by Shane Torres
The IRS agent then helped me put the debt in a deferment status because I had no money at the time to cover the payments. Deferment essentially meant they were going to charge interest and let it add up but they weren’t going to try to collect until things got sorted out.
About the middle of 2012, I called them and said, “Hey, I’m ready to work out a payment plan.”
All along I had the mindset that I was going to do my absolute best to make everything right in all scenarios. Knowing at that point that my family needed me to succeed. If I failed, at least I could say I tried.
That is how I got by, and how I still approach things to this day.
Chapter Five:
Reading the Road Signs
It’s often said that the closer you are to rock bottom, the more clearly you’re able to see things.
One day I took my kids up to the town square to play at the park (in the midst of these big life altering decisions I was making). Mandy was off at an appointment and I happened to be at home with the kids. While watching them play on the equipment, it suddenly occurred to me that this was the first time I’d ever taken them to the park. My kids were five and three at the time and I was experiencing the joy of being at the park with them for the first time as a parent.
Money and business and “having stuff” was more important to me before than carving out time for my kids.
These “road signs” started showing up everywhere highlighting something I was supposed to see, a path to follow, perhaps a lesson to learn. Being with my kids told me I should live more in line with my values, which prompted me to actually write down what I valued.
I started with family. The park was a sign that whatever I was going to pursue had to have family as a priority. I made a decision right then that If I was in town, I was going to be at every single event they had. Balance and the appropriate use of my time, relative to me valuing my family, was critical.
The money challenges we were having was a sign that I had been working hard for money, but for all the wrong reasons. It wasn’t to help other people so much as it was to satisfy my ego or prove my naysayers wrong. It occurred to me that if I was taking care of other people, the money would ultimately take care of itself. While it wasn’t immediately clear, I was going through this mess so that I could help other people through theirs.
To this day helping someone with a short sale, avoid foreclosure or helping one of our agents with something personal, is an incredible feeling.
The finances (and three kids and a wife) kept me hungry for success during this time.
What I can only call “opportunities” kept popping up at just the right time. We chalked it up to God’s provisions, but everytime it felt like we were on our last nickel, something would drop in our laps that provided.
There were times that I had my doubts, when it was particularly rough, and we were running out of money. At one point I said to Mandy, “I know God’s got a plan but I need a sign I’m making the right decision here.” The next day I got a check in the mail for just over $7,000. That was the sign I had asked for, and God had provided.
In fact, it reminded me of the story of the man stuck on the roof of a home surrounded by rising flood waters.
After praying for God to save him, a neighbor came by in a canoe offering him a ride to safety. “No thanks, God is going to save me.”
More prayers to God and along comes a rescue worker in a speedboat offering a ride to safety. “No thanks, God is going to save me.”
The water continues to rise and after more desperate prayer, a helicopter flies overhead dropping a rescue line. “No thanks, God is going to save me.”
The man eventually dies in the flood waters and arrives at the pearly gates. “Lord, why didn’t you save me from the floodwaters?”
God responds, “I sent your neighbor, a rescue worker, and a helicopter. Were you looking for a miracle?”
Another sign that our tithes and prayers were working were the continued opportunities that came up when we needed them most. Whether it was an unexpected tax refund, a request from a friend to help with some construction projects, or a job offer pushing snow in the winter, I was reading the signs and following the opportunities.
While some people read ‘Opportunity is Nowhere’, I was reading ‘Opportunity is Now Here’.
Those opportunities became the cornerstone of building a $20M+ real estate company.
Chapter Six:
Opportunity is Now Here
They tell you when you get into real estate that you need to have a sphere. You need to have a network of people and you need to have groups you’re a part of to get referrals from. I didn’t have any of that. In fact, most of the people in my life had turned their backs on me. I was having to start from scratch.
At this point, I had declared bankruptcy, was facing foreclosure, battling a bank in court, negotiating with the IRS and had a wife and three little ones at home. To top it off, I was starting a business that the experts say takes at least three years to achieve “stability.”
And yet, I saw opportunity.
Larger numbers of foreclosures were happening in 2009 and early 2010, and with my experience personally, I thought ‘why not start here?’
Days on end I spent contacting foreclosure agents but none of them were replying. So, I contacted my broker at the time and asked, “Hey, how do I get in on these? Because I think I can do a pretty good job here.”
When I started going through the list of asset management companies, I realized it’s extremely hard to get into foreclosures, mostly due to the fact there were so many people doing it. You basically had to know someone in the banks or asset companies to get started but by signing up for REO (Foreclosures), you also get signed up for a BPO which is a Broker Price Opinion.
Essentially, a BPO is ordered by the bank to get an idea of the value of the home in foreclosure. Agents are hired to go out to do an assessment of the value of a home. Once an agent agrees to the BPO, finishes the report and turns it in, the companies will pay the agent $50 on average per BPO Report. Now, $50 may not seem like much, but I was willing to do whatever it took to build my business, keep my family afloat, and stay in my home.
On the very first BPO, I was asked if I’d go to a town an hour and a half away in the middle of a sleet storm. While I wanted to say no, I said “yes” to build that relationship.
You are also graded as a provider of BPOs. The more I did, the higher my grade went. I must have crossed a major threshold of service, because I got a phone call asking me how many I could handle. The servicer had just taken on one of the largest lenders in the nation and had BPO orders to fill on a daily basis. The opportunity was now here and I told them, “as many as you can send me.”
I would go on to become the largest BPO Agent in the state.
Three things happened as a result of me taking on this opportunity:
First, the income that came in from doing BPOs was extremely helpful in getting our family through some lean times. That second year (2010) in real estate, I did over 1,000 BPOs and made over $50,000 from the servicer. Easily more than anyone else in the Midwest was doing on their own.
Second, and as a by-product of having to complete 1,000 BPOs, I focused on building really effective systems that allowed me to get them done quickly, without taking too much time away from other business building activities. That mentality around systems has been a cornerstone of how I’ve built my business over time. The systems run the business and the people run the systems.
Third, because I was visiting so many foreclosures and looking at so many valuations, I knew my market like the back of my hand. There’s really only one way to get to know your market and that is to actually be out there seeing it! With 1,000 of these visits under my belt, I was absolutely confident, at listing appointments, about the price points for various homes. In fact, it was almost second nature.
I didn’t do anything as far as setting the world on fire in sales. My very first
year (2009) I only sold three homes and made around $13,000 so it wasn’t much. But in 2010, my second year in the business, I cleared over $100,000 between BPO revenue and sales commissions.
When I tell people that I did that many BPO’s, they’re shocked.
To be honest, I was running ragged. I was running from this one to the next and I wasn’t very smart with my time. Then I got to a point where I got smart about how I scheduled my day.
I would get up early in the morning. I would do my marketing and emails. I would do data input with BPO’s and then would go out in the afternoon and take photos of the BPO’s I needed to do for the day. It was structured in such a way that I was able to fill it in with any appointments that I had. I literally scheduled everything into a big circle.
A system was finally put in place where I was able to sit down with all of my data and photos, and I could pump out one BPO in fifteen minutes. It was definitely hustling.
It got to a point where I was doing so many BPO’s I would send Mandy out to take photos of the properties for me and then I would do the data input the next morning. I had to do that otherwise I was gone more than I wanted to be and I still struggled with that a little bit in the beginning. Not a little bit... I struggled with it a lot just like most do.
The busier I got in real estate, the more I cut back on BPOs because I just didn’t have time to do them. So, in 2010, I did 1,000 BPOs and then 600 the next year and then it just started to trickle down to doing none.
On any given morning, I might get a few orders, even to this day. I’ve tried in the past to help people get into them because it is a good supplemental income, but they just don’t understand the opportunity and give up.
Around the same time I started applying for all those BPO companies, I took my first short sale class. At the time, I didn’t have any money and the National Association was bringing a series of classes to the Des Moines area that would result in a designation. In truth, I didn’t know what I was signing up for. I knew it was normally $250 a class and they had it on sale for $75. I thought, “I can afford this and they say you need designations, so why not?” So, I started by signing up for two classes.
As I was sitting through the first class, presented by LeRoy Houser, a well-known coach, listening to him going through all of the short sale information, I thought, “this is genius.” This is what I’ve got to focus on. I took that packet and knew I needed to know more.
The next class I went to featured a speaker from Chicago, so I got his whole perspective on the distressed market from his territory. At this point, I was starting to take the packets from both classes and create my own. I hadn’t really started marketing yet, I’d just started to dabble in it, so I was getting a few short sales just by chance.
In the Fall of 2010, our company brought another company to town to certify agents as CDPE which is Certified Distressed Property Expert. This particular instructor was from Minneapolis, so again I got another perspective of another market. After that class was done, I gathered all three materials from each class, took what I liked from all three of them, and created my own pre-listing short sale packet.
By late Fall, I had marketing postcards created, and started to send the postcards to distressed properties. A few months later, the floodgates opened because of the system that I had created. Because I was going through foreclosure myself at the time, I could relate to what the people were going through.
At one point, I was managing 50-60 short sales at a time, processing them by myself, doing the follow-up by myself on a weekly basis. I controlled 25% of the short sale market in the area. To this day, I still have over 95% success rate in completion of those short sales.
My go-to for finding pre-foreclosures was RealtyTrac (https://www.realtytrac.com/), a foreclosure search website. I still, to this day, have a subscription to RealtyTrac and I send postcards to the list on that site every month. It’s all about power in numbers. When you’re sending out a couple hundred postcards a month, you only need one or two to make it worthwhile.
What started to happen was, these pre-foreclosure situations were in isolated areas in neighborhoods. Even though I didn’t live there, I started becoming the go-to agent in those neighborhoods.
When I saw some business coming from a particular area, I’d throw up a bus bench ad in those neighborhoods with a very powerful message which then lead to me getting bigger short sales. They started off as smaller ones, but eventually I was doing $500,000-$1,000,000 short sales.
What most people didn’t understand at the time was that what was happening in the housing market didn’t just affect the middle class or the low-income families. It affected all families, including millionaires who had lost everything, some you would have never imagined being impacted. So, it was not uncommon to see million-dollar homes being foreclosed on and happening in short sales.
The South Side of the Des Moines metro took a huge hit. Because of the distressed property marketing I had in that area, I started getting an abundance of short sales. At one point I had 20 or 30 signs up in that community and decided to install a bus bench ad (which is still there to this day). As a result, people started to think I was from the Southside.
At the time, a lot of people were saying, “Oh, I don’t wanna do that. It’s too far from home” or “I don’t wanna get up that early to do the work necessary to sell those.”
What I saw was these people needed help. So, if they were engaged and willing to work and cooperate with me, I was gonna help them. It didn’t matter to me what I was going to make from them. At the end of the day, it all added up.
It all started with that first class that I went to, and seeing the genius in the short sale process. They literally said, the government is putting this law into effect that would forgive sellers tax liabilities. Banks will tell you exactly what they will sell these homes for. As long as you understand who you’re dealing with, they’re giving you the price.
Then they started incentivizing clients to do short sales. Giving them checks for anywhere from a $1,000 to $20,000 dollars. If you’re in foreclosure and someone’s offering you $20,000, you’re going to cooperate.
Opening my first office
We’ve lived in Polk City, Iowa for over a decade and by 2012 I’d started to crawl out of a hole, I was making a little bit of money, and I kept driving by an open office space to check my mail. I drove by that office space twice a day. Finally, I looked at it and the rent was really cheap. I just kept looking at it and going back to it. This went on for a few months.
In early 2012, I called the owner of our real estate company and asked, “Hey, has this ever been done?” and he said, “No, but I don’t see why we can’t.” He owned the rights to everything at the time and I needed permission to open that office and use the RE/MAX name. I was an independent agent (as normal), but paid for all of the overhead in that office. I opened my first office in the Spring of 2012.
At the time, I had been working with a virtual assistant who did much of the detail oriented work. When the office opened, I brought her in-house. She answered phones. She was my office manager. She worked with our transaction coordinator. She was marketing. She helped put systems into place. If I had a new idea, she would help create it and make it look good. She did basically everything.
Because the traditional business was starting to grow, in 2012 I started to invest in marketing a little bit more in my local community. I became more involved by being seen at local events and by joining the Polk City Chamber of Commerce. A chamber of commerce (or board of trade) is an organization of businesses whose goal is to further the interests of the businesses and is also a great networking opportunity. That slowly took off and after 18 months, we just kind of blew up in the local area too. We were a prominent player in two markets which then snowballed into other markets.
Getting involved in the chamber organization is an incredible, yet affordable, way to get your name out in the community. To join the chamber as a member it was on
ly $165 (every chamber is different). After the first few months, someone nominated me to be on the board. My response was, “Okay, fine. I don’t know what that means but yeah, sure.”
As our kids were getting older and involved in more activities, I was starting to be seen more and more in the community. I had been on the board for a year or so and at the time the local chamber was kind of in disarray. Just bad vibes given off by a lot of people.
After a few years on the board, I was asked to be chamber president. That gave me a whole different level of exposure because the next thing you know I’m doing ribbon cuttings, I’m giving speeches, I’m in the papers. The folks in town began to tie that together with my signs and my mailers.
With the local chamber membership, I also became a member of the Greater Des Moines Partnership, the official economic group of Des Moines and its surrounding communities. This was when I started to realize the magic was in the partnership with the chamber. For a very nominal fee, you get to rub elbows with some of the most powerful people in Central Iowa, which normally you wouldn’t even get close to in any other circumstance. So, I started going to more of those networking opportunities.
When I took over as chamber president, I think we had 19 members locally. Within a year we were back up to 40 members and the chamber was breaking even and not losing money. It’s not a profit center but you never want to lose money! The next year, no one wanted to step up and be chamber president and while it’s only supposed to be one term, I volunteered for a second term. As chamber president, you take a trip to Washington D.C. and, again, you have literally 200 of the most powerful people in Central Iowa in one location. It was great exposure, and an opportunity I was afforded both years.
After my second year, my term as chamber president was up, but I got a message from one of the directors at the Partnership asking for a meeting. Not knowing what I was walking into, when I got there they asked me if I would consider being a chair of the Affiliates Council. Essentially, asking me to be the head of all presidents of all the chambers in the region. And my response was, “Why not?”
