'em.

I'd tried to rent them out, owner finance them, sell them.

Even left some matches and a gas can on the front of the house hoping someone would take a hint and do me a favor…

It was a nightmare.

This was my first ever real “Cash Flow Crunch”

I could literally feel the pressure mounting as if I was rapidly sinking in quicksand.

When you're trying to stay afloat and you're shelling out payments on 10 empty houses it doesn't take long for the cash you've made to disappear.

All of the money I had made and accumulated was gone and we'd spent every last dime on these damn houses that were sitting there empty and the debt was starting to mount.

I was broke and living off credit cards just a few months away from  bankruptcy.

And I was brainstorming with this lady who had just come back from an Internet Conference and had the lamest ideas I'd ever heard..

She said – “Hey, why don't you put these up on Ebay?”

I literally laughed out loud because I though this was the most ridiculous idea I'd ever heard – Sell a house on ebay? – Yeah Right!

But at this point I literally had nothing to lose…

So I pulled out one of my trusty credit cards and paid the ebay auction fee – to list a house it was around $150.

Remember I had already spent my last dime of savings, and I was now living off credit cards.

I was just hoping for some miracle with this dumb idea…

To add to the stress, this house that I'm about to list with the dumb ebay idea, – the mortgage payment is 1 week late and the grace period has just passed.

And I had no money to pay it.

And I'm having a hard time sleeping as the debt is adding up extremely fast…

What the hell am I suppose to do?

Watch for tomorrow's email to see how the Dumb Idea plays out – you're not going to believe it.

Again – I love hearing your comments and feedback – let me know if you've ever had your back against the wall – hoping and praying for a dumb idea to pan out…

About the Author Derek Pierce

Derek Pierce is an online marketer specializing in Search Engine Optimization. He used his SEO to escape over $100,000 in credit card debt building a 6 figure business from a spare bedroom.

follow me on:

Leave a Comment:

2 comments
Mark Alan Effinger says February 18, 2013

Been there. Multiple times.
Not with homes. Mostly technology companies.
I’ll share details later. But I empathize with you in a big way.
Looking forward to Part Tres.

Reply
Tom McGaughan says February 18, 2013

I can definitely relate…I have a toilet flange extender kit that we, my friend Alan & I, invented about 7 years ago. We have gotten it code approved by the major plumbing orgs and it is patented. It has cost a fortune. Both of us are living from hand to mouth in trying to get our Set-Rite kits into the big box home improvement stores for the past 5 years. We just keep fighting with the knowledge that once people see it on the shelves it will sell big time. I think the main theme to your posts is to relay the mindset of never give up and I can appreciate your every word. Hang in there when you have a good idea and believe in it.

Tom

Reply
Add Your Reply