Get ready to be F.I.R.E.D U.P! In today's episode, we have Aaron Amuchastegui. A husband and father of four, a real estate entrepreneur, owns properties, real estate software companies, best selling author, and a homeschool hacker.
Krista Mashore:
Hey everyone. It's Krista Mashore here. Are you ready to be fired up? Because I sure am. I have Aaron A. I'll let him tell you how to say his last name. He is the host of one of the biggest real estate podcasts, Real Estate Rockstars, as well as doing many amazing other things. This guy owns more property than anyone I've ever met before, and he's going to teach you how to do it, too. Aaron, welcome.
Aaron Amuchastegui:
Hey, thanks for letting me come on. We had so much fun interviewing you on my podcast last month. And you and I were talking and by the end of it we had to stop the recording because we're like, “It's been an hour. I need to cut this off so I make sure I follow up with my commitments there.” But we could have kept talking so I knew that we'd be able to finish some of that conversation here.
Krista Mashore:
Oh, we had such a great time. Sometimes I'm like, “Oh, I got to do a podcast.” But we just kept going and going. So everyone, the last time I talked to Aaron he was actually going to the MMA fights and he bought the biggest package ever and he was on stage. I want him to tell you about the process. So tell me how was that?
Aaron Amuchastegui:
We went to UFC Vegas. It was UFC 264 in Las Vegas. It's awesome VIP package. Part of why we did it … When I first saw the ad that said 60,000 people, live back in Vegas, like, “We're doing this, Vegas is open again.” Man, I cannot wait. Part of why we're living in Austin, Texas is life, it got slowed down a lot for five, six months but in general, my wife and I hunger for events. We hunger for normalcy. We hunger for being shoulder to shoulder. And there's was this fear for a while that it would never happen again. We would never again be in a room with that many people. We would never again feel safe. We would never again feel okay.
Aaron Amuchastegui:
And I'll tell you what, everyone that was in Las Vegas was feeling the same way. So that weekend, we had UFC going on and it was Conor McGregor and Dustin Poirier. McGregor, everyone loves him. He brings a bunch of people in. Plus there was a Garth Brooks concert and Justin Bieber was doing a concert there. There was so many different things that brought, I don't know, like a million people to Las Vegas that weekend. It was so much fun. Getting to do events, there's a buddy of mine named John Vroman. He's got a book called The Front Row Factor. He runs the Front Row Foundation. The premise of that whole thing, they create events for kids that like someone's dying of cancer, but the Make A Wish Foundation says no, his foundation helps out.
Aaron Amuchastegui:
The premise of it was he remembered going to a concert in the back row and seeing the people in the front row really having this awesome time. Screaming and dancing and high fiving. And he was thinking, “How different is that experience than mine?” We took that to heart so every time we do any event, we do front row, we do as big as we can, we do whatever they let us do. Through talking to some people at the UFC, it was also my wife and my 15 year anniversary, first time she had ever gone to Vegas with me. I've gone to Vegas a lot of times but it was her first time coming with me even though we'd been married for 15 years. I really want to do the whole VIP experience all weekend. So during the weigh in on ESPN, you see McGregor onstage and you see me over to the right. I'm on stage. There's eight of us.
Krista Mashore:
Oh my gosh.
Aaron Amuchastegui:
I've got a picture as Dustin's coming off stage right next to him. Super fun, super exhilarating, especially as you're looking around at one of this hugely televised event, so many people there again. It was a cool way to really kick off going back and having these experiences. Met a whole bunch of fun people. The other cool thing about doing stuff VIP and doing events, for any of your listeners, people that are in business, that event won't end up costing me anything.
Krista Mashore:
First of all, what did it cost you? Is that appropriate to ask? I have to know. What did it cost you?
Aaron Amuchastegui:
I won't say just what that part of the ticket was. But that whole weekend is a $40,000, $50,000 weekend. We were also second row at Justin Bieber the night later. If you do Masterminds and things like that, it's easy to say that. Now there'll be some people that hear me say and they're like, “You spent what to go have a weekend in Vegas? I can't believe-“
Krista Mashore:
Talk about how you just said how it's paying for itself. That it didn't cost you anything. That's what I'm not good at so explain that.
Aaron Amuchastegui:
Now some people paid 100,000 for the weekend or 150,000. But the reality is, is if you go to these events, you are going to meet a ton of different people. You're going to meet a ton of people. I'm sorry. I've got a little bit of a cough that I got in Vegas. That's a fun joke that happened later. But you sit next to the same people that are spending a lot of money to be at these high level experiences. You're on stage with these other people that are successful people, there's been a lot of money for these high end experiences. Well, you share this fun experience with them. You instantly become really good friends with them.
Aaron Amuchastegui:
When that works properly, when now you're like, “Now I'm hanging out with and texting back and forth with a guy that does this business over in Florida.” And it's like, “Now I know this guy that does this business up in Colorado. This guy wants to start investing in real estate investing. And this guy is just trying to lend more money.” You create all these friendships and things at those levels. But the key whenever you spend a lot of money to go to an event is everybody else there is spending a lot of money, too. Which means they have the ability to do it, they have the success in business to do it. The key though is then capitalizing on that relationship.
Aaron Amuchastegui:
Now you've created this authentic relationship with them anyway. The biggest thing is just to remember when you go home. Just a few weeks later, like shooting a text, like, “Hey, it was fun hanging out.” One of them's like, “Hey, remember, when you come to Miami, let's hang out. We'll get our families together.” It's like, “Yeah, no problem.” All that happens, so it won't pay for itself this month or six months from now or this year. But there will be some sort of a deal that I will do with somebody that I hung out with in Vegas.
Aaron Amuchastegui:
Just from creating that relationship and being an authentic friend, there'll be something that happens later that it totally pays itself back and we get more than that. Because I do so much in real estate, likely it's going to be some sort of a partnership of somebody bringing me a deal or buying a deal with me or investing in a deal with me, that comes back tenfold.
Krista Mashore:
That is very, very true. I think that's what me … One thing I like to do when I meet people is I like to … When they tell me, “I love Snickers,” or, “I like this certain brand.” I always write it down in my contacts and their name under the notes. So that I try to really listen for things that people tell me and then I can do a special cool gift or something that really relates to them that they said. You know what I mean?
Aaron Amuchastegui:
It's such a great way to … It's hard to have authentic relationships with hundreds of people. Then you also think you're going to remember that stuff. Like when they tell you they like Snickers, in your brain, you're like, “I won't forget that.” But you need to write down, you need to put it in your contacts or in a spreadsheet. When I came back from Vegas, I actually started looking out there to see, “Is there an app that actually helps people keep track of all that stuff? That actually helps make sure …” I have a CRM for my customer. Somebody comes in signs up for my foreclosure site, they're going to get a text message, they're going to get a phone call. In three weeks, they're going to get another one. They're going to get a bunch of emails.
Aaron Amuchastegui:
And in six months from now, they're going to get a little email that said like, “Hey, is there anything else we can help you with?” Or a text message that says, “Hey, can we help you with anything?” Relationships I think can be done the same way, should be done the same way to enhance them because it reminds us to do that outreach. I haven't found a technology-based solution yet for that. But it's the same concept of a drip campaign for a recurring revenue type business [crosstalk 00:08:01] relationships. Just like in real estate, you're staying top of mind, you're having these conversations. And then when you go to that city, they remember to come hang out with you. And the best business deals I've ever done were just from friends that neither of us had any intention of doing deals together. A few years later at random, we were like, “Well, maybe we should do that one together.”
Krista Mashore:
Because you also do develop a little bit of trust from the person because you're meeting on a level that's not intended for that. You like each other just because you like each other and then it just makes it, I thought it makes it more just easier.
Aaron Amuchastegui:
Yeah. When the relationship starts with just playing experiences, like personal experience that have nothing to do with business, but it's always just something we end up talking about. It's always inevitable, “What do you do? How did you end up here? How are we sitting on stage next to each other during …”
Krista Mashore:
Who won that fight? I don't know who won. Did McGregor win?
Aaron Amuchastegui:
McGregor lost. He was, by far, the crowd favorite. I was shocked when they announced McGregor, the room is so excited. When they announced Poirier, the crowd just starts booing like crazy. And I could not believe it because Poirier won the last one. He's big fighter, great man. He's a great guy.
Krista Mashore:
Why is that, do you think?
Aaron Amuchastegui:
At the very end of the first round though, McGregor kicks him. He blocks it with an elbow, breaks his leg. He goes to stand back up again. He's standing there and all of a sudden, his leg just folds out from under him.
Krista Mashore:
He breaks McGregor's leg?
Aaron Amuchastegui:
Yeah. McGregor had kicked him in his shin, landed against his elbow. Then McGregor came back down. He's standing there not knowing what happened. And all of a sudden, his leg just folds over and you're like, “Ah.”
Krista Mashore:
So that was it?
Aaron Amuchastegui:
That was it. They'll fight again in probably 18 months. But I would say …
Krista Mashore:
It wasn't like Rocky. Rocky would have done it on one leg. He would have like …
Aaron Amuchastegui:
They were both wanting to keep fighting. It was a really awesome weekend and really awesome day. But the end was very anticlimactic for so many people.
Krista Mashore:
Because it was only one thing?
Aaron Amuchastegui:
I had no idea, too, how much people invest in betting on fights.
Krista Mashore:
Really?
Aaron Amuchastegui:
I had so many conversations with people that had bet $50,000, $100,000, $200,000 on McGregor to win. As soon as-
Krista Mashore:
Was McGregor the underdog?
Aaron Amuchastegui:
McGregor lost the last fight. So McGregor was the underdog as far as the official ranking of it. The first time they fought, McGregor beat him. Last time, McGregor loses. But it was the first time McGregor had fought in a long time. And he said, “I was off practice. I'm going to come back and take this serious.” He's playing really well. I mean, that first round, they were really pretty even. It was a really fun fight to watch.
Krista Mashore:
That sucks. That is so …
Aaron Amuchastegui:
Looking over the guys next to me that bet $100,000 or $200,000 on McGregor to win, and then as soon as his leg breaks, my wife and I are disappointed that the fight's over. These guys are about to puke. They were like just run out of there afterward and you're just like, “Some people aren't just having fun here. Some people do business.”
Krista Mashore:
They lost a lot of money. Oh, man, that's crazy. Okay. We went off tangent, but there was a lot of lessons to be learned from that. Which is when you do things, think about the people that are around you and how can you literally listen to what they're telling you and keep conversations open and relationships open because you never know what might happen in the future. So always, always think about that. There's something I always say to my students. “You're always on a job interview.” “Well, hey, even something like that, you're kind of on a job interview. You never know what can happen as far as what happens later on.”
Aaron Amuchastegui:
You're always on a job interview. And experiences are the best ways to create memories with people because … And the whole rest of it again, too. We had a lot of friends in town from other places. We would book these little mini events throughout the weekend, invite everybody to come. We have these awesome experiences together and it just solidifies those friendships and relationships. Everything we do, business is always part of personal as well. You're always-
Krista Mashore:
What are the little events that you do? Give me better ideas.
Aaron Amuchastegui:
There was a concert middle of the day. It's like buying a booth at one of the clubs so 10 or 12 people could go. You're saying, “Hey, come to this concert with us. You'll be able to come …” You're just totally invited. When you get there, it's just another VIP little experience. It was supposed to be McGregor's after party. We had also booked this private lounge at one of the clubs. It had its own private pool and stuff like that with it. So we invited 16 people in that, McGregor obviously didn't come to his after party.
Aaron Amuchastegui:
But it's got a really fun experience with everybody there. Vegas is also one of the key places of VIP experiences. So if you want to have a fun experience, it's going to be really memorable for people. We did four or five throughout the weekend. Chainsmokers was the daytime band. Chainsmokers' going to come play at this club. So we got one of the couches that were right by there, invited friends to come in and just have some fun experiences.
Krista Mashore:
I wish I was there. I want to be like, “Can I go?”
Aaron Amuchastegui:
You were there the week before. You showed us …
Krista Mashore:
I know. We were sitting at, it was at Cosmo. And we saw a thing about McGregor. He go, “Babe, McGregor's fighting.” He likes McGregor too, for some reason. I don't know why he's the … Okay, so tell everybody a little bit more about you, Aaron A. First of all, how do you say your last name?
Aaron Amuchastegui:
Amuchastegui. It's one of a kind. If you start typing in though like Aaron, Aaron is easy. It's simple, A-A-R-O-N. My parents did that because they knew my last name was so hard that they should give me an easy first name. But if you start typing like “AMU.” Aaron AMU, Google will autofill the rest out there. It's Amuchastegui. You and I got to first meet on the Real Estate Rockstars Podcast. I'm the host and owner of that podcast, and we interview real estate agents. I will say it's the biggest podcast out there for real estate agents. Plus we have some classes and things like that to train new agents to get listings, how to succeed, things like that. It's a very low dollar, low ticket, 49 or 99 bucks a month for some classes. That's how you and I first met.
Aaron Amuchastegui:
The funny part about that conversation though is we were sharing stories about the early 2000s and the foreclosure craziness of Northern California. I was also from Northern California originally. I live in Austin, Texas now. I love being out in Austin. I do miss the weather of Northern California. In 2005, I was a home builder in San Luis Obispo, Santa Barbara area, Southern California. It was awesome. We were building houses in 50 days. They would sell as soon as we put them on the market. I was golfing two or three days a week. It was really unfair expectation of what my life was going to be.
Aaron Amuchastegui:
I graduated from college in construction management. Got this awesome job, was making lots of money and golfing more than I was working. Then the housing market crashed and life sucked really fast for a lot of people. We got pay cuts and we started doing manual labor again on these jobs. I moved up to Sacramento where the home builder that I was working for, that's where they were based out of. We didn't see as much turmoil down Santa Barbara, but in Sacramento, man, we saw the crash.
Krista Mashore:
Like 90%.
Aaron Amuchastegui:
In Atwater, there were these houses, these model homes were like 700,000. At the end, we were selling them for 100,000.
Krista Mashore:
Yeah, I know.
Aaron Amuchastegui:
I don't know where your listeners are but just think about that for a second. There are plenty of places where there's crashes throughout the US but very few like Northern California where the crash was literally a 70 to 80% price reduction. People will tell you now when they're predicting real estate like, “Hey, it might go down. We might see a little correction. We might see it go down a little. We might see it go up a little.” I have all sorts of opinions on that but we saw crazy crashes back in '07, '08, '09. It was unfathomable. I was like, “What am I going to do with my life?” I can't do anything anymore.
Aaron Amuchastegui:
I discovered courthouse step purchases in Sacramento. At that time, there was only three other guys that were doing it. No one would tell you how to do it. We were reading lender law on how to do it. We bought our first house at auction. When we bought it, everybody was like, “Oh my God, I can't believe you bought that.” We were terrified. We had already thought we're going to lose all our money. Long story short, it worked out. Two weeks later, the deed showed up and we own the house. We flipped it and we sold it and we had multiple offers on it. We were like, “Oh my gosh, we figured out what the niche was.” Prior to that, we were trying to buy OREOs off MLS and fix them and sell them but we couldn't figure out why the listing agents would always say, “It's already in escrow. Somebody else bought it.” Well, they had their own buddies they were selling it to. We didn't know. We were newbies.
Krista Mashore:
There was so much fraud going. Let me back up again. So first of all, it's crazy. My daughter lives in San Luis Obispo. I am 15 minutes from Sacramento. I live in Antioch, Brentwood, Oakley area. I'm sure you know where that is. What are you saying? Sacramento and my area were exactly the same as far as how much it crashed. Every single home between 75% and 80%, we went down. Every real estate agent, out of 100 real estate agents, two agent would make it because they actually have the foreclosures and the short scenarios.
Krista Mashore:
What you're saying about agents in the OREO business, there was so much fraud going on. I remember I tried to buy a house before and it's like, “Wait a minute, I offered you 70,000 more. Why is it …” “She bought it.” That kind of thing happens so often back then. My husband and I were trying to go to the courthouse steps and we were trying to purchase. We had property radar, we spent all this time checking out houses, and the day before, we check the deed, we'd do all this running. Then we had somebody who was helping us bid and I'd be like, “Well, wait a minute. I gave you 300,000 on that house. Why did it sell for 240,000 when I told you I gave you 300,000?” Because they had this scam going on down at the courthouse, which now those guys were in jail forever.
Aaron Amuchastegui:
They might have just got out. Some of them might have gotten out. The world has fraud that happens and it gets to be so frustrating. And the frustrating part, too, when you see it is sometimes it's so obvious and you're like, “Is there nothing I can do?” We were so young in the business, we felt like, “All right, we're getting kicked out of this area. Let's go figure out where we can go next.” I remember writing offers to the OREO agents. We were scouring MLS, it would come active. [inaudible 00:18:34] listed 100,000 and every other time, it was too slow.
Aaron Amuchastegui:
So we finally had it set up where as soon as it came active, we write the offer. It's 20,000 over cash. We send it in four minutes after the listing comes up. And the guy says, “Sorry, we've already accepted another offer.” And it's like, “You liar.” Now those guys that had those listings, they crushed it. They made so much money and then their friends they were selling it to made so much money. And we realized there was this hustle with OREOs that the listing agents would tell the bank, “It's only worth 200.” Because it makes their job really easy if they list it at 200 because then they could get multiple offers and sell it really quick.
Krista Mashore:
They were pocketing. Back then, they were pocketing. I mean, I can't remember how … It happened so much. Finally, they got smart, the banks, and it's like, “You have to submit every offer.” They make you put it in the portal in every single one of them. Everybody knew that was wrong.
Aaron Amuchastegui:
Everyone knew it was wrong, but that listing agent had all the power. There was an old show called 99 Homes that talked a lot about the foreclosure. It's kind of about the foreclosure crisis based in Modesto during that time. It's fun if somebody wants to learn. It's cheaply made but a really good story about what we saw. Then at auction, we discovered auction because at auction where we were, no one could actually kick us out. Whether they want you or not. And there were still tricks that would happen but if you kept bidding more than the other person as long … If you show up a minute late, they would have sold to somebody else. There was all sorts of ways they could make it to where you hadn't.
Aaron Amuchastegui:
That fraud thing that you're talking about, I remember going down to San Joaquin, we were mostly in Sacramento, we want to go check out the San Joaquin market. And we showed up and we were the new guy there and we were getting outbid by $20,000, $30,000, $40,000. And we couldn't figure it out because we were like, “Yesterday, the prices were selling for a lot less than we looked on Foreclosure Radar.” We thought we were totally going to be competitive and we're getting outbid. Then later, the story comes out that whenever new people would come in, they would pay way more than they needed to for houses so new people would leave. Then that way, when nobody was there, they could take turns.
Aaron Amuchastegui:
When the opening bid comes out for 200,000 with the bank, they would say, “Nobody bid. I'm just going to get it for $1 over.” So one person would buy it for 200,000, instead of getting bid up to 300,000. And the three of them would go do another auction, they would share in the deal. [inaudible 00:20:46] bunch of money. It was totally illegal. Most people don't realize that bidding collusion is illegal. So if you look at a deal with somebody who say, “I'm not going to bid on this one so you can bid on it instead.” That's illegal. That's a crime. It's a big deal. It was so weird back then. I mean, it makes for great war stories now. When I heard about what happened down there, it made a lot more sense. I was a lot less confused about what had happened.
Krista Mashore:
I bought a house once and literally the house was on fire. He just bought a house that caught on fire. I'm like, “No, I did not …” They're like, “Yeah.” So it was my first one I had ever bought. I remember driving down the street and going, “Oh my God, it is on fire.” Once I had bought the house, a man came up to me, he's like, “Hey, would you like to sell that to me? We'll give you 20,000 over.” I think he was an undercover trying to see if I would do it. I didn't know that was wrong to do. I wasn't sure. I was like, “No, it's cool. We got it. I think we're just going to …” Thank goodness, I didn't say yes because I think if I would have said yes, I think that would have been wrong, too. We had no idea. I just think the universe was looking out for us to keep us safe. We ended up finally quitting because it was just too much work.
Aaron Amuchastegui:
It was a hard business. I like the foreclosure business. For a lot of years, I end up flipping a bunch of houses out there. We flipped a thousand houses in Northern California. We raised a lot of money with people. We go to nine auctions on the same day. And we'd see all sorts of … We'd buy houses that were half burnt down, when the people were … The worst stories you could think of we had of the things that you would find, the things that had happen in houses. We'd also had some of the best stories. Sometimes you unlock the door and it's amazing. You open the door and it's perfect.
Aaron Amuchastegui:
I did really well during that time. Then in 2013, all the big hedge funds started coming in. They came and even talked to me, they're like, “Hey, come to work for us.” I was way too cocky. I thought, “These guys will never put us out of business. Why would I go work for somebody else? I'm a business owner. We're our own brokerage, too. We're doing so well.” Well, they put us out of business. And I lost all the money that I had saved. So during that time, I was only …
Krista Mashore:
How did you lose all that money?
Aaron Amuchastegui:
It's crazy, right? Over $1 million in cash. And what happened was overhead. During 2013, I had a bunch of drivers, I had company cars, we had health plans, we had an office, everybody would show up every morning and get checks, drive to auction. Well, we went from buying 20, 30, 40 houses a month to none. Every time you almost win, and the nature of …
Krista Mashore:
Because the hedge funds were buying all the stuff from the banks in bulk?
Aaron Amuchastegui:
Yes, they were buying it all. They were just paying more at auction every time. So every time, you only get outbid by 3,000 or 4,000s, you're like, “Okay, I almost got one today. I almost got one today.” And the nature of auction is you have four or five days in a row, and then you get one. Four or five days in a row, then you get one. Well, I went 12 months without getting any. I remember calling my wife and saying, “Hey, I need you to transfer some money from your account in so I can make payroll.” And she goes, “I'm out of money.” And I went, “What?” My big lesson that I learned during that time … So the next year, we had about a year and a half very sad times of going, “How do you go from making a ton of money to not … How did I miss this giant opportunity because now we can't compete because the hedge fund will just outbid us?”
Aaron Amuchastegui:
I remember thinking back, “I should have just kept 100 of those houses. And if I just kept 100 of those houses, then I would be set for the rest of my life. Instead of flipping them.” I hadn't learned the art of investing. I didn't have any mentors. I didn't have any Masterminds. I didn't know anyone else that was successful with money and so no one had taught me to invest. I kind of thought like, “I'm making this much money every month. I'm going to make that much money every month anyway.” I learned that I should have invested. In 2015, I discovered the Texas market. Nobody was doing foreclosures out there at the time. I was there by accident. I went out there to buy an apartment complex that I'd been looking at and I got called …
Krista Mashore:
How did you have the money to buy the property? You lost everything.
Aaron Amuchastegui:
I had a line of credit. I had a line of credit left so when everything went crazy, I bought one apartment complex in a town called Killeen, Texas back in 2011. The only investment I had essentially in 2013 when I was broke was this apartment complex that I bought during 2011. So 2013, 2014, we're having a really sad time. In 2015, a lady calls me, who is the real estate agent on that apartment complex. And she said, “Hey, there's another apartment complex for sale, you should look at it.” I look at it, I get the title report, and the title report says it's scheduled for foreclosure next month. And I went, “This is really interesting. I've got the rent rolls, I've got the title report. I would have never thought about buying an apartment complex on the courthouse steps. But I have all the info, maybe I should.”
Aaron Amuchastegui:
At that time, we're still broke but I've got a line of credit that my dad had started with his bank before he died. We didn't have a way to actually buy houses so we weren't using it. We take cash out on the line of credit. I fly out there, I get my Southwest flight. The auction happens. I get cold feet, I don't bid on it. I call my wife and I'm like, “I chickened out. I got scared.” I haven't bought a house now in two years. And she was, “What? We couldn't even afford the Southwest flight. Why did you fly out there?” So I'm kicking myself. And then while I'm sitting there, I look back and another auctioneer shows up. He sells 40 houses, one after another and nobody bids on him.
Aaron Amuchastegui:
I'm the only one standing there. He's like, “This house for 40 grand, this house for 50 grand.” I went, “Oh my god, this is like California 2009. There's no one here and I just saw 50 houses going to sale.” I flew out the next month. I bought some houses. I drove the houses before I bought them. I drove to Home Depot after. We got the drill, drilled out the locks. And I thought, “Oh my gosh, I've got this big opportunity again.” I started so 2015 ….
Krista Mashore:
It's like you had an angel on your side for that.
Aaron Amuchastegui:
An angel on my side, totally. And I learned all these lessons. So this time, I bought 10 houses the next month and I got loan, I kept them as rentals and I got loans on them. Then I did it again the next month and I did it again the next month. I did that every month since 2015. I said, “The market will never go up in Texas.” In 2020, the market went up in Texas. I've been really, really lucky on my Texas investments.
Krista Mashore:
How many properties do you own out there? Over 1,000?
Aaron Amuchastegui:
I own about 500 houses.
Krista Mashore:
There's no loans on any of them, right?
Aaron Amuchastegui:
Some of them have partners on them and some of them have loans, but some of them are also paid off. They've doubled and tripled in value. We definitely have debt and we have partnerships, but the way that they've doubled and tripled stuff, it's been crazy. It's been just absolutely crazy, absolutely lucky the way that it turned out. One fun little story I want to add, and who knows how it'll help your podcasts people. I remember in 2013, sitting at an auction in California … When I started auction in California, there was three of us bidding on 100 properties. It was amazing. Then in 2013, there was 100 people bidding on three properties. And I remember saying, “The only person winning here today is the guy that built Foreclosure Radar.” [crosstalk 00:27:48] the software because all 100 people were paying 50 bucks a month or $100 month for that data.
Krista Mashore:
I used to pay for it, and I actually know him. He's a smart guy.
Aaron Amuchastegui:
Sean O'Toole.
Krista Mashore:
Sean O'Toole, yeah.
Aaron Amuchastegui:
Brilliant man. If you want to hear real estate predictions, have him on your podcast because he predicted …
Krista Mashore:
Will you introduce me? I haven't talked to him for so long. He lives in my area.
Aaron Amuchastegui:
Sean lives up in Truckee right now. I'll totally introduce you. He's a brilliant guy. He has rebuilt property radar to this national thing for agents and investors. Great friend of mine. You'll want to have him come on for predictions because he predicted the .com bubble. He sold all of his real estate in California in 2005. He invented Foreclosure Radar in 2007, two years [crosstalk 00:28:31]
Krista Mashore:
Okay. I want to interview him. I want him here.
Aaron Amuchastegui:
I was like, “This guy's a smart one.” In Texas, in 2017, I bought the foreclosure listing company in Texas. I was a customer and I said … That was my ultimate hedge. Where I said, “Someday, I won't be able to buy houses in Texas anymore at auction because there'll be 100 bidders again. Eventually, there'll be 100 bidders at this place where today there's only three.”
Krista Mashore:
That's what happened, right?
Aaron Amuchastegui:
That's what happened. So I own the Foreclosure Radar version in Texas, it's called Roddy's Foreclosure Listing Service. So now this last year, I stopped being able to buy houses on the courthouse steps because there's been so much fewer foreclosures, and there's 100 people at every auction trying to buy them. But the cool thing now is we're the ones selling them the software. I got to learn a bunch of stuff. Even though I lost everything in 2013, after working so hard for 2009, 2012, I learned so much that life and God gave me a second chance, once I learned those lessons.
Aaron Amuchastegui:
So I got to start over. I got to do it again. In 2015 and 2017, “What's the stuff that you missed?” It was totally like Groundhog's Day. Now I'm just super grateful. I like teaching everybody my secrets. We have a super cheap how to buy houses book. I say super cheap because it's 10 bucks and every one of my secrets is in there. People are like, “Do you do coaching? Do you do anything else?” “No, we sell the products, we sell the software. But mostly I just love being able to talk to people that are now succeeding.”
Krista Mashore:
Tell the name of the book so people could …
Aaron Amuchastegui:
So it's called Bidding to Buy. Bigger Pockets is my publisher. A lot of people heard of the Bigger Pockets Podcast. It's called Bidding to Buy and it's the secrets of buying houses on the courthouse steps. The concept is buying upstream a little bit more. It's hard to buy OREO houses listed on the MLS because that's where the competition is. It's about trying to find houses where there's no competition.
Krista Mashore:
They still exist now?
Aaron Amuchastegui:
Do auctions still exist?
Krista Mashore:
Those type of houses. Finding those type of houses.
Aaron Amuchastegui:
You have to go even further upstream now where … They still exist. But at the other side now is the trick is finding somebody and all the new technologies. Before somebody stops making their mortgage payment, a lot of people buy that list and they go knock on the door and say, “You stopped paying your mortgage, sell me your house instead, because you have equity.” Because also everyone has equity right now. “They owe 80. Why wouldn't they sell me the house for 100 even if it's worth 150?” Because they only have three weeks for auction.
Aaron Amuchastegui:
But before they stop making their payments, they usually stop mowing their lawn. Then the city starts fining them for not mowing their lawn. So that's this new level of lead where people are they want to find city liens. What's a house that the city has been fining them for not mowing their lawn? Or what's a house where they stopped paying their water bill three months ago? Because there's usually these other trends that happen first. So the big trend in real estate is trying to find houses six months before they go into foreclosure. If somebody stopped paying their water bill, they've stopped paying their property taxes or they've stopped mowing their lawn, and they have equity, then they're a prime person to go try to buy the house from direct instead. Because they don't care anymore.
Krista Mashore:
Why wouldn't somebody just put the house in the market? It's such a crazy hot market and just say, “No, I'm just going to sell it regular.”
Aaron Amuchastegui:
Most people would. But you'd be amazed at how many people are still super overwhelmed by that process. You coach real estate agents. Real estate, all day long should be telling people, “I'm a real estate agent.” You'd be amazed how many people say they don't know a real estate agent. They don't know a single real estate agent. They don't have a single person in their network to ask. I saw a guy make a post on Facebook last week and he said, “Hey, does anyone want to list my house for me for sale? I just need a real estate agent that will answer the phone and do this.” And nobody replied on his thing. He's like, “Here's a free listing,” and nobody made a comment.
Krista Mashore:
I've never seen that. I always see eight million people respond.
Aaron Amuchastegui:
Yes, because you're a real estate agent and you make sure everybody knows that you are. Why wouldn't someone hire an agent? One is they might not have one that they trust yet. So there's a huge opportunity for that. Two, they're overwhelmed or they're embarrassed. They don't want to call the agent and say, “Hey, my house is actually a wreck. I don't have the money to move my stuff out of the house. I stopped mowing the lawn. But I know I've got 50,000 in equity, can you help me?” They would rather sell to somebody else discreetly and even move in the middle of the night. They don't even want to tell the neighbors some of the time that they're moving.
Krista Mashore:
You know what's crazy? Okay. I live in a really nice area in Discovery Bay, it's on water. And my neighbor, all of a sudden, a moving van is in his driveway. I was like, “What in the heck is going on?” He's actually a real estate agent, too. He didn't even own the house. He was renting it but he was acting like it was his own house. I was so shocked. I'm like, “What happened?” He's like, “Well, we were renting it, it was rent to own, and then it ended up not working out. We couldn't buy it at the time.” I'm like, “Oh my gosh.” Just crazy stuff happens. You're right.
Aaron Amuchastegui:
Crazy stuff happens. And people are embarrassed. Nobody wants to say like, “I lost my job six months ago so now I'm in foreclosure. I know I have equity in this thing but is there any way you could sell it in the next three weeks?” Because that's the other thing that happens when … In California, if you stop making your payment, you get a 90-day notice that says, “In 90 days, you're going to get foreclosed on.” In Texas, you get a notice that says, “In 21 days, you're getting foreclosed on.”
Aaron Amuchastegui:
So payment, your auctions in three weeks. That's enough time to get a deal kind of but not enough time to prep it on MLS, FHA loan, or something. I mean, rules are different now. Foreclosures aren't going to be coming back anytime soon. The moratoriums up this month, but they're going to make it to where lenders for the next 90 days have to offer modifications. The government, they're going to do everything they can to not have a slew of foreclosures.
Krista Mashore:
I agree. Thank goodness because God, it was horrible. I used to have to knock on people's doors and be like, “Hey, I'm sorry but your house got foreclosed on.” I'm actually glad it was me I did it because I was so gracious about it. We did everything. My husband I would help them move, we did everything we could for these people. We actually have gotten a lot of business since then. They were like, “You were so nice when you foreclosed on us.” I'm like, “Because I …” I met this one man, his mom got foreclosed upon and we just took such good care of her and we actually ended up selling her house and double lending it later on because he was like, “You were so good to my mom, we [inaudible 00:34:48] sell we were going to call.”
Krista Mashore:
Couple lessons here that you … I want to point this out. So a couple lessons. Number one is that you had everything and then you lost it all. Then you did it again. You literally had everything again and lost it all again. But you still, even though you have those two losses, number one, when you had an opportunity to buy the apartment and you didn't, you got scared. And what you probably should have, looking back. But because you didn't, you are open to see this new opportunity of how 40 houses just sold an hour and no one buy them.
Krista Mashore:
You realized, “Oh my gosh.” But you took action and be resourceful and you found a way then to turn that into something. All the while, you did just what you had said before you would do, “I'm going to buy houses myself now.” And then also you were predicting what was going to happen. So you took action about the software. So it's like you really, really learned from what you did wrong and modified and adjusted your behavior and took risks. But the risks were more calculated because you had learned the lessons from the past. So even though those failures seem like failures, really they weren't because now you're crushing it more than ever.
Aaron Amuchastegui:
Yeah. I loved your summary of that right now, Krista, because I tend to skip over the action part of it a little bit. And when you think about that action part, we were broke. And it was putting a flight on Southwest on a credit card, then getting the line of credit set up and flying out to Texas at a time … Back then, I was terrified of flying. Right now, I have flown 100,000 miles a year and it's not … But at that time, me flying out to Texas, I actually flew to Dallas and then did a three-hour drive down to Killeen instead of flying to … Because I wanted to have one less flight that day. I was so afraid of flying, I would rather drive three hours than do a connection flight. I was like, “I'm only going to do one flight a day to get down there.” Then getting there on the Friday and then driving houses for 12 hours. Then comping houses for 12 hours. Not sleeping while I'm there to show up for auction. Because cramming for auction …
Krista Mashore:
Heck, yeah. I know. Oh my God.
Aaron Amuchastegui:
So doing it in a whole different state, that was a whole lot of risk, a whole lot of effort on … I saw this opportunity but then, I mean, it would have been-
Krista Mashore:
And you know nothing about the neighborhoods. You have to make sure there's no liens or taxes. You have to drive and make sure the house isn't burnt down. I mean, there's so much involved but you did it. You took action, you modified and adjusted in. I just think it's really a cool story, quite frankly. Because wherever you're at right now listening to this, it doesn't matter what your circumstance is, your circumstance can change. Even though you might seem totally down and out and like, “Oh my gosh, it's so horrible.” It can change. My best year in real estate is 169 homes, they were all foreclosures. Because I worked with Freddie Mac, Wachovia, Wells Fargo. 13 different asset management company. So we were crushing it.
Krista Mashore:
When the market got better, all those they went from 169 houses to 12. Like you, I had his full-time assistant and transaction coordinator. I was a single mom so I had two kids. And I was like, “Crap, the market just changed.” On a listing appointment, I didn't get it. And I say, “Well, how come you didn't choose me?” They go, “Krista, we loved you. But the last guy called you the Foreclosure Queen.” And I was all, “I am the Foreclosure Queen.” I literally started studying, “What are the Fortune 500 companies doing? How are they marketing?” And I just revamped everything.
Krista Mashore:
By revamping and taking a real look at where I was that and changing it, the next year I was back up to 100 homes, and none of them were foreclosures. I mean, I was pretty down and low, 12 a year. That might seem like a lot but it wasn't for me. With my being a single mom and all that and having two full-time employees. I had to change that. So if you're listening, I mean, Aaron just showed you how twice he went under, and he just revamped himself and now he's a bazillionaire. That happened to me twice, too. It's you got to be willing to take some risks, modify your behavior, adjust, and just move forward.
Aaron Amuchastegui:
And be open. I love your story, too. When you actually figured out why and you were like, “I do need to change my brand.” Because what you thought was like your experience, “I'd done this many deals.” Or like, “Well, you haven't done this type of a deal.” And when you're down and out, it's hard. It is hard to see the value and the lessons and the things that you learn. But I had to stay open and keep learning and going, “What else was I supposed to learn? What else was I supposed to learn?” Because there were some big lessons for me to learn. And I felt like as soon as I learned them, the universe opened the door.
Aaron Amuchastegui:
But then as soon as the door gets opened again, you have to take action like you did at the very first time. It was really easy for me to take action back in '07 because I was 27 years old and I had two young kids and I was hungry. And I had more energy. Operating all night and working all night was easy. Having to remind yourself after you've lost it a couple times, it's okay to be sad, it's okay to be depressed, it's okay to go through it and learn from it. But then keep your head up and keep trying and keep trying, because the universe will open that again. Then trying to get that confidence back, quick to remind yourself like, “You can do it no matter what.”
Aaron Amuchastegui:
I remember talking to a friend. Anyone I talked to in 2013, I was pretty darn depressed. Beginning of 2014, I talked to one of my buddies, and I'm telling him the story about like, “Last year, man, I lost it all. I'm back at zero.” He goes, “What happened to your office?” He had brought a film crew down and it filmed in my office and done some flip videos for us in 2012. So he's like, “What do you mean you lost it all?” I'm like, “But it's fine.” But I'm laughing as I'm talking to him. And at that time, I said, “Because I know no matter what, I'm going to find the next big thing.” I found a couple of big opportunities before, I'm just going to … I know that it-
Krista Mashore:
But some people don't know that, Aaron. You just said, “I know I'm going to find the best big thing.” But some people, they get in this position of failure, that they don't get that belief. So where do you think that belief comes from that you said, “I know there's going to be another opportunity”?
Aaron Amuchastegui:
I think it was a process of grief first. I had to go through the grief and lose it. And then actually getting through … There were some moments where it was still like, “Well, I learned some pretty big things.” Something that just comes from faith. When you have go in really, really down times, that's when people are going to find their higher power. That's when I found God. People find their thing that brings them a little bit of faith and hope that like, “Hey, things are going to be okay.”
Aaron Amuchastegui:
It's really even like a story about Donald Trump or some of the other big business guys. Way before he was president talking about how many times these people filed bankruptcy strategically and then became big business people. So many big companies have filed bankruptcy multiple times. Some of the most successful people ever have gone to zero several times. As I was reading some books, in the second of that one, I was able to actually look back and go, “You know what? Right now, I don't know what that next big thing is but I know that it's going to be unlocked as long as I keep trying.” And during that time, I was trying a whole bunch of different things. But when this one got unlocked, when I looked back and saw like, “Wow, this is like 2009 all over again.” I knew for sure that was the reset finally getting sent to me and so I had to go all in.
Krista Mashore:
You just got to keep going. I just think it's really good lessons here. The other thing I want to point out, too, is I think people sometimes look at people that are successful, and they just assumed that they were always that way. They just assume that, “They're successful because of this and this.” It's because you've got these really cool headphones on. I mean, whatever their thing is. They don't realize it's because the person has failed many, many times so they kept getting up, they kept going, they kept believing in themselves, they kept just trying.
Krista Mashore:
I think it's just important to point out because I see that so often where people will just think these things and they don't think that these things can happen, and they had the worst of it. They got to understand that people that are doing these amazing things have failed a ton of times and have seen a lot of heartache, they've just chosen to continue to move forward and adapt and modify.
Aaron Amuchastegui:
Especially with the world of social media. Like I'm going to post my highlight reel, but people on social media is they're going to see the coolest stuff that I do. They're going to see the most fun stuff that I do. They're going to see my successes, they're going to see the best travels I go on with my family. I'm going to share my highlight reel. The reason we do that, and that's not a bad thing but just know that everyone is sharing their highlight reel. So if you start comparing yourself to someone's highlight reel, that's bad. I share my highlight reel because the reason I do everything is for the highlight reel.
Aaron Amuchastegui:
We don't do it to create the hard times, we don't do it to create … We do it for those amazing moments. So I want to focus on the highlight reel. I think people should focus on the highlight reel because we worked so hard to have those moments. We go through all of the pains and struggles of entrepreneurship in order to have those moments so we are supposed to share those. If we only focus on the crap, if I only focus on losing it all in 2013, I never would have been able to come back. I had to start focusing on that highlight reel. I think that's actually the healthy part about social media and the highlight reel that maybe people don't think about. Because you can compare yourself to someone else's and go, “My life isn't as good as theirs.” Or, “Man, it must be nice to be Aaron. His life is really successful.”
Aaron Amuchastegui:
I went to prison when I was 20. We don't have enough time to really go too far but I posted that on my Instagram a year ago. I was like, “Here's a picture of me when I was 20 at a prison in Southern California.” This young little white kid. And people are like, “Oh my gosh. We would have never guessed that you turned out to be …” I was like, “This isn't even my worst story.” That's not even the worst bottom. That's the one that resonates with people more when they see that picture. They're like, “Oh my gosh.” It's like, “Believe me, losing my stuff in 2013 was worse. Or almost getting divorced in 2015 was worse. We have those ups and downs, we focus on the highlight reel. When you see someone else's highlight reel, you should drive to create that but don't get discouraged when it's not there every time.
Krista Mashore:
Well, comparison is the thief of joy. I don't know who said that. It's not my quote. But comparison is the thief of joy. And number two, how many times do you see people on social media like, “Oh my God, my wife is so wonderful. I'm so in love.” Then two weeks later, they're filing for divorce and fighting over the cats. It's Fakebook, not Facebook. I personally love to be like, “I screwed this one up today.” Because people appreciate imperfection. And if you're listening to this, be authentic. Don't always just try to be full of crap because people know it. Aaron, this has been awesome. I do want to find out later about why you went to jail. But you wanted to tell us real quick why you went to jail?
Aaron Amuchastegui:
Funny, I was from a small town in Southern Oregon. I wasn't really good at making friends and being social. The town I was in, I graduated from high school with a bunch of people that I went to preschool with. So I wasn't really good at meeting people. When I went off to college, party too much, did too many drugs, did all sorts of different things and had this almost like a bet going with a guy one day. A buddy of mine, we're hanging out with, we're partying too much. He owes me some money. I'm giving him a hard time about it. He goes, “You know what? I'm going to get your money today. Drive me down to this bank and I'll go in and I'm going to go in and rob it and give you the money back.” He's thinking that I am going to call his bluff and say no. It was like a game of chicken.
Krista Mashore:
You thought he was kidding.
Aaron Amuchastegui:
We both thought each other were kidding but we were waiting for … But we didn't want to be the not cool kid. So we were waiting for the other person to call it off. Neither of us thought it was actually going to happen. At the end of day, it happened.
Krista Mashore:
He went in there and robbed the damn bank?
Aaron Amuchastegui:
He went in there and robbed the bank. He came out. I had more money in a bank account in that bank than he came out with. Stupid 20-year-old kid. Man, some crazy lessons. Turned ourselves in the next day. For a kid like me that was from a small town in Southern Oregon getting sent to a Southern California federal penitentiary, it was crazy.
Krista Mashore:
How long were you in there?
Aaron Amuchastegui:
A little over two years.
Krista Mashore:
Oh my gosh. That's so crazy.
Aaron Amuchastegui:
So crazy and so nutty. And the best part, the reason I like to share that story is because, again, we talked a little bit about if you're at your bottom, the world is still going to be so much opportunity. I've had three resets if you get to count that one. What's so funny is is when people think about that one, they go like, “Life will never get worse than that.” It's like, “Well, no life can get better or can get worse from wherever you were. But you got to learn from it wherever you can and go with what's next and then not take life for granted.”
Krista Mashore:
I never imagined you in prison for three years.
Aaron Amuchastegui:
Really, I love to share that story. It's a story of hope for other people. Because if a scrawny little kid like me can go survive that and then turn out to be okay afterward, anybody can. But that's why now we value experiences and everything so much. If I'm going to go to an event, I'm going to go front row. If I'm going to go do something, we're going to do it because no one can ever take your memories away. When we lost all of our money a couple different times, we never regretted the trips that we took. We regretted the stuff we bought. We regretted the cars, we regretted the expensive sunglasses. We never regretted the trips that we took with each other or with our family. So we just said, “From then on, experience is everything. Whenever we can, we're going to do front row.”
Krista Mashore:
This has been awesome. And don't hang up when I say stop recording. But Aaron Mala.
Aaron Amuchastegui:
Aaron A.
Krista Mashore:
Aaron A. from Real Estate Rockstars Podcast. Flipping more homes than you can imagine. Owning more rentals, 500 rentals. That's just awesome. This has been such an inspiration. I absolutely enjoyed myself and I don't want to stop. But we need to because coming up to the hour. But I need to ask, I always ask everyone at the very end, what piece of advice, one piece of advice would you give people, I think you already have, but our listeners, whether it's personal or business, before we leave?
Aaron Amuchastegui:
I would highlight again that very last thing I said is, “You will never regret choosing experiences over things.” So if you've got an opportunity to create an epic experience for somebody, for a birthday, for Fourth of July, for anything, and you're trying think, “Do I do this or not?” Always choose the experience. You'll never regret doing the experience over things.
Krista Mashore:
I so appreciate it. Listen, everyone, thank you so much for spending your time. Aaron, thank you. You were amazing. I just appreciate you being on here. I know you're a super busy man. So thank you, everyone. Give him a little high five for what a great job you did. Thank you. Thank you. And thank you for listening. We really appreciate you spending your time with us. Remember, action, take action. I think our biggest lesson from today is that no matter where you're at in life, things can get better but you've got to take action. You've got to try and you cannot give up. Thank you so much for your time. Make it a great day. I hope you're just as fired up as I am. I'll see you next time.
Krista Mashore:
Hey everyone. It's Krista Mashore here. Are you ready to be fired up? Because I sure am. I have Aaron A. I'll let him tell you how to say his last name. He is the host of one of the biggest real estate podcasts, Real Estate Rockstars, as well as doing many amazing other things. This guy owns more property than anyone I've ever met before, and he's going to teach you how to do it, too. Aaron, welcome.
Aaron Amuchastegui:
Hey, thanks for letting me come on. We had so much fun interviewing you on my podcast last month. And you and I were talking and by the end of it we had to stop the recording because we're like, “It's been an hour. I need to cut this off so I make sure I follow up with my commitments there.” But we could have kept talking so I knew that we'd be able to finish some of that conversation here.
Krista Mashore:
Oh, we had such a great time. Sometimes I'm like, “Oh, I got to do a podcast.” But we just kept going and going. So everyone, the last time I talked to Aaron he was actually going to the MMA fights and he bought the biggest package ever and he was on stage. I want him to tell you about the process. So tell me how was that?
Aaron Amuchastegui:
We went to UFC Vegas. It was UFC 264 in Las Vegas. It's awesome VIP package. Part of why we did it … When I first saw the ad that said 60,000 people, live back in Vegas, like, “We're doing this, Vegas is open again.” Man, I cannot wait. Part of why we're living in Austin, Texas is life, it got slowed down a lot for five, six months but in general, my wife and I hunger for events. We hunger for normalcy. We hunger for being shoulder to shoulder. And there's was this fear for a while that it would never happen again. We would never again be in a room with that many people. We would never again feel safe. We would never again feel okay.
Aaron Amuchastegui:
And I'll tell you what, everyone that was in Las Vegas was feeling the same way. So that weekend, we had UFC going on and it was Conor McGregor and Dustin Poirier. McGregor, everyone loves him. He brings a bunch of people in. Plus there was a Garth Brooks concert and Justin Bieber was doing a concert there. There was so many different things that brought, I don't know, like a million people to Las Vegas that weekend. It was so much fun. Getting to do events, there's a buddy of mine named John Vroman. He's got a book called The Front Row Factor. He runs the Front Row Foundation. The premise of that whole thing, they create events for kids that like someone's dying of cancer, but the Make A Wish Foundation says no, his foundation helps out.
Aaron Amuchastegui:
The premise of it was he remembered going to a concert in the back row and seeing the people in the front row really having this awesome time. Screaming and dancing and high fiving. And he was thinking, “How different is that experience than mine?” We took that to heart so every time we do any event, we do front row, we do as big as we can, we do whatever they let us do. Through talking to some people at the UFC, it was also my wife and my 15 year anniversary, first time she had ever gone to Vegas with me. I've gone to Vegas a lot of times but it was her first time coming with me even though we'd been married for 15 years. I really want to do the whole VIP experience all weekend. So during the weigh in on ESPN, you see McGregor onstage and you see me over to the right. I'm on stage. There's eight of us.
Krista Mashore:
Oh my gosh.
Aaron Amuchastegui:
I've got a picture as Dustin's coming off stage right next to him. Super fun, super exhilarating, especially as you're looking around at one of this hugely televised event, so many people there again. It was a cool way to really kick off going back and having these experiences. Met a whole bunch of fun people. The other cool thing about doing stuff VIP and doing events, for any of your listeners, people that are in business, that event won't end up costing me anything.
Krista Mashore:
First of all, what did it cost you? Is that appropriate to ask? I have to know. What did it cost you?
Aaron Amuchastegui:
I won't say just what that part of the ticket was. But that whole weekend is a $40,000, $50,000 weekend. We were also second row at Justin Bieber the night later. If you do Masterminds and things like that, it's easy to say that. Now there'll be some people that hear me say and they're like, “You spent what to go have a weekend in Vegas? I can't believe-“
Krista Mashore:
Talk about how you just said how it's paying for itself. That it didn't cost you anything. That's what I'm not good at so explain that.
Aaron Amuchastegui:
Now some people paid 100,000 for the weekend or 150,000. But the reality is, is if you go to these events, you are going to meet a ton of different people. You're going to meet a ton of people. I'm sorry. I've got a little bit of a cough that I got in Vegas. That's a fun joke that happened later. But you sit next to the same people that are spending a lot of money to be at these high level experiences. You're on stage with these other people that are successful people, there's been a lot of money for these high end experiences. Well, you share this fun experience with them. You instantly become really good friends with them.
Aaron Amuchastegui:
When that works properly, when now you're like, “Now I'm hanging out with and texting back and forth with a guy that does this business over in Florida.” And it's like, “Now I know this guy that does this business up in Colorado. This guy wants to start investing in real estate investing. And this guy is just trying to lend more money.” You create all these friendships and things at those levels. But the key whenever you spend a lot of money to go to an event is everybody else there is spending a lot of money, too. Which means they have the ability to do it, they have the success in business to do it. The key though is then capitalizing on that relationship.
Aaron Amuchastegui:
Now you've created this authentic relationship with them anyway. The biggest thing is just to remember when you go home. Just a few weeks later, like shooting a text, like, “Hey, it was fun hanging out.” One of them's like, “Hey, remember, when you come to Miami, let's hang out. We'll get our families together.” It's like, “Yeah, no problem.” All that happens, so it won't pay for itself this month or six months from now or this year. But there will be some sort of a deal that I will do with somebody that I hung out with in Vegas.
Aaron Amuchastegui:
Just from creating that relationship and being an authentic friend, there'll be something that happens later that it totally pays itself back and we get more than that. Because I do so much in real estate, likely it's going to be some sort of a partnership of somebody bringing me a deal or buying a deal with me or investing in a deal with me, that comes back tenfold.
Krista Mashore:
That is very, very true. I think that's what me … One thing I like to do when I meet people is I like to … When they tell me, “I love Snickers,” or, “I like this certain brand.” I always write it down in my contacts and their name under the notes. So that I try to really listen for things that people tell me and then I can do a special cool gift or something that really relates to them that they said. You know what I mean?
Aaron Amuchastegui:
It's such a great way to … It's hard to have authentic relationships with hundreds of people. Then you also think you're going to remember that stuff. Like when they tell you they like Snickers, in your brain, you're like, “I won't forget that.” But you need to write down, you need to put it in your contacts or in a spreadsheet. When I came back from Vegas, I actually started looking out there to see, “Is there an app that actually helps people keep track of all that stuff? That actually helps make sure …” I have a CRM for my customer. Somebody comes in signs up for my foreclosure site, they're going to get a text message, they're going to get a phone call. In three weeks, they're going to get another one. They're going to get a bunch of emails.
Aaron Amuchastegui:
And in six months from now, they're going to get a little email that said like, “Hey, is there anything else we can help you with?” Or a text message that says, “Hey, can we help you with anything?” Relationships I think can be done the same way, should be done the same way to enhance them because it reminds us to do that outreach. I haven't found a technology-based solution yet for that. But it's the same concept of a drip campaign for a recurring revenue type business [crosstalk 00:08:01] relationships. Just like in real estate, you're staying top of mind, you're having these conversations. And then when you go to that city, they remember to come hang out with you. And the best business deals I've ever done were just from friends that neither of us had any intention of doing deals together. A few years later at random, we were like, “Well, maybe we should do that one together.”
Krista Mashore:
Because you also do develop a little bit of trust from the person because you're meeting on a level that's not intended for that. You like each other just because you like each other and then it just makes it, I thought it makes it more just easier.
Aaron Amuchastegui:
Yeah. When the relationship starts with just playing experiences, like personal experience that have nothing to do with business, but it's always just something we end up talking about. It's always inevitable, “What do you do? How did you end up here? How are we sitting on stage next to each other during …”
Krista Mashore:
Who won that fight? I don't know who won. Did McGregor win?
Aaron Amuchastegui:
McGregor lost. He was, by far, the crowd favorite. I was shocked when they announced McGregor, the room is so excited. When they announced Poirier, the crowd just starts booing like crazy. And I could not believe it because Poirier won the last one. He's big fighter, great man. He's a great guy.
Krista Mashore:
Why is that, do you think?
Aaron Amuchastegui:
At the very end of the first round though, McGregor kicks him. He blocks it with an elbow, breaks his leg. He goes to stand back up again. He's standing there and all of a sudden, his leg just folds out from under him.
Krista Mashore:
He breaks McGregor's leg?
Aaron Amuchastegui:
Yeah. McGregor had kicked him in his shin, landed against his elbow. Then McGregor came back down. He's standing there not knowing what happened. And all of a sudden, his leg just folds over and you're like, “Ah.”
Krista Mashore:
So that was it?
Aaron Amuchastegui:
That was it. They'll fight again in probably 18 months. But I would say …
Krista Mashore:
It wasn't like Rocky. Rocky would have done it on one leg. He would have like …
Aaron Amuchastegui:
They were both wanting to keep fighting. It was a really awesome weekend and really awesome day. But the end was very anticlimactic for so many people.
Krista Mashore:
Because it was only one thing?
Aaron Amuchastegui:
I had no idea, too, how much people invest in betting on fights.
Krista Mashore:
Really?
Aaron Amuchastegui:
I had so many conversations with people that had bet $50,000, $100,000, $200,000 on McGregor to win. As soon as-
Krista Mashore:
Was McGregor the underdog?
Aaron Amuchastegui:
McGregor lost the last fight. So McGregor was the underdog as far as the official ranking of it. The first time they fought, McGregor beat him. Last time, McGregor loses. But it was the first time McGregor had fought in a long time. And he said, “I was off practice. I'm going to come back and take this serious.” He's playing really well. I mean, that first round, they were really pretty even. It was a really fun fight to watch.
Krista Mashore:
That sucks. That is so …
Aaron Amuchastegui:
Looking over the guys next to me that bet $100,000 or $200,000 on McGregor to win, and then as soon as his leg breaks, my wife and I are disappointed that the fight's over. These guys are about to puke. They were like just run out of there afterward and you're just like, “Some people aren't just having fun here. Some people do business.”
Krista Mashore:
They lost a lot of money. Oh, man, that's crazy. Okay. We went off tangent, but there was a lot of lessons to be learned from that. Which is when you do things, think about the people that are around you and how can you literally listen to what they're telling you and keep conversations open and relationships open because you never know what might happen in the future. So always, always think about that. There's something I always say to my students. “You're always on a job interview.” “Well, hey, even something like that, you're kind of on a job interview. You never know what can happen as far as what happens later on.”
Aaron Amuchastegui:
You're always on a job interview. And experiences are the best ways to create memories with people because … And the whole rest of it again, too. We had a lot of friends in town from other places. We would book these little mini events throughout the weekend, invite everybody to come. We have these awesome experiences together and it just solidifies those friendships and relationships. Everything we do, business is always part of personal as well. You're always-
Krista Mashore:
What are the little events that you do? Give me better ideas.
Aaron Amuchastegui:
There was a concert middle of the day. It's like buying a booth at one of the clubs so 10 or 12 people could go. You're saying, “Hey, come to this concert with us. You'll be able to come …” You're just totally invited. When you get there, it's just another VIP little experience. It was supposed to be McGregor's after party. We had also booked this private lounge at one of the clubs. It had its own private pool and stuff like that with it. So we invited 16 people in that, McGregor obviously didn't come to his after party.
Aaron Amuchastegui:
But it's got a really fun experience with everybody there. Vegas is also one of the key places of VIP experiences. So if you want to have a fun experience, it's going to be really memorable for people. We did four or five throughout the weekend. Chainsmokers was the daytime band. Chainsmokers' going to come play at this club. So we got one of the couches that were right by there, invited friends to come in and just have some fun experiences.
Krista Mashore:
I wish I was there. I want to be like, “Can I go?”
Aaron Amuchastegui:
You were there the week before. You showed us …
Krista Mashore:
I know. We were sitting at, it was at Cosmo. And we saw a thing about McGregor. He go, “Babe, McGregor's fighting.” He likes McGregor too, for some reason. I don't know why he's the … Okay, so tell everybody a little bit more about you, Aaron A. First of all, how do you say your last name?
Aaron Amuchastegui:
Amuchastegui. It's one of a kind. If you start typing in though like Aaron, Aaron is easy. It's simple, A-A-R-O-N. My parents did that because they knew my last name was so hard that they should give me an easy first name. But if you start typing like “AMU.” Aaron AMU, Google will autofill the rest out there. It's Amuchastegui. You and I got to first meet on the Real Estate Rockstars Podcast. I'm the host and owner of that podcast, and we interview real estate agents. I will say it's the biggest podcast out there for real estate agents. Plus we have some classes and things like that to train new agents to get listings, how to succeed, things like that. It's a very low dollar, low ticket, 49 or 99 bucks a month for some classes. That's how you and I first met.
Aaron Amuchastegui:
The funny part about that conversation though is we were sharing stories about the early 2000s and the foreclosure craziness of Northern California. I was also from Northern California originally. I live in Austin, Texas now. I love being out in Austin. I do miss the weather of Northern California. In 2005, I was a home builder in San Luis Obispo, Santa Barbara area, Southern California. It was awesome. We were building houses in 50 days. They would sell as soon as we put them on the market. I was golfing two or three days a week. It was really unfair expectation of what my life was going to be.
Aaron Amuchastegui:
I graduated from college in construction management. Got this awesome job, was making lots of money and golfing more than I was working. Then the housing market crashed and life sucked really fast for a lot of people. We got pay cuts and we started doing manual labor again on these jobs. I moved up to Sacramento where the home builder that I was working for, that's where they were based out of. We didn't see as much turmoil down Santa Barbara, but in Sacramento, man, we saw the crash.
Krista Mashore:
Like 90%.
Aaron Amuchastegui:
In Atwater, there were these houses, these model homes were like 700,000. At the end, we were selling them for 100,000.
Krista Mashore:
Yeah, I know.
Aaron Amuchastegui:
I don't know where your listeners are but just think about that for a second. There are plenty of places where there's crashes throughout the US but very few like Northern California where the crash was literally a 70 to 80% price reduction. People will tell you now when they're predicting real estate like, “Hey, it might go down. We might see a little correction. We might see it go down a little. We might see it go up a little.” I have all sorts of opinions on that but we saw crazy crashes back in '07, '08, '09. It was unfathomable. I was like, “What am I going to do with my life?” I can't do anything anymore.
Aaron Amuchastegui:
I discovered courthouse step purchases in Sacramento. At that time, there was only three other guys that were doing it. No one would tell you how to do it. We were reading lender law on how to do it. We bought our first house at auction. When we bought it, everybody was like, “Oh my God, I can't believe you bought that.” We were terrified. We had already thought we're going to lose all our money. Long story short, it worked out. Two weeks later, the deed showed up and we own the house. We flipped it and we sold it and we had multiple offers on it. We were like, “Oh my gosh, we figured out what the niche was.” Prior to that, we were trying to buy OREOs off MLS and fix them and sell them but we couldn't figure out why the listing agents would always say, “It's already in escrow. Somebody else bought it.” Well, they had their own buddies they were selling it to. We didn't know. We were newbies.
Krista Mashore:
There was so much fraud going. Let me back up again. So first of all, it's crazy. My daughter lives in San Luis Obispo. I am 15 minutes from Sacramento. I live in Antioch, Brentwood, Oakley area. I'm sure you know where that is. What are you saying? Sacramento and my area were exactly the same as far as how much it crashed. Every single home between 75% and 80%, we went down. Every real estate agent, out of 100 real estate agents, two agent would make it because they actually have the foreclosures and the short scenarios.
Krista Mashore:
What you're saying about agents in the OREO business, there was so much fraud going on. I remember I tried to buy a house before and it's like, “Wait a minute, I offered you 70,000 more. Why is it …” “She bought it.” That kind of thing happens so often back then. My husband and I were trying to go to the courthouse steps and we were trying to purchase. We had property radar, we spent all this time checking out houses, and the day before, we check the deed, we'd do all this running. Then we had somebody who was helping us bid and I'd be like, “Well, wait a minute. I gave you 300,000 on that house. Why did it sell for 240,000 when I told you I gave you 300,000?” Because they had this scam going on down at the courthouse, which now those guys were in jail forever.
Aaron Amuchastegui:
They might have just got out. Some of them might have gotten out. The world has fraud that happens and it gets to be so frustrating. And the frustrating part, too, when you see it is sometimes it's so obvious and you're like, “Is there nothing I can do?” We were so young in the business, we felt like, “All right, we're getting kicked out of this area. Let's go figure out where we can go next.” I remember writing offers to the OREO agents. We were scouring MLS, it would come active. [inaudible 00:18:34] listed 100,000 and every other time, it was too slow.
Aaron Amuchastegui:
So we finally had it set up where as soon as it came active, we write the offer. It's 20,000 over cash. We send it in four minutes after the listing comes up. And the guy says, “Sorry, we've already accepted another offer.” And it's like, “You liar.” Now those guys that had those listings, they crushed it. They made so much money and then their friends they were selling it to made so much money. And we realized there was this hustle with OREOs that the listing agents would tell the bank, “It's only worth 200.” Because it makes their job really easy if they list it at 200 because then they could get multiple offers and sell it really quick.
Krista Mashore:
They were pocketing. Back then, they were pocketing. I mean, I can't remember how … It happened so much. Finally, they got smart, the banks, and it's like, “You have to submit every offer.” They make you put it in the portal in every single one of them. Everybody knew that was wrong.
Aaron Amuchastegui:
Everyone knew it was wrong, but that listing agent had all the power. There was an old show called 99 Homes that talked a lot about the foreclosure. It's kind of about the foreclosure crisis based in Modesto during that time. It's fun if somebody wants to learn. It's cheaply made but a really good story about what we saw. Then at auction, we discovered auction because at auction where we were, no one could actually kick us out. Whether they want you or not. And there were still tricks that would happen but if you kept bidding more than the other person as long … If you show up a minute late, they would have sold to somebody else. There was all sorts of ways they could make it to where you hadn't.
Aaron Amuchastegui:
That fraud thing that you're talking about, I remember going down to San Joaquin, we were mostly in Sacramento, we want to go check out the San Joaquin market. And we showed up and we were the new guy there and we were getting outbid by $20,000, $30,000, $40,000. And we couldn't figure it out because we were like, “Yesterday, the prices were selling for a lot less than we looked on Foreclosure Radar.” We thought we were totally going to be competitive and we're getting outbid. Then later, the story comes out that whenever new people would come in, they would pay way more than they needed to for houses so new people would leave. Then that way, when nobody was there, they could take turns.
Aaron Amuchastegui:
When the opening bid comes out for 200,000 with the bank, they would say, “Nobody bid. I'm just going to get it for $1 over.” So one person would buy it for 200,000, instead of getting bid up to 300,000. And the three of them would go do another auction, they would share in the deal. [inaudible 00:20:46] bunch of money. It was totally illegal. Most people don't realize that bidding collusion is illegal. So if you look at a deal with somebody who say, “I'm not going to bid on this one so you can bid on it instead.” That's illegal. That's a crime. It's a big deal. It was so weird back then. I mean, it makes for great war stories now. When I heard about what happened down there, it made a lot more sense. I was a lot less confused about what had happened.
Krista Mashore:
I bought a house once and literally the house was on fire. He just bought a house that caught on fire. I'm like, “No, I did not …” They're like, “Yeah.” So it was my first one I had ever bought. I remember driving down the street and going, “Oh my God, it is on fire.” Once I had bought the house, a man came up to me, he's like, “Hey, would you like to sell that to me? We'll give you 20,000 over.” I think he was an undercover trying to see if I would do it. I didn't know that was wrong to do. I wasn't sure. I was like, “No, it's cool. We got it. I think we're just going to …” Thank goodness, I didn't say yes because I think if I would have said yes, I think that would have been wrong, too. We had no idea. I just think the universe was looking out for us to keep us safe. We ended up finally quitting because it was just too much work.
Aaron Amuchastegui:
It was a hard business. I like the foreclosure business. For a lot of years, I end up flipping a bunch of houses out there. We flipped a thousand houses in Northern California. We raised a lot of money with people. We go to nine auctions on the same day. And we'd see all sorts of … We'd buy houses that were half burnt down, when the people were … The worst stories you could think of we had of the things that you would find, the things that had happen in houses. We'd also had some of the best stories. Sometimes you unlock the door and it's amazing. You open the door and it's perfect.
Aaron Amuchastegui:
I did really well during that time. Then in 2013, all the big hedge funds started coming in. They came and even talked to me, they're like, “Hey, come to work for us.” I was way too cocky. I thought, “These guys will never put us out of business. Why would I go work for somebody else? I'm a business owner. We're our own brokerage, too. We're doing so well.” Well, they put us out of business. And I lost all the money that I had saved. So during that time, I was only …
Krista Mashore:
How did you lose all that money?
Aaron Amuchastegui:
It's crazy, right? Over $1 million in cash. And what happened was overhead. During 2013, I had a bunch of drivers, I had company cars, we had health plans, we had an office, everybody would show up every morning and get checks, drive to auction. Well, we went from buying 20, 30, 40 houses a month to none. Every time you almost win, and the nature of …
Krista Mashore:
Because the hedge funds were buying all the stuff from the banks in bulk?
Aaron Amuchastegui:
Yes, they were buying it all. They were just paying more at auction every time. So every time, you only get outbid by 3,000 or 4,000s, you're like, “Okay, I almost got one today. I almost got one today.” And the nature of auction is you have four or five days in a row, and then you get one. Four or five days in a row, then you get one. Well, I went 12 months without getting any. I remember calling my wife and saying, “Hey, I need you to transfer some money from your account in so I can make payroll.” And she goes, “I'm out of money.” And I went, “What?” My big lesson that I learned during that time … So the next year, we had about a year and a half very sad times of going, “How do you go from making a ton of money to not … How did I miss this giant opportunity because now we can't compete because the hedge fund will just outbid us?”
Aaron Amuchastegui:
I remember thinking back, “I should have just kept 100 of those houses. And if I just kept 100 of those houses, then I would be set for the rest of my life. Instead of flipping them.” I hadn't learned the art of investing. I didn't have any mentors. I didn't have any Masterminds. I didn't know anyone else that was successful with money and so no one had taught me to invest. I kind of thought like, “I'm making this much money every month. I'm going to make that much money every month anyway.” I learned that I should have invested. In 2015, I discovered the Texas market. Nobody was doing foreclosures out there at the time. I was there by accident. I went out there to buy an apartment complex that I'd been looking at and I got called …
Krista Mashore:
How did you have the money to buy the property? You lost everything.
Aaron Amuchastegui:
I had a line of credit. I had a line of credit left so when everything went crazy, I bought one apartment complex in a town called Killeen, Texas back in 2011. The only investment I had essentially in 2013 when I was broke was this apartment complex that I bought during 2011. So 2013, 2014, we're having a really sad time. In 2015, a lady calls me, who is the real estate agent on that apartment complex. And she said, “Hey, there's another apartment complex for sale, you should look at it.” I look at it, I get the title report, and the title report says it's scheduled for foreclosure next month. And I went, “This is really interesting. I've got the rent rolls, I've got the title report. I would have never thought about buying an apartment complex on the courthouse steps. But I have all the info, maybe I should.”
Aaron Amuchastegui:
At that time, we're still broke but I've got a line of credit that my dad had started with his bank before he died. We didn't have a way to actually buy houses so we weren't using it. We take cash out on the line of credit. I fly out there, I get my Southwest flight. The auction happens. I get cold feet, I don't bid on it. I call my wife and I'm like, “I chickened out. I got scared.” I haven't bought a house now in two years. And she was, “What? We couldn't even afford the Southwest flight. Why did you fly out there?” So I'm kicking myself. And then while I'm sitting there, I look back and another auctioneer shows up. He sells 40 houses, one after another and nobody bids on him.
Aaron Amuchastegui:
I'm the only one standing there. He's like, “This house for 40 grand, this house for 50 grand.” I went, “Oh my god, this is like California 2009. There's no one here and I just saw 50 houses going to sale.” I flew out the next month. I bought some houses. I drove the houses before I bought them. I drove to Home Depot after. We got the drill, drilled out the locks. And I thought, “Oh my gosh, I've got this big opportunity again.” I started so 2015 ….
Krista Mashore:
It's like you had an angel on your side for that.
Aaron Amuchastegui:
An angel on my side, totally. And I learned all these lessons. So this time, I bought 10 houses the next month and I got loan, I kept them as rentals and I got loans on them. Then I did it again the next month and I did it again the next month. I did that every month since 2015. I said, “The market will never go up in Texas.” In 2020, the market went up in Texas. I've been really, really lucky on my Texas investments.
Krista Mashore:
How many properties do you own out there? Over 1,000?
Aaron Amuchastegui:
I own about 500 houses.
Krista Mashore:
There's no loans on any of them, right?
Aaron Amuchastegui:
Some of them have partners on them and some of them have loans, but some of them are also paid off. They've doubled and tripled in value. We definitely have debt and we have partnerships, but the way that they've doubled and tripled stuff, it's been crazy. It's been just absolutely crazy, absolutely lucky the way that it turned out. One fun little story I want to add, and who knows how it'll help your podcasts people. I remember in 2013, sitting at an auction in California … When I started auction in California, there was three of us bidding on 100 properties. It was amazing. Then in 2013, there was 100 people bidding on three properties. And I remember saying, “The only person winning here today is the guy that built Foreclosure Radar.” [crosstalk 00:27:48] the software because all 100 people were paying 50 bucks a month or $100 month for that data.
Krista Mashore:
I used to pay for it, and I actually know him. He's a smart guy.
Aaron Amuchastegui:
Sean O'Toole.
Krista Mashore:
Sean O'Toole, yeah.
Aaron Amuchastegui:
Brilliant man. If you want to hear real estate predictions, have him on your podcast because he predicted …
Krista Mashore:
Will you introduce me? I haven't talked to him for so long. He lives in my area.
Aaron Amuchastegui:
Sean lives up in Truckee right now. I'll totally introduce you. He's a brilliant guy. He has rebuilt property radar to this national thing for agents and investors. Great friend of mine. You'll want to have him come on for predictions because he predicted the .com bubble. He sold all of his real estate in California in 2005. He invented Foreclosure Radar in 2007, two years [crosstalk 00:28:31]
Krista Mashore:
Okay. I want to interview him. I want him here.
Aaron Amuchastegui:
I was like, “This guy's a smart one.” In Texas, in 2017, I bought the foreclosure listing company in Texas. I was a customer and I said … That was my ultimate hedge. Where I said, “Someday, I won't be able to buy houses in Texas anymore at auction because there'll be 100 bidders again. Eventually, there'll be 100 bidders at this place where today there's only three.”
Krista Mashore:
That's what happened, right?
Aaron Amuchastegui:
That's what happened. So I own the Foreclosure Radar version in Texas, it's called Roddy's Foreclosure Listing Service. So now this last year, I stopped being able to buy houses on the courthouse steps because there's been so much fewer foreclosures, and there's 100 people at every auction trying to buy them. But the cool thing now is we're the ones selling them the software. I got to learn a bunch of stuff. Even though I lost everything in 2013, after working so hard for 2009, 2012, I learned so much that life and God gave me a second chance, once I learned those lessons.
Aaron Amuchastegui:
So I got to start over. I got to do it again. In 2015 and 2017, “What's the stuff that you missed?” It was totally like Groundhog's Day. Now I'm just super grateful. I like teaching everybody my secrets. We have a super cheap how to buy houses book. I say super cheap because it's 10 bucks and every one of my secrets is in there. People are like, “Do you do coaching? Do you do anything else?” “No, we sell the products, we sell the software. But mostly I just love being able to talk to people that are now succeeding.”
Krista Mashore:
Tell the name of the book so people could …
Aaron Amuchastegui:
So it's called Bidding to Buy. Bigger Pockets is my publisher. A lot of people heard of the Bigger Pockets Podcast. It's called Bidding to Buy and it's the secrets of buying houses on the courthouse steps. The concept is buying upstream a little bit more. It's hard to buy OREO houses listed on the MLS because that's where the competition is. It's about trying to find houses where there's no competition.
Krista Mashore:
They still exist now?
Aaron Amuchastegui:
Do auctions still exist?
Krista Mashore:
Those type of houses. Finding those type of houses.
Aaron Amuchastegui:
You have to go even further upstream now where … They still exist. But at the other side now is the trick is finding somebody and all the new technologies. Before somebody stops making their mortgage payment, a lot of people buy that list and they go knock on the door and say, “You stopped paying your mortgage, sell me your house instead, because you have equity.” Because also everyone has equity right now. “They owe 80. Why wouldn't they sell me the house for 100 even if it's worth 150?” Because they only have three weeks for auction.
Aaron Amuchastegui:
But before they stop making their payments, they usually stop mowing their lawn. Then the city starts fining them for not mowing their lawn. So that's this new level of lead where people are they want to find city liens. What's a house that the city has been fining them for not mowing their lawn? Or what's a house where they stopped paying their water bill three months ago? Because there's usually these other trends that happen first. So the big trend in real estate is trying to find houses six months before they go into foreclosure. If somebody stopped paying their water bill, they've stopped paying their property taxes or they've stopped mowing their lawn, and they have equity, then they're a prime person to go try to buy the house from direct instead. Because they don't care anymore.
Krista Mashore:
Why wouldn't somebody just put the house in the market? It's such a crazy hot market and just say, “No, I'm just going to sell it regular.”
Aaron Amuchastegui:
Most people would. But you'd be amazed at how many people are still super overwhelmed by that process. You coach real estate agents. Real estate, all day long should be telling people, “I'm a real estate agent.” You'd be amazed how many people say they don't know a real estate agent. They don't know a single real estate agent. They don't have a single person in their network to ask. I saw a guy make a post on Facebook last week and he said, “Hey, does anyone want to list my house for me for sale? I just need a real estate agent that will answer the phone and do this.” And nobody replied on his thing. He's like, “Here's a free listing,” and nobody made a comment.
Krista Mashore:
I've never seen that. I always see eight million people respond.
Aaron Amuchastegui:
Yes, because you're a real estate agent and you make sure everybody knows that you are. Why wouldn't someone hire an agent? One is they might not have one that they trust yet. So there's a huge opportunity for that. Two, they're overwhelmed or they're embarrassed. They don't want to call the agent and say, “Hey, my house is actually a wreck. I don't have the money to move my stuff out of the house. I stopped mowing the lawn. But I know I've got 50,000 in equity, can you help me?” They would rather sell to somebody else discreetly and even move in the middle of the night. They don't even want to tell the neighbors some of the time that they're moving.
Krista Mashore:
You know what's crazy? Okay. I live in a really nice area in Discovery Bay, it's on water. And my neighbor, all of a sudden, a moving van is in his driveway. I was like, “What in the heck is going on?” He's actually a real estate agent, too. He didn't even own the house. He was renting it but he was acting like it was his own house. I was so shocked. I'm like, “What happened?” He's like, “Well, we were renting it, it was rent to own, and then it ended up not working out. We couldn't buy it at the time.” I'm like, “Oh my gosh.” Just crazy stuff happens. You're right.
Aaron Amuchastegui:
Crazy stuff happens. And people are embarrassed. Nobody wants to say like, “I lost my job six months ago so now I'm in foreclosure. I know I have equity in this thing but is there any way you could sell it in the next three weeks?” Because that's the other thing that happens when … In California, if you stop making your payment, you get a 90-day notice that says, “In 90 days, you're going to get foreclosed on.” In Texas, you get a notice that says, “In 21 days, you're getting foreclosed on.”
Aaron Amuchastegui:
So payment, your auctions in three weeks. That's enough time to get a deal kind of but not enough time to prep it on MLS, FHA loan, or something. I mean, rules are different now. Foreclosures aren't going to be coming back anytime soon. The moratoriums up this month, but they're going to make it to where lenders for the next 90 days have to offer modifications. The government, they're going to do everything they can to not have a slew of foreclosures.
Krista Mashore:
I agree. Thank goodness because God, it was horrible. I used to have to knock on people's doors and be like, “Hey, I'm sorry but your house got foreclosed on.” I'm actually glad it was me I did it because I was so gracious about it. We did everything. My husband I would help them move, we did everything we could for these people. We actually have gotten a lot of business since then. They were like, “You were so nice when you foreclosed on us.” I'm like, “Because I …” I met this one man, his mom got foreclosed upon and we just took such good care of her and we actually ended up selling her house and double lending it later on because he was like, “You were so good to my mom, we [inaudible 00:34:48] sell we were going to call.”
Krista Mashore:
Couple lessons here that you … I want to point this out. So a couple lessons. Number one is that you had everything and then you lost it all. Then you did it again. You literally had everything again and lost it all again. But you still, even though you have those two losses, number one, when you had an opportunity to buy the apartment and you didn't, you got scared. And what you probably should have, looking back. But because you didn't, you are open to see this new opportunity of how 40 houses just sold an hour and no one buy them.
Krista Mashore:
You realized, “Oh my gosh.” But you took action and be resourceful and you found a way then to turn that into something. All the while, you did just what you had said before you would do, “I'm going to buy houses myself now.” And then also you were predicting what was going to happen. So you took action about the software. So it's like you really, really learned from what you did wrong and modified and adjusted your behavior and took risks. But the risks were more calculated because you had learned the lessons from the past. So even though those failures seem like failures, really they weren't because now you're crushing it more than ever.
Aaron Amuchastegui:
Yeah. I loved your summary of that right now, Krista, because I tend to skip over the action part of it a little bit. And when you think about that action part, we were broke. And it was putting a flight on Southwest on a credit card, then getting the line of credit set up and flying out to Texas at a time … Back then, I was terrified of flying. Right now, I have flown 100,000 miles a year and it's not … But at that time, me flying out to Texas, I actually flew to Dallas and then did a three-hour drive down to Killeen instead of flying to … Because I wanted to have one less flight that day. I was so afraid of flying, I would rather drive three hours than do a connection flight. I was like, “I'm only going to do one flight a day to get down there.” Then getting there on the Friday and then driving houses for 12 hours. Then comping houses for 12 hours. Not sleeping while I'm there to show up for auction. Because cramming for auction …
Krista Mashore:
Heck, yeah. I know. Oh my God.
Aaron Amuchastegui:
So doing it in a whole different state, that was a whole lot of risk, a whole lot of effort on … I saw this opportunity but then, I mean, it would have been-
Krista Mashore:
And you know nothing about the neighborhoods. You have to make sure there's no liens or taxes. You have to drive and make sure the house isn't burnt down. I mean, there's so much involved but you did it. You took action, you modified and adjusted in. I just think it's really a cool story, quite frankly. Because wherever you're at right now listening to this, it doesn't matter what your circumstance is, your circumstance can change. Even though you might seem totally down and out and like, “Oh my gosh, it's so horrible.” It can change. My best year in real estate is 169 homes, they were all foreclosures. Because I worked with Freddie Mac, Wachovia, Wells Fargo. 13 different asset management company. So we were crushing it.
Krista Mashore:
When the market got better, all those they went from 169 houses to 12. Like you, I had his full-time assistant and transaction coordinator. I was a single mom so I had two kids. And I was like, “Crap, the market just changed.” On a listing appointment, I didn't get it. And I say, “Well, how come you didn't choose me?” They go, “Krista, we loved you. But the last guy called you the Foreclosure Queen.” And I was all, “I am the Foreclosure Queen.” I literally started studying, “What are the Fortune 500 companies doing? How are they marketing?” And I just revamped everything.
Krista Mashore:
By revamping and taking a real look at where I was that and changing it, the next year I was back up to 100 homes, and none of them were foreclosures. I mean, I was pretty down and low, 12 a year. That might seem like a lot but it wasn't for me. With my being a single mom and all that and having two full-time employees. I had to change that. So if you're listening, I mean, Aaron just showed you how twice he went under, and he just revamped himself and now he's a bazillionaire. That happened to me twice, too. It's you got to be willing to take some risks, modify your behavior, adjust, and just move forward.
Aaron Amuchastegui:
And be open. I love your story, too. When you actually figured out why and you were like, “I do need to change my brand.” Because what you thought was like your experience, “I'd done this many deals.” Or like, “Well, you haven't done this type of a deal.” And when you're down and out, it's hard. It is hard to see the value and the lessons and the things that you learn. But I had to stay open and keep learning and going, “What else was I supposed to learn? What else was I supposed to learn?” Because there were some big lessons for me to learn. And I felt like as soon as I learned them, the universe opened the door.
Aaron Amuchastegui:
But then as soon as the door gets opened again, you have to take action like you did at the very first time. It was really easy for me to take action back in '07 because I was 27 years old and I had two young kids and I was hungry. And I had more energy. Operating all night and working all night was easy. Having to remind yourself after you've lost it a couple times, it's okay to be sad, it's okay to be depressed, it's okay to go through it and learn from it. But then keep your head up and keep trying and keep trying, because the universe will open that again. Then trying to get that confidence back, quick to remind yourself like, “You can do it no matter what.”
Aaron Amuchastegui:
I remember talking to a friend. Anyone I talked to in 2013, I was pretty darn depressed. Beginning of 2014, I talked to one of my buddies, and I'm telling him the story about like, “Last year, man, I lost it all. I'm back at zero.” He goes, “What happened to your office?” He had brought a film crew down and it filmed in my office and done some flip videos for us in 2012. So he's like, “What do you mean you lost it all?” I'm like, “But it's fine.” But I'm laughing as I'm talking to him. And at that time, I said, “Because I know no matter what, I'm going to find the next big thing.” I found a couple of big opportunities before, I'm just going to … I know that it-
Krista Mashore:
But some people don't know that, Aaron. You just said, “I know I'm going to find the best big thing.” But some people, they get in this position of failure, that they don't get that belief. So where do you think that belief comes from that you said, “I know there's going to be another opportunity”?
Aaron Amuchastegui:
I think it was a process of grief first. I had to go through the grief and lose it. And then actually getting through … There were some moments where it was still like, “Well, I learned some pretty big things.” Something that just comes from faith. When you have go in really, really down times, that's when people are going to find their higher power. That's when I found God. People find their thing that brings them a little bit of faith and hope that like, “Hey, things are going to be okay.”
Aaron Amuchastegui:
It's really even like a story about Donald Trump or some of the other big business guys. Way before he was president talking about how many times these people filed bankruptcy strategically and then became big business people. So many big companies have filed bankruptcy multiple times. Some of the most successful people ever have gone to zero several times. As I was reading some books, in the second of that one, I was able to actually look back and go, “You know what? Right now, I don't know what that next big thing is but I know that it's going to be unlocked as long as I keep trying.” And during that time, I was trying a whole bunch of different things. But when this one got unlocked, when I looked back and saw like, “Wow, this is like 2009 all over again.” I knew for sure that was the reset finally getting sent to me and so I had to go all in.
Krista Mashore:
You just got to keep going. I just think it's really good lessons here. The other thing I want to point out, too, is I think people sometimes look at people that are successful, and they just assumed that they were always that way. They just assume that, “They're successful because of this and this.” It's because you've got these really cool headphones on. I mean, whatever their thing is. They don't realize it's because the person has failed many, many times so they kept getting up, they kept going, they kept believing in themselves, they kept just trying.
Krista Mashore:
I think it's just important to point out because I see that so often where people will just think these things and they don't think that these things can happen, and they had the worst of it. They got to understand that people that are doing these amazing things have failed a ton of times and have seen a lot of heartache, they've just chosen to continue to move forward and adapt and modify.
Aaron Amuchastegui:
Especially with the world of social media. Like I'm going to post my highlight reel, but people on social media is they're going to see the coolest stuff that I do. They're going to see the most fun stuff that I do. They're going to see my successes, they're going to see the best travels I go on with my family. I'm going to share my highlight reel. The reason we do that, and that's not a bad thing but just know that everyone is sharing their highlight reel. So if you start comparing yourself to someone's highlight reel, that's bad. I share my highlight reel because the reason I do everything is for the highlight reel.
Aaron Amuchastegui:
We don't do it to create the hard times, we don't do it to create … We do it for those amazing moments. So I want to focus on the highlight reel. I think people should focus on the highlight reel because we worked so hard to have those moments. We go through all of the pains and struggles of entrepreneurship in order to have those moments so we are supposed to share those. If we only focus on the crap, if I only focus on losing it all in 2013, I never would have been able to come back. I had to start focusing on that highlight reel. I think that's actually the healthy part about social media and the highlight reel that maybe people don't think about. Because you can compare yourself to someone else's and go, “My life isn't as good as theirs.” Or, “Man, it must be nice to be Aaron. His life is really successful.”
Aaron Amuchastegui:
I went to prison when I was 20. We don't have enough time to really go too far but I posted that on my Instagram a year ago. I was like, “Here's a picture of me when I was 20 at a prison in Southern California.” This young little white kid. And people are like, “Oh my gosh. We would have never guessed that you turned out to be …” I was like, “This isn't even my worst story.” That's not even the worst bottom. That's the one that resonates with people more when they see that picture. They're like, “Oh my gosh.” It's like, “Believe me, losing my stuff in 2013 was worse. Or almost getting divorced in 2015 was worse. We have those ups and downs, we focus on the highlight reel. When you see someone else's highlight reel, you should drive to create that but don't get discouraged when it's not there every time.
Krista Mashore:
Well, comparison is the thief of joy. I don't know who said that. It's not my quote. But comparison is the thief of joy. And number two, how many times do you see people on social media like, “Oh my God, my wife is so wonderful. I'm so in love.” Then two weeks later, they're filing for divorce and fighting over the cats. It's Fakebook, not Facebook. I personally love to be like, “I screwed this one up today.” Because people appreciate imperfection. And if you're listening to this, be authentic. Don't always just try to be full of crap because people know it. Aaron, this has been awesome. I do want to find out later about why you went to jail. But you wanted to tell us real quick why you went to jail?
Aaron Amuchastegui:
Funny, I was from a small town in Southern Oregon. I wasn't really good at making friends and being social. The town I was in, I graduated from high school with a bunch of people that I went to preschool with. So I wasn't really good at meeting people. When I went off to college, party too much, did too many drugs, did all sorts of different things and had this almost like a bet going with a guy one day. A buddy of mine, we're hanging out with, we're partying too much. He owes me some money. I'm giving him a hard time about it. He goes, “You know what? I'm going to get your money today. Drive me down to this bank and I'll go in and I'm going to go in and rob it and give you the money back.” He's thinking that I am going to call his bluff and say no. It was like a game of chicken.
Krista Mashore:
You thought he was kidding.
Aaron Amuchastegui:
We both thought each other were kidding but we were waiting for … But we didn't want to be the not cool kid. So we were waiting for the other person to call it off. Neither of us thought it was actually going to happen. At the end of day, it happened.
Krista Mashore:
He went in there and robbed the damn bank?
Aaron Amuchastegui:
He went in there and robbed the bank. He came out. I had more money in a bank account in that bank than he came out with. Stupid 20-year-old kid. Man, some crazy lessons. Turned ourselves in the next day. For a kid like me that was from a small town in Southern Oregon getting sent to a Southern California federal penitentiary, it was crazy.
Krista Mashore:
How long were you in there?
Aaron Amuchastegui:
A little over two years.
Krista Mashore:
Oh my gosh. That's so crazy.
Aaron Amuchastegui:
So crazy and so nutty. And the best part, the reason I like to share that story is because, again, we talked a little bit about if you're at your bottom, the world is still going to be so much opportunity. I've had three resets if you get to count that one. What's so funny is is when people think about that one, they go like, “Life will never get worse than that.” It's like, “Well, no life can get better or can get worse from wherever you were. But you got to learn from it wherever you can and go with what's next and then not take life for granted.”
Krista Mashore:
I never imagined you in prison for three years.
Aaron Amuchastegui:
Really, I love to share that story. It's a story of hope for other people. Because if a scrawny little kid like me can go survive that and then turn out to be okay afterward, anybody can. But that's why now we value experiences and everything so much. If I'm going to go to an event, I'm going to go front row. If I'm going to go do something, we're going to do it because no one can ever take your memories away. When we lost all of our money a couple different times, we never regretted the trips that we took. We regretted the stuff we bought. We regretted the cars, we regretted the expensive sunglasses. We never regretted the trips that we took with each other or with our family. So we just said, “From then on, experience is everything. Whenever we can, we're going to do front row.”
Krista Mashore:
This has been awesome. And don't hang up when I say stop recording. But Aaron Mala.
Aaron Amuchastegui:
Aaron A.
Krista Mashore:
Aaron A. from Real Estate Rockstars Podcast. Flipping more homes than you can imagine. Owning more rentals, 500 rentals. That's just awesome. This has been such an inspiration. I absolutely enjoyed myself and I don't want to stop. But we need to because coming up to the hour. But I need to ask, I always ask everyone at the very end, what piece of advice, one piece of advice would you give people, I think you already have, but our listeners, whether it's personal or business, before we leave?
Aaron Amuchastegui:
I would highlight again that very last thing I said is, “You will never regret choosing experiences over things.” So if you've got an opportunity to create an epic experience for somebody, for a birthday, for Fourth of July, for anything, and you're trying think, “Do I do this or not?” Always choose the experience. You'll never regret doing the experience over things.
Krista Mashore:
I so appreciate it. Listen, everyone, thank you so much for spending your time. Aaron, thank you. You were amazing. I just appreciate you being on here. I know you're a super busy man. So thank you, everyone. Give him a little high five for what a great job you did. Thank you. Thank you. And thank you for listening. We really appreciate you spending your time with us. Remember, action, take action. I think our biggest lesson from today is that no matter where you're at in life, things can get better but you've got to take action. You've got to try and you cannot give up. Thank you so much for your time. Make it a great day. I hope you're just as fired up as I am. I'll see you next time.
