Mike Wallace is 34 years old. He grew up in Dallas/San Antonio and graduated from UTSA with a degree in Finance. Mike worked as a commercial lender for several banks in San Antonio for 12+ years before starting investing in real estate in May 2017.
What you’ll learn about in this episode:
- How real estate improves during a recession
- The benefits of purchasing a ‘Walmart’ house
- How Mike started bringing in multiple deals in such a short period of time
- How Mike finds most of his leads
- Mike’s goal for creating cash-flow
- The tools that Mike uses to help him find properties
- The importance of having a mentor
- The value of planning accordingly if you are thinking of getting into real estate
- The importance of having a backup plan
Mitch Stephen: Y’all just might figure out how to fail forward to financial freedom.
This is Mitch, and welcome to the Real Estate Investor Summit Podcast. I have Mike Wallace on the line, and quite an interesting story. He started from scratch not too long ago, and we’re going to hear his story and see his progress.
Right now, I gotta get a few words from my sponsors, and we’ll be right back.
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Alright, I’m with a new investor. His name is Mike Wallace. Happens to be an acquaintance of mine from way back. I’m going to let him tell you the story. Hey Mike, how you doing today?
Mike Wallace: I’m great man, thanks for having me.
Mitch Stephen: Yep. So you’ve had a lot of changes. Let’s do this, let’s kind of give a little bit of a recap of who Mike Wallace is. I mean, did you go to college? You know, what was your upbringing like? Just take us back in a quick review of how did you get to this place?
Mike Wallace: Yeah, I went to high school here in San Antonio, and then went to college here at Saint Mary’s University, and then transferred to UTSA, where I finished a finance degree. After college, I started working for a local bank here in San Antonio, and worked for that bank and two other banks for a little over 12 years doing commercial real estate lending. So, you know, that’s how I got to know you, is through the bank. Just got to learn about, you know, really what people do in the real estate world to make money, and see how these investors do it, you know, a lot on the commercial side, but then, you know, some on the residential investment side. It’s just something that really interested me, and I finally made the move back in May of this year, left the bank and started doing this full time.
Mitch Stephen: Okay, so for the record, I banked with the first bank that you were with for 20 years. Eventually, you showed up into that bank, and we got to know each other pretty good at that bank, because not only was I having to turn over my finances and stuff, but we were also going hunting, and going to different basketball games, and going to different events together.
Mike Wallace: Sure.
Mitch Stephen: And really, for the sole purpose of building long-term relationships. And it works, because we’ve had a relationship for a really long time.
You also get to see how all kinds of people make their money, not just the real estate, because you’re privy to a lot of people’s financials. You get to see, you know, how lucrative business can be, or how stressed businesses can be.
Mike Wallace: Sure.
Mitch Stephen: So one day Mike comes up, and he says, “I don’t want to be a banker anymore. I want to be a real estate investor.” Why don’t you tell that story?
Mike Wallace: So, it was the middle of July in Texas. You know, I’m wearing a suit and tie every day, and just having one of those days at a corporate job. I’m going to go meet Mitch for happy hour, and he pulls up and comes in and he says, “You know, how’s it going? How’s the bank treating you?”
And I just said, “You know, I don’t know if I’m going to be in this for the rest of my life. I’m having a bad day. How’s your day going?”
And he said, “Well, I made 30 grand on the way over here.” And he’s in shorts and flip-flops, and I just thought to myself something’s wrong with this picture. You know?
I had already been thinking about it, and you talk about the straw that broke the camel’s back, that was about it.
Mitch Stephen: That was it.
You also mentioned that, you know, you were watching over my account for a long time, watching my financials.
Mike Wallace: Sure.
Mitch Stephen: You got to see what happened in the good times, and you also got to see what happened in the bad times. Talk about that a little bit.
Mike Wallace: Absolutely. Yeah, and you know, I’ve banked a lot of different real estate guys and investors that invested in different kind of things. What struck me about your business was that even in a recession, your business didn’t get hurt, and in fact seemed to improve, which, you know, there’s very few business that get better in a recession, especially when it comes to real estate. So, you know, seeing other real estate investor that were doing lot and land stuff, or retail centers, or any sort of that kind of thing, you know, that they took a little dip and your business seemed to flourish, you know, just really caught my eye and was something that made me very interested.
Mitch Stephen: Well, I bet you at first … The business I do is not glamorous. Would you agree? My business is not glamorous.
Mike Wallace: Yeah, absolutely. No, that’s true. Actually, it’s different-
Mitch Stephen: I mean, compared to some of those people out there building subdivisions with nice $350,000 plus dollar houses on them, or half a million dollar houses, or million dollar houses, people building strip centers, people building commercial buildings, people doing all this stuff, golf courses, you name it. You got to see all that, right?
Mike Wallace: Sure, yep. Absolutely.
Mitch Stephen: And then here comes these little, bitty Walmart houses, which no one’s impressed with at first, and neither were you, neither is anybody really. Neither was I! Neither was I, at first.
Mike Wallace: Sure.
Mitch Stephen: But what was it that really made you think, well of all the things in real estate, I’m going to go into these little Walmart houses?
Mike Wallace: You know, it was a couple things. One: you know, the cost of entry is lower. So, you know, I couldn’t go out tomorrow and do a subdivision. I couldn’t get the financing, the money to go and do something like that. So the barrier to entry I think’s a little lower. You know, someone that doesn’t have a lot of money, that was intriguing. And the other thing was, you know, the cash flow of it. As a banker, that’s what we looked at was cash flow on all these deals, you know. Over time, once I really got to understand the business, and you know, you could see it on paper, just the cash flow from these houses can be tremendous. Being the background I have as a banker, cash flow is king.
Mitch Stephen: Yeah, so how long ago was it when you quit your banking job?
Mike Wallace: I left at the end of April, this year.
Mitch Stephen: The end of April.
Mike Wallace: So basically started doing this in May.
Mitch Stephen: May, June, July, August, September, October, November. I mean, you’re not even done with eight months yet. So this is going to be a very interesting case study for all you listeners out there. It hasn’t been eight months yet. How many houses had you bought and flipped before you quit to jump into real estate?
Mike Wallace: Zero. I mean, I had bought-
Mitch Stephen: Zero.
Mike Wallace: Two personal houses, but no investment houses.
Mitch Stephen: Yeah. So May 1st, you jump ship. You got some pretty big news on that day, too, didn’t you?
Mike Wallace: Well, about six weeks later, found out that we were pregnant. So, yeah, first child. Talk about a lot going on in my world in a very short amount of time.
Mitch Stephen: So when he says we, he’s not talking about me and him. He’s talking about him and his wife.
Mike Wallace: Correct.
Mitch Stephen: So how did you prepare for this leap? I mean, what was your thought process? Because, I don’t know. Yeah, I’m going to go ahead and ask you. You don’t have to … Just ballpark it. And if you don’t want to answer it, you don’t have to answer it. But, I mean, you had to have a pretty good job, a pretty good paycheck, after 12 years of being working with a bank. I mean, what income strata were you in? What did you jump away from?
Mike Wallace: So I was making well over six figures, and, you know, had all the insurance and all that stuff. The expense account, car allowance, you know, I had all that stuff that comes along with a corporate job. So yeah, that was a tough decision to leave that income stream, you know. One, the income stream, and two, something that I knew. You know, after spending 12 years doing something, I felt very confident as far as being a commercial real estate banker. It was tough to leave it.
It was lots of conversations with my wife and I on, you know, should we do this? Should we not? The way that we have been able to do it so far, is we had to downsize. You know, we had a big 3,000 square foot house with a pool and all that stuff. Sold that, pulled the equity out, moved into a house that’s 1,500 square feet, to half the size. Cut out overhead down as much as possible and stacked as much cash as we could in the bank to kind of live on for this first year or so, to try and build this thing up.
So, like you said, it hasn’t been glamorous.
Mitch Stephen: You really didn’t just jump off on a whim. I mean, you thought about it for a long period of time. You had lots of conversations. Did you have conversations with people besides your wife? Who else did you talk to about this?
Mike Wallace: Oh yeah.
Mitch Stephen: Your parents? Your wife’s parents? Who?
Mike Wallace: I talked to my parents, I talked to her parents. Talked to, you know, past colleagues. M mentor in the bank, I went and talked to him. You know, I had a lot of frank conversations about it, really weight the pros and cons. You know, at the end of the day, I wanted to control my own destiny. It’s hard to do that in a corporate environment. As a banker, the pinnacle, probably, of that is becoming the president of the bank. You know, in San Antonio, one of the biggest cities in the United States, there’s maybe eight people that are presidents of banks in San Antonio. So those are just hard jobs to come by, and that’s kind of the pinnacle. I just felt like there was more freedom, and at the end of the day, I could control my own destiny doing something else.
Mitch Stephen: Yeah. Did any of those people you talked to think you’re crazy? Or did they all support you?
Mike Wallace: They all supported me. You know. My dad is very conservative by nature, so he just wanted to make sure I had thought about this really, really hard. But, you know, after explaining to him my thought process and everything, everyone was pretty supportive, and said, “Hey, this is what you want to do? Go do it.”
Mitch Stephen: You know, one of the things that would go into my calculations, tell me if this was in your calculations. I was looking for another bank to got to work for when I found the job I got now. If I ever want to go back into banking, I can get back in. Maybe I’ll take a little cut in pay or something.
Mike Wallace: Absolutely.
Mitch Stephen: But I can always go back if I wanted to. Was that a realization or was that a part of the calculations?
Mike Wallace: Yeah, absolutely. It was, you know, taking a risk here. I kind of boiled it down to, you know, the worst thing that can happen is we blow through all of the money that we saved and we run out of money, and this just isn’t working, and I go back to banking. That’s kind of what I foresaw as the worst possible outcome. Which, you know-
Mitch Stephen: How much time did you set yourself up for? How much money? Did you have money away for six months? Did you have money away for a year? Did you have money away for two years? What did you have?
Mike Wallace: About two years. So we had everything [crosstalk 00:15:19]
Mitch Stephen: Until the baby card got played.
Mike Wallace: Yeah, so now it’s like two months. But yeah, we tried to set ourselves up to do it right and really give it a fair shot. You know, because the last thing I wanted to do was try it three or four months, and say, “Oh, we’re running out of money, I have to give up now.” You know, that’s not really fair.
Mitch Stephen: No. I take it your wife was on board?
Mike Wallace: She was. So, she’s a real estate agent, so she understands that world to a certain extent. She was definitely on board. And honestly, she’s the one that helped push me to do it.
Mitch Stephen: Okay, so hats off to you. That’s a big decision. A huge decision, given the comfort level of life that you had, the income level that you had, all the security, everything. And you still came to the conclusion that one of these days, you’re going to regret it if you don’t give yourself a chance to be your own guy.
Mike Wallace: Yeah, I just didn’t want to live the rest of my life thinking, “What if?”
Mitch Stephen: Yeah. I had to have instilled a little bit into you, because I’m always dropping by and asking if you want to do things all the time, and you’re like, “I can’t, I’m at work.”
Mike Wallace: Yeah, yeah, absolutely.
Mitch Stephen: Hey, we’re leaving to go fishing! You know, it’s Thursday afternoon. You want to come?
Okay, so May the first, eight months ago, you take off your coat and tie and honestly, I don’t think I’ve seen you in a tie since. Have you ever been in a tie since then?
Mike Wallace: Absolutely not. Shorts and flip-flops.
Mitch Stephen: You grew a beard. I’ve seen you in shorts and tennis shoes all the time. Shorts and flip-flops all the time.
Mike Wallace: Mm-hmm (affirmative), that’s exactly right.
Mitch Stephen: So tell me, how long … You had never done a house before. How long before you did your firs house?
Mike Wallace: I bought the first one maybe three weeks after leaving the bank.
Mitch Stephen: Tell me, you remember the numbers on that deal?
Mike Wallace: I paid $32,000 for it. Paid cash for that, did a little bit of rehab to it. I think we put $5,000, put into it. And we’re selling that one for $78,000, I think. We’re going to owner finance it.
Mitch Stephen: Okay, that was another thing. I’ve noticed you’re not caving in. You’re really going for the cash flow. I mean, I think after years and years of looking at not just my spreadsheet, but other spreadsheets, you’re determined to build a cash flow. Because you know you could sell that house and make twenty, twenty-five thousand dollars right now and take a lot of heat off yourself. But that’s your first deal, and even your first deal, you didn’t do it. So you really had a plan, like, “I’m going to go two years to see how much cash flow I can build. Not how much money I can make. How much cash flow I can build.”
Mike Wallace: Absolutely. Absolutely.
Mitch Stephen: That’s a lot different than a lot of people. I mean, three weeks in without a job, and then you got a chance to make twenty, thirty thousand dollars. Most people are going to take the twenty, thirty thousand. You’re not doing that. So have you sold that house yet? Did you sell the house?
Mike Wallace: No, that one’s still on the market. The first one’s still on the market.
Mitch Stephen: Okay.
Mike Wallace: But we’ve still got some rehab to do on it.
Mitch Stephen: Okay. Is that just taking an extraordinarily long period of time, or did you try to sell it as-is for a while?
Mike Wallace: We tried to sell it as-in and got lots of looks on it. Basically, it came back that, “Hey, you need to do a couple things to it to sell it.” So finally decided to bite the bullet and do those things.
Mitch Stephen: Okay. So how long until the next deal, more or less?
Mike Wallace: The next one was probably a week after that, two weeks after that. That one, I was just driving down the street, you know, these little neighborhoods, and saw one that was for sale by owner. Called the lady that was selling it, went and looked at it, made her an offer, and she didn’t accept it. Two weeks later, I called her back, and she decided to accept the offer.
Mitch Stephen: What are the number on that one?
Mike Wallace: Bought that one for 65. That one, I put four grand into it, which was just painting it and putting some carpet in there, and sold it for $110,000, owner finance and got $10,000 down, and we’ll carry a hundred thousand dollar note.
Mitch Stephen: So that’s really your first paycheck, the $10,000 down.
Mike Wallace: Yep. That was the first paycheck.
Mitch Stephen: Alright.
It’s been right months since you started. How many deals have you done in eight months?
Mike Wallace: I’ve done 22.
Mitch Stephen: Wow, so things started to pick up a little bit, huh?
Mike Wallace: Yeah, started to, you know, really get out there and network and let people know, hey, this is what I’m doing, if you have anything, send them my way. You know, it takes a little time to gain some traction, but you know. Started having people call me, rather than me kind of chasing my tail. Started to gain some traction there.
Mitch Stephen: Where are you getting a lot of your business from? Where is your business coming from?
Mike Wallace: You know, it’s either coming from realtors, have probably been the best source of leads. And then, a couple wholesalers here in town. And then attorneys have been good.
Mitch Stephen: Did it help that your wife was in the real estate business? How did that help? OR did it help at all?
Mike Wallace: Absolutely. Yeah, I mean, she knew a lot of people, and a lot of people knew her. So you know, I’d go meet with the realtor, try to set up a meeting, or get a phone call with somebody. If they knew here it was an easy way to get in and have the conversation be a little more fluid, so it definitely helped that she’s a real estate agent here.
Mitch Stephen: Yeah, so is she helping with you sell these houses or anything? Or is that a whole separate component?
Mike Wallace: No, she’s busy with her business, and so we keep it pretty separate. You know, every now and then, if I need her to help me run comps, or if there’s a lockbox on the house and she can let me in, that type of thing. But yeah, we keep it pretty separate.
Mitch Stephen: Okay. Let’s try to recap this eight months and your 22 deals. Do you have any idea, abut how much you’ve made upfront in down payments, or your share of whatever, whoever you’re partnering with, and how much cash flow you’ve built up to?
Mike Wallace: Probably total in down payments would be, probably close to 80. 80,000 so far. And got monthly cash flow of looking at about 7,500 right now. Now, I’ve still got several that are on the market and that are being rehabbed, so that number should go up.
Mitch Stephen: Man, that’s just incredible. You’re well on your way. I mean, you’re well on your way. And this is the first eight months. So, look, I actually didn’t know a lot of this to heart. I kind of generally knew, but I didn’t know exactly. You’ve got to be feeling pretty good about yourself about right now, I think. Or are you still in that, “I’m scared shitless,” phase?
Mike Wallace: You know, each day is different. Some days, I feel pretty good. Other days, I’m like, “What the hell did I just do?” You know, when we found out she was pregnant, I thought, “Oh God, I made the worst decision of my life.” But no. I’ve got a pretty good pipeline, got a bunch of deals in process, and so yeah. I feel pretty good right now. Feel pretty good right now.
Mitch Stephen: Did you wholesale any deals along the way?
Mike Wallace: Yeah. I think I’ve done three wholesales. You know, one was pretty beat up and I didn’t want to take the time to mess with it, and thought I could wholesale it pretty quickly. That one, I just put under contract, and never closed on it, just signed to contract, and made like, $7,500 on that, you know, quick and easy. The other two were ones that I took down. Took one down at 45 and we sold it for 67 the next week. Took one down for 105 and sold for 127 the next week. So made like 20 grand a piece on those wholesales.
Mitch Stephen: I gotta ask you, on that cash that you made from those wholesales. Are you using that to live on, are you rolling that back in to expedite the $7,500 cash flow?
Mike Wallace: I took out $1,500 on, you know, the down payments or the wholesales. I’ll take out about $1,500 to put in my personal pocket, and I leave the rest in the company to try and, you know, grow it. I’d like to buy a couple in cash and not have to borrow the money, all that good stuff.
Mitch Stephen: Well, I really admire that you’re sticking to your guys. You’re really taking that two years that probably got whittled down to 18 months, you know, because you got a third person who is going to be involved here. Your young … Is it a boy or a girl? Do you know?
Mike Wallace: It’s a baby boy.
Mitch Stephen: Baby boy. Alright. Would you do it all over again?
Mike Wallace: Absolutely. I wish I would have done it sooner, to be perfectly honest.
Mitch Stephen: Yeah, you would have been a little longer without a baby.
Mike Wallace: Yeah. I wish I would have done it when I was 23 years old.
Mitch Stephen: How old are you right now?
Mike Wallace: I’m 34.
Mitch Stephen: 34. You know, I didn’t hit my stride until I was 36. Light bulbs started going off about 34, but I didn’t hit my stride until I was 36. I’m 56 right now. Everything’s happened during that 22 years, you know, 24 years.
What is your end-all goal? How do you look at this business right now, as far as the future’s concerned? How are you looking at it?
Mike Wallace: You know, my goal right now is to get to 100 notes. And I don’t know why that’s the number I have in mind, but for whatever reason I want to get up to 100, you know, where I’ve got cash flow coming in from 100 different properties. Then, you know, by the time I get to that, it will probably be so much fun, I’ll just want to blow it up even more, keep going. So the goal right now is to get to 100.
Mitch Stephen: Wow, well that would be more than enough. That’s a really nice sized goal. Are you using any high-falutin software? What kind of tools are you using to find these houses, or to make your world go around?
Mike Wallace: I use software called Podio, which just helps me keep track of everything. Other than that, I spend a lot of time on the county appraisal districts, and you know. Just the normal internat tools that are out there.
Mitch Stephen: How are you learning how to do this? Are you just going out there, trial and error? You have a mentor, you have people around you that talk to you, coach you? How’s that working?
Mike Wallace: Yeah, I mean there’s some guys that do it that they let me bump questions off of them here and there, and they’ll give me advice. A lot of it’s trial and error, though.
Mitch Stephen: How many hours you work in a day?
Mike Wallace: More than I worked at the bank.
Mitch Stephen: How many hours you work in a day?
Mike Wallace: I don’t know. 15? You know, it’s different, though, because I’ll be at home but I’m still working. You know, I’ve got my laptop on me, and my cell phone, and I’m making phone calls, answering emails, sending text messages, looking at stuff online. It’s not condensed into an eight hour, 9-5 type day. It’s just kind of all day, every day.
Mitch Stephen: Yeah. Does fear play a lot in how many hours you put in? Or is it just you get immersed and it doesn’t feel like work? Or is it a little bit of both?
Mike Wallace: It’s a little bit of both. I mean, fear is a big driver. Fear to fail. And then, yeah, to be honest, it’s fun. The latter part of when I was at the bank, it got kind of monotonous. It wasn’t fun. This business, every day is different. Nothing is the same.
Mitch Stephen: Have you hit any home runs?
Mike Wallace: Yeah, I found a deal. Got two houses and two lots. Was able to pick it up for 90. Sold one of the houses for $140,000 and got 15 down. Sold one of the houses for $126,000, got 20 down. And I have the lots now, free and clear. So that turned out to be a pretty good deal.
Mitch Stephen: Wow. Don’t need many of those.
Mike Wallace: Yeah, I wish they were all like that.
Mitch Stephen: Yeah, but you’re not out there swinging for home runs, are you? Or are you swinging for home runs al the time? I don’t swing for home runs. I just want to make a base hit, single, double, every now and then a triple. Occasionally, despite myself, I hit a home run. You know what I mean? Every now and then, I’ll hit a grand slam. But you know, I’m not looking for home runs.
Mike Wallace: Yeah, that is exactly right. No, no. Singles keep the lights on.
Mitch Stephen: So what’s you’re advice to people that really want to quit their job but are afraid to take the leap?
Mike Wallace: I would say you gotta plan accordingly. It was tough to downsize and kind of change our lifestyle. It’s been tough. But, you know, without doing that, this wouldn’t have worked. I think that was the most important factor. And secondly, you know, in my case, being married, having a partner that’s on board with it and that understands, you know, it’s going to be different for a while. You know, those were the two biggest important factors for me. But yeah, if you have the drive to do it, and the will and the want to do it, you know, I’d say do it.
Mitch Stephen: You really did plan well. You spent months thinking about how you were going to downsize, and then actually doing it. You know, you moved from a … Tell me, what kind of house did you live in before, and what do you live in now?
Mike Wallace: 3,000 square feet, it was four bed, three bath, had a pool, huge backyard. Really, really pretty house. To, you know, 1,500 square feet, 3/2 house that was built in the 60’s.
Mitch Stephen: But your freedom is more important than those material things at this immediate time right now. Your freedom’s more important. That’s what I’m getting.
Mike Wallace: Yeah, absolutely. And you know, in the grand scheme of things, you know, I’ll be able to get that house back. Or at least that’s the plan later on in life.
Mitch Stephen: If you want it, you certainly will. You might be able to get an even bigger house, if you want. I think sometimes, and you’re about the age where you might start coming to the conclusion like, “It ain’t about that.” You know what I mean?
Mike Wallace: Right, no, that’s exactly right.
Mitch Stephen: But you know, different strokes for different folks. I’m not saying one way or the other, there’s not a good or bad to it.
I know one guy that was very successful, my old partner. He had the big old house, and the gated community, with the pool in the back yard, and the whole thing, you know. He had a 7,000 square foot house. He lives in a 1,500 square foot house now with his family, because he said, “I didn’t want the overhead, I didn’t want the problems, I didn’t want my kids to grow up like that. I wanted my kids to grow up humble, and to know what it was like to be in the middle.” And he really wanted to spend his time traveling, and not leaving behind a 7,000 square foot house all the time. You know, he just wanted to travel and come back. And he does travel a lot. You know, when you go to his house, it’s nice but it’s quaint. But it’s clean and top-notch finish out, and it’s really nice. But he just didn’t want a big house. He’s married with two kids. I’m always amazed. He’s kind of like the millionaire next door. You would never guess. You would never guess how wealthy this guy is, you know? Something like 500 houses, free and clear. And there he is, in a 1,500 square foot house, and just happy as a clam.
Alright my friend, I really appreciate you taking the time to come on and be so transparent, talk to the listeners out there, and just give them a little slice of your life and the first eight months of your life. I guess the only thing that baffles me a little bit about it is, you must have gotten some kind of education or a plan, or you must have someone around you that’s really helping you. Because I don’t see how you jump off like that without having someone you really trust to guide you, or to give you advice. Did I miss that somewhere?
Mike Wallace: No, and I do. I mean, you’ve been great for me. A lot of it was I spent 12 years picking your brain, trying to understand your business at the bank, and that was the biggest help. And then, getting in here and, you know, being able to call you or a couple other people who have been in this business, and being able to bounce ideas off your head and get good advice has been huge.
Mitch Stephen: Alright, my friend. Thank you so much for taking the time to be on. I really like these sessions because they’re real, they’re not fabricated. You’ve been very transparent. I hope I didn’t ask any questions that were too personal
Oh, there’s one last question. How are you funding your deals? Are you doing it … How are you funding your deals?
Mike Wallace: Through private money. I’ve got a couple of investors that, you know, I talked to before making the leap, and they were willing to, you know, invest and believe in me. So, they’ve been able to help me so far.
Mitch Stephen: Are they partners with you? Are you paying them an interest rate? Or are they different, each one or them different? Or what?
Mike Wallace: Yeah, paying the interest on the money they give me. I give them a first lien on the house, and pay them interest monthly. You know, based on the-
Mitch Stephen: Okay, so you kind of had that lined up before you jumped. Oh, there’s one other question I thought to ask you. It skipped my mind here, but now it’s back. Did you have a back-up plan? Do you have someone that says, “If it doesn’t work, you can come work for me?” Is it a bank? Did you line something up with a bank, or someone at a bank, that said, “Hey, if it doesn’t work, you know, in a year or so, just come back to me and we’ll get you going back at the bank.” Or whatever. Did you have that kind of plan?
Mike Wallace: Yeah, absolutely. In fact, the bank that I left, they said they’d gladly take me back. And then another banking friend of mine said, “Hey, you know, if it doesn’t work out and you get into trouble, you’ve always got a home here.” So yeah, that kid of made it easy to know that if I did get in any trouble, I could jump right back in. [crosstalk 00:37:52]
Mitch Stephen: Yeah, see, I want people to know the truth about this stuff, about how you planned and why, what your thought process is. You know, it’s going to be different for everybody. Sure. I imagine that being at the bank helped you find some of those people that have the money, because all you did was see people with money all the time, or most of the time. Right?
Mike Wallace: Absolutely. I built up relationships with these guys, and you know, they developed trust in me being their banker for years, and years, and years. So you know, it was nice to be able to go back to them and say, “Hey, you know. I want to do this. Would you help me?”
Mitch Stephen: “I need some money.”
Mike Wallace: Yeah, exactly.
Mitch Stephen: “I need you to give me a loan now.”
Mike Wallace: Yeah. It’s been fun. It’s fun sitting on the other side of the table.
Mitch Stephen: Alright, my friend. I really want to thank you for really being so transparent, coming on, taking the time. You know, there’s no upside to you for sitting here, spending an hour with me, but I appreciate you doing it. It certainly was a lot of upsides to the listeners. I’m sure, because this is a slice of life of a real guy who took off his coat and tie and took a leap of faith. He planned for it well. He got his ducks in the row. He had a plan B and a plan C. But he’s going for it. And by all indications, seriously, it looks like you’re going to make it.
You must have had some kind of pace that you were going to measure yourself by. Are you ahead of pace, or behind pace?
Mike Wallace: I’m kind of right on track, you know. I was hoping to do, you know, if I could do two deals a month, two to three deals a month, I felt like that was going to be a pretty good pace. I’m kind of right in that. Obviously, I’d like to do more, so next year we’ll probably ratchet it up a little more to, you know, ideally maybe one a week.
Mitch Stephen: Well, if you keep talking to people, and you keep expanding your good reputation, you probably will … It will just happen because more people will know who you are and what you do. Especially if you’re tapping that real estate community, because that’s where … You know, they see the deals first, usually. They usually know about it before anybody else. Whether they do anything about it’s another thing, but it’s your job to teach them how to do something about all that stuff that they throw in the trash can. You know?
I mean, those houses that you’re buying from people, those realtors think they’re tear-downs, don’t they?
Mike Wallace: Oh yeah. Yep. Absolutely.
Mitch Stephen: Yeah.
Alright my friends. I got my seven o’clock weekly Q&A coming up here in a few minutes, so I’m going to have to wrap it up here.
I’d like to thank everybody out there for stopping by to get you some Mike Wallace, and get a slice of life in an investor who took off his coat and tie and left corporate America eight months ago. He’s done 22 houses. Probably brought in, I don’t know, probably seventy, eighty thousand dollars in down payments. Got his cash flow up to $7,500 a month.
You know, the reason why I wanted you all to hear this story is because it’s going to be different for everybody, and this is just a story about how one guy figured out how to do it. And by all indications, this guys is going to be a monster, and free and independent, and he can be as wealthy as he wants to be, or as modest about that as he wants to. But one thing’s for sure: I’m not sure he’s ever going to go back to banking again. If I was a betting man, I bet you that’s he’s not ever going to go put on a coat and tie and go work for a bank again. It’s pretty clear to me that this man’s going to be in control of his own destiny for the rest of his life. That’s what he set out to do, and that’s what he’s done.
So thanks to you all for listening. This is Mitch Stephen with the Real Estate Investor Summit Podcast. I want to thank all of you for stopping by to listen. Please spread the world about the reinvestorsummit.com archived podcasts and let people know that we’re out there. You want to do me a favor? Go write a review at iTunes or on Stitcher. Tell them that you’ve enjoyed these podcasts. It always helps to get good reviews from folks just lie you, because I am not famous, and no one in the world listens to any of this stuff except for great reviews from people like you, and I appreciate it very much.
Alright. This is Mitch Stephen and Mike Wallace. Thanks a lot, Mike. We’ll talk to you soon. I wish you the best of luck in the upcoming days, and months, and years. Okay?
Mike Wallace: Thank you, sir. Appreciate it.
Mitch Stephen: Alright, this is Mitch Stephen with the Real Estate Investor Summit Podcast. We are outta here!
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