"How Do I Restart After Losing Everything?"

0:00Alex, hi. >> Uh, my name is April Peterson and I um buy pre-foreclosures >> Okay. >> and then flip them, sell them on the market. Um last year I went through a divorce cuz I had built this business with my husband over 15 years. >> Mhm. >> And um over the last 3 years, minus last year, we did about 3 million revenue. >> All right. >> And then last year because of going through the divorce and all the things, it was about 1.9.

0:28>> Okay. >> So I took, you know, 6 months off or so. Um before I get into my problem, I did want you to know that I was listening to you do a podcast one time. >> Mhm. >> And you were talking about one of the greatest investments you ever made was into um earplugs. >> Yeah. >> Um because you, you know, got your focus back and all that stuff. Well, since getting divorced, I um I met an amazing man who's now my boyfriend, but the problem is he snores really loud.

0:56>> Yeah. >> And so I invested in the best earplugs on the planet. They're $35, not like the ones you recommended, so I got you some. >> Oh, well, thank you. I appreciate it. Ah. >> I didn't know if I'd get to see you. >> I know, thank you. >> love >> I would put them in now, but then we wouldn't be able to keep going. >> Seriously, they're amazing. >> No, they look great. 45 decibels is awesome. I'll use them. >> So problem, I don't I mean, I think the problem is that I went through divorce last year.

1:25>> Okay. >> And so now I'm, you know, $750,000 in debt because I have a bunch of overhead from payroll, from people that I refuse to let go for an ethical reason. Um and I've changed the business >> or because you just didn't Well, you just felt bad. >> No, I didn't feel >> So I don't think it's unethical to I just like Just cuz I don't think it's against ethics. >> to replace as well. >> Okay, that's fine. >> high skill set.

1:51>> Okay. >> Um and then I also um So my goal is 10 million. >> All right. >> And really it's not 10 million, it's to live in Thailand half of the year. >> I'm kidding. Yeah. >> [laughter] >> To be what? >> No, like it's not so it's to beat my ex. I was just kidding. >> Yeah, no, you're not wrong. Actually, I was like, we did 3 million together. What could I do by myself? >> Right. >> So, yeah, that's a driver for me for sure. >> Okay. >> Um So, I think the problem is just this bridge, period. So, I've changed the business model where um I used to have a bunch of American sales people making calls. Now I've transitioned to a bunch of VAs.

2:26>> Okay. >> I've been training them up the last few months. They're doing amazing, surprising the heck out of me. >> Right. >> Um but like >> What's the issue? >> I don't know if I can make payroll next week. >> Okay, so that's the issue. >> Got it. Um >> [clears throat] >> When do you think you will be able to make payroll? Like you you know your pipeline, I'm guessing. >> two big closings coming up in 30 days. That's about 200 grand. >> Okay. And what's what's What are you going to miss payroll by?

2:54>> Miss it? >> Well, you said you're not going to be able to make it. >> Well, I'll make it. I just don't know where the money's going to come from. >> Where is it going to come from? >> I don't know. I'll find it. >> Okay. Great. So, then what's the issue? >> I have no idea. >> [laughter] >> Okay, so you don't know where the money's going to come from. It will magically appear. Um and then you'll pay your payroll and then you'll have the $200,000 coming from these other deals.

3:18You're scaling up the VA team. Um it sounds like you're just in a crunch. >> I'm in a crunch. >> Okay. There might not be anything wrong with the business. It just sounds like you're you're catching the plane. You know what I mean? You're coming back up. Like basically you made it you made a strategic decision that getting rid of the team that you had that had higher capacity than you're currently at would take you longer to replace than the short-term cash that it cost you to keep them. That was the monetary decision.

3:44And so part of the downstream effect of that monetary decision is that you're paying the price of that decision now. And the The is that you will quick cuz like let's say let's play out the other scenario. Let's say you let them all go. You wouldn't be able to do $200,000 next month and maybe $300,000 the month after that. And so you're paying the bridge to be able to scale faster. So I don't think there's necessarily that's a wrong and it's just a risky decision. Um but that's the risk you've already chosen to take on. So I don't know if there's anything wrong. I think you're just like paying the price for the skill that you want to have faster.

4:16>> So let me ask you this. So I've got 750 in debt. >> Yeah. >> Okay. Um it's high interest debt. >> Okay. >> Like I said, I'll net a couple hundred in the next 30 days. >> Okay. >> And maybe get about 100 back of my own money. >> Okay. >> So would you get would you take a bridge loan or find a bridge loan or find a hard money lender that >> Are you confident that you're going to be able to generate the leads you need to do the pre-foreclosures, do the model that you're familiar with doing?

4:43>> It's working. >> Okay. So you're you're confident that the like cuz you've done this for a while. >> Yes, but it's a new model that I'm >> Okay. What's so new about it? >> Um the VAs are 70% >> but the model's the same. You're just using a different team. >> Yeah. >> Okay. But you're still doing pre-foreclosures. >> Yeah. >> Okay. So you've been doing this for a while. So I feel like the pre-foreclosure game hasn't like materially changed. Right. Okay. So again, you're just in a cash crunch. And so I'm guessing the question is like should you take a bridge loan versus what's the alternative?

5:13>> Wait and pray. >> Well, you said you're going to go find the money. >> I know, but >> [laughter] >> I just I feel like I'm like you know, the the energy that I'm promoting to my team is not the energy I want to promote. It's like [ __ ] close a deal, you guys. Like mama's out of money. >> [laughter] >> And I don't like that energy. >> Yeah, I understand. Um we just have to look at like what are the options?

5:39Right? Your options are let them go >> No. >> or take a No, but like right, but like the options are let them go or do a bridge loan. Like or pull money out of your ass, which is always my preferred way of doing things. Um but like really, that's like that's that's what it is. Um the difficulty that you have is that you're not in like a service business where you can just like make something up and then sell a super high expensive packages. One of the benefits of service businesses. Um If you had to make the money tomorrow, what would you do?

6:10>> A Mormon, probably. >> A Mormon? >> Yeah. [laughter] I have a lot of them in Idaho. I have a lot of them in Idaho. >> Yeah, yeah. >> [laughter] >> So So here an idea. Um you have this big list of people that you've done business with over however many years, correct? >> You talking about investors that I've sold properties to? Yes. >> Yeah. And you also have a big list of homeowners that you've done business with over the years.

6:37>> Foreclosure clients? >> Yeah. Is there anything that you can do for either of those people in the short term that would generate money? >> I mean >> Anything, you know, legal. >> [laughter]

7:02>> Um I can offer to sell rich people's homes. I don't know. >> Yeah, if there's a whole bunch of money in that, right? You know, um >> [sighs and clears throat] >> Unless you figure that out, which I'm not saying you can. I I believe in you. I think you can. Um and you're obviously on the spot right now and you're probably not like the most creative in this exact moment. Um The bridge loan I'm ne- I'm never a fan of of debt in general, especially to like pay like Basically, I do not like debt when a model is broken in order to figure something out. You have a model that has worked for for years and you are doing this. You're basically catching the plane as it's and then you're going to scale back up and you you're keeping the infrastructure cost so that you can scale faster. And so you're basically borrowing from a year from now today.

7:51>> I hate that. >> But that's but that's the trade you made. >> Yeah. >> Right? It's like the alternative was you fire everyone and then you have to re-find those people. That was the that was the trade. And so I think you just you got to live with the trade that you're in right now. If you have to make the short-term again, I'm never an advocate of of taking debt. Um but again, what are your options? Like I I think of like can I pre-sell future business? Can I like go to the investors and say, "Hey, I'll give you a better deal on my next house if you'll front me the cash for it."

8:20>> Yeah, I can do that. >> Right, okay. So like I that's why I think of what are the assets I currently have. I've got customers, I got investors. What can I do for these people that can get them to give me money? And futures is a great way to do that. It's prepayments. And you take and it's just like you're trading uh spiff here for debt. And if you like that better, then do that. And I'm sure how many I mean how many investors have you done a deal with in a long time? >> [snorts] >> How many investors total? >> Yeah, probably a lot. >> Hundreds?

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