Hey, thanks for taking the time to visit my about me page. I really appreciate it.
My name is Paul Clukey (and my beautiful wife “Kitty Kat” above)
I was in full stride when I glanced over and noticed a book on an octagonal kiosk. It was an Airport Barnes & Noble type store. The book that caught my eye was entitled “The Coming Crash in the Housing Market” by Jon Talbott. The typical hustle and bustle of the airport was raging on, but this book really captured my attention.
At first I kind of scoffed at the name. That was only because it kind of warred against my own ego.
You see I had bought into the real estate investing riches idea like there was no tomorrow.
I thought, if others can do it…why can’t I? If it worked for them, it will work for me. After all I am much smarter than those average joes, right? So, I leveraged every bit of credit and income I had to enable myself to acquire as much real estate as possible.
I was tired of traveling for a living. I was tired of dealing with hospitals and institutions, corporate contention and constraints!
You see I had a plan. It was supposed to work like this.
If I could on 10 homes and all of them paid me an NOI of $1000 per month well, that’s a $10,000 a month paycheck.
I had gotten really good at calculating all of the possible scenarios. ROI and different things. My net operating costs and income. Renter acquisition costs, etc. All of the things a good real estate investor should know.
I had gotten on the phones and negotiated with different people trying to buy their houses right out from underneath them at a discount. I remember saying. Look at the roof, it needs all this work. I will buy it at a discount simply to make up for the roof.
The housing market was hot, interest only loans and stated income lending was a big thing.
Heck, everybody was doing it. So, back to my WTH experience at the O’Hare Airport.
>There I stood in front of the book that was rattling my cage to no end. It couldn’t be.. I couldn’t be wrong about my plan!
I picked it up to begin sifting through the pages. The pages were full of charts and graphs of why the housing market was simply unsustainable. It talked about derivatives and capitol hill and the monkey business going on on wallstreet. I DIDN’T Really Understand it. I’d liked to have thought I did.
I remember feeling overwhelmed by the potential of this news however. It couldn’t be, you know?
This reality was to harsh. It meant everyone was wrong. Could it be true? Or was this just another slick salesman selling a book.
I reasoned that it was the latter. I mean who was this guy anyways?
It makes sense right? Everybody’s talking how amazing the real estate market is and how much money can be made in it. The country is booming beyond belief. Then this guy shows up and wants to sell a book, right? How does he do it? Uh….well….Just throw out an idea that is contrary to what everyone believes. Blow a hole in everybody’s opinion. Maybe that’ll sell.
I remember thinking this guy is a marketing genius. He’s going to sell a lot of these damn books. But the truth is I am going to be sitting with my margarita in my hand enjoying beautiful sunsets because I have a completely passive income of $10,000 a month.
No more schlepping a bag. No more boring, stuffy, ueber politically-correct meetings. None of that BS in my future…just sipping margaritas and working when I want.
Say hello to freedom!
Yeah, so I thought. OMG I was wrong.
I can imagine you know exactly where the story goes next but I’ll tell it you anyway.
The housing market did crash. And I was sitting completely exposed. I remember talking to my wife at the time and telling her that I realize that we had 90 days before we would have no money left. I remember sitting at the kitchen table and she looked at me and said what? Up until this point, not only had I kept myself fooled, I had kept her fooled too. We were going to be rich weren’t we? We were going to be debt-free and independently wealthy.
That was because I was so smart. I knew what I was doing. I had read all of the books. WRONG!
I was completely unprepared for what happened next. The first deal that went south was a big home that I had signed an agreement on. I had $57,000 cash invested in the deal. I called the company to let them know that I was having trouble figuring out how I was going to unload some of the other real estate but I had an order to close on this deal. They flat out told me they didn’t care and told me to go get my attorney ready. I remember dealing with their corporate attorney (who had threatened serious legal actions) and we finally came to an agreement that if I paid them another $15,000 I could get out of my contract. However, I would lose everything that I put into it.
So, I lost that deal. I lost the cash that I had taken out of an equity line from the current house I was living in.
I ended up paying a mortgage of $3300 and had to move out. I was able to rent that house for $1800 per month. You guessed it. I was losing money and bleeding out everywhere every single month.
I was also in the middle of a rehab project with a house that was built in 1932. It originally showed great promise for the area. But once everything collapsed there was nothing I could do. I finalized the project and I moved into that house.
That was when I learned, “Don’t ever buy a house that you personally don’t want to live in.”
Fast forward about 18 months and I was completely broke. I lost everything. I filed bankruptcy.
During that time I ended up living with relatives. My three kids slept the mattresses on the floor in a guest bedroom.
In my medical job I was still making well over six figures. However, I was driving through the Burger King drive-through in a Mercedes asking for a $.99 whopper.
It has taken over a decade to recover from these financial sins. But I took my licks. I am remarried and a lot more financially set.
In many ways I guess you could say that I’m back on top. I own my own real estate out right I don’t owe anyone anything.
The home that I live in now is over 4400 ft.². It has a Mexican tile roof and a highly modified backyard sporting a giant outdoor fireplace. I also own a house on the coast.
So yeah, I guess you could say that I learned a big lesson. I actually vowed to myself that if that man (Jon Talbott) ever wrote another book, I would do exactly what he said.
Want to hear something funny? I ended up hiring him as my own financial adviser when I got back on my feet.
It was pretty cool sitting on the other end of the phone call with John Talbott who had been featured on CNBC and written all these books. He’s actually a pretty down-to-earth guy, but he’s really smart. I asked him why he was willing to give me direction on my finances. He told me, “Paul, you know what I do for a living right?” I said, “Yeah you are a writer.” He said, “Exactly, and if I know what you are doing with your finances and a bunch of other people for that matter then I have my finger on the pulse of the market. This allows me to put out very relevant content.” Told you he was brilliant.
He gave me some advice that I have stuck too and it’s helped. But what has helped even more is learning that building income without leveraging too much or risking too much is really where it’s at.
Ever since I learned about Internet marketing I was intrigued. For $12 you can buy a domain name build it out and eventually get it ranked so that people can do business with you and through you online whether you ever meet them in person or not.
So that’s what this blog is about and this is what I’m about. I am the Real Estate Spy because I was once on the other side.
If you happen to read this article all the way to the end I want to tell you thank you. That displays real persistence and I know that you will find what you are looking for. Most people simply click off the about me page after a reading a couple of lines. You didn’t. Congrats.