So if you have been following the blog, you already know that I spent $15,000+ on real estate training. In reality, I only spent $7,500 as I split the cost with my cousin.
This real estate training was the first of its kind that I had attended. I was young, naive and more motivated than ever, especially since I already failed to purchase a duplex. After that failure, I felt like I was never going to be able to get started in real estate investing, so I put everything I had into that training. When day 3 of the training came around and they announced the additional training and prices, I felt butterflies in my stomach. I thought this training was going to be the answer, but I didn’t have enough confidence to get started. I knew that we could not afford the training sessions. I again felt like a failure. Everyone else in the class was going to take the training and become successful investors, but I was just going to go back to my day job and not get any closer to my goal of retiring within the next 15 years.
But I just needed a little more…
I could feel that I was so close, and I knew that real estate was going to be a key piece of achieving my goals. Even so, the cost of a single additional training session was nearly $10,000. There was no way we could spend that much money for one training. After some chatting, we decided that we would not take the additional training sessions. As we sat around, the “trainer” kept announcing as new people signed up for additional training. Each time, they received a standing ovation. They were presented with their own copy of the Cashflow 101 game, several more audio trainings and books and were able to talk with the others investors who were “committed to success”.
Maybe we would go and save some money, then purchase the additional trainings. But then as we were reminded, these prices were only available today. If we didn’t purchase today, we would have to pay double the price in the future.
The pressure was on. Time was winding down. We talked some more. If we waited, the single training session would cost us $20,000 in the future. But for only another $5,000 we sign-up today and get 3 more training classes. As we tried to justify it to ourselves, $5,000 more didn’t seem too bad to get an extra 3 training sessions. And since we were so close anyways, we would definitely become successful investors if we had 4 more training sessions (or at least that was the story we told ourselves).
So we made the decision, we would going to purchase 4 “advanced” training sessions for $15,000. My cousin put it on his credit card, but even with getting my credit card limits raised on day 1, I still could not afford to pay the $7,500, even across multiple credit cards. I did not want to be the reason that we could not continue with the training, so I desperate called the credit card companies one last time. After pleading, I had enough available credit between 3 credit cards to pay for the $7,500 training. So we signed the paperwork, received our “free” copy of Cashflow 101 and all of our advanced training material. We were then announced as the next investors who were committed to success and suddenly felt like celebrities.
After all the people who were not committed to success (read: the people who were smart enough to not spend $15,000 on credit cards for training), all of the committed people were pulled together. We were hyped up and the coaches gave us some action steps to take for the next week. Excited, we eagerly left so that we could get started on our action items.
I spent the trip home wondering how the heck I was going to tell Ariana that I just spent $7,500 on real estate training and that I took our total credit card debt from $4,000 to $11,500. The good thing was that I has already talked myself into this being a good investment, so I could just give her the same logically reasoning.
“All we need to do is wholesale a few houses. Wholesaling can be done with no money and we can make $5,000 – $20,000 per deal.”
To be honest, I don’t remember her reaction when I told her. This might be because she knocked me out, I’m not 100% sure.
I spent the next several days doing all of my action steps. We also had a follow-up conference call with our trainer who made sure we were taking our action steps and keeping us motivated. As the week wore on, the initial excitement was starting to wear off as I found how much work it was. I also did not realize how difficult it would be to find these $5,000 wholesale deals that we kept hearing about. I started to second guess myself and called to see if I could cancel. I was informed that I was past the 3 day return window, so there was no way to cancel it. The butterflies returned to my stomach, and the realization hit me. I needed to find a way to make this real estate investing thing work. Not only did Ariana and I just get engaged (so we were planning for a wedding) and just bought a new house, but I more than doubled our credit card debt by spending $7,500 that we did not have on a credit card.
Oh, and by the way, the interest rate on those credit cards was only 17.99%, so my returns from real estate not only needed to make us the $7,500 to pay the credit cards back, but also additional to pay the ~18% interest rate on $7,500.