by Shane Torres
The Road To $20 Million
Bankruptcy to Multi-Million Dollar Real Estate Producer
Shane Torres
© Copyright 2019 Shane Torres
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Dedication and Thank You
To my wife Mandy and children, Andi, Cohan.
And Gavin; thank you for always supporting me in everything I do.
Table of Contents
PART ONE: THE BREAKDOWN
Chapter One: The Fall
Chapter Two: My Lowest Point
PART TWO: HEADED IN THE RIGHT DIRECTION
Chapter Three: Running On Fumes
Chapter Four: Sitting Courtside
Chapter Five: Reading the Road Signs
Chapter Six: Opportunity is Now Here
PART THREE: THE ROADMAP
Chapter Seven: Determine Your Destination
Chapter Eight: Plan For Passengers
Chapter Nine: Find Your Fuel & Efficiency
Chapter Ten: Engage In The Journey
Chapter Eleven: Explore Your Options (for Business Entrepreneurs)
Chapter Twelve: Drive Your Brand and Your Business
Chapter Thirteen: Enjoy The Ride and See The Sights
NEXT STEPS
ABOUT THE AUTHOR
Note from the Author
The Road to $20 Million was created to redefine the journey to success and make it attainable for everyone; using my own path to success.
From the things that worked well and the lessons I learned along the way.
It’s my hope that you’ll avoid the pitfalls and mistakes I made, and fast-track your own success through what you learn in this book.
Shane Torres
PART ONE:
THE BREAKDOWN
Chapter One:
The Fall
Tuesday, March 2009. As I sat in my truck, at a jobsite on the NW side of Des Moines, my 3rd that morning, it hit me.
At this point in my life, and where I was with my construction business, there were nights where I didn’t sleep. Most days I didn’t eat and when I did eat, I got sick. The stress of the company was affecting my family, my health, my marriage and my life.
I was on the phone with my wife, Mandy, and the realization struck like a 2x4 to the head. Through a fog of uncertainty and frustration, I said the words, “I can’t do it anymore.”
“What do you mean you can’t do it anymore?”
At that point I broke down.
We had ten or twelve projects going on, a multi-million dollar construction business, and I realized that I wasn’t going to be able to proceed with any of it.
Just uttering the words, admitting to myself and my wife that I’d had it, it was like a big weight was lifted off my shoulders, even though I knew it wasn’t over… in fact, it was just beginning.
At the end of the day on Thursday of that same week, I grabbed my laptop, set my keys to the company truck and office on the counter, walked out, and took my personal truck home.
I was done.
At four o’clock in the morning on Friday (the next day) I sent an email. I had told myself I was going to be able to sit down with each person individually and tell them what was happening but when the time came, I didn’t have the courage to do so. I was too weak.
So, I emailed everyone with tears pouring down my face, barely able to type, and let them know that we were shutting the company down and it was over.
By eight o’clock my phone was blowing up with people trying to talk to me — contractors, clients, banks, partners. Some were wanting answers, others were just furious.
I was actually sitting in the parking lot of Consumer Credit of Des Moines waiting for the office to open while people were trying to get a hold of me — all the while knowing I was going to have to file for bankruptcy. As I sent every call to voicemail, each one stinging for different reasons, I sat there in tears and again reflected on how I got here.
At the time, I had just turned 30. My 5 year old company had grown from a few projects in the early days to large retirement centers and hotels. We had 40 full-time employees at the peak with an additional 100+ sub-contractors.
To keep our growth curve moving in the right direction, we did a little of everything: we built new homes, had framing and siding crews, we did remodeling, some light commercial general contracting. In the winter we did snow removal with the 10 trucks that had snow plows and a couple of skid loaders.
For 4-5 years I had everything under control (or so I thought). Looking back, I was 10 feet tall and bulletproof.
We weren’t looking at the downside risk of our decisions.
We were ordering custom trucks and spending money we shouldn’t have spent on other “necessities.”
In addition, several of the bigger jobs were problematic as the materials that were ordered didn’t match our plans. I was facing having to absorb tens of thousands in losses on ordering and processing errors. We weren’t saving money as a company and eventually I found myself sacrificing my own personal finances to help fund the business.
My pride was tied up in the success of the business and my pristine credit score that I had worked so hard to rebuild.
So money was spent on equipment and property leases that realistically should have been renegotiated. Our overhead was bloated, but my ego got in the way of handling that in the moment. I just assumed there would always be more work, and as a result, I’d always be driving forward.
Unfortunately, that was not the case.
As for that day, I had to see what bankruptcy looked like. I had no money at that point, so even to file the Chapter 7, I had to borrow the money from my aunt.
I did end up talking to a few people that called that day, ultimately learning who friends were and who they weren’t. By the time I was done, I really didn’t have anyone left that I saw as friends.
The lawsuits and threats started almost immediately — even threats to my children and wife.
Chapter Two:
My Lowest Point
For the past decade I had lived my life by the motto: Without work, there’s nothing else.
All of my pride, ego and self-worth had been tied to the business, and now, it felt like I had nothing. No pressing business to attend to, no one calling for guidance or direction, no big decisions to be made. I felt lost and was in a very dark place.
I was still going through the motions, getting up early, getting online to look for jobs, but I wanted nothing to do with construction, or with home building. I was applying for jobs in Kansas City, Chicago, and Minneapolis and getting rejected left and right. I was told they were not hiring due to downturn or I was overqualified.
Over the next 30-60 days, I literally just shut down and locked myself in the basement — phone off, watching TV. Lost in 90’s TV shows like “Las Vegas” and “90210.” It was my escape from reality and my previous world that was burning around me.
I felt like I had let everyone down and was a failure as a provider for my
family.
Each conversation or trip out of the house was a reminder of how I failed myself and everyone around me. I couldn’t talk to anyone about it without breaking down.
During that time, I ballooned to my highest weight ever — 260 pounds. My sleep was irregular, my food intake was terrible, and I was living on a steady diet of Zantac and Aleve.
In the midst of television watching, some word or phrase would trigger a memory and I’d relive some aspect of what had happened and what I could’ve done differently to alter my circumstances. I would just sit there and think about what I could have done differently over and over again.
In one of my absolute low points, Mandy and I had a pivotal conversation that turned things around. In the midst of an emotional breakdown, I reminded Mandy that in my 20’s I wanted to be worth a million dollars by the time I hit 40. But by the age of 30, I’d hit that mark and lost it all.
I remember asking her, “If you obtain a goal and then you lose it, does it count? Did you still obtain that goal?” It was almost as if the success I’d had was no longer on my scorecard. I had what I thought was the most important thing, and now the thought of not having it was keeping me depressed.
“What did you lose that mattered?” She asked me back.
That night I didn’t sleep. I thought about what she’d said. I lost money. I lost cars. I lost houses. I lost what I thought were friends.
My family was still there. My kids were still there. I was way overweight but semi-healthy. What really mattered I still had, but I’d have to change the road I was on if things were going to get better.
The next day I made a conscious decision that I was going to change direction. I sold my Bowflex, which sat unused in the corner of the basement covered in clothes, and bought a one year membership to a gym. After 10 years of “not having time to work out,” I now had nothing but time to exercise and start working on myself.
As a former high school athlete who was fairly strong and fast, the first several weeks at the gym were humbling. I could barely walk on a treadmill or lift anything without having to stop to catch my breath.
Within 90 days, working out 4-6 times a week, I had dropped 30 pounds and was close to lifting the same amount I could in my early 20’s. (To this day, I work out 3-6 days a week and attribute my energy level and mental focus to that habit and having a routine.)
Looking back at that one simple question, “what did you lose that mattered?,” that conversation with Mandy was the turning point.
PART TWO:
HEADED IN THE RIGHT DIRECTION
Chapter Three:
Running On Fumes
My next step was figuring out what I was going to do for work. The daily exercise was good for me, if nothing else than to give me somewhere to go and a sense of purpose, but I was needing both something to attach myself to and a way of providing for my family.
Fortunately, my accountant had me paying myself as a W2 employee of my own company which made me eligible for unemployment benefits. The $300 a week we were receiving essentially covered necessities and allowed us to pay whatever bill was going to get shut off next.
We were blessed with extensions to this a few times due to things the state government allowed. Without those extensions, I don’t know what would’ve happened.
Our mortgage wasn’t getting paid and every month we lurked closer and closer to foreclosure. Growing up we received food assistance and I had vowed that I would never have to do that, so it was a very low point for me when I had to file for food assistance to feed my family.
Before the business tumbled, I used to have a limited mindset as it related to giving. If we didn’t have the money, we generally wouldn’t give very much. Our new situation was a wake up call in more ways than one however, and my wife and I agreed that we had to start giving first and put our faith in God that He would provide.
We relied on family heavily during this period. My aunt and uncle had offered me the opportunity to drive trucks for their directional drilling company. They knew we were in a challenging spot and the offer was a lifeline for our finances. So they paid for me to get my Commercial Driver’s License (CDL) and started making plans for me to be a part of their team. The job itself was an over-the-road truck driving job that would have me away from home up to 8 or 9 months a year. It wasn’t ideal, but it wasn’t working in construction either.
To add another wrinkle in our plan, just before I was to start the job, we found out that Mandy was expecting our third child. So on top of the financial mess our lives were in, at the beginning of foreclosure—not sure of the road I was supposed to be taking, God blessed us with another mouth to feed.
Finding out we were going to have a our third child, I believe, came at the perfect time. During a late night conversation, Mandy admitted that she didn’t want me on the road working away from home. Although she had no desire to move from our house, she would rather lose the house than have me on the road all of the time.
By the next morning I had made up my mind — I was going to turn down the truck driving job and I would do everything in my power to keep the house. While I wasn’t positive that we could avoid foreclosure, I decided that I was going to do my absolute best to save it. I was prepared for the consequences if I didn’t, but I had to be able to say I’d tried my best.
Since I had decided not to become a truck driver, I had to figure out what my options were.
At the end of 2008, I had started taking classes to get my real estate license. I had completed the course and taken the test, but only passed the national test the first time and had failed the state test twice. Having been in the construction industry, I assumed the test would be a breeze. Testing was not a strength of mine however, and since I hadn’t passed the state test, I had let that option go while I was going through the loss of my company and battling depression. I had no money to take the test again, so I borrowed from my father-in-law, bought a study guide at the Des Moines Association of Realtors office, and committed to passing on my third attempt.
An hour ahead of my test, I sat in the parking lot and went through that study guide back and forth, back and forth. When it was time, I immediately went in, took the test, and passed it.
My journey as a real estate agent could now begin.
Chapter Four:
Sitting Courtside
When my business finally collapsed, there were a number of companies who were (understandably) upset. So for the next 18 months, while I was starting my journey in real estate, I also spent a good portion of my time dealing with lawsuits.
While most of the suits got dismissed in the bankruptcy, one of the larger banks in town decided to dispute the bankruptcy and sue me for upwards of $400,000.
After reviewing the quotes from attorneys to defend me, most in the $20-30,000 range, I responded to the suit and decided to defend myself in court (I was fortunate that an attorney friend was giving me free advice).
I’m not sure if it was me being naive or just a feeling like I had nothing else to lose by doing it, that prompted me to make that choice. But because I couldn’t afford to pay an attorney, I went after the trial just like I was going after saving my house from foreclosure, getting healthy, and building the real estate business.
I was going to do my best.
Most people involved in the trial were surprised at my decision. Those on the other side of the courtroom tried to play that against me — the fact that I didn’t really know what I was doing. They tried to get things dismissed right away because I didn’t answer questions in the proper fashion. I was fortunate in the fact that the judge saw that I was at least trying and didn’t hold my ignorance of the process against me. She did not allow them to dismiss anything.
It was at that moment I knew I could win.
I found the biggest challenge was everyday questioning what to do and how to do it. When you get a response from an attorney, you literally have to go through the whole document line item by line item and address eac
h individual one. Keep in mind, I didn’t go to school for this. I’m not the best writer or speller, my grammar isn’t perfect. It was a tedious process and my family’s financial future was riding somewhat on the outcome of the case.
The court case was an 18-month process, in and out of federal court.
During one court date the attorney called me to the stand and questioned me, then called the bank’s lender to the stand and questioned him. When it came time for me to cross-examine the lender, I basically used similar questions and came up with material on the fly.
Going into a federal courthouse, you’re not allowed to take your cellphone so you’re literally going in on your own and it’s a scary feeling.
When the final day in court came, closing arguments were given and I learned (the hard way) you cannot object in a final closing statement. The judge does not like that. Nevertheless, my year and a half of defending myself came to an end. It took 60 days to get the judges verdict — about 95% of the case was dismissed.
I ended up owing the bank less than 10% of the original amount of the case.
We’re from the IRS and we’re here to help
If you’ve ever heard that the IRS won’t call you or send you a text message, that’s true. What they will do is make house calls. They’ll do it more than once, if need be. And if they do, it’s time to take them very seriously.
To add insult to injury, when things got tight with the construction company, we had fallen behind on our payroll taxes. We had about $100,000 in IRS debt and I found out there’s two things you can’t get rid of in a bankruptcy: payroll taxes and student loans.
Again, I was very fortunate with the IRS agent I was given because she helped me navigate through that situation.
One thing I realized was that even when you owe people or organizations money, they’re very willing to help you sort things out if you’re upfront about your willingness to pay, but also your inability to pay the whole amount. In the end, the $100,000 I originally owed was successfully negotiated down to about $48,000.
