I Lost EVERYTHING. I Told Her To Leave Me.

Layla and I had, so we started dating in April of '16. I immediately was like, hey, I've got this idea for this thing called Gym Launch. I want to go fly out to gyms and do turnarounds because I can like fill my gyms up faster than I can build them.

By the way, context is at the time you owned a couple of gyms.

I had 5 gyms when I met her.

And the bank balance looked like what at the time?

I was making like $20,000 a month. I know that. So I like, I don't remember what my savings were, but I was making like $20,000 a month in cash flow. And you're like, wait, 5 gyms? It's like, yeah, some of them weren't good. Some of them were, I had 2 corporate locations that were a little smaller anyways. But I was like 25, 26. So like I was hood rich, you know, as far as I'm concerned, I could buy whatever I wanted. I could live where I wanted, you know, I could go out to eat, whatever. And so I started the turnaround business and I made $100,000 in cash in 21 days. And I was like, holy shit. I was like, this is awesome. And so I came back and she picked me up from the airport and I had this big stack of contracts and I was like, hey, we can go on that date because I hadn't taken her on a date in 3 weeks and we'd seen each other every day. So it'd been like 21 days of hanging out and not one date. And so she's like, you promised you'd take me on a date after we, after you did this launch. And I was like, okay, okay. I was like, help me process these. So you process the contracts in 45 minutes. She saw it was $100 grand. She was like, holy shit. The first question she asked is, is this legal? And I was like, yeah, it's legal. And she was like, all right, I'm in. And so she decided to join me. So we went out to the next launch together, a few more launches. And then one of the launch guys that I did, that I did really well, the one that I came back with $100 grand for, was like, hey, let's partner. Like, instead of, you know, you just doing these gyms and then walking away, let's just open new gyms. I'm a really good operator. I'll just open them behind you and run it. And then if you open up 1 or 2 gyms a month, at the end of the year, you own 24 gyms instead of just like doing the service. And me being me, I was like, of course, money on the table. Why would I not do that? And the fact that he had been indicted for fraud, like it was a misunderstanding, whatever. And he was like, hey, you know, you should sign all the leases for these new locations because I had a little run-in, like no big deal. You should do it. And so I personally guarantee the lease and I put all the capital up because, you know, I'm 25 and don't know what I'm doing. And so, of course, we know how this story goes. I launched, I crushed, launched at 376, you know, new members, which for like a CrossFit/micro gym is massive to open up with. Then I wake up one morning and all the cash in the bank account's gone. And I was like, what the fuck? And I, you know, hit him up and I was like, dude, what's going on? He's like, oh, that was my half. And I was like, what do you mean your half? I was like, you took all the money out. He's like, well, I know you've been skimming. And I was like, what? I was like, I'm here. What? I'm here every day. So I came to him with all the bank accounts, like every transaction highlighted. And I was like, hey, let's go through this. Like, I just want to make sure we're good. And he threw it off the table. He's like, I don't need to see that shit. And I was like, oh, you— okay, got it. I now understand what happened. Like, okay, so I just got all my money stolen. And right when that had happened, I had decided to go all in on that business. So I sold my gyms. And I put all that cash in that account. So the cash that I used to open the gym and the subsequent cash that came, all of that was pooled into one place, but that was what I had sold all my gyms for. And so when he emptied that, I had basically the 5 years I had built my gyms, I had nothing. And so that sucked. Uh, and so Layla was like, you know, dust it off, forget the whole like build and whatever. Like, let's just go back to the turnaround model. Like you made money doing that. Like, let's do that. And I was like, all right, we'll do that. And so the next launch that's supposed to happen is in California. There's a guy who hits me up randomly on Instagram, says, hey, do you have work for me? I've got two, I've got a kid on the way and I've got a one-year-old. I need the money. And it just so happened he lived 10 minutes away from the one gym that we were going to launch in the world. And so I was like, dude, do this launch for me. So he does $100,000 in sales in 28 days. And all of a sudden though, as I'm like, normally I know my deposits always hit on Tuesdays over the weekends. And so Tuesday hits and I'm like, there's no deposit. I'm like, we're processing the contracts. Like, what's going on? I call up Mindbody, which was the, you know, Heartland was the processor they integrated with at the time. And they put, you know, they give me the runaround and they're like, oh, it's a standard annual review. And I was like, okay. And no, no Wednesday, no Thursday, no Friday, no Saturday. Then it's the weekend again. And then Tuesday comes back and no, no deposit. And I was like, dude, what the fuck? So they said, no, you're still in the annual review. So I did it one more week and now it's Christmas Eve. And I had about $23,000 left after all the money was— it was basically my checking was what was left from all that other stuff. And so they got on the phone. I said, I'm not getting off. It's Christmas Eve. I need to pay my guys. Like, what the hell? And they said, we're going to hold on to this for 6 months because it's irregular activity. Because I was processing these turnaround gyms through my brick and mortar location. I didn't know how processing works. I was like, you know, I'm flying into Calgary, Canada. Doing a turnaround, running it through Huntington Beach, California for an in-person transaction. Like, I didn't know how it worked. And so they were like, this is weird. We're going to hold onto the funds. And so I owed $22,000 in commissions for sales that I hadn't gotten paid for, for this guy who had, you know, the kids and the babies or whatever. And so I didn't want to like give myself the idea that I could not pay him. And so I sent him the money. And so I had $1,000 left. It's Christmas. We're at Layla's family's house. I'm stressed the fuck out because I just lost all my money in the last two— like, I got the money stolen. And then the, my, my Hail Mary to save the day was the $100,000 new launch. I didn't get paid for that. I ended up just having to empty the small $20,000 that I had and had $1,000 left. She told 6 of her friends to quit their jobs to start that month on the 26th of December, because that's going into New Year. So I could do, I was like, let's do 6 gyms because that's logical. Go from 1 to 6 immediately. Um, since we're going to go all in. And so After I found out that I didn't have any money and I had $1,000 left and the ads were supposed to launch on the 26th and I was going to be spending $3,300 a day in advertising, hotels, rental car, per diems for the 6 sales guys that were her friends. And I had $1,000 in total. And so I, you know, we're sitting at like, Her parents are downstairs. We're in like the spare bedroom where like the grandkids are. So there's like this little mini furniture everywhere. They like, I'm sitting in a tiny chair and I was like, hey, this could go horribly wrong. And if you, I said, I wouldn't stay with me if I were you. I am a sinking ship right now. And so in that moment, she grabbed my chin and she was like, I would sleep with you under a bridge if it came to that. And so I was like, all right. And honestly, I just kind of felt relief at the time. I kind of, I can appreciate it more later, but you know, she quit her job to join me doing these turnarounds. And all she got to see besides the one that she did in the beginning was me just getting kicked in the nuts for like 8 straight months. And so then the next day I said, okay, well, I still had a $100,000 limit on my credit card from all my 5 gyms. Like, Amex hadn't updated the fact that I was broke. And so I put $3,300 a day on that credit card, mind you, with no way to process money. And so I'm spending $3,300 a day of money I don't have with no way to process new money. And so I, I got like porn casino and like gambling processing that had like 10% reserves and like 6%, 7% processing fees. They were taking like 17% off the top. But I needed the cash. And so I got one turned on with a $50K limit and I needed, I mean, I had $100K in costs. I need, it was, we were going to do $200K. I needed $200K. And there's like, well, if you do well, You know, you get 50 and I got it only turned on 3 days before the end of January. So this whole time I'm fronting $3,300 a day and we're collecting these contracts with credit cards and I'm not processing anything. And people are calling me like, hey, I haven't seen the money come out. Hey, like what's going on? Are you guys going to run the card? We're like, yeah, yeah, we're getting to it. And so 3 days before the end of January, the first $50K processor hits. And so I've run that in a day, you know, because I had so much backlog, but he's like, the good news is it's month. So on the 1st of February, you can run another 50. So I ran 50/50 and that covered my 100 that went out, the 3,300 a day. And then I got 2 more processors turned on at 50/50. And then, and then I was able to get out of it. There's also another crash that happens after that where I lost it all again 3 months later. But that was because all of the launches that we were doing, I had a new hole in my model, which is that I was selling and other people were delivering, and then they would tell the customers to refund and then sign up with them for half the price after we'd leave. So we'd sell like 5, you know, we'd sell a $500 challenge or whatever, and then we'd put 100 people in the location and they would just tell them all like, hey, refund with them, sign up with me for $200. And, uh, we'd already, I already fronted the cost for the hotel, the ad spend, the commissions, the sales guy, like all that jazz. And so that's when I lost everything again. And that was, that was probably the hardest of all of them. All right.

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