The Biggest Risk I Took When Building My Business
Welcome to the Entrepreneur's Edge, the official podcast of MCM University. I'm Alex De Leon. Here with me is my partner in crime, Steve, your favorite father daughter duo. For our first episode, we'll be going big and diving into the biggest risk that Steve took when building the business. We'll discuss why he took it, how it paid off (if it did), and what he learned.
Alex:So, Dad, let's rewind way back and talk about what the market was like and what you were like when you first started.
Steve:Well, I was fortunate enough to do an internship at the age of 21 for a real estate investment company that was here in in Tarrant County. I did a 3 month internship that turned into a 6 month internship and I ended up working with them for a couple of years. So they were primarily buying and selling apartment complexes. And during those years, this was way back in 1988 before any of our listeners were even born. But anyway, this was back in 1988.
Steve:And for those that remember those years, it was when the savings and loans were really going bust. And so it was very easy to find properties. It wasn't that that difficult, to do, whether it was apartment complexes or single family homes. These savings and loans were just trying to get rid of these homes. So, literally, you could walk into a savings and loan, which I did many times, and walk out with 5 to 10 contracts, or properties under contract, that that I was going to purchase.
Alex:So did you know what properties that were gonna be offered when you so how did you know, like, what type of properties were gonna be there and, how much it was? I mean, did you do any research beforehand?
Steve:Yeah. Well, it's you know, back then, you would basically contact the, REO department. That's the real estate owned department for the banks. And they would tell you, yes. We have a list or whatever.
Steve:And now remember, back then, there was no email. There was no, you know, searching it online or anything like that. So we would actually have to either go and pick the the list up, or they would actually mail it to you snail mail. Right? And so that's how you kinda find out.
Steve:So you would basically call these different, savings and loans and try to get with the REO department, and, build a relationship with them so that they could provide you with this list so that you could go and drive by these properties. Most of the properties we were buying at that time were really not where you could walk into them. So just literally you're driving by, looking at the area, looking at the, you know, the house itself from the outside, and they will let you you know, you do would say, okay. I'm gonna give this much for the prop the property.
Alex:Interesting. Very interesting. So did you so so this was back in the dark days, back in the dark years. So did you, how did you know what the inside looked like? Did you have Polaroids? Haha
Alex:Like, what did that look like?
Steve:Good question. And we and we didn't. If you if your contract was accepted, now this was way before option periods. Okay? So you didn't have an option period.
Steve:But if your contract was going to be accepted, you'd have to go get the key from the savings and loan. And, many of the many of the of the savings and loans had master keys. So that made it easier. So if you were on their good list of good investors, they would give you a master key and you could go in and walk the property if the property was vacant at that time, which the majority of them were. So this was before Supras, lock boxes became very, you know, popular.
Steve:So you physically had to go get a key or have a key, one of those, master keys.
Alex:So you say you were 21 years old, doing all of this. What was your mindset like when you were running around chasing these deals?
Steve:I loved it. I loved I felt like I was so much in my element. I, you know, I talk about, you know, the monopoly game and, you know, all the things that you can learn. And for those parents that are out there, I mean, encourage your kids to play monopoly. It's just such a such a great game and such a game that involves long term strategy.
Steve:And that's really what real estate is. It's really long term strategy on how to build wealth or build a portfolio and those things. But for me, I was in my element. I was 21 years old. I love the game Monopoly.
Steve:You know, the only thing was is I was playing monopoly with somebody else's money. You know, 21. You know? So yeah.
Steve:It was it was I had that safety net and people that were doing things, that I didn't really understand or know at the time at the age of 20 one. I just knew what my responsibilities were, working with that company.
Alex:Okay. So when did you decide that you wanted to, you know, take a big risk, and what was that risk like? What was the turning point for you and the deciding factor on, essentially taking the risk that changed everything for you?
Steve:I think for me, you know, I was turning 24 years old. I was still working for this company. And, at the time, the two partners wanted to go their separate ways. They had a different different vision for the company. One was a little bit more conservative, and the other one was a little bit more of a risk taker.
Steve:And so that that over time, when you start accumulating large pieces of property like apartment complex and things like that, there can be some tension. So they decided to go their own their separate ways. Each one of them offered me a position with their new firm. But at that point, I had just been recently married, so I went and talked to my wife, b, and we basically came to the conclusion that I felt like I could do this on my own, that I didn't necessarily have to, you know, go work for any one of for either one of them. After I gave my notice about 2 or 3 weeks later, we find out that we're we're expecting expecting Who?
Steve:Guess who? You.
Alex:Who? Little ol me?
Steve:So, you know, I already was already all in. You know, I had that mindset of being all in and had made up my mind. And I said, okay. Well, you know, if, it's it's it's a sink or sale and I'm doing it with a new bride and a and a baby to and a baby on the way. And I have to say that that that added a little bit more motivation and more, you know, for me to get started and get things going.
Steve:So for of the view that are out there and you're like, well, the timing is not right. Things have to be perfect. I've gotta have everything figured out. Hey. Just jump in and do it.
Steve:If it's a dream, if it's a passion, just do it. You're gonna figure out the rest of it as you go along.
Alex:I love that. So what did mom think when you came to her and said you wanted to gamble on yourself and take the risk and just jump?
Steve:I love that question because it reminds me of a quote, from Warren Buffett. And Warren Buffett said the most important decision you'll ever make in your life has nothing to do financially or anything else. It's who you choose as your spouse. That's the most important decision you'll ever make. Bea has been an incredible supporter of everything that we've done.
Steve:She's been with us for or been been with me for the the good, the bad, the ugly, you know, the all in and all in between. And so she's extremely supportive. So, of course, even back then as newlyweds and knowing that we were we were that we were pregnant with you, she was still a 100% on board.
Alex:That's that's a game changer. I feel like if you have someone in your corner like that, that's just it's a huge game changer. It's it's you know, the risk is unknowing. You don't know what's gonna happen afterwards, but you know that, you know, your your partner is gonna be there with you no matter what the outcome of that risk is. Yeah.
Alex:That's I love that. I mean, almost 4 decades.
Steve:4 decades almost.
Alex:That's a long that's a long time and lots of risk in between with that. Absolutely. So okay. So you you made the risk. You jumped off on your own.
Alex:You what was that first transaction like? That first deal, you know, what what was that like for you to do everything on
Steve:your own? It was it was tricky for sure. You know? It was one of those, and I'll be, you know, completely transparent with people. When I put that property under contract, at the time, we needed $500 for earnest money.
Steve:I didn't even have the 500 dollars for the
Alex:earnest money.
Steve:You know? At 24, really, just It's a lot of money. 24. It is. It's a lot of money.
Steve:So at 24, putting the property under contract, taking it to the title company, and telling them and basically by the leap of faith of saying, hey. Will you hold my check until I can replace it with a cashier's check? Mhmm. And very fortunately for me, I you know, I've been there's a lot of great people, that have to that that are there, with you along the way. And I've been was very fortunate to build a relationship with Barbara and Richard Kilgore, and, they really spent the time and taught me or taught me how to do business really the right way when it came to contracts and those things.
Steve:So she this was like a Monday or Tuesday. I was dropping off this check, and she said, I'm giving you till Friday. You know? And back then again, there was really no computers that you're entering in this stuff. You're just taking the check, stapling it to a file, then somebody comes around, I guess, and, you know, makes it deposit or makes the bank run or whatever.
Steve:So she did that for me, and sure enough, I went and hustled my butt off to get that property. And at the time, I I I had learned about assignments. Right? And so that's something where everybody a lot of newer investors get started, when they don't really have the the funds or the cash to be able to, close on a property themselves. But that very first property was an assign was an assignment that I that I made.
Steve:So I came back and I replaced that check my check with the person my end buyer's check-in order for them to to be able to deposit that, that earnest money.
Alex:Interesting. So how much did you make off of this big first deal?
Steve:I think I paid, like, $3,000, which back then was a lot of money. I wanna remember if I remember correctly, we paid, like, 15,000 for this house. It's on the east side of Fort Worth, on Martin Street, right there by Martin and and, and Miller. Mhmm. But, yeah, you know, that's the house, you know, March 9, 1988, man. That's the that's that's the closing date.
Steve:That's the date that I'll never forget
Alex:The infamous important date.
Alex:So that's that's awesome. So fast forward 36 years later, you've closed, I don't even know, hundreds of deals between Yeah. Between then and now.
Steve:I would say, yeah, several thousands for sure.
Alex:Were there any moments you know, I'm sure at the beginning there was, but have there been any moments, over the last 36 years where you've, had that that creeping feeling of, you know, doubt that I make the right decision? Was this the right path for myself and my family? You know, what is am I good good enough for this? You know, is that do you ever have those feelings of doubt creep up on you?
Steve:Absolutely. You know, all you know, and I'm I'm not gonna say, like, every day or all the time, but there's times that you're you you kind of I think any entrepreneur Mhmm. Is going to go back and reflect at their career, or they're gonna be in a moment. They're like, man, why am I doing this to myself? Right?
Steve:Why am I putting myself under this stress or under this pressure, of of of of doing it? And I would say the first 3 years that I was doing this on my own, the biggest thing is I didn't know what I didn't know.
Alex:Yeah.
Steve:Right? So I struggled the first the first 3 the first 3 years. And, but I stuck I stuck with it. And it reminds me, you know, just here recently, I had one of my mentees with MCU University kind of send me a quote that I had heard before. Right?
Steve:And it talks and it basically, the quote reflects on, we don't have the patience to, to spend 3 years in our own in our for our own business. Right?
Alex:Mhmm.
Steve:But we have the patience to work 40 years for somebody else.
Alex:Yeah.
Steve:And so and that says a lot. And I think, you know, it's it's whether the the regardless of what business you're in, if you're an entrepreneur, you're gonna have ups and downs. You're gonna have, you know, the market's gonna ebb and flow whether whether it's the car business, the real estate business, restaurants, whatever the case may be. It's it's going to be you're gonna have peaks and valleys. So the thing is you just have to stick with it and just, you know, and do the best that you can and just have that faith and belief in yourself.
Alex:I get it. I mean, when I was teaching, you know, I only taught for 5 years, and unfortunately, that is the national average for teachers to be in the classroom is 5 years. So I felt like I was average there. But but it the risk of of coming to that realization that you don't wanna keep doing this forever where you feel unfortunately trapped in that mundane clock in, clock out, and you're creating something, but you're creating something for somebody else, you know, and for whoever that corporate office or that manager or whatever that looks like. And the risk of having to step out on your own, and you're risking everything.
Alex:I mean, you're you risked health insurance. You risked maybe a life insurance policy. You've risked all the, you know, you risked all the stuff that
Steve:A steady paycheck.
Alex:A steady paycheck that they tell you that they they, whoever they are, they tell you that you're supposed to want, and that's the, you know, the, quote, the American dream. But, you know, our country was founded on entrepreneurs, I feel like. And so, that but, anyways, that risk of just stepping out on your own, I mean, it's it's terrifying.
Steve:Mhmm.
Alex:And I think I'm glad that you said that you still have those creeps of doubt every now and then because it's you know, if you don't, then I don't feel like you're pushing yourself enough, for growth.
Steve:There's that, you know, that saying if your dreams don't scare you, then they're not big enough. Yeah. Right? And that's so true that's so true.
Alex:Yeah.
Steve:You know, it it it's, it's you have to have, you gotta aim for the stars, man.
Alex:Yeah.
Steve:You just can't be mediocre and, sit around and point fingers. I mean, you just look in the mirror and you say, hey. I've got a man up, a woman up,
Alex:whatever the case
Steve:may be, and and say, hey. We're gonna we're we're we're we're all in. We're going for we're gonna do this.
Alex:So you said that you didn't know what you didn't know. So how did you learn what you didn't know?
Steve:So there again, I mean, surrounding yourself, by people that are more experienced than you, that are that bring different skill sets than you have, is is key, you know. And definitely having a a I've had several mentors in in in my life. And even today at the age of 60, I have I have a mentor and he's in his eighties, business professional that that he was. I meet with him once a quarter. We meet for lunch.
Steve:We go over different things. He's a great listener. He provides great feedback. I've I've, you know, I've there's a lot of things that he's just said over the years that has resonated, and has really made me think about my business and how to move forward. But, as a business owner, or an entrepreneur, it's not you have to you don't have to know everything.
Steve:Right? You just know how to have you have to have the ability to bring people together.
Alex:Mhmm.
Steve:And so that to to to and share that vision of what you have and let the people that are the experts in those areas help you along the help you along the way. And that was a big piece for me that I learned early on and, from just talking to several people about how they built the business, what they did for for their business, you know, how they started how they started off. Every business starts with that first sale. Right? Whether it's a first sale of tennis shoes, whether it's, you know, a a baker's dream to have their own bakery, and they have this they sell the first cupcake.
Steve:Whatever the case may be, everything starts with the very first one. So you have to just kinda build from there and don't expect something that's gonna happen, success overnight.
Alex:Yeah.
Steve:You know? If you're gonna there's gonna be a lot of things that you're gonna have to figure out along the way.
Alex:I love that. So we've I love that. So we have 36 years of success. Uh-huh. I may be a little biased, but I feel I feel like you've had 36 years of success.
Alex:Do you feel like it was worth it?
Steve:Absolutely. Absolutely. I've been able to, you know, from a from a standpoint of just let's take, like, the business piece, you know, away from this. Right? But just all the people that I've been able to meet.
Alex:Yeah.
Steve:You know, all the relationships that I've been able to build along the way. You know, everybody there was, you know, different title companies that helped me in the very beginning to 5 years in to 10 years in, different lenders, different people, different friends that I've made over the years, you know, different investors that I've come up that I've I've come across, and nothing makes me happier than to to see them, you know, again and knowing and and, you know, and I'm so thankful and grateful for those relationships that helped along the way. And then from a business standpoint, you know, I never really envisioned us having MCM University. Right?
Alex:Yeah. And that's something that
Steve:came that came that came about a couple years ago. You know, it's and and I think that's a big piece of what of what we're doing is and it's in a way, you know, for our family, it's always been about giving back.
Alex:Mhmm.
Steve:Right? To the community and giving back in some in some way. And this is from what some way for me to kinda share what knowledge I have. May not be perfect, may not be, you know, it be be where it's gonna work for everybody or things like that. But it's being able to share, you know, the ups and downs and understand where people are and that, you know, not everything's gonna have to be perfect for you to get started in being an entrepreneur, starting a a business, or getting into real estate.
Alex:Yeah. Yeah. And I when you were talking about how, you know, your big risk was just finally just stepping out on your own and just just doing it, I feel like that's where the majority of our mentees are right now, and they're they're they're jumping off. Some of them have are already down the cliff. They've already jumped.
Alex:Yeah. But I mean, but we've you know, the majority of them are you know, they're fixing the jump, and they're fixing to make this, and their their their goal is to make this their full time
Steve:Yeah.
Alex:Gig. And I that's exciting for them to like, for me to watch that.
Steve:Sure.
Alex:And I know it's gotta be for you. I mean, they're basically you know exactly how they were feeling during these 1st few years. I mean, that was your I mean, you know exactly better than anybody else how they're feeling right now. What would you piece of advice that you would say for them, or for anybody looking to start their own business, or just take a risk and maybe push that hobby to their actual full time, about minimizing risk, and those taking those calculated, risks?
Steve:That's a good question because, you know, it let's say and I'm I know we're talking about entrepreneurism here and not necessarily just like the real estate business or or mentees, but, I would I would say that one, come to the realization that you're not gonna have all the answers in the beginning.
Alex:Mhmm.
Steve:Okay? And it's okay. It it that's completely okay. Do some research, but don't let it paralyze you. Right?
Steve:Yeah. So don't let the the list of 3 things that you have to do turn into 6, turn into 9, turn into 12 things that you have to do. Right? Take it step by step. Again, let's use the baker for example.
Steve:What do what do they have to do to sell that first cupcake? Okay? So break it down into the simplest of of things. If you're ready to do that, then go all in. You'll figure the rest out along the way.
Steve:I for for the starting off as as a as a real estate investor to, teaching, you know, our our CE courses to building MCM University. I didn't we didn't have all this figured out Yeah. When we started.
Alex:Right? Yeah.
Steve:We didn't really know how it all was gonna play out or how it was gonna how it was gonna go. Right? Mhmm. And so I would say that would be the biggest thing. And then I know that that, in this, you know, might ruffle some feathers, but I know that there the the the the keyword or or phrase now is is like side hustle.
Alex:Oh, yeah.
Steve:Yeah. I've got this side hustle or whatever. Well, if you are passionate about that side hustle, then leave whatever the other hustle that you've got going on Right. To the side Yeah. And focus in on that side hustle, you know, and add the things.
Steve:I think what I think a mistake a lot of entrepreneurs make is they add things to their plate or things that they're wanting to do that have nothing to do with the one that kinda brought them and put them in that position Mhmm. To do it. So and I'll give you an example. Let's say that, you know, you have a food truck, you know, and you're killing it at barbecue or whatever, a food truck. And then all of a sudden, you got a friend of yours saying, hey.
Steve:Let's go open up a tire company.
Alex:Oh, yeah. You know? Yeah.
Steve:You're like, okay. Yeah. Let's go open up the tire company, and then you're leaving the food truck. It nobody's manning the food truck as you're now focusing on this. But instead of saying, okay.
Steve:Let let me do this. Instead of buying a tire company, right, let me go ahead and buy a second trailer.
Alex:Yeah.
Steve:Right? Do so keep building, adding to what you're doing that you know is working. Don't go in in in the early years and get something that you'd that that, you know, that you're just literally rolling the dice trying to trying to to make work.
Alex:Yeah. You know? Yeah. I mean, entrepreneur entrepreneurism, if that's even a word, I feel like it can be addicting. You know, I hear the word serial or the phrase serial entrepreneur a lot, and, you know, that's I love that.
Alex:And then it also kinda terrifies me a little bit because, you know, how how well thought out are some of these bit because, you know, how how well thought out are some of these plans, you know, some
Steve:of these ventures that we that we or
Alex:somebody else would go on. So, yeah, that's kind of that's interesting, advice for that. Maybe maybe just, investing in the tire shop where you can just give them some seed money and let it and let it grow like that.
Steve:And invest in your comp in your
Steve:And have them be part of the yeah. The, buy the other food truck.
Alex:Awesome. Well, thank you guys for tuning in with us on our very first episode of The Entrepreneur's Edge, MCM University's official podcast where Steve and I talk about business, real estate, and family. We'll have new episodes each Sunday with the hopes that this ignites conversation and curiosity for your upcoming week. Join us next week as we discuss how networking completely changed our business. We'll see you next time.
