Joe Crump and Katie flying
a kite from inside the van in February
(it was very cold outside).
My
Story
(Long
& Occasionally Painful)
I have been a real
estate investor since 1986. During that time I have helped many hundreds
of people buy and sell real estate and sold a ton of it for myself.
I've been married to my
wife, Nancy for 13 years. I'm a dad to an 12 year old boy named Alex
and a 8 year old girl named Katie. Alex wants to be an inventor and
Katie wants to dance. We live in Indiana now... the town
where I grew up. I've come full circle.
I have very few
complaints about my life at the moment. I've found some excellent ways
to make a living that don't take up all of my time (it hasn't always
been this way). I don't miss any of my kid's soccer games or music
recitals. Nancy is a stay at home mom (that's the way she wanted
it too). I spend Sundays with my family. I love what I do and I
don't ever intend to retire.
I graduated from college
in 1981 with a degree in Film Production (making movies) and promptly
moved from Chicago (were I went to college) to Los Angeles. I worked
in the movie industry for the next 5 years as a "Grip."
"Grips" are
the guys that rig the lights and camera to prepare for a shot. It
wasn't a bad living. I made good money and I had half the year off (it
was all freelance work). But I wanted to be a script writer...
(they say everybody in L.A. has a script)
So, over a 5 year
period, I wrote 12 feature length screenplays until, finally, some
executive at 20th Century Fox gave me a call and told me they
liked one of my scripts and wanted to develop it.
Hooray!...
I was going to make $350,000 and begin my real career! Or so I
thought. Well, after about a year of "development" and
rewrites, it finally sputtered and died.
I said, "enough of
this garbage," (but not in those exact words) and decided
that I would make enough money to make my own damn movie. I thought
that real estate might be the right way.
Real estate *was*
more fun than being a grip. No bosses... no regular hours... good
money (better than gripping) and lots of freedom.
My Grandpa said…
"There’s no shame in being
poor, it’s just damn inconvenient."
You know, I’ve been poor and I’ve
been rich and it’s better to be rich.
I started real estate investing back
in 1986 in Los Angeles, California. Three years after I started I had
bought $17,000,000 (that’s 17 million!) worth of property. The first
property I bought was brand new construction.
I didn’t know what the heck I was
doing back then.
I bought brand new construction and I
didn’t know what I was going to do with it, I didn’t know if I was
going to rent it and I didn’t know if I was going to keep it.
I did know that I didn’t
want to live in it. It was too far away from where I worked.
To be honest with you, I don’t know
why I bought it, other than the fact that I looked at all my friends
and they were making more money on the appreciation on their houses
than they were making on the job.
I was in the movie industry at the
time and I was making good money by most people’s standards. I only
worked about 100 days a year, had lots of time off and got to work on
sets and do lighting. I was what they call a "Grip." … it’s
mostly camera rigging and lighting.
Anyway… the real estate values were
shooting up so quickly in the late l980’s in Los Angeles, that my
friends and coworkers were making more money on their property than
they were in their job. So I decided to buy a property… and then,
within a month after I bought it, the value had gone up 20%.
Blind, Dumb Luck.
Don’t try to repeat this idiocy. I
was in the right place at the right time.
I turned around and immediately sold
that new house and made a nice chunk of money and I thought,
"This is a great business. I’m going to like
this."
I didn’t realize at the time that
markets don’t jump like that very often. I was very lucky… at
least in the beginning. But this good fortune started me on a road to
being able to start buying properties like crazy. I started doing
rehabs after that first success.
I had this brilliant idea that if I
bought a house a little bit under value, I might make even more money…
what a concept… so I bought HUD and VA foreclosures.
These properties were a little under
value and I fixed them up, waited a month or two for the values to
rise, and then sold them for another big chunk of cash.
I did that again and again and again.
Then I went truly insane and started buying construction projects, new
construction. It seemed like a good idea at the time… kids, don’t
do this at home.
My
Business Kept Growing -
Leverage
Was King!
I was living up in the Hollywood
Hills in Los Angeles in the Laurel Canyon Area. A shack up there cost
$350,000 at the time. I was building properties like crazy… I think
the most expensive one was a $1.6 million. They were all on the
hillside. These properties had $300,000 foundations because of the
earthquake rules in L.A.. They had 3 foot wide concrete and rebar
pillars going down 50 feet into the ground. They were huge properties
and I thought they were going to make me a fortune.
Remember… only three years had
passed and I had bought over $17 MILLION dollars worth of property and
a big wad of that was equity. Everything I had was buried in these
properties… I was leveraged to the hilt and constantly looking for
more property to buy. I thought I was immune to failure, touched by
the gods, a golden child.
My fall to earth was approaching
rapidly.
Well, 1990 comes along and then 1991
and the real estate market in Los Angeles dropped 30%. That’s right…
the value of property dropped 30%. That meant that my $1,600,000 house
was now worth $1,120,000. That means that $17,000,000 worth of
property, was now worth $11,900,000…
I owed more than that… my equity,
my profits, my fortune had vanished like smoke… almost overnight.
I had a 25% margin on most of these
properties. The construction lenders that I had borrowed from, came to
me and said, "We’re going to stop the loans. We are not going
to give you any more money." I said, "But I just finished
the foundation, a $300,000 foundation… it’s in the ground…
concrete, steel. You can’t get it out. What am I going to do?"
They said, "We’re very sorry.
We can’t continue giving you more money. We have to cut our losses.
You’ll have to stop building. If the property doesn’t keep it’s
value, we have the right to stop giving you money and reduce our
potential losses."
"But you told me you’d loan me
the money," I wailed… okay, I didn’t really wail… I just
felt like wailing.
They said, "Well, look at your
contract. We can stop you anytime we want to." They stopped me
and everything fell apart. I could no longer make any of the payments
on my infrastructure.
I Lost Everything…
I lost my house. I lost my cars. I
lost my dump truck, my bulldozer, my bobcat, my concrete forms…
"Oh no, don’t take the bulldozer," I said. They took the
bulldozer. I lost everything. I had people coming to my house in the
middle of the night pounding on the door wanting money. I had people
serving me legal papers every night. Literally, I got served with
many, many lawsuits for unpaid bills because when you’re doing
construction, there is a lot of stuff going on.
It was a hard lesson… a very hard
lesson.
When it all finally played out, I
knew that I had to leave my house. I was walking up in the Hollywood
Hills with my dog and I remember looking out over all of L.A. (it’s
really beautiful at night, you can see the whole city from up there).
But that night, as I looked out over the city…. it was in flames. On
top of everything else, the L.A. riots where in full swing.
So… we have the riots going, my
business was in the tank, my wife was 6-months pregnant with our 1st
child, I had no place to live, no place to go… but I
had family in Indiana and they still loved me.
Ex-Millionaire Eats
Humble Pie
So here I am… 35 years old, driving
back to the Midwest in a big rented moving truck to move in with my
parents. Talk about eating humble pie. This was a difficult thing to
do. I’m sure a lot of you have been in tough financial situations
before. I know a lot of people have gone through this sort of thing
before, maybe not to the extreme that I’ve done, but a lot of you
have seen hard times. It was a difficult thing to experience and I
wouldn’t wish it on anyone.
Well, I had to start over. I didn’t
have any money to work with. I didn’t have any credit to work with.
But I knew a lot about
real estate. I became a real estate agent. I started selling property.
I just had to get on my feet quickly. I needed money quickly.
But then I started to open my eyes
again and I realized, "Wow, I can buy property."
Here was the equation I was using
before the crash.
I would go out, I would get a loan, I
would put money down and I would use creative financing to help
leverage the deal. That is how I built the business so big, so fast.
With my new situation (no money and
terrible credit), I knew I was not going to be able to
take out any conventional loans. I had to stop using
conventional lenders. I had to pull out of that system. I had to do it
without any money because I didn’t have any money.
So now all I had was the creative
financing part. So my question to myself was… "how am I going
to make that work?"
An
Incredible System For Buying With
No
Money And No Credit Arose From
The
Ashes Of My Failure
The answer to the question, "how
am I going to make it work?" is what evolved into the
"Safety Net" method and my "Millionaire Matrix."
I developed the "Safety
Net" Method of real estate investing over the past 10 years. This
is a revolutionary, proprietary method that you will not find anywhere
else. It is so proprietary that I trademarked it.
Nobody, anywhere, is teaching this
method and it’s not because people know about it and don’t want to
teach it, it is because I INVENTED this method.
Using this method you can:
Do deals in a matter of minutes.
You can do them from your HOUSE…
you never even have to leave.
The deals will not
close unless they are good deals and you make money.
You never put you finances at ANY
risk with this method.
You are able to leverage your
profits so that you can make literally hundreds of thousands and
millions of dollars without having to get a single loan or use
your credit.
I've been involved in
over $30,000,000 in real estate transactions over the years.
There have been lots of headaches and I've been stabbed in the back a
few times, but overall, it has been a blast.
During this time, I've
helped many people buy their first investment property. I've also
worked with big investors.
Some of them had money
and good credit, many of them did not. I've dedicated this book
to the folks who had NOTHING to start with and built a money-making
real estate business to be proud of.
I put my first venture
online in 1998. It is a book that I originally wrote for my clients
with bad credit titled, "How To Clean Your Credit In 60
Days!" You can find out more about this book and download a FREE
trial version at: www.cleanyourcredit.com.
Then, I started a real
estate investor newsletter called "The Real Estate Money Maker
E-zine!" It's FREE and gives tips about how to buy and
sell real estate with little or no money down, with bad credit or no
income. I've got over 47,000 subscribers and it's growing every day. You
can subscribe by going to:
It is our goal to
provide the best personal financial information available on the
market today. Feel free to contact us at anytime with your questions,
comments or concerns.
Please check out some of Joe
Crump's other home study programs:
