Why I Broke Up With My First Real Estate Business Partner

Oh, how you doing there? Didn't see you. I know why you're here this week. You're here for Nathan Payne's Wholesaling Storytime, Tales from the Trenches. And we got another doozy for you this week, everybody. Now, if you haven't been watching this series of me telling you how I got started in wholesaling with zero knowledge of wholesaling or real estate, didn't have any money, started with $0 in my pocket, I've done hundreds of deals, over $2 million in wholesale fees, and I'm giving you the real, the raw. I'm giving you everything about it because a lot of the stuff on social media is fake, and I'm telling you exactly my journey from start to finish. We'll start to where it is right now of how it is to start a wholesaling company so you can see the ups and the downs. And I'm telling you, there's a lot of ups, there's a lot of downs. So today we're going to be talking about how I broke a partnership agreement in my first 6 months of wholesaling. And, you know, it didn't end pretty. Unfortunately, the partner that we had broken up with still doesn't want to talk to us. I reached out, and I'm not going to say his name, we're not, we're not here to poo-poo on anybody, but I reached out maybe a year ago to say, hey man, I hope you're doing good, and no response. Doesn't want to talk to me this very day. I thought I handled the partnership breakup pretty well, but you decide because you're going to see exactly how we did it. I'm going to explain the whole thing. And as you saw me reading earlier, this is the journal. I've been keeping a journal of my journey as a real estate investor since I started in 2018. I got 5 or 6 of these and I document how the journey is going because I think it's important. So now I'm able to tell you guys this story so you can see for yourself. So wherever you're watching, tell me where you're watching from. It's important to me because I like to connect with the people that I talk to. So, you know, type in, like this video if you're watching it live, because it helps the algorithm get it to more people. And in these stories that I tell, I also— every story I have a gift, I have a resource I want to give you. This gift that I'm going to be giving, all you have to do is go to painlessflipping.com, and every week you get a story with a resource that's free. What I'm giving away with this is a free site where you can go and get a personality test because this is extremely important, everybody, that if you end up partnering with someone, you got to make sure that 1 1 doesn't equal 2. You got to make sure that in a partnership, 1 1 20 100, because if you do 1 1 2, it's not really going to be an effective partnership. So that is what I'm going to be giving you. Subscribe at panelsflipping.com for the story time, and we'll be sending you free resources. We give away calculators, all the resources I have in my Drive. I put them in stories like this so you guys can see how I use them, and they're all there for you for free. So Without further ado, let's dive into the story of how we broke up with the broker and how it did not end well. Ended well on our part, but he doesn't like us anymore apparently, or he— it just didn't end well. All right, let's just say that. So let's get into it. So if you haven't been aware of where my journey's been, I'll con and catch you up. So we started $0 knowing nothing about real estate. We were just calling for sale by owners and it wasn't working out. We made a post on Facebook and we ended up connecting with a broker here in Utah that was like, hey, I had a dream about wholesaling. I was wholesaling deals in Missouri and my my business partner at the time, Corey, me and him, his dad was from Missouri. So we were like, oh wow, you had a dream about wholesaling deals in Missouri? He was like, yeah. So he was like, well, I have an office, you guys can use the Mojo dialer. I have a bunch of lists, none of my agents here are calling them. Call the expired listings, call pretty much— he had like the phone book. He was like, you're able to call neighborhoods. So we were just calling random people and we ended up getting our first deal from expired listings. It was a $5,000 deal. You know, fast forward 6, 7 months later while we're still working at this office, we've done over $100,000 in deals in wholesale fees from being brand new, not knowing what we're doing, within a 6-7 month period. But what ended up happening, guys, is we got a little anxious, we got a little crazy, and we started spending a lot of money on marketing because we were like, let's amp this thing up. And if you guys remember a previous episode, I talked about we hired a cold calling squad. We personally hired friends from college because we're like, oh, we'll pay them $15 an hour, they'll be really good. So we hired some cold callers, we sent out a ton of mail, and we just started spending money. And deal flow started going down. And I know $100K might sound like a ton of money, everybody, but when you got marketing spend— me and Corey were splitting everything, the revenue, you know, what we were making, 50/50— it didn't go as far as you think it would go. And with 2 or 3 months of a dry spell of not getting deals and having to pay out the marketing, what ended up happening is we're getting low on that bank account. And while we were doing well getting money and making deals happen, we had talked to the broker because, you know, he letting us work in his office, decided, hey, let's go on all the deals 30-30-30. Let's do a partnership. I'm already with Corey. Let's add the broker in. Let's go 30-30-30. And we all thought, we all thought we were going to take an equal load of everything. That's what I thought when I made the partnership. I was like, okay, everyone's gonna do that. And that's the tough thing about partnerships is sometimes one person might not feel like the other guy's doing enough work when maybe they really are, or maybe they're not. It's a feeling you have. That's why you really have to trust who you're working with, and you got to have like, you know, be on the same page and the same vision. So what ended up happening is we partnered with the broker. He started getting 30% of the deals we were doing. And me and Corey were sitting back like, man, I feel like we're doing still all the work and he's still focusing on his brokerage. He's just kind of giving us some advice here and there and he's getting 30% of the deal. This is a bad deal we made to give away that much just for, you know, someone to be involved in just asking them for advice to get 30% of the company. So we kind of felt like that for a while. And you know what ended up happening is when we had the dry spell, we had to fire our cold callers, our friends. We went to them and we were like, hey man, this isn't really working out. We're The count's kind of going down. We don't really think it's fair that we're splitting everything. And we just had an open and honest conversation. And we're just kind of letting him know, we're like, we don't really think this partnership is working out. Like, we don't really feel like you're holding your end of the weight. Like, we're knocking, we're doing all this stuff, we're cold calling, and you, you're not. Yeah, I mean, you got a broker, that's fine, but you're getting 30% of everything. And he's like, look guys, this is what he said when we were telling him open, honestly, that we didn't think it was working. He said, it's the expertise that I bring to the partnership. It's like the advice and it's the experience that I have. And I asked him, I said, You know, your expertise has gotten us, you know, unfortunately in this hole where we haven't got a deal for several months and we've had to fire the cold calling company. Like, why didn't you kind of tell us, hey, we shouldn't spend that much money on marketing up front? Like, you shouldn't hire your friends at $15 an hour when you can hire VAs. So I asked him those things because I was like, hey, you know, that expertise could have saved us maybe some time or some money. Like, why didn't it? And this is what he said. He said, I needed you to learn for yourselves what not to do and what to do. What not to do and what to do. And I thought to myself, I was like, Well, what's the point of your expertise if you're going to let us fail and you're just going to have us blow this money or not have it work out? You're just going to let us fail to learn. What's the point then? Because we could just learn by ourselves and not have to pay 30% to fail and you'd be there and, you know, make them part of the money. So anyway, he still was like, no, I bring a lot of value from just my knowledge. And we were like, no, man, we're grinding. And to give you that much, it just doesn't make sense. And looking back, obviously we probably could have done a better job of explaining, but it just didn't make sense to have 3 partners in a wholesaling company where two guys are grinding, one guy just gives advice. That's what mentors are for, you know, that's why we join coaching programs eventually later. So it just— the feeling wasn't there, like the happiness, what we— the joy we felt in the beginning. You could say it was awkward at that point. So we just told him, hey, we're gonna leave, this isn't working out. And he's like— you could tell he was distraught, you know, because we had brought him a deal. We've done several deals with him, like we had brought in some listings, we had done a deal where he ended up probably making about $150,000, $200,000. So I think he was upset because he probably felt like, you know, giving us a space. But he also got a lot of deals and made some money off of us, which is great. Good for him. But we decided we just left. So we took our cubicles, we took our stuff, and we just left on a weekend, you know, because it was the end of the weekend. We just took our stuff and we were gone. And I haven't heard from him since, you know. He didn't reach out. Like, we haven't reached out to— I've reached out to him within the last, you know, year or two and just said, hey, I was 27, I'm 32 right now. Hey, sorry if I didn't handle that the right way. Hope you're doing good. Never heard back from him. Unfortunately, that's how things happen. Maybe he doesn't like me, who knows. But again, you know, You live and you learn, and we tried to deal with it as good as possible. I'm just trying to say we tried to do the best we could at breaking the partnership. All right, it wasn't like we signed any documents and it was an LLC that we created. It was more of like a verbal, and we were seeing how it went as it went on, and we didn't feel good about it as it went on. So that's, that's what ended up happening. So as I reflect, that's the bittersweet talking about it that happened. So guys, I just, I want to give you some advice on partnerships. If you don't have the same vision, the alignment, the desire, the goals, you are going to come at a pass eventually. You're crossroads where you're like, hey, you're not doing enough, or you're not doing what you said you would do. I feel like I'm doing more work than you are. Like, you have to be on the same page. So make sure before you start a partnership, like I said, with the gift that I'm giving you in the newsletter, I'm going to give you a personality test. Make sure that you guys, your personalities complement each other. You don't want to have the same person, a visionary and a visionary, because then they need an integrator, right? You need a visionary integrator. You need to be able to complement each other's strengths and not just butt— not butt heads, but just do the same thing. Because unfortunately, that's what happens a lot in partnerships, is people just they like each other and they both provide the same value. And it just doesn't— the business partnership doesn't end up working. And, you know, I just wanted to say, hey, it works out like that. You know, sometimes it works out good, sometimes it doesn't work out good. But you do your best to navigate these situations. And I'm giving you the advice that with partnerships, take personality tests, see if you complement each other. Now, if you ask Tom Kroll, one of my mentors, he'll say never have a partner. It doesn't make sense. Don't do it. That's, you know, a lot of high-level entrepreneurs say like you don't need partnerships, you don't need like a 50/50 partner. That's like something that a lot of people do in the beginning. You know, I think that's fine if you're in the beginning and you'd have that open, honest conversation with your business partner and say, hey, this might not last forever, but, you know, let's do it now because it's fun to be in business with your friends. That's essentially why I got in business with Corey, because it was fun to work together. Like, we were able to learn together and grow, but we're no longer business partners now, and we ended fine. It's not like he's mad at me, I'm not mad at him. That's just how things work out, okay? I just want to recommend to everybody here that, uh, I already said this, but take the assessment. I think it will help you not only with partnerships but just to know how you navigate and how you work in the best, like, the best way to go about, you know, your business. So yeah, that's what I just want to wrap up. This is a shorter one today, everybody, but I hope that story helped you understand that in my experience, 6 months in, I had to already break a partnership up. It didn't end as well as it, you know, probably could have if I navigated it better. And there were some hurt feelings, some tears were probably shed, not on my part. Maybe the broker cried a little bit. I remember the day after we told them we were thinking about it, the next day we saw him, he was not looking too hot. He was looking like he had not slept a wink. And that's not probably because of us, but maybe it was. Maybe he was tossing and turning, couldn't sleep because he's like, oh man, these guys are leaving and they're making me a lot of dough. Who knows? Maybe he's just like, just couldn't sleep. Maybe he's, you know, he had back pain. Who knows? But the next day when we went and talked to him, it seemed like he was pretty distraught about it. But sometimes you got to have the hard conversations. Again, going back to one of my— what my mentor Tom Kroll says, he says you got to have the tough conversations. If you're not willing to have the tough conversations with your partner, do you really have a partnership? Do you really have a good relationship? You don't feel comfortable bringing up the uncomfortable things. And that's, that's something I want you guys to all know. If you can't say things that make you feel uncomfortable to your partner, don't even think about getting in partnership. You got to be able to have the conflict, the trust. You got to be able to just get, get raw and dirty and say, hey, this is what I think's going on. You can't just hide your feelings. It's like a marriage. You got to be honest. You got to be true. You got to tell the truth, or it's probably not going to work out because, you know, you need truth. You can't lie. Lying doesn't ever work out. It builds up, builds up, and you'll always live, you know, you'll feel like you're living a lie. Hope you guys enjoyed Nathan Payne's whole telling storytime tales from the trenches. I'm just getting started, guys. I've been in this business for like 5 years, and I've just gone over the first 6 months and highlighting some of the stories from the journal. Next week, I'm going to be talking about how I, uh, went to a condemned home to check out the condition of the property. I was driving for dollars, and I saw this homeless-looking guy. No offense to him, he just looked homeless. I told him what we were doing. He's like, yeah, I'm selling that house over there. And it was a condemned home that had been condemned. No one's supposed to live in it. He had climbed through the window, broken the boards on the window, and was living in it still with his girlfriend. He was selling it 2 days later to one of the wholesalers just by chance that I know in this, like back in the day in the market, they're still around. But and I was like, word, you've already signed. What if I can pay you more? I didn't know about like if someone signed, there'd be a notice of interest. And, you know, I just thought maybe we could just beat it. So I was like, let me go take a look at the property. So he climbs in through the condemned window. He starts opening up like all these boards with a little drill he has. And he's like, come in and check out this house. And Corey's like, I'm not going in there, bro. And for me, like, I want to get a deal. So I was like, let me look at this house. House. Let me tell you something right now, and I'll tell you more on the next story. You don't need to go inside a condemned house that's boarded up to see the condition. It's condemned, all right? But I, I was dumb. I looked in, I saw like some of the crazy stuff I've ever seen. I'll explain it next week. But that's what we're talking about with these stories. I was in the trenches, literally in the trench of a condemned home. I, I probably still got the video somewhere. I don't know what I was thinking. But stay tuned for next week.

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