From Bankruptcy to a Million-Dollar Exit with Entrepreneur Brecht Palombo
Episode Details
Transcript
No one becomes successful overnight. People around us simply seem to work and work. Eventually, they succeed. Consider Brecht Palombo, the man behind the investing weekly #AltReports. In business, he has achieved great success. But his life wasn't a smooth ascent into a trajectory of achievement; rather, it was marked by many twists and turns. Brecht always worked three jobs but was never good with money. He got to the point where he got eviction notices for not paying rent and had a car repossessed when he was 21. He was good at making money but had no idea how to manage it. Brecht then decided to get into real estate. In 2008, his traditional real estate sales went down from $220,000 to $19,000, doing the same amount of work. He had all different kinds of expenses and had tons of debts with no revenue at all for a couple of years. After a year and a half, he had nothing.
Quotes:
“Instead of just getting up and grinding away the computer every day, I have to be much more deliberate in what I was doing. I would have to only do the things that mattered. That allowed other people to do what they could to run the business, which was a major letting go period for me.”
"I haven't been able to get over the feeling that now I have more money than I've ever had before, it could all disappear in a moment. It has never left me.”
Books and Resources
The4-Hour Workweek byTimothy Ferriss
TurnaroundManagement Association: TMA
Connect with Brecht
LinkedIn:https://www.linkedin.com/in/brecht/
Twitter:https://twitter.com/brechtify
Website:https://brechtpalombo.com/
Podcast:https://bootstrappedwithkids.com/author/brecht/
If you want to know more about #AltReports and the services they offer, you may visithttps://altreports.com/
Haven Financial:
https://www.myfinancialhaven.com/jamiebateman/
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Speaker 1
00:00
This episode is sponsored by the Integrity income fund, which is.
Speaker 2
00:05
Managed by yours, truly and my team at Labrador lending.
Speaker 1
00:10
The Integrity income fund is for accredited investors. It aims to pay 8%.
Speaker 2
00:15
Preferred return and an.
Speaker 1
00:16
8.5% preferred.
Speaker 2
00:18
Return for early investors. It aims to pay out monthly distributions. There's a.
Speaker 1
00:24
25 thousand dollar.
Speaker 2
00:25
Minimum and only a one-year lockup.
Speaker 1
00:29
If you are an accredited investor and you're looking to get away from Wall Street, letting looking to beat inflation and looking for an asset class that is backed by hard physical real estate. Then look no further than the Integrity income fund. Check it out at Labrador lending.com. I just had the chance to talk to Brick palombo and Breck story is fascinating. He has had a lot of success in business. He just had a recent exit of a company that he spent 12 or 13 years, creating, and that was very successful, but his story is far from, you know, a straight up into the right line of success. It there a lot of ups and downs. He went through a period of bankruptcy and extreme. Humility and pain. And he gets a little bit. Choked up on the episode, referring to his family situation and during those difficult times, but he's got a, an awesome perspective after having gotten through this adversity and, you know, talks about how money isn't going to solve your problems. Money isn't going to bring you happiness, but there are a ton of awesome Lessons Learned through this for entrepreneurs, especially and anyone who's had any kind of financial struggle. You know, he's learned to live without and learn to live with quite a bit. And so, I really enjoyed chatting with him. He's onto a new Venture now called alt reports, and he's Focused on alternative investing and building a community around that and potentially some investment funds around in that space. So, Breck is a, is a great guy and I really enjoyed speaking with them. And I know you're going to love this episode. Inspiring stories of real people overcoming incredible odds to live life to the fullest. We are all guaranteed to face. Hardships, how will we handle the adversity? Joy.
Speaker 3
02:46
Has to be moved by every day, people who have turned poverty into prosperity, and weakness into wealth Be Inspired as these relatable Heroes, get vulnerable and former counterintelligence investigator Jamie Bateman puts his interviewing skills to the test, restore your faith in humanity as you experience. True Cinderella stories of average people turning surreal struggle and deep despair into booming, businesses and financial Fortune. Take ownership of the life you are destined to live and to Turn your adversity into abundance. Welcome everybody, to another episode of the form adversity, to abundance podcast. I am your host Jamie Bateman. And I am delighted today to be joined by Breck palombo Breck. How are you doing today? I am great. How are you? Good, Breck comes to us from Ultra ports. His new business venture, he's working on that. We're going to get into and I had the chance to be on bricks Show recently. So I am not sure which, which show will come out.
Speaker 1
03:53
First, but brick, tell us what you're up to today.
Speaker 2
03:59
Today I am exploring what to do with your money at Ultra ports. So, you know last year I had sort of big exit like a business event and found myself a little bit flat-footed on what to do with proceeds and started. Ed talking to a lot of folks and really opened up the sphere of stuff that I am I was looking at which led me to thinking. Well, if I have been is involved in money and businesses, I have been in all the stuff is sort of, you know, dark to me and I haven't ever seen any of it. Then there is, there must be people who would want to know how the private markets. And that sort of investing all happens in. So that's sort of the journey that I have started with reports in the newsletter over there.
Speaker 1
05:03
Awesome. Yeah, that's right up, right? Up my alley, right up, our alley, as far as the listeners Go. I mean, it's, I am in a mastermind group called The passive income Mastermind and you know, that's what we talk about is what to do with money. Yeah. And dealing with the, the non-public Asset classes and strategies that are out there that a lot of people. Most people don't even know about her. If they do look like you have alluded to if they do they barely they have scratched the surface, you know, they might have heard of a self-directed IRA or something and realize that you can put your money in a multifamily project, but other than that, I mean, there's a whole world that's, that's most people are unaware of. So that's yeah. There's an untapped Market there, exactly. It's private, right? It makes sense, but yeah. So tell us a little bit more about if you would be I don't know how much you can talk about it, but your sale of your business and previously and kind of give us that maybe the last two or three years of your life and overview of what that looked like. Okay? Hmm, last two or three years. Well, I.
Speaker 2
06:18
Feel like I should go back 12 years, but we will start, we will start the last two or three so yeah, I lost last October 8th. I sold a business that I had built over the prior twelve years and it's an online business in the real estate space that was called or still has called distressed Pro.com, it's in good hands. Now some other the acquirers and what happened was over the last couple of years, only back about seven years, Years ago, I had got my online business to a point where I no longer had to be any particular place in order to run it. And so that was, I started the business in 2009 and then in February of our of 2014, a sort of found myself. Now, I had, you know, as financially free or whatever is making good solid six figures. And automatically like re bills, you know, recurring revenue, and all that. And, and I found much.
Speaker 1
07:24
Work were you putting in at that point yourself?
Speaker 2
07:27
Well, see, that's kind of the thing that I found was that I was still doing the Daily Grind. So I was living in New England which was where I was born and raised. And every day I would get up in from 8 to whatever 6, I go to this desk and just, you know, be at it. No matter, you know. What was going on? And then I remember a friend of mine had moved to Colorado, and he posted a pictures, you know, Bluebird like blue, sky day, you know, powder a big skier. He's skiing. And I am like, what am I doing here? It's like 38 and raining. And I am yeah, dark. And like, I have never wanted to be here. I am only here because I was born here. There's no other reason for me to be here. And I really kind of just like I broke down. Yeah, and well and found myself like very depressed even after having what a lot of people would consider to be like, you know, successful Seth's. Yeah, sure. And so at that point, I was like, all right, well, I had a podcast at the time called bootstrap with kids where I had been recording for a couple of years, like the chronology of this and in the building of the business. And, so I said well I am gonna I got to change this like I can't.
Speaker 1
08:49
Be.
Speaker 2
08:51
Weeping at my desk. You know what I mean? That's there's no reason for it. Like I shouldn't that sure. I shouldn't be feeling like this, and so I talked on the podcast about that. That I was going to move and I started made a commitment. I just like, hop and made a commitment and then the ball started rolling. So after that, Like, I will just give a, it's a lot of stories, I will condense into a small bit but that was in February. March by August. We had sold everything that we had, literally everything that we had her dropped it off at Goodwill impact ourselves into a van and a, in a trailer, three kids and a dog. And we drove off with, you know, sort of loose plans that turned into about an In month trip, huh? We ended up Landing in Bend, Oregon eventually and it was really Having to prepare for that, kind of travel that completely changed, my mindset and the business and it demanded. That instead of just getting up and grinding away, you know, the computer every day that I would have to be much more deliberate in what I was doing that, I would have to only do the things that really mattered and that I would have to allow other people to do the things that they could. Due to run the business, which is kind of major letting go. For me. Yeah. And so, so that seven years ago, now, landed me in Bend Oregon. And, and I got to say that I have been pretty blessed here. You know I ski 70 to 100 days a year. Depending on what we have got going. I probably am a big cyclist I ride you know. 150 days a year, something like that. Like quite a bit. Almost every day, and I am at home and yeah, things are really good. I really can't complain nice last year. What happened was the way the it came to pass? That I sold the business was that I just got to the point that I had been working on it for so long that and I just sort of hit a plateau. It was still growing, but not at a rate that felt awesome and 12 years, long time to be on anything. And so, at that time, when I realized, I would be exiting that business, I really buckled down to really remove myself from it, to the point where it is to half our meetings on a Monday, pretty much it, which allowed me to really when I exited that business from offer to sail is, Days. And, you know, it's the first check over seven figures I have ever.
Speaker 1
12:03
Received. That's awesome.
Speaker 2
12:05
It was for that business and I expect there would be more and so 15 days. No support. You know, I had one or two follow-up calls with them. Usually, when you sell a business, you offer support for months at a time, but I just decided that I was going to completely eliminate myself from that. And really, Our the team that I had and doing that really made that business much more valuable and allowed me to step, you know, step away.
Speaker 1
12:36
Prior to the sale. You enabled and your team to take, take that an ownership and got it. It's about.
Speaker 2
12:44
18 month. Process of really, really working. Get them autonomous. Yeah, yeah. It's, I have had several guests who have some, what I mean your story is unique but there It reminds me of like Kevin Dahlstrom was on the show. He was making 1.2 1.3 million dollars a year at his, and he was a chief marketing officer for, I think he worked for Mr. Cooper, I think he created the Mr. Cooper brand. But basically, he found himself.
Speaker 1
13:21
Grinding and making a lot of money and a wife and a couple kids. I am not sure, but just wasn't happy and yeah. But then didn't need to be continuing to do that, you know, because I made a lot of money. And so, and I don't want to speak for him, but he, he talked about how he, in a sense, kind of had a reset, and what some people might call a midlife crisis, but he called it a reset, and they moved, he moved the family. Lie to Boulder Colorado because he likes to climb rocks. And then similar to you, he started a new Venture after maybe a month because I think he was a little bit bored, but that I have had other guests on whom have been removed from their business who, you know, oftentimes through not their own doing and it's, and it's kind of devastated the business or Really hurt things from a profit standpoint. So really what I am getting is you have over the years made a commitment to being intentional and strategic with your time and energy and it sounds like it's paying dividends at least, that's one. One thing I am pulling out. So, yeah, I mean, so that's, that's really good context for kind of the recent, you know, seven year period. Is there anything you want to add to the today's You know, the element of today I guess before we jump back into a little bit more of your background?
Speaker 2
14:56
Yeah I mean I guess I could just say.
Speaker 3
14:58
That.
Speaker 2
15:01
I can confirm for you that, you know, money doesn't bring happiness for somebody who's thinking that you're listening to this and you're thinking that it might not that I am unhappy but A lot of my friends actually have had exits at this point. I see. I am in like a cohort of folks. You started, you know, 15 years ago. And, and, and none of them started from anything. Many of them have seven and eight figures today, and I can tell you that the struggles with just relationships and children in the day-to-day and all that kind of like, none of that changes. Not one thing your stuffs a little nicer, but the feeling of what I haven't been able to get over, is the feeling that now, I have more money than I have ever had before, but the feeling that could all disappear in a moment. Just has never left me. And I don't know if it ever will. I didn't grow up with any money. Hmm. And I don't know what one has to do to get into a mindset where you just don't think about it anymore. But I don't know anyone. No matter how much they have who-who's comfortably in that wasn't W mentally right now. Yeah.
Speaker 1
16:29
I appreciate you sharing that and it's a we really like to keep it real on the show and not pretend that. You know if you have 10 million dollars dropped in your lap tomorrow that solves all your problems and yeah.
Speaker 2
16:44
Doesn't know and you sound like you can say that from experience but.
Speaker 1
16:53
But you know, also that doesn't mean you should bury your head in the sand and shy away from conversations about money. And to me money is a very important topic, you know. But absolutely, I agree that, you know, certainly the, I think money in and of itself or wealth, you should be personally. I think it should be viewed like, kind of like the internet or, you know, something very powerful or but inherently not good. Or bad. It could be used for you or very good purposes or very bad purposes. That's just, you know, my own kind of perspective. But yeah.
Speaker 2
17:31
I mean it's about security and time. Like I want to know that I have control my time and I can do what I want to do when I want to do it. Absolutely. And I don't have to worry about.
Speaker 1
17:42
The money. Yeah, that's what makes perfect sense.
Speaker 2
17:44
Let you know when I stopped worrying about the.
Speaker 1
17:47
Money. Yeah. No I hear you though. It's more about Freedom time, freedom and control of Choices and your, and your life really. But so, let us jump back and, and dive into, I know you mentioned something before the other day to me. Yeah, some Financial struggles, you have had. And we can certainly pivot and talk about other struggles. But if you would, that's kind of jump back to, you know, whatever time frame, you want to start with but sure, focus on some, some personal adversity that you have been through. And again the goal is to pull out Lessons Learned and maybe things that you have been able to apply to your own perspective on life or your business or it. There is you know we're trying to make it somewhat of a practical show as well. Yeah other than just talking about people's problems, we want to try to help people and you know, so I think you get the point so yeah. Let us jump back. Where do you want to start?
Speaker 2
18:50
Sure, I will go all the way back. My first business I bought when I was 15 with a neighbor of mine and it was a bike shop and it is the neighborhood Bike Shop had been on our street for 25 years and it changed hands twice. And the owner was a young guy who's this is bad as in the 80s. So everything was different at that. We bought it for $3500. So which is basically like a collection is like Um, relationships with vendors and a collection of like dirty parts. And so, we did that in and grew that. And that, you know, I was always working, you know, two three jobs and just really like industrious but was never really very good with money and was not, I had a real procrastination kind of problem wouldn't face. Paperwork and that kind of thing. Which plagued me and just dog me all through like my early 20s in a big way to the point where you know, I would get the fiction notices for not paying the rent, I had a car repossessed when I was 21 and all just sort of being like, Not keeping my eye on the ball and not being able to like face the finances, you know? And that really dog me for a long time and it took some it took like some really abrupt stuff happening, my early 20s to change that and to get me to grow up a little.
Speaker 1
20:43
Bit, right, right. So, So just before the before we get to the kind of major, you know, adversity there, do you think what was causing those? It me was it you didn't make enough money or you were spending too much money or you just were disorganized or all of the above.
Speaker 2
21:03
I just organized and I just had a problem facing money dealing with one knee and I think, you know, from Well, now it's gonna be like a therapy session J. I always think I can edit things, but we rarely do. Yeah, I had to go back there. Really, think about it. You know, I grew up in this house where his parents are divorced and had step kid, you know, step siblings and all this kind of thing. And it was a situation where, you know, my father did pretty well my mother and her new husband did not And there's money tension all the time. And I think that For that reason. I just don't want to face it. I just feel like just dealing with the subject of it was. Yeah difficult. Okay. I was good at making it and but I just had no idea what to do with it. Yeah. Okay. Yeah. So or how to manage.
Speaker 1
22:06
It. Yeah. So then in you said, I think you mentioned your early 20s.
Speaker 2
22:12
So fast-forward a little bit and you know, get into the later in the twenties. I got into direct sales which is Really good for me. And then mostly in software, got recruited to a company, a startup out in San Francisco, and 1999 to lead their north of sales. For forty-one thousand accounts turns out. We didn't have any product, you know, is vaporware, and then in then the.com crash happened. Try so out of work again and I decided to get into real estate. Started in real estate in 2001 or 2002 really started at the bottom doing just like rentals, like run around Turnin, Turnin, keys, on Newbury Street in Boston, you know, doing Doom rentals work like that?
Speaker 1
23:03
You're an agent.
Speaker 2
23:05
Yeah, I was an agent. Yeah, I had an uncle who did really well at least a it appeared to me is very wealthy. You know I had a downtown you know Penthouse and all that kind of stuff, and he just was selling real estate in Boston. I said that looks pretty good. I think. Look think of Mercy that. Yeah and things went pretty well. I quickly moved into the investor Niche, so worked with a lot of investors and you know that 2001 is sort of 2006-7 time frame. It was find anything that you could possibly convert to condos or subdivide. Yeah, do that at some stage whether it's just the paperwork, or they're fully finished, sell them, you know, in Repeat keep moving that in multifamily sales is a lot of what I did, which is going great. And then 2006, I remember I had this deal where it was this Like old folks home, like an assisted living type. Yeah, I speak to you do senior living. Yeah, yeah, Senior Living big, beautiful place in Malden, Massachusetts. And it was, it was going to be a great conversion as far as we were concerned into condos. They were you know selling it, and we had a sort of did a private offering to a group of investors that we knew, and we had we ended up with like 10 offers in multiple offers. As were with, they had 100% financing, they were bringing nothing to the table and it was all hard money in the values that they had in mind for the exit on it. Were we're way out of control, and I was like, all right, this is officially bubble town. Like we're definitely like that's where if this type is. How easy like everybody with a hammer and a van. Now developer, and they have unlimited money.
Speaker 1
24:56
So if you can fog, if you can fog a mirror, you can get a loan. Yeah. And yeah, that's yeah. I mean of course, of course, in hindsight, it's easy to talk like this, right? But you're saying you saw this at the time, your distances. Yeah.
Speaker 2
25:11
Yeah, I did. And so what I did was I got positioned and I got my auctioneers license and I started, I was like, well, who's going to have all the game when this happens and it's going to be Banks. Right? Sure. So, so I did that and I teamed up with a great firm called Trans on auction properties Iran. Their southern New England territory, Massachusetts, Connecticut and Rhode Island. And that was awesome. Except for the interim which was like 2007 till 2000 like, you know, nine or so. Because what this doesn't, you know, it's not like a switch flipped, sure, right? They start selling right? So you're having forced, I didn't change the fact that in 2008. I went from, you know what from my last year in like traditional real estate sales, I think we're Just over 200 like 220,000 or something like that. The next year. It was Nineteen thousand. You know did all the same amount of work in made like nineteen thousand dollars. Yeah, my father.
Speaker 1
26:17
Was ever, I just go to say my father was a realtor growing up, and so I have you know, pretty closely experienced the ups and downs, and he would bust his butt. I mean, he worked really hard and it some years ago, it didn't matter. Yeah, you know, it's like you're one year. You're rolling in it. And then next year, your Barely able to pay the mortgage, so I can relate from watching him through, you know, all those years. So, yeah, it's a tough. That's a tough business can be rewarding, but also there's a, there's a downside. So me, it.
Speaker 2
26:53
Was horrible. I had a, I had a condo project going on at tons of debt on it. I had a new brokerage that I had opened up Lisa's that time. That's when you would still the least copiers for $600 a month, you know. Yeah. And an office space and you know, That kind of stuff your back and you think about, you know, two thousand, six, seven, eight that time frame were in a very different place in terms of how business runs. So, I had all these expenses, I had tons of debt and I had no Revenue at all for a couple of years. Not at all, but felt like not at all after you know. Because by that time now I have got.
Speaker 3
27:39
You.
Speaker 2
27:39
Know, had Old, I had another one on the way, and we're just I took, you know, a real estate like I am 100% in real estate heading into the global financial crisis with leverage was a.
Speaker 1
27:55
Terrible. So lace to be the leverage and the debt. You just mentioned it, that was all kind of personal or mortgage or was it business debt or there's mortgage? Yeah, it is the.
Speaker 2
28:08
Cost of flipping this, this.
Speaker 1
28:09
Kind of guy. Got it, got it. Understood okay.
Speaker 2
28:12
Yeah. And so kind of deep into that and I had a partner, my partner went bankrupt and then I against like, I decided, okay, well I am going to keep going the right thing for me to do. Right then would have been to strategically defaulted to just said okay, you know, like I am going to start, I am going to start anew, but I didn't for whatever reason I had, in my mind, you know, the idea that I had somehow put some, like, Moral or ethical, you know.
Speaker 1
28:55
Leo's weight down.
Speaker 2
28:57
This decision, to continue to pay these things that were obvious losers. At that time there was no, the if I was going to get any of that, money back is going to be in a decade. It wasn't going to be, you know, it wasn't going to be any time soon. So just quickly becoming insolvent and what you and what I should have done is I yeah I should have filed right then, but I didn't time persisted for another year and a half and then It was bad, man. I had, I had nothing oui.
Speaker 1
29:29
Oui.
Speaker 2
29:31
My kids are born. My first two, I have three in the first two were born, 21 months apart and it was headlong into a bankruptcy, and a foreclosure, and a short sale moved in with my mother.
Speaker 3
29:47
Which, you.
Speaker 2
29:48
Know. I don't know if there's anything more embarrassing than moving in with your mother with your wife and two babies. Right? I mean, it was.
Speaker 1
29:58
All choked up like talking about. I can't. I mean that's, that's a lot of butter, that's a lot. There's a lot of pressure there. There's yeah, and I think, and this was probably before, you know, I think it got a little more became a little bit more common after that to maybe four. Younger adults to move back in with their parents but there's yeah, that's.
Speaker 2
30:22
Not going that way. At that time. It wasn't in that way. That's a great. Yeah, that's the thing on humbling. Yeah, you know, for a lot of folks at in my at my age, at that moment, when back for Masters, you know, they went back, and I am going to go get an MBA right, you know Ride This Out. I mean, I guess that's that works is not. If you're is deep in a business as I was that was so ravaged by, you know, by that the global financial crisis.
Speaker 1
30:54
Yeah. Well and how did that affect your, you know, obviously we don't want to beat you up and that's not the point of. I know it's a show but, you know, how did that affect? What was your wife saying? What was, you know, the what were the family circumstances that?
Speaker 2
31:11
My wife is a rock.
Speaker 1
31:16
Yeah, gotcha. Now that's I mean yeah it sounds like you have been through some real pain there. So.
Speaker 2
31:23
You stirred it up. Jamie look at that. Yeah she's a rock. What happened was? I mean I just I turned work up to 11, you know, I worked day and night.
Speaker 1
31:38
To get out of that situation all the time.
Speaker 2
31:40
Shh. I the auction started kicking in finally and I Would be on the road, I do 1,000 miles a week. I would be on the road from 7 AM till you know, 5 or 6 PM and then I got the idea that I wanted to do something online. And, so I started, you know, looking around for how do I, how do I do that? Instead of listening to podcasts and following stuff, and then I found myself in July of, or June of 2009. I was at this thing called the American bankruptcy Institute Symposium. So that's where you meet Lawyers who are handling bankruptcy cases. And when you're an Auctioneer, that's who you want to know. Because the council is who, you know, makes that whole thing, go Council, like, bank accounts. Payable is, yeah, they're in control all day. Like any of the debt that they're selling? Or who they pick to liquidate that stuff? That all like, they are major Gatekeepers for that. Also, bankruptcy sales can be very good for an auctioneers, so that's a whole other discussion, but I was at this boring thing at Brett, Woods and I had been listening the whole way up. I was listening to podcasts and then you know, really the only thing for an Auctioneer to do it or not at a bankruptcy symposiums to go to the bar in between things to try and meet people and buy them a drink. You know what I mean? Sure so the rest of the time I kind of hold up in my room and I have read the I read the.
Speaker 1
33:08
4-Hour workweek. Mmm. Yeah.
Speaker 2
33:11
And it's so cliche but this is exactly what happened was. I read the 4-Hour workweek. That weekend or is two days, probably weekday and listen to podcasts my way back home. And then I decided that's it. I am doing this. And I had an idea. I did a quick test of it and the idea was okay. If I am, if I am looking for these deals from the bank's then somebody else's, you know, I know a lot of people in real estate, they are looking for deals and back. Ex and I had discovered through some of my training that I got with the auction company that I was associated with the FDIC data. And I can't really actually have an NDA for my last company. So I can't get into a lot of detail about like I can't produce any free or paid content about sourcing non-performing notes or REO direct from back here? That's like basically what my NDA.
Speaker 1
34:09
Says. Okay, well let us just let us end this show right here.
Speaker 2
34:12
Because But basically it is a bunch of data out there and I knew where it was and how to get it and what it meant. And, so I took it and I started packaging it and trying to sell it as a PDF and on my very first try, I sent out this friend of mine actually sent out an email for me to his list and I sold like 800 or $900 of this PDF. It was like 150 page PDF that has each bank and all of their you know, all that stuff.
Speaker 1
34:42
On it.
Speaker 2
34:43
And All right. Well, that's going to work. I think and I managed to scrape together, like, not a lot of money. I think three thousand dollars, something like that, and I had a prototype built. And so on August, 31st to 2009, I had my first software product I had no idea what I was doing. I was had no technical skills whatsoever. I was completely on a wing and a prayer and that Distressed Pro.com, my first user, it was me on August 31st, 2009.
Speaker 1
35:20
And you had no technical background.
Speaker 2
35:23
Now, none? Yeah, okay. Now.
Speaker 1
35:25
As I think, I mean nowadays, it may be more common, you would know better than I would, but more common to be able to do something like that, you know. I am not saying it's easy but yeah, you can approach something. It's way easier, right? Yes. Most people that would have done that had. I would have a technical background and creative Back there coating all night and figuring it out. But I think it nowadays, you can Outsource the technical piece a lot more easily. I would think you can. Yeah. So what? And just a, so the bankruptcy event that you were at was strictly for your professional career had no tie into your personal bankruptcy rights.
Speaker 2
36:06
Right? Yeah. Okay. If you're somebody who's looking to do distress deals with lenders, then the turnaround management association that's TM a.org. Org or the American bankruptcy Institute, those are two groups or associations where you want to go? Be kind of in that mix got it. Okay.
Speaker 1
36:24
So you saw that there was this was probably going to work. Now you're now you have got sounds like you have well I hoped it would work but there's a chance this could work. There's a whiff of it which is maybe more than you had previously, right? Yeah. I mean when I really wanted that was.
Speaker 2
36:43
Regular recurring monthly income. Yeah you know it's great to go get a 50 or 80 thousand dollar check doing a deal. You know that feels awesome feels better to have 10 or 20 thousand dollars coming in every single month. You know what I mean? Like there's not it's those two things aren't equivalent. I mean, I can remember in the final days of my brokerage where we were pushing this two and a half million dollar multifamily deal. Through and the guy had, he owned a bunch of property, but he's terrible with his credit, and he had, like not paid some medical bills. And in, we're like, in the 11th hour on this deal, which is the commission's from, which were desperately needed were my wife's in postdating checks, you know what I mean? Like, yeah, yeah, it is not a good feeling. And, yeah, we did end up closing that and, you know, it was big sale. Is awesome because I stress involved with that versus like just money coming in every month, right?
Speaker 1
37:48
Cute boy. And it's not only the unpredictability in the, the volatility, but also the fact you're also pivoting your mindset to, from a job to a business. You know, that's at least that's my own. I could be putting words in your mouth, but I mean, I think the for the, you know, those big checks typically, you're really working it, whether you own a business or not, you're really working. A hard for those big checks. Yeah. Whereas your and at this point your life, it sounds like you were trying to be intentional about with that 4-Hour, workweek mindset and making it more of a recurring more passive. You can debate all day if there's ever actually any such a thing as truly passive income. Yeah. But there is.
Speaker 2
38:34
That you're right. I would.
Speaker 1
38:36
Agree with that. But, but there's a, there's a lot of gray and there's there is, you know, there's a Bactrim. So you have pivoted your mindset and your so and tell us how to tell us what you can about distress Pro from when it started, you essentially already did in the beginning but just bring us up through up.
Speaker 2
38:57
To the stairs. The ark is basically August. 31st is, you know, the first user and I start I started a podcast at the time and I started just going to speaking events. I would go. And I would go to any kind of real estate event and so in late October of that year, I got my first paying user is name is Mark ostroff from the back of the room. In Providence Rhode, Island Real Estate Investors Association type meeting, you know, did the presentation. And then, you know, went to the back of the room and sign them up for 80.
Speaker 1
39:36
Bucks. By the way, it sounds like you will never forget the details of that first customer but I mean, the fact you have mentioned podcasts, three or four times and this nowadays it's you know, we all have podcasts. Right. I guess back then it was pretty uncommon. I mean it.
Speaker 2
39:57
Was uncommon and it got me noticed really quickly and put me on the map really quick. You know, so that, I just started interviewing, guys, I knew in the area who were doing good business and that was, that was Of the start of it. And then once I posted that on, you know, LinkedIn and that kind of thing. I have been on LinkedIn long enough. That my handle on there is just / my first name, you know, I mean, so that's like quite a while guys and yeah. So I started like that then I sort of discovered SEO, but basically, from 2009 to 2010, Fall of 2012. I think also October 2012. I just worked my ass off. I worked, I did auction all day and I did the new business all night and my wife and I slept in separate rooms and because I was just, we had two babies, and I was just working, working all the time. And then, in 2012, I reached eight thousand a month in recurring revenue and I said, Ted. All right. Like I am going to I am just going to step off. I am going to take this leap and see, you know if I can, if I can really go for it and, and I did that in the following is like days or a week. I was on this host called media Temple. And I had been, I got hacked, and they whoever hacked me started, like sending spam like banking spam type, Ages and media Temple, just shut it off. All site and everything just like drop the whole thing off, and I was like, what's happening? And they're like, well you have been spamming people, I am like, it's not me and I like, you know, we can see that it came from your IP address. So I am like, you know, I am not, I am not talking a technical person. I don't know where what the hell is going on, you know, at all and that was horrible. I was down for about 3 days. This was just after terminating everything else that I was doing, and they wouldn't even turn it back up. So that at that time, I was too dumb, to even have like proper backups. If you know what I should have, had, is a way to just turn it on somewhere else, I didn't have that. I did when I was done one before I sold, but at that time I didn't and it was like it was an existential moment like that was like that very well could have been it. I ended up finding an amazing guy from Egypt actually who's able to like take The little pieces out and put them back together and got a stood back up. But yeah, so then it started growing you know, faster when I got my full attention and that kind of brought us up to 2014 where, you know, crying in my office and.
Speaker 1
43:09
New England in February. Yeah. So what would you say about the kind of the, what's your take on just the overall view? What's your view of I guess? Hustle culture, I guess. Like, you know what I am getting at is you have kind of well, nowadays, everything is so polarized. You have two sides to every only two sides. Yeah, everything. Yeah, really. Do you know, I guess, you know, you have been through periods where you have had a lot of ups and downs. You have had a lot of periods where you have worked extremely hard and then it sounds like some periods where you have been a lot more passive Do you think it's possible to get to sort of passive income, or essentially, you know, passive business without putting in that extreme amount of work? Because I guess what I am saying is you get a lot of successful business people who talk about, you know, or anti hustle culture and, and yeah, talk. But it's like, yeah. But you put in 10-15 years of a, whole lot of work and I think so, I am just curious, if you have anything to add there.
Speaker 2
44:22
I am a big believer in systems and I try to do things only once anytime that I am approaching any work that I am doing, like in the business that I am starting now. Everything is new, right? I have never run a media company and I have never had, you know, daily deadlines, and in all this kind of thing. And so everything that I do I approach it with Okay, I am about to do this, but if it weren't me doing this, how would somebody else do this? How would I tell them how they can do this correctly? So that I can hand that thing off every single time. So, I never now. I mean, this is a hard one lesson, like, this wasn't something that was like, oh yes, I have been doing this is going to do its repeatable, you know.
Speaker 1
45:11
Right? You haven't been doing this for since you were 15 or since you bought the bike shop, you know, you weren't doing that.
Speaker 2
45:17
That.
Speaker 1
45:17
Time my first.
Speaker 2
45:18
Business that made any money was the real estate business into that you know, started in 2004 or six or whatever, something like that. But you know, the other ones I was just working. I was working in the business. All time I wasn't working on the business but since our road trip, I am very focused on working on this — gotcha. But yeah, but every I do Think that? And it all comes down to people. You can do a bunch of, you can do a lot of sorts of automations and that kind of thing. But at the end of the day, you're going to have some really competent people, whom you love who? Yeah, can execute the way that you need them to execute? Yeah, actually you can delegate to them but I look at anything that I am doing and I want to First eliminate it, if it is not providing any value, if it can't be eliminated, then I want to automate it is. Can't be automated then I want to delegate it and that's sort of how I approach any of the things that I am doing and then I want to systemize all of that so that each time anybody who's going to go and approach that they're going to follow that system and then if that system needs to be improved, and we're going to you know, we're going to improve that, but we're not going to do things without a system at all. And I think that's how you get to sort of passive income or whatever. Hmm. That's where you can. Have like the business that I sold. We had systems on how we talk about things, when do we talk about them? Where do we talk about them and what things are worth talking about? Like we're down to like every last little Nook and that is a way, that once you do that and people buy into it, and they're on board, that's how you have to have our meetings a week and everything stays on track because I.
Speaker 1
47:17
Was the last 18 months of the business is what?
Speaker 2
47:20
Years, the last 18 months of the business. It wasn't like that. Before that I was probably still putting in a day or two, maybe sometimes a little more with a week but definitely the last 18 months because I just made a commitment. I was like if I am ever going to sell this, my name and face are all over the thing. I am on the vdi someone that you know, all this kind of thing is gonna have to stand on its own legs, you know. Yeah. And so with that in mind, then anything that I.
Speaker 1
47:47
Do Can't.
Speaker 2
47:49
Have to be done but it has to be able to be done by somebody.
Speaker 1
47:52
Else. So can you say approximately how much you were making an income in the last couple years before you sold the business, you don't have to give us exact numbers over?
Speaker 2
48:04
Over 300,000.
Speaker 1
48:06
And not working. Not working a whole lot.
Speaker 2
48:08
That's new. Yeah, the thing about software business is they're really high margin, especially as you get a little Bit bigger because for me to, you know if I have got developers and support and marketing manager, if I have 1000 customers or 10,000 customers, it's.
Speaker 1
48:29
Not that different almost the same amount of work. Yeah.
Speaker 2
48:31
It's almost amounted. So I didn't have that many customers but yeah. The scale is.
Speaker 1
48:39
Various gotcha. You know, there's.
Speaker 2
48:44
The bit selling that business. Felt like a big deal on felt like a lot of money. For about five minutes, you know, but it's really peanuts compared to I think what's possible out there. What a lot of people are achieving. So there's always that like you know what else could I do? What else could I achieve and that just doesn't, it doesn't go away. There's not, I have a friend who just sold a business for made eight figures and what's, and we were in a group where I have a number of masterminds that I am in and it's been one of the things is been huge for me over the years. Some of them have been on for seven years, eight years, and he's in one of them, and so I know it was business. Very intimately and you know, his life in and all that kind of thing, and he has this big exit and Slifer, really hasn't changed, you know, like you got a, you got a new bicycle, you And there's, you know, it's and that's kind of how it is, you know, it's like okay, well, we still have kids, they're still gonna like, I still got to get to practice, and they have gotta, you know, like life is still just doing what it's doing so stern. Oh.
Speaker 1
50:02
Yeah. So now you're on to your. We will talk in a few minutes about your current Venture but what would you say what's for you? What's the driving force? Then at this point is it, you know, is it? Making more money is it proved yourself what you can accomplish, what? What? What drives you right now? For.
Speaker 2
50:23
Me, it's security. I in the Financial Security of my family that it's a might sound like a lot of money to you know but in the grand scheme of things and the way that money is going and all that, it's actually not very much and I think that if we're talking about, I am 40, you know. Old. Am I 48? I guess. I am 40 so long, bro. I have to remind myself every so often. But yeah, yeah, no, I mean, well and granted. It's easy for me to just say this, but you seem like someone who knows how to reinvent yourself and, you know, so even if you lost it all heaven forbid, right? Yeah, and I feel like you could you'd recovered, you know, So there's this saying that, it's like a stoic saying that I heard Tim Ferriss say, where, what you do is you sort of, get you, you, you will sort of downgrade, your yourself and your, you know, two more subsistence at least in a small way. What I did was about a week ago, I just drove off with no schedule and camped, and stuff like that, and you just like eat beans and don't wash and all the while asking yourself is this the condition that I so feared, right? Because when you really get down to it, you know? So I am sitting there and it's cold and it's wet and it's going to tent or whatever. It's like, you know, is this the condition that I? So feared friend. And I think that really helps to like recenter and in bring it home. Yeah.
Speaker 1
52:16
It's really good. The episode that should be out right before this one, I interviewed as his name's Clint Fiore, and he crashed his plane and almost died about 20 years ago and that's not to say he has no problems or no anxiety anymore, but he was talking about just replace. What if with even is, you know, and even more. So, you know, similar thing, what you're talking about, you know, just kind of saying, well, Even if this happens. Yeah, I will be.
Speaker 2
52:50
Okay. Yeah. Okay, yeah, absolutely. And I think that's really the have folks have to think about it. We spend a lot of time painting these, you know, pictures and making these movies in our heads, about all the terrible things that are you know, could or are going to, you know, happen to us. And that really sacrifices the now which is too bad because that's all that matters. Which is something that I have really tried to focus on over the last few. Years is just to be like to be present which is I think they should be a goal for anybody.
Speaker 1
53:26
All the time. I think it's hard to for especially foreign entrepreneurs who tend to be, you know, type A Strivers, you know, I am always thinking about the next, the next goal or the next, you know, the next step. And.
Speaker 2
53:40
Well, if you are at least make it a goal and make it a vision and not make it a fear and a.
Speaker 1
53:45
Worrier. Sure, sure. That's true. Yeah, good point. So as we head towards the end here, I am going to fire off a few rapid fire questions. Like I said, we can edit things out. What's one thing that people misunderstand about you? Huh. That's an interesting question. I try to be real transparent and open in my communication, I think that I put online and all that I try to be real. Real honest, I think probably because I have the audience that I have had for so long and I have had my face out there. I think people think that.
Speaker 2
54:31
I think it probably looks like. Well, I don't know what it looks like. I think it probably looks like I am just easily successful or whatever. That is not the case. You know, like there's nothing I have been done. I have wasted tons of money. I have done a huge numbers of just like stupid wasteful things that didn't amount to anything. It was not a smooth thing so is not the like success or whatever else is not. Been a.
Speaker 1
55:01
Breeze. Yeah, now that's very like that. That's really good. Keeping it real. So if you could go back and give your 18 year old self some advice, what would that be?
Speaker 2
55:15
I would have invested much sooner in longer-term stuff I would have died would have been saving all the time. I was not an awesome saver until after I went bankrupt, and so I would have been saving the whole time. The other thing I would tell myself is that no one's going to give you permission. I feel like in the beginning part of my life, I would have like great ideas or, you know, for business and that kind of thing. And then I would get stopped by self-doubt because I didn't have the degree or I didn't have the, you know, whatever the pedigree into to do the thing that I wanted to do and I would slap that right out of my self. I couldn't. Yeah. That's really good. Yeah, no one's. Yeah. That's, that's good. I have nothing to add. If you could have coffee with any historical figure, who would it be? Well, at my default on historical figure. Question is Ben Franklin? Yeah, that's a good one. Yeah, if you had to write one book in the next 12 months, what would the topic be or the title? I guess it'd be letters to my.
Speaker 1
56:42
Children. Okay. Nice. It's really good. How about one meal you had to pick one meal to eat for the rest of your life? What would that be? She.
Speaker 2
56:52
Is. That's what I whatever I just ate last. I guess is probably be happy with. But it would be a.
Speaker 1
57:07
Okay, nice. So as we pivot towards talking about your current Venture and then wrapping up the show, what's one struggle or challenge that you're facing in your business right now? Hmm.
Speaker 2
57:24
The strategies and tactics that I used at to grow, distressed Pros. Successively are not the same that will grow my current venture. And, so I am having to learn a bunch of new stuff, okay? So yeah.
Speaker 1
57:40
Okay, got it. All right, well, let us talk about. What's your what is your current Venture? And how do you see that playing out in the next few years?
Speaker 2
57:48
Sure, so I have got a fast fun irreverent daily newsletter it's the daily update for investors in. So basically on Monday we're going to cover. What is important to keep an eye on for the rest of the week and Tuesday? We start to investigate Gate a little bit into an investment theme and Wednesday. We take a look at the data around that and then Thursday, we have a call or an interview or a deep dive on a, an alternative investment fund platformer strategy, where we really get into that. And then on Friday, we kind of wrap up the week and talk about what, what to look for the next week. I try to make them We tried to make the like really fun, four minutes flat. It's pretty irreverence kind of punch in the face. Sometimes don't hold anything back in there. And so, that's what that is over there. I am hiring right now, content, manager, and social, media manager, and some other roles. And, and yeah, so it's free. What I see happening on the back of that is some community and some joint. Investments and to, you know, probably funds like yours and yeah, so that's the idea over there at all.
Speaker 1
59:12
Reports. Okay. Yeah. That makes a lot of sense. So all reports and can people sign up for your newsletter? There.
Speaker 2
59:19
Ya go to alt reports.com and there's a bunch of ways, to, to sign up. You will find once you get there and it's free, if it's not for you, after you subscribe, unsubscribe, no hard feelings. But it's been, I have had a great response. We have Tremendous open and click-through rates and really some fantastic replies. And I am getting to engage in meet a lot of folks in investing who are doing some really cool stuff that I look forward to, like bringing, you know, to the for each.
Speaker 1
59:54
Week. That's great. So, what's how does the, what's the main profit Center for you there?
Speaker 2
01:00:02
We're going to have some sponsorship to start. Art. And then I see on the back of that, like, probably there's some community and there is, there might be a fund or fund to funds or Syndicate, or, you know, that kind of thing behind their, a lot of what we do talk about is for accredited investors only, but it's not exclusively, and I am been working at, you know, find more opportunities where that are less.
Speaker 1
01:00:31
Restrictive. Yeah, gotcha. Got it. Kevin Dahlstrom. You should go. You should go listen to that episode. It's okay cool. He's working on a company called swell, and they're part of what they're working on is opening up private Investments for non-accredited, you know, making it a little more I guess Democratic if you will is great. So, but yeah, we're can work in our listeners. Find you any other places besides all reports.com? Yeah, you can find me on LinkedIn, it's LinkedIn.
Speaker 2
01:01:05
You know.com shins / Breck, the re CHT, or if you just type in, bre CHT along, but there's not a lot of us in there. And you can find me on Twitter, but I don't do too much of their, but I am. I am checking my LinkedIn there every day. So, yeah. Got.
Speaker 1
01:01:23
It. Awesome, Breco. I know we went a little bit long, but you only work four hours per week, right?
Speaker 2
01:01:30
That was me.
Speaker 1
01:01:35
Just giving you a hard time but thank you so much for being vulnerable and talking about some, you know, some painful personal periods in your life and I do appreciate that and I know our listeners will as well. So thanks again my pleasure and to our listeners out there. Thank you all for spending your most valuable resource with us and that is your time. Thanks everyone have a good one. Thanks so much for tuning in to this episode of the form adversity to abundance. Podcast. If you're enjoying the show, please feel free to rate, subscribe and leave a review wherever you listen to your podcasts. That helps others find the show, and we greatly appreciate it. Thanks again for listening, and we will catch you in the next episode.
