Episode 338: Getting Back Up Through Real Estate With Brandon Gaunce
Being given an ultimatum at your job can be very hard to cope with, especially if you are unsure of what to do next. In this episode, Brandon Gaunce, the owner of TexasHousebuyer.Net, shares the irony of how he came up with a system that saved his former employer millions of dollars but basically eliminated him and other positions clear across the country. Don’t miss this episode to learn how Brandon jumped with both feet into the fire and got back up with the help of real estate.
Watch the episode here:
I have my good friend, Brandon Gaunce. We have at least a five-and-a-half year story and we’re going to talk about how he went from having his back up against the wall, given an unreasonable ultimatum at his job, which he declined and went on his own, jumped in with both feet into the fire, so to speak. We’re going to tell you how it turns out. Brandon, how are you doing?
I’m doing wonderful.
How did we meet? I’m going to guess you heard about me or read about me or something was the first step. Where was that?
At the end of 2013, my company announced that they were eliminating my position and I ended up going to a real estate seminar in Houston. You happen to be a speaker there. I went and watched you speak, went to one of your little private events and I ended up signing up for your mentoring program on my wife’s birthday, March of 2014.
If I remember correctly, you worked for a national company, right?
Its name will remain unnamed, but you invented or came up with a system that basically eliminated you and other positions clear across the country and saved them millions of dollars. For doing such a great thing, they went ahead and let you go because you had eliminated that position. No good deed goes unpunished, does it, Brandon?
How much were you making when you were there?
You would think if a guy saved you millions and millions of dollars, at least multiple millions of dollars that you can at least keep the one guy for $70,000 a year that made it happen and find something else to do.
To clarify, they did offer the newly created position to me but it would’ve required me to purchase a vehicle and commute about three hours round trip daily.
That’s like, “Let’s see if we can get this guy to walk away. Let’s not fire him because it would look really bad. Let’s give him a job opportunity that he turns down and that’s impossible.” What’s going through your head at that point?
I was pretty nervous. I didn’t know what to do. I had heard a little bit about real estate and been intrigued by it but had no experience doing it whatsoever. I don’t know why my wife is usually fairly skeptical, but she was supportive of me going out and trying to start doing something in real estate. Her confidence increased after I met you and she watched some of your videos and talked to you and stuff like that.
I don’t normally take complete newbies one-on-one when I take someone one-on-one for that price tag, which is a decent amount of money in anybody’s book. When you start talking about $15,000, $20,000, $25,000 to get a coach for six months or a year, that’s a scary number for a lot of people, especially when you don’t have a job and you are not sure what the future holds for you. I was early in my career too. I was very early in my teaching career. I wasn’t sure if I was going to be a good teacher or not. I remember talking to Brandon and thinking, “This is going to be a real crap show because he doesn’t have any experience. He’s got his back against the wall. He’s got to move quickly.” They didn’t give you a severance package, though. You have eight months, right?
They gave me a six-month severance package.
I made a very special deal with you on that day, didn’t I?
I wanted to know if I could get a person like Brandon through the gauntlet. Over the phone, he seemed like he was a hard-working person. He seemed like he was an honest person. He definitely had a fire under his ass because whether he liked it or not, there was fire, right?
Yes.Being tied to a job limits the amount of time you can travel and things of that nature. Click To Tweet
It was a big fire. I was putting myself in his shoes and I remember how scared I would have been. Anyways, I told Brandon I was going to jump out on a limb with him. I was going to do everything I could for him and let’s prove something to ourselves. I was talking to me silently as well as to him. He started working and we started talking on a daily basis or every other day basis. Sometimes we’d hand out some homework and it wouldn’t get done for a couple of days, but we were talking whenever he would get lost, confused or get overwhelmed and then we would get back down to a steady pace and moving forward. What were the first days like?
They were pretty nerve-wracking and overwhelming. I’m trying to learn everything and go over all the processes. I don’t want to get too far ahead, but I remember calling you one day all excited that I left a homeowner’s property and they had verbally agreed to sell me the property. You asked me if I had it under contract yet and I explained I hadn’t figured out how to fill out a contract. You had to slow me down and say, “Back up. You’ve got to learn step one first,” and needless to say they ended up backing out of that deal.
Those verbal contracts are not really strong. You’re making $70,000 a year, but you had a very low overhead, which was a key.
It wasn’t very much and that was the other stipulation. Because of the severance, my wife said, “See what you can do in six months and after that then you need to go look for a real job,” which was okay.
Your wife was working too for the same company but she had a steady job. She’d been there for how long?
Over twenty years.
Which is how you ended up with a job there when you met her?
We met there.
You’ve got some income, but you’re still bleeding out slowly and you’ve got low overhead, which was key. It was a huge factor and the reason why I chose to take you. It was one of the factors because you can’t take on a ship with a hole in it that’s taken on so much water, it’s going to be sunk by tomorrow. I knew you had some time. There was a point where you decided to get a part-time job.
It was pretty much immediately. I found a part-time job that allowed me to do driving around doing some insurance claims.
I was instrumental in helping you find that job. Was I or not? Am I remembering this right?
No, I found that on Craigslist. It was related to my previous field.
I thought that was cool because you were driving a lot in that job. I said, “Every time you’re close to a neighborhood, take the long way. Get there 30 minutes early and drive up and down the roads of the neighborhoods and do some driving for dollars and stuff.” Do you remember your first deal?
The first deal, I don’t remember when our contract did but it closed September of 2014.
Do you remember what you made?
You called and wanted to settle up at that time with a portion of what you owed. I told you it’s not time yet. Keep that, get the gun away from your head, get everybody calmed down at the house and keep going. I was very fortunate. I don’t need any of this to survive. I was trying to make a point here, I’m trying to get you all the way to the finish line in style and not take all or even half or even 25% of what you made on the first couple of deals because I know you needed that comfort. That makes a lot of difference doesn’t it when you put that first $5,000 in the bank? Talk to us about the confidence that you get after your first little deal. $9,000 isn’t going to change the world, but that’s not the point, is it?
No. The confidence at the house with my wife and all that was tremendous. That rocketed what was to come.
You have a special reason for wanting to be on the podcast. It’s been five and a half years. Tell us what the news is.
To summarize, from that first deal in the second year, I did 29 properties, I believe it was. I might be off on that number a little bit but it was substantial.
You didn’t jump out of the shoot like a rocket and make your first deal in two weeks, did you?
No. That first deal took a while to get it contracted and then ultimately to close. It was from March until the end of September. The second transaction closed, I believe the week before Christmas because I called you and told you I got through doing training at Papa John’s Pizza to take on a part-time job. You asked me which was better use of my time, delivering pizzas or looking for another $10,000 potential property? I didn’t go back to Papa John’s. I closed on the second transaction within probably five days of that phone call. That one netted almost $30,000 and that’s when we squared up financially. In the second calendar year, my first full year is when things took off.
You did the $9,000 one and then you did the $30,000 one, all of this has taken almost all your six months’ time?
Yeah. It took from March until the end of December, it was almost 8, 9 months.
I don’t want to paint an unrealistic picture for people. It takes a little while to get enough speed to get some wind under your wings. Plus, you didn’t know anything. You didn’t know how to write a contract even, or where do I get one? Do you remember the day you settled up with me? I remember it very clearly. You said, “I’m in my car. I’m already headed toward San Antonio. I don’t have all the time it’s going to take though to go all the way to you and turn around and go all the way back. Can you start driving towards me on I-10?” I said, “What’s up?” You said, “I’ve got a bag of cash for you.” I said, “How much?” You’re like, “You name the number.” I said, “I’m getting in the car.” Do you remember where we met?
That was at the T&A truck stop. I think it’s near Luling Exit near 183 about 5 to 10 miles.
I remember it was an emotional moment, wasn’t it?
I was happy for you and you got choked up, then you made me get choked up. Here we are, two grown guys standing in a truck stop parking lot all welled up. I thought it was a big day. I knew it was a big day for you. Your confidence level was through the roof. You were going to go on to do good things. That $30,000, even minus what you owed me plus the other stuff you put in the bank was a happy cushion. You bought yourself another 6 months or 8 months because you had gotten good at living pretty frugal at that point.
What I think that second transaction confirmed to me was I had done a lot of leg work during that year. It confirmed to me that this was repeatable, what I had done in those first two deals. Because of the leg work and all the seeds that I had planted in that previous year, it made the second year go way faster than I could have ever imagined. That’s what ultimately “retired me” if you want to call it that from Corporate America because in your book, you talk about having your moat and that you can control what’s inside your moat. I always looked at that as I need to increase my income but also need to control my expenditures or reduce them. The faster I reduce them and the faster I grew them, when those points met, I was free or that was the freedom number that I could control.
The faster you reduce your debt and the faster you increase your residual income, pretty soon you didn’t have to worry about your overhead anymore because you did 29 deals in your second year. Do you know about how much you made in your second year?
I don’t recall exactly, but that is the second year that my freedom number for a brand and not counting my wife, but for a brand, it happened.
You got enough coming in to replace your job, which was $70,000 a year.
This call is about to thank you again and thank your wife and your family for everything you’ve done to change our lives and to let you know that up until October 2019, my wife was fortunate enough to walk away from her job as well.
You replaced two incomes in five-and-a-half years, more or less?
Yeah, $140,000 annually.
Thar’s not bad. We went to high school for four years.
We were for two-and-a-half.
Did you go to only two-and-a-half years of high school?
Maybe three.Don’t hesitate to hire a coach or a mentor; it’s worth every dime. Click To Tweet
Do you have your GED?
Yeah, I have a GED and after high school, I went and enrolled in some college classes, but I didn’t graduate high school or do any further than math and English in college.
How does your wife feel about this new change, this new development?
She’s pretty excited about it. We had anticipated trying to get her retired. One of the reasons why is we had two grandbabies in 2018.
Thank you. I thought it was important for her to be able to have more time to be able to focus on grandbabies and being a grandmother, especially since some of them are out of state. Being tied to a job, that limits the amount of time you can travel and things of that nature. In the last weeks, she has been doing that and she’s actually in Arizona on a camping trip with her son, daughter-in-law and three grandkids over there.
Are you in your 40s?
Late 40s, early 50s.
You started working from the day you walked out of school, right?
Even while you’re in school? I wanted to have the segment because it is possible. It does work out. Do you have any idea how many deals you’ve done in the entire five and a half years?
Probably between 120 and 150.
You don’t particularly specialize in big, humongous deals, do you?
No. On an average deal, I profit about $9,000.
You went rural. You got outside, you got away from the big inner city. Some of the stuff that you deal in is not what people would think, pieces that lay on lots, shabby mobile homes on a piece of dirt, whatever it looks unwanted. We had a guy force abandon a 1950’s gas station down our throat in a small little town. We wanted to buy a little piece of dirt and we agreed on a price of $20,000, and he made us take a gas station with the land. What’s the matter with this man? Does he have environmental issues? Come to find out, we bought the lot and the gas station for $20,000. We sold the lot. We weren’t looking to sell it for cash. We were looking to sell it with owner financing for $25,000, $30,000. Someone came by and offered a $16,000 cash. We decided to take it because that only left us $4,000 in this downtown, tiny town, 18,000-people town 1950’s gas station.
The only reason gas stations and things like that have a hard time selling is banks won’t loan on them until they get all the old tanks, gas tanks and all the environmental issues brought up to the new standard. If you leave them alone, no one cares. No one’s coming after you. If you owner finance the property to your buyer, then everything’s cool. You let the buyer know, which probably is obvious, “There were some gas tanks on here. You need to sign off that they’re still down there and they’re probably rotten, leaking and all crap,” but no one cares except for a bank if the bank is not going to loan on it. The buyer signed off, “We sold the gas station for $55,000 with $15,000 down, fifteen-year note at 12%.” You’ve done a lot of stuff for cash.
I would say 75% of the stuff I do is for cash. That number that I told you on my average profit, those are the cash transactions. In 2019, I haven’t figured it out, I’ve probably increased that a couple of thousand dollars per deal on average but my owner finance stuff, which is about 20% to 25% of what I do, those typically are double my investment or more, sometimes triple depending on how you buy the property.
Your particular motive was doing a lot of stuff for cash, make your profit upfront and pay off everything. How close are you to paying off everything?
All I have left is my house and the rehab that I’m doing right now will probably pay it off. Once that’s paid off, other than food and gas, my total bill expenditure will be about $1,500 a month.
You’ve replaced a $140,000 income and you’re still out there making deals every day. The train starts to pick up speed, doesn’t it?
Yeah. That’s what I’m really thinking next year is going to do. That’s why I’ve been so focused on getting that stuff paid off. We’ve had discussions on the right way or wrong way to do this, but my thought process was if all I have to do is pay for cell phones, insurance, groceries and gas, then my $8,000, $9,000 a month of owner finance notes are only going to start to grow tremendously. That’s going to allow me to start doing longer owner finance notes. Right now, most of my stuff is 3 to 5 years. I’ve got a couple of 10 and 15s trickled in, but 2020’s goal is to get some bigger $80,000 to $100,000 and $120,000 notes.
Everybody has their own way and their own thresholds, their own talents in their own market. It’s always different for someone. People call me for one-on-one mentoring sometimes going, “Tell me what the course is like.” I said, “It’s not a course. I’m a consultant.” You pick up the phone and you call me when you bump into something and let’s talk about the deal you’re looking at. Let’s talk about the deal you’re thinking you’re going to make. Let’s talk about the deal unfortunately sometimes that you already made without calling me and let’s figure out how to up the game. Let’s figure out how to make the most out of it or let me tell you, “You need to walk away if they don’t go for a better offer than the one that’s on the table right now. You need to walk away from this thing.” I don’t tell anyone what to do. I’m a friend in your corner that has 22 years of experience in 2,000 houses getting my teeth kicked in. You’re going to pay for it one way or the other, aren’t you? You’re going to pay the street or you’re going to pay someone that’s been there before. That’s what I always say. What’s your comment on that statement?
I’ve never actually considered hiring a coach, hiring a mentor or anything like that until you came along, but that’s what this episode is about. It was worth every dime of it and I would never hesitate to do it again.
The thing is you called. You picked up the phone and you called and you called often there in the beginning. I remember the first 2 or 3 months, I think you are my boyfriend or something, calling every day when I woke up and every night before I went to sleep, which was cool. That was fine. You had a long way to go and there were a lot of basics that you didn’t even know. I was fortunate that the relationship worked out the way it did too because on the other side of it, it gave me confidence. This was a couple of years ago when I was thinking about hanging my hat out there as a coach and I wasn’t sure if I was going to be any good at it.
I certainly didn’t want to take anyone’s money if I didn’t know that I was going to be able to help people. It was my grand experiment too. We’re both lucky to have found each other at that one time and that it worked out the way that it did because it gave me a lot of confidence too, to say, “You can do this. You can do it from afar. You can do it from a phone and a computer. You can get people where they’re going.” The only thing I couldn’t do was get your ass out of bed, which was never a problem because you didn’t have that problem. You’re an early riser in a late stair, which is honestly exactly what it was going to take to get through your predicament.
I remember the first year I was hand-printing postcards at midnight, 1:00 AM and mailing out 20 or 30 at a time because I could only afford that many stamps. My first set of postcards were baby blue and they came from the card stop that my grandmother found in her closet. I printed it on my computer and it’s perforated, I tore the perforations but it was whatever stamp it was at the time. I couldn’t afford a roll so I was budgeting myself and I would mail out my top 25 prospects or something like that a week.
It takes you right back to being scared again. It was tough, wasn’t it?
Yes. I feel bad sometimes, Mitch, if I know I have stuff to do and I’m lying in bed and I’m like, “I should get up and go do that.” I remember back going, “You wouldn’t have done that five years ago. You would have been up doing it.”
That fear is a great motivator, isn’t it?
Yeah, it is.
You’ve got to have some of that. I appreciate you being on. I don’t think we’re going to have to wait five years for any more great progress. There will be tremendous progress in the next 18 months, 24 months because you’re at this place now where the momentum starts to accelerate through the curve. It straightens right out. It’s going to be interesting to see where it all goes to. Your wife is not working in the business with you, is she?
No, she is not. She wants to, but it’s better if we keep it separated. She’ll find something to do. I want her to decompress from cooperative for a while. I recognize that I did that and I don’t think she does completely. It will take her a while to decompress before she figures out what she wants to do.
Tink a lot about having the family in the business or not, because one of the things is you’re probably going to want to travel a lot and if both of you all are in the business and you both leave to go wherever, think about it. I found myself trapped by that because I had all my family in my business. We can never go anywhere together unless we shut the entire business down and it stops. Which we did, but it’d be a little bit different if I had hired some other people. The other thing is it’s hard to fire a family even if they’re not doing their job or they’re not doing it the way you want. That’s a big problem. It’s not a problem for me anymore, but there was a time when that caused a lot of issues. I want to congratulate you on your success and tell Jodie when she gets back from her camping trip congratulations. Does she freak out in the morning when she wakes up now?
No. She’s enjoying sleeping in a little bit more and definitely missing the traffic.
We’re all planning this so long that it’s not any big revelation or is it still a little bit of a shock to her?
No, we were actually planning this for a while and our target was on around her birthday of March of 2020 but there were a lot of changes going on in the last couple of months at work. She was coming home and very stressed out. I was honestly afraid she’s going to have a stroke, a breakdown or something. It took me a month to convince her I’d be okay before she finally put her notice in. When she did, she stayed an additional month because she was still scared but she’s relieved that she’s done it. Right now, she’s lost.
She’ll reacclimate because it’s a whole different world now. Congratulations. Thanks for taking the time to be on. It’s been a great relationship for me, Brandon. You’re one of my good friends. I tell everybody all the people that get on my call, they become my friends and it’s true. Usually by the time we get through this gauntlet we know a lot about each other and we spent a lot of time on the phone talking. Everybody’s different. Every single person is different. For me, Brandon, there was no curriculum. He’s different than the next guy I’m talking to, than the next person we’re talking to. His circumstances were completely different. He had no job but low overhead, lots of drive. He didn’t know a lot. I had to take the phone calls and then figure out how to take our current situation and help turn it into some money.
We did it together and talked about it. It’s a great comfort to be able to call someone. I know this because I have people that I deferred to on different things. It’s a great comfort to have someone to call and say, “I’m stuck in this place, I’m going to make this decision. This is the right decision but how do you see it?” You get a second point of view from someone who’s more specialized in that department than I am. It’s a great comfort and it’s a lot different than going through life, making decisions with all the common sense and all the smarts you have and then still having to wonder, “I wonder if that’s right or not.” Sometimes a confirmation gives you the confidence to not worry about it and go out and do it. Not only I feel that way, but another guy who should really know feels that way. I’m going to quit worrying about it and go do it. One thing I’m sure you were surprised in the beginning was there’s a lot of money and crap out there. There’s a lot of money in the crap nobody wants.
I promise I’ll get out there and see you as soon as I can.
Is there anything you want to say to the people that are maybe in the boat you were in several years ago?
Get a good teacher and a good mentor and provide all the coal for the train. Don’t stop feeding the train.
You’ve got to feed the train. We’re out of here. Bye, Brandon.
Mitch, have a good day.
- Brandon Gaunce
About Brandon Gaunce
Brandon Gaunce had worked in Corporate America since he was 16 years old. Along the way he grew in his industry to where he was training and teaching the skills he had learned over the previous 20+ years. There was always something missing even though he had become what some might view as “successful”, working for someone else was holding back his entrepreneurial spirit. An idealist at heart he tried starting several businesses, some were massive failures some were very good models. BUT….his responsibilities and obligations to his employer held each of these opportunities back just enough to lose steam and ultimately fail.
In February 2014 fate and opportunity finally met and Brandon discovered his position at his corporate job was being eliminated in the next few months. As God had a hand in it, he attended a real estate seminar where Mitch Stephen was a guest speaker to whom he gravitated towards due to Mitch’s genuine, non-guru personality. He truly wanted to help.
Subsequently, Brandon and Mitch had an hour-long interview to discuss Mitch’s program and Brandon’s circumstances. Afterward, Brandon decided to turn down a relocation package from his corporate job and to dive feet first into Real Estate knowing he had Mitch’s mentoring and guidance and had finally realized it was Corporate America holding him back since they only viewed his skills and talents as replaceable assets.
It was a STEEEP learning curve for Brandon, to say the least, but he ended up buying and selling 3 houses from September 2014 through December 31st and netting a total of 31,000. This gave Brandon tremendous confidence and with Mitch’s mentoring and teaching him as he evolved Brandon bought 26 properties in his first full year. He whole tailed but several properties he owner financed and created $1700 month in Owner Finance Notes. As of August 30th, 2016 Brandon has bought 39 properties this calendar year increasing his owner Finance Notes to $5100 month and now has a net worth of over $700,000.