Millionaire Story: Sean Whalen
Welcome to the Eventual Millionaire Podcast. I’m Jaime Tardy and today we have Sean Whalen on the show. Sean is the president and CEO of a company called Property 23, a real estate investment company that within the first 24 months has grown from nothing to being on track to see revenues near $18 million. Thank you so much for being here today Sean.
SEAN WHALEN: Thanks Jaime.
JAIME TARDY: Excellent. So first I’d love to talk a little bit about your background to get a bit of a sense of where you came from.
SEAN WHALEN: Well, how much time do we have that?
JAIME TARDY: As much as you need.
SEAN WHALEN: Well sit down and get comfy then. I grew up back east just outside of Washington D.C. and grew up in a single-parent home. My dad was kind of a corporate government guy and my mom has worked for the airlines for years and years and years so I grew up kind of in your typical middle class American home and ever since a young age I’ve always had a kind of key fondness for what I now know to be entrepreneurialism but I’ve always had a job and always worked ever since I was a little kid. My background has always been working hard and it’s kind of a funny story but to this day I’ve never owned a pair of Air Jordans and I know that sounds really funny to some people but I grew up where my parents said, “You can buy them if you want but you got to pay for them” and so I can’t tell you how many times I walked down to Footlocker when Air Jordans used to be the shocking $100.00 for a pair of shoes and I could never spend the money. So it’s kind of a funny little thing to me personally to know the value of the money that I work for and how hard I work for it. I’ve always been of that mindset and really love it.
JAIME TARDY: So did your parents instill really good basic personal finance on you or did they just sort of give you the tools that you needed to make those decisions on your own?
SEAN WHALEN: You know, it’s exactly the exact opposite. My parents were fiscally extremely well my father was extremely fiscally irresponsible. I say that with a lot of respect but it’s not something that he doesn’t know. My parents didn’t, I guess you could say of the mindset of understanding credit and using credit and never wanting to say no and never really living inside of a means. It’s not something that they instilled. The thing that they did instill is a work ethic. My dad worked really hard, my mom worked hard and they always instilled in me that if I wanted something I had to go get it. That was something that I think I can take from upbringing. It wasn’t necessarily that my parents taught me about money. They just taught me the ethics of working hard and more than that, if you want it go get it and that’s something that I definitely can attribute to my childhood and to my youth and upbringing. My parents are a lot different today than they were 15 years ago but probably not the most fiscally responsible people you would have met.
JAIME TARDY: So that’s great. I’m assuming you just learned from their mistakes too? I mean I understand personal finance can be a big thing and we’ll get into later discussions about personal finance but did you always know that sort of they were doing it wrong or did you just know that you didn’t want to spend $100.00 on Air Jordans because that was just crazy.
SEAN WHALEN: Well no, just probably more of the latter. I didn’t know as a kid. You don’t really understand money. You understand that when the ice cream truck rolls through town you want to have a dollar to go get something and if you don’t have a dollar where do you go to get it? You run to mom and dad and get it. My parents were the kind of people that if they didn’t have a dollar they would just find a way to go get a dollar and give it to you. It didn’t really teach me necessarily the concept of money itself. It was more of just knowing that as I look back now in hindsight, my dad wanted to give us everything I guess you could say as a family to be together to enjoy time but truthfully, it put him in probably a worse financial situation because he would borrow to do that or leverage to do that and that’s obviously not the right thing to do. I mean everybody wants a Ferrari but if you can’t afford a Ferrari you don’t go get a Ferrari. It’s just plain and simple.
As a kid everybody wanted to have the cool shoes and cool clothes and the this and the that but my parents kind of put it on me as I’ll give you these clothes and if you want to go get those clothes you can go pay for them yourself. It was really an interesting learning experience and dynamic as I got older, as I started working to really grasp the value of it because truthfully, even in my early years as an entrepreneur I didn’t understand that. I always though that having a boat was, I justified that to myself as it’s time for me to spend with my family. It’s enjoyment, it’s recreation, it’s something that brings me happiness but the payment that I’ve got is really what is the millstone around my neck of I had to go work harder and work longer and work more to try and make money to pay for that and it was almost, it was just totally blinding to me in the early days of being an entrepreneur and I can definitely attribute that to how I was raised and ultimately I learned the greatest lesson once I lost pretty much everything and realized that that was not anywhere close to what I wanted and the true freedom, the true happiness comes from not thinking about money, not having to worry about money and that’s definitely something that I’ve had to learn on my own for sure.
JAIME TARDY: So when you were younger did you always have a goal to be rich and have a million dollars and successful?
SEAN WHALEN: No, not at all. When I was a kid I grew up back east. I’m a huge Yankees fan. I always wanted to be a baseball player. I was like every other kid, I had the aspirations of being a pilot and being a firefighter and being kind of those cool trades but obviously we don’t have it. None of them make any money so it really wasn’t a money thing. I learned at a young age that there was always a service to be provided and people are willing to pay for a service. One point in particular that I always think back on that was probably my dad’s proudest moment is we went on these ski trips back east and I was a kid in elementary school and my mom used to pack us these massive lunches, most kids would get a brown paper bag and we’d get the big brown paper bag that you’d get from the store and we’d have a case of juice boxes versus one or two juice boxes.
Well, long story short, on the way home from the ski trip after a day of skiing all the kids on the bus were completely famished and nobody had any food and whatever else. Well here I was with this mini supermarket if you will sitting under my feet in my bag and I’d pull out a juice box and kids are like, “Give me a juice box, I’ll give you a dollar for a juice box.” Well I ended up coming home with more money than I left with that my parents had given me and that was my dad’s proudest moment when I pull out this wad of dollar bills that all these kids had given me for bags of chips and juice boxes and candy bars and extra sandwiches that I had. He looks at me and says, “Where did you get all that money?” I said, “All the kids on the bus wanted food and stuff when I had a bunch so I just told them give me a buck and I’ll give you a juice box and they did.” He thought that was the greatest thing ever to happen as a father. That’s just kind of how I looked at it. People wanted to mow their lawn and I just went up to them and I said, “I’ll mow your lawn for you, give me $5.00” and they would do it. That’s kind of how I started just really having an understanding of there being a want in our community and ultimately people wanted to pay for a service and I wanted to provide that so.
JAIME TARDY: That’s excellent. A taste of entrepreneurship at a very, very young age. It’s funny how many stories there are of that. And let’s get into it. What was your very first business and how did you start that?
SEAN WHALEN: You know, I don’t know. I’ve had so many of them and I’ve done so many things that I don’t know if I can actually tell you what the first one was but I mean I remember the kids in the neighborhood growing up. I always had, it’s funny, I had the money that I wanted to buy stuff, I would just, I don’t know if I was too cheap or if I didn’t want to spend it, but it was always you didn’t want to do anything. The kids were always like, “Where are you getting this money? Your parents must be rich and they’re giving it to you.” I said, “I mowed Mr. Johnson’s lawn over here. I did this or that.” I remember one summer just organizing all the kids in the neighborhood and I was the guy that would go around and I would get all of the people to, get all the neighbors to say, “Sure we want you to come mow our grass” and I would send the kids out and I’d split the money with them. So if they gave us $5.00 I’d say I’ll give you $2.00 to go mow this guy’s yard and kids thought that was the greatest thing in the world. I mean that was two candy bars that day or two ice cream bars from the ice cream as he was driving through town. I ended up making $3.00 off the deal so I think from my earliest recollection of growing up it was organizing the small army of youth that we had in our neighborhood back in Virginia to go out. We did everything. We did yard work, we did mowing lawns, we washed cars. I mean we set up a car wash right out in front of my house and if you had buckets and the hose and the whole thing and people would bring their cars over and I would have all the kids in the neighborhood washing cars and I was making money the whole time off of it.
It wasn’t that mentality of, I didn’t know who Warren Buffet was, I didn’t know who these guys were. I was a kid. I knew who Michael Jordan was and who Cal Ripken was and Don Mattingly because they were my heroes in the sports world. I didn’t really know business at all. It was just a way that I knew I could have money for myself and that made sense to me. It was kind of what I now know in the business world of understanding making 1 percent of a 100 people’s efforts versus 100 percent of my own. Yeah, I could make $5.00 going out and mowing all the yards in the neighborhood but why not have five guys go out and mow them and I’ll make a little piece of everything that they do. So it’s kind of what I translated into business today and truthfully, it’s probably one of the greatest business principles that I’ve understood and learned.
JAIME TARDY: That’s extremely important, leverage, especially finding it at such a young age. It’s good to know then instead of waiting forever to find that out. So how did you end up getting started in real estate because that’s really what you do now?
SEAN WHALEN: I started a mortgage company. I started doing mortgages a few years back but truthfully my wife and I, we wanted to buy our first home and I’ve always been going out and kind of doing my own thing and what I mean by that is I was not one to go hire a real estate agent and say, “Okay, here’s the box that we want to be in and here’s what we’re looking for.” I was the guy, and to this day, that’s how I find the best real estate deals is on my own driving around. I was driving around one day and I found a house and went back to my wife and said, “We need to buy this house, let’s buy our very first home” and it was foreclosure from the bank and we did all of the long arduous work of negotiating with the bank and making offers and doing this and doing that and ended up, when we were just first married, buying our first home. I remember just that I was terrified, terrified, terrified. I really didn’t know much about real estate at the time. Terrified in buying it and then it was after that fear wore off I realized hey this is kind of fun and a year later I actually sold the house for just a little over $40,000.00 profit and it wasn’t something we were looking to do. It wasn’t, we’re going to buy this and we’re going to flip it and I just remember it from that point on it was just I had this fascination with real estate that all of these deals were out there.
There were millions of opportunities. Every piece of real estate was an opportunity and it just consumed me. I was kind of the I don’t want to say a victim but the victim of Rich Dad, Poor Dad. I don’t know if you want to call it a blessing or not but Kiyosaki there’s plenty of self-made entrepreneurs out there that have read Rich Dad, Poor Dad that say, “That’s why I dropped out of college. That’s why I became an entrepreneur because I realized, I learned what Rich Dad, Poor Dad was.” But I read the same book and had that same thought process. Said, “Hey if I am going to make something happen, I’ve got to go do it” and that’s really how all of my real estate has evolved is not following trends, doing stuff that other people are not doing.
At the time, when I bought my home, it was none of my friends owned homes. Home ownership at that stage in life wasn’t a priority to people and it was to me. It’s what I wanted and it just carried through to what we do now. Case in point, our business now buying and selling foreclosures. Well now everybody is doing that but three years ago who was doing that? Everybody was making money and doing this and business was great and the economy was fantastic and I was out seeing the writing on the wall and buying the foreclosures. So that was probably my very first real estate experience was buying that home and selling it and since then, like I say, I just have this fascination and passion with real estate. I can’t see myself doing anything else ever. I love business. I love the principle of business but real estate just is in my blood for some reason and I can’t get away from it.
JAIME TARDY: That’s really funny. It sounds really similar to my story. At 19, me and my husband bought, well he wasn’t my husband at the time, but we bought a foreclosure too and we did the same process and it was amazing how scary, really scary, and how fun it was too. So then I want to ask you then, you said it’s sort of a blessing and a curse to read Robert Kiyosaki and stuff like that. Do you think it’s a good option especially for a young entrepreneur to get into real estate now?
SEAN WHALEN: Right now today?
JAIME TARDY: Yeah.
SEAN WHALEN: Without a doubt. It’s the best buying time ever and I don’t say that just because I’m doing what I’m doing but show me a time that you can buy property at the price that it’s at right now. A lot of people say well there’s never been a buying opportunity like this since the Great Depression. Well even if it’s the Great Depression if you’re a fan of history as I am, real estate home ownership wasn’t a big thing in America. The housing boom, housing growth, that whole concept didn’t really happen until after World War II. So even during the Great Depression home ownership wasn’t a big deal. So what people don’t realize is there has never been in the history of America an opportunity to buy real estate like there is today in 2011. We’re buying homes today that are less expensive than what my parents paid for their first home 30 years ago. I’m not an economist. I didn’t graduate from college. I don’t have some fancy degree and this, that and the other, but it doesn’t take rocket science to tell you that if today I can buy properties for the prices of 30 years ago, the market ebbs and flows. Our market is down. Will our market go up? Absolutely, it always does, it always has. When, I have no idea but all I know is that more millionaires existed after the Great Depression than before the Great Depression for one reason – opportunity, and so the answer to that question absolutely unequivocally, 110 percent is yes. Now is the time to be buying real estate.
JAIME TARDY: Excellent. So let me clarify then. So why did you say that you were sort of a victim of, was it just the boom and the market bust? Is that why you were sort of put in a bad position?
SEAN WHALEN: Well no, now today talking history of what I mean by that of the Rich Dad, Poor Dad book and what I was referring to with that comment is that it almost in some ways, for somebody like me who’s an ADHD, ODD whatever you want to call it, entrepreneur it almost brainwashes you. It almost becomes the law, the way that you have to do things because it makes such sense. That’s what I mean by you kind of become that victim of saying nothing else matters. I’ve got to do this and what Kiyosaki talks about in Rich Dad, Poor Dad is he had the rich dad and the poor dad and he wanted to go after this one course of action and that was kind of how the curse I guess you can say is nothing else mattered. I didn’t want to go to school. I didn’t want to do anything. I wanted to go down that mental path and that’s where truthfully now it’s the biggest blessing that’s ever happened to me because I do what I love. I think ultimately that’s the goal that Kiyosaki had with that writing was teaching people it doesn’t matter if you have a rich dad or a poor dad the question is where do you want to be? What do you want to do? That’s where ultimately that book changed my life in how I viewed myself and my time and what I was going to do with that time.
JAIME TARDY: Definitely, that book has a lot of core concepts that all entrepreneurs should read, definitely. So tell me a little bit more about the mortgage company and how you started that and why you started it. You said you didn’t really have a lot of experience in that.
SEAN WHALEN: Yeah. Well I had bought my home and at the time I was kind of bouncing around. I had sold insurance for awhile and I did this and did that. I was selling cars and I did well at everything that I was doing but I was kind of the jack of all trades and the master of none. I didn’t have one thing that was, I think entrepreneurialism was my core deal but what I really identified with and what made me successful and what made me happy wasn’t identified yet. I mean I knew that I loved real estate but I loved working for myself.
I loved the idea of being an entrepreneur and doing all that but a buddy of mine, while I was selling cars had gone and started doing mortgages and this was years ago when literally all you had to do was pay a fee and fill out an application and you could become a licensed mortgage broker. Literally you had to have no schooling, no education, no test, no anything and so he went and became a mortgage broker and I saw the money that he was making and he was a lot like me, an entrepreneur, and didn’t go to school, didn’t go to college and he and I were dear friends and I was doing cars and he was doing the mortgages and ultimately he just ended up kind of really opening my eyes to the world of finance and real estate that’s kind of where I got my start. I got my mortgage license and started doing mortgages and kind of the same way going back to my youth and what I did I realized that there was a niche of investment properties and there wasn’t really anybody who, as an investor, as somebody who had bought my first home who was looking for ways to grow that, there weren’t really any mortgage companies that were focusing on that.
It was your typical hey my rate is better than his rate or I won’t charge you this or this and that. That was the competition in the market. That’s what everybody was doing and so I went to my friend and I said, “Look man, we’re both investors, we both think like investors why not find the very best investment products, find the very best banks to work with, the very best structure for an investment property that we ourselves use, that we ourselves find success with and let’s open up our own mortgage company and let’s just offer that.” I mean I don’t want to mess around with 30 year mortgages and 15 year mortgages and this and this and this, let’s just do this. He jumped on board and I jumped on board and we had a couple other guys that saw the same thing and saw the same opportunity and so I started a mortgage company and we just exploded with growth.
It was obviously fed quite well by the market because everybody was buying and we hear about it now the ability that everybody had to get mortgages and how easy it was and truthfully it was. You can’t necessarily put your finger on this downturn in the market on one particular thing. It was a culmination of multiple things but the ease of mortgages and what people could get made it really a robust time for people to be investing and our business just exploded because we focused on one avenue, one deal and it worked really, really well and so the mortgage company exploded and we naturally, as investors, bought more properties and just saw opportunity after opportunity and the market was going crazy and that’s kind of fed my appetite for my own investing and that’s really how all of everything that I’ve done since the early 2000s have fed off of starting that mortgage company.
JAIME TARDY: So how old were you when you started that mortgage company?
SEAN WHALEN: Oh boy, I don’t know. I’m 32 now and I mean this was six, seven years ago I guess. So I’d be in my mid 20s.
JAIME TARDY: Excellent. So tell me more. It exploded with growth. How long did you own that mortgage company because you don’t own it right now, correct?
SEAN WHALEN: No. I owned it for a couple of years and the market obviously went crazy and it did what it did and everybody knows what happened in 2004, 5, 6 and just the explosive nature of the industry. I’ve always been one to, as an entrepreneur, I might do it a little bit differently in the sense that I have ideas and I want to run really fast but I’ve seen so many people that have come and gone and set up a deal and they end up doing it wrong and you end up with legal problems or you don’t do things right and so I’ve always been one to try and find out what the legal structure is, what it is that I need to do to make this efficient before I go out and I do something and as I got more into my own investing I realized that having a mortgage company and then me being out there trying to buy properties at the same time and getting loans and stuff there’s that arm’s reach that I wanted to have so I sold my mortgage company actually to my partners and I just decided I wanted to be investing full time on my own.
That’s what I wanted to do and I felt like I had enough knowledge and basis of the world of finance that I could do that and so I walked away from the mortgage company in 2006 which hindsight 20/20 was a great time to do that because in 2007 we obviously know that the market just turned on a dime but I started focusing on my own investing, buying properties, finding foreclosures. I was really, really into just going out and looking for those deals, negotiating those deals and finding a way to flip them or cash flow them or whatever else and that’s what I did for about a year and a half and in the midst of all of that I started getting into a fond passion for development as well. Along the same lines of being in real estate as an entrepreneur, I kind of met visionary, I think one thing that a lot of people don’t understand and don’t get and as you talk to most entrepreneurs you probably realize that a lot of them see things that other people don’t see. Not in a really weird like psychic kind of a way but just, we can see stuff that other people can’t see.
I look at my wife as a perfect example of this. I go drive around and I look at real estate and I love commercial real estate. I love old buildings, old Victorian and vintage buildings and I look at that and it could just be a total, terrible looking. I mean it’s a pile of just mess and I look at that and I think what a gem, what an opportunity and I talk to my wife and I say, “Well we can do this and you can do this and you can do this” and she looks at it and she’s like, “That building is a piece of crap, what are you talking about? Why would you want to own that?” It’s amazing to me how that vision is something that I don’t share with very many people but that’s really how my investing went.
I realized that there was an opportunity to buy and I was out buying and that’s how I grew the companies and grew the businesses that I was involved with and a lot of people just saw what I was doing and it wasn’t necessarily something that we slapped on the side of a billboard or a TV commercial but people just saw that we were being successful. I mean we were young guys, we were finding success in the market, we were doing great deals and people wanted to be a part of what we were doing. That’s what I gain a lot of pride in is knowing that people watch you and as an entrepreneur a lot of people watch what you’re doing to see what you’re doing and a lot of people wanted to get involved with the way that we were investing and the properties that we were investing in and it grew and became really, really fun.
JAIME TARDY: So of course and then 2007 happened. So what did that mean for you and all your investments?
SEAN WHALEN: It was an interesting thing. I mentioned a little earlier about kind of learning the hard way. I mean understanding really the true meaning of money and the true position of money. 2004, 2005, 2006 it was the leverage game. Everybody was leveraging. Everybody got home equity lines of credit. Everybody was buying undervalued property. Banks were offering you lines of credit and this and that just for being handsome. You walked into the bank and said, “I need a line of credit and I’ve got equity” and they’d give it to you and I looked at that as an opportunity to feed growth and to expand a portfolio of real estate. I got into some commercial developments and started working with the likes of Jack Nicholas and Donald Trump and started working on some really big projects and put some really big money behind a couple of deals and I, as much as anybody else, really didn’t see what was coming down the pipe in 2007 and anybody that’s been in the real estate world realizes that the market changed almost overnight.
Typically with an upturn or a downturn you have progressive sliding down or progressive growth but literally the fall of 2007 it was almost overnight the market just stopped. Loans stopped being written, banks just pulled back from every single thing and being an entrepreneur running a million miles an hour I thought I had the world at my fingertips and I had three letters of commitment from and this is something that’s kind of funny. If you come to my office I actually have these three letters framed on my wall because it’s something that I look at every day to kind of remind me of what I want to do and what the possibility is in my life and what I have the power to be able to do. But I had three of the largest banks in the world committed to fund one of my projects and it was just an unbelievable deal and literally overnight all three of those banks walked away and I basically, all of my future on these properties and on these projects and when you have the Royal Bank of Scotland telling you that they’re going to give you the money for this project and you’re looking at this proformas and you have these accountants and numbers all around you that you realize that by the time you’re 30 you could be work nine figures that’s a really, really appealing deal and long story short I bet the farm on these projects and leveraged every single thing that I had to get into them and when the market fell and the banks walked away, I mean I pretty much lost everything and it was a really eye-opening experience because everything that I had known to that date was different.
It was a new game, new rules, everything had changed. Leverage wasn’t there. Banking relationships, I mean it was truly a relationship deal it wasn’t the opportunity to just walk in and say, “Hey I got a great property give me a $10 million loan to go build these apartments” or whatever and the whole dynamic changed and I continued to work to try and find ways to make it happened and ultimately it didn’t and I had to file bankruptcy and it was a really, really interesting experience for me personally because I looked at bankruptcy as failure. I looked at it as my attorneys had been telling me for a year, “Sean, this is a pretty deep hole. It’s going to be very, very difficult for you to dig out of this deal.” It wasn’t we had a couple bucks of debt here or there when you’re talking millions of dollars and playing under a new set of rules and having a whole new market and industry. It’s really difficult and so it caused me to really, I ended up having a lot of the kind of self reflection, what am I doing? This is ridiculous. I could have been 30 years old and retired. I could have been done but I bet the farm literally on this deal and it ended up cleaning my clock and so in 2007 it really kind of gave me perspective of what it is that I want to do and what my goals and ambitions are in life but at the lowest point, it ended up being one of the most brilliant opportunities that I ever had in my entire life and that’s what makes I think being an entrepreneur unique is when the market is going up you see opportunity. When the market is going down you see opportunity.
I’m not one that reads the paper or watches the news and gets emotional and affected by what I see and what I hear. I look out my window to find out what the market is doing. I know it sounds weird to some people but at the lowest point of my personal business career, I saw one of the best opportunities that I had ever seen and here I am a couple years fast forward having gone through a bankruptcy, having dealt with literally the lowest point that I’ve ever been personally, emotionally, from a business standpoint literally losing everything, one of the best opportunities in my entire life has presented itself and I jumped on it and took advantage of it.
JAIME TARDY: Wow, that’s a crazy story. So seeing you on top of the world going to absolutely the bottom of the mountain, how did you get through that though? I know you did a lot of self reflection but being able to see that brilliant opportunity did you know at that point, at that lowest like ding everything is okay now I have a brilliant opportunity and I can move forward?
SEAN WHALEN: No, it was one of those things from a very practical standpoint I looked at it and I thought all right I’ve got everything that I’ve ever worked for, every dime that I’ve got, the equity in my homes, the land that I owned, every single thing that I had I leveraged and I basically pushed all my chips to the middle of the table on this project and when all your chips get taken you kind of look at it and say, “All right how do I keep playing?” I’ve got to get up and I’ve got to walk away and that really is the defining point. I think what’s been really intriguing to me and fascinating over the last two years, two and a half years to watch is the dynamic shift in the market of those people that were on the top, they were kind of the idols of the business world. You’ve seen a lot of those people fail. You’ve seen a lot of those people sink. You’ve seen a lot of what were sound companies go under because of the market and it’s not because of bad management.
It’s not because I was doing anything wrong as an individual. I was trying to create future. I was trying to create opportunity. I thought that all of these projects were literally going to make me worth a few hundred million dollars. That was the legitimate opportunity that was in front of you. It wasn’t an I was out driving Lamborghinis and buying private jets and this and that and I think that’s really the dynamic that’s interesting to see now is I was the kind of guy that I looked at and I thought there’s nothing more I can do. What can I do? My money is gone. My money is into these projects. The banks are walking away. I have one of two options. I can either sit here and sulk and crawl up in a ball in the corner and say my life is over, I’ve lost everything, people are talking negative about me. They’re writing about me in the press, in the media and this and that and the other and they’re calling me a total idiot or I can get myself out of this deal.
It kind of goes back, I guess to be funny on it, but I go back to the story about the shoes and buying the Jordans. I mean my parents were not going to buy me those shoes period and if I wanted them I had to go get them and ultimately I realized that nobody was going to help me out of this deal. Nobody was going to help me out of this situation. I didn’t have a rich uncle that I could just go to and say, “Hey I screwed up can you bail me out? I’m going to be good. I’ll turn my life around” and I got a free pass out of the deal. I had to take the hard knocks.
I had to take what I was dealt and it was a painful deal and what was really interesting is in the midst of all that, in the midst of trying to figure out a way to make this happen, I had a friend of mine who went and got a job at a coaching company. You see a lot of these gurus that sell vegetation and books and DVDs and kind of the TV guru. Well he went to work for one of these companies as a coach and he’s a dear friend of mine, one of my best friends and this is a kid who has never owned any real estate, had never owned any real estate before and he went in and because of my experience in real estate he was always calling me asking me questions, what about this? What about that? What should I do? What should I look for and he called me and he said, “Hey I got this job and this is what I’m doing” and it was funny because at the time I was neck deep in trying to talk to the banks and figure out ways to keep these projects going and so my mind was not on what he was doing or even on a new business model. It wasn’t on anything. It was how do I make this work right now in front of me.
So he said, “Let’s do lunch” and to make a really long story short, we did lunch and he said, “Dude there’s these properties all over the country that are tax foreclosures” and I didn’t even realize, I knew that I paid a ton of taxes and I knew that banks held the deeds to my properties and he said there are these tax deed properties everywhere. I gave it a little attention and I’ll look into it and he said we’ve got to go check out one of these auctions. When you have some time let’s go to one of these auctions because here’s a kid who had no real estate experience, had never done anything before and was now a coach, was kind of a mentor to these people that had spent tens of thousands of dollars on this how to system of how to make money in real estate. It was kind of funny because I love this kid to death but I’m looking at him like what do you know about real estate? How are you in a position that you’re coaching someone? I don’t mean any disrespect to you but, and I started to kind of look at this industry, this coaching industry and its education industry which is a multi-billion dollar industry and it just became really, really intriguing to me the dynamic of it and we went out to this auction and we ended up buying a couple of properties and we came back and we bought these properties for a few hundred bucks and I didn’t believe that they were even there. I mean I was working on multi-million dollar projects and big number deals and so to look at a residential lot in Pennsylvania or West Virginia or something like that for $500.00 of back taxes I could buy this thing free and clear.
I was like there’s no way to do this, it’s not possible and it did, it was. I came back and I had bought six properties and I ended up two of those properties with him and we made enough money that we paid for the other four and we own the other four free and clear. As an entrepreneur the light just went on in my head. I got that fire, that excitement, when you see that deal and you realize there’s an opportunity I just went crazy about it and I dug in and I said you’ve got to give me everything. I want to know everything and as one world is kind of crashing down, this new world and this new opportunity is right in front of me and I realized if I am going to make this happen, if I am going to get out of a hole, if I’m going to get out of the mess that I’m in the only way for me to do that is to create profitability. The only way for me to do that is to turn the deal around and to make money to pay my debts and it’s where the investing in the tax deed properties just started and it absolutely took off and that’s again where we are today.
JAIME TARDY: So that’s how you started Property 23. It’s funny because when you said you went out and bought properties I was like you just went bankrupt how did you buy properties? But for a couple hundred bucks that’s just ridiculous that you could actually do that.
SEAN WHALEN: And it was while I was trying to deal with the attorneys and deal with this and deal with the projects and do this and do that and do whatever. It was kind of a take a break, take 15 minutes, go help my buddy, go look at this deal and really there was no objective with it other than to just kind of be a friend to my friend and to help him whatever it is that he wanted to do. That’s why I say it almost kind of fell in my lap and what I saw what nobody else saw. They were doing it just as kind of a little you buy this book and you buy a property and that’s it and that’s kind of your thing. Well I, thinking in a grand scheme, I mean why would I have risked everything that I owned, everything that I had worked for with my mortgage company, with my private investing, why would I leverage my own home? It’s because I believed in the deal. I believed in the project that I was invested and I believed in what I was doing. I believed with everything. One thing you’ll see with entrepreneurs at least in my particular scenario that you’re either both feet in or both fee out. Entrepreneurs don’t sit on the fence and I don’t sit on the fence and I have put both feet in on this project and just got, you get nailed and so when I jump in I jump in big time and that was really the dynamic of being with him is in helping him I saw what he didn’t even see and he was in the industry. He was doing this and teaching people this for a living and he didn’t even see what I saw. So working through all of that and then juggling and trying to file bankruptcy and doing all that, that’s kind of how this whole thing started.
JAIME TARDY: Well it’s funny you mention belief because in all the interview series that I do, belief comes up a lot. What I want to ask you which you might not have an answer to this question but where does that belief come from?
SEAN WHALEN: My mom is, I remember my parents got divorced when I was young, when I was about 15 years old and I remember times that I would go in and I would see my mom, I’m a fairly spiritual guy, I believe in God and I have very sound deep principles that I live by. But I remember seeing my mom just on her knees praying and that really stuck with me throughout my life and I remember just knowing how hard things were and knowing as a single mom she was working her guts out to give her kids everything, to give her kids every opportunity my brother and I that we could have. When my parents got divorced we literally left with nothing. We left with the clothes on our back. We didn’t, it wasn’t a pretty situation and my mom was thrust into a terrible future and I just remember her getting on her knees and her always reassuring my brother and I that we could do whatever we wanted to do and I just, that stuck with me and I don’t know how that has been, it wasn’t something that was really taught. It wasn’t necessarily something that we talked about much as a family. I just remember seeing my mom and knowing that my mom had faith beyond any measure of reality. No matter how bad it got, she had the faith that we were going to get through it and that’s how I am today.
I was at the depths of financial disaster being on top of the world like you say going down to the bottom and literally having nothing. I mean losing every single thing that you have. You read the papers and the suicide rates are up and divorce rates are up and everything, it’s just a bad situation and I constantly think back to my mom on her knees praying and that’s kind of the same situation that I put myself in and I realize that nobody is going to do this for me. Nobody is going to just, I’m not going to win the lottery. Nobody is going to show up with a blank check and say here kid all of your problems are solved. Nobody did that for my mom and she’s really the rock that I relied on and she really doesn’t know that I don’t think but that’s really where the belief comes from me is that I can do it. If my mom can make it through the situation that she was in, I can make it through any situation that I’m in and no matter how bad it gets, no matter how terrible things people write about you or say how lame you are or this or that or the other or how bad your financial position is, I’m the guy that’s going to change that and I can change that and that’s really where my belief is, is in myself and in my capabilities and truthfully in deity in the fact that the picture is much bigger than just a financial situation.
It’s much bigger than just a bankruptcy. It’s much bigger than just a project or a home or a business. We’re here for a pretty unique opportunity to leave this place that we’ve got a lot better and that’s something that I’m fiercely adamant about is making sure that I can be that rock for my kids. That belief system is instilled in them that they can do anything they want. You want to be a dancer, go be a dancer. You want to be a race car driver, go be a race car driver. There’s no box that you have to fit in and that’s something that I can definitely 150 percent attribute the belief system that I have and the faith that I have to my mom for sure.
JAIME TARDY: Wow. So you need to call your mom tonight and then your kids years from now will call you and thank you too. That’s huge. That’s really huge. Well can you tell me, just to go on and to see where you are now because you came from the depths. Tell me about Property 23, what it does and how somebody can get started with it if they’re interested in.
SEAN WHALEN: Yeah, we went from buying those early properties to me seeing an opportunity in the sense that most people wanted to buy, they were buying and education system, they were buying a kit and I bet you most people listening to this have at some point in time bought a how to kit. Show me how to buy real estate or show me how to invest in this or show me how to do that. In most cases that education is very, very costly. What I saw and what I realized and what Property 23 is is a bridge between the learning world, the education world and practical investing because buying a book doesn’t make you money and that’s really what I understood.
Reading Rich Dad, Poor Dad won’t make you money. It won’t put money in your bank account but what it will do is it will change your paradigm and your thought process enough to have you become a more effective person in making money. That’s what I saw with Property 23 is I’d go to these auctions and there was nobody there. In some cases I’d be the only guy at an auction and I’d pick up 40, 50, 60 properties at a time and I’d come home and I’d sell them to these people that had bought the book, bought the tape, bought the DVD that wanted these properties desperately and I was making great profits off of it. I was turning these properties as quick as I could buy them and people just started seeing again like I was mentioning before, we weren’t soliciting, we weren’t on billboards, we weren’t in magazines, people just saw this is what I was doing and what was happening and they were asking the same question. “Well Sean, what’s the deal?” “What going on with the other projects?” I read something about your bankruptcy or this or that and I just thought what is that going to do for me in the future?
I’ve got to put everything that I know in the past and make it an asset for me in the future and yeah I had to deal with those situations but Property 23 grew as massive as it did and as quickly as it did because people saw that I could buy a book, I could buy a system, I could buy whatever but I don’t end up ever buying what it is that I truly want which is a piece of real estate because they don’t have the time. I don’t have the energy, the ability, I mean how much time do you have in jumping on a plane and flying across the country and going to a county municipality and doing research and opening up tax books and tax records and finding out if this property is free and clear, has any liens or whatever and then learning how to bid on a property. 99.9 percent of America just does not have the time to do that and that’s where I saw the opportunity. So that’s what Property 23 had become.
We buy more properties than people could ever dream of and we do all of that hard work. We do all the research, all the due diligence. We find the properties, we negotiate the deals, we buy the properties. We do all of that heavy lifting if you will and we give you the finished product. That’s what Property 23 has grown to. My own personal situation has been a rough one and it has been difficult in trying to get through it and as we talked about earlier, I’m an open book. I hope that my experience makes me a better person in the future and I believe that it will and I hope that people that realize they might be in the same situation that I was in and struggling financially or this or that, being bummed out, being negative about the situation or whatever is not going to do anything for the future. You’ve got to look past that.
You’ve got to realize that the only way to dig out of a hole is to start filling it in with dirt and that’s what I did is I realized if I went to work and worked really hard and worked smart and did what it is that I know I can do, I could create profitability again. In a bad situation I could create a good opportunity and that’s what Property 23 is, is that turnkey opportunity for anybody in America. Anybody listening to this, watching TV, watching that late night infomercial going well that guy’s got, he bought that property for how much and sold it for how much? I could do that. Call Property 23. That’s exactly what we do. We give you that opportunity to do it and we don’t sell books, we don’t sell tapes, we don’t sell education, we don’t sell how tos. We just give you that opportunity and that’s really what I believe fiercely in and with Property 23.
JAIME TARDY: When I read on your blog when I was doing research you had a quote and you said, “Never let anything get in the way of building your future” and this whole interview today shows exactly that. I mean you stand behind that quote which is an amazing thing.
SEAN WHALEN: Truthfully, there is nothing that can alter that. If you really step back from your own personal situation and I’m not Tony Robbins. I’m not a life coach, a mentor or whatever, but I can tell you from personal experience that sitting in a corner and feeling bad for yourself it sucks. It causes depression. I mean if you’re entrepreneur and you just get your clock cleaned, go back at it man. I mean if you built something you know that you can build something. We go build something else. You can’t look at the market that we’re in right now and a bad hand that you’re dealt. You’ve got to get back right up and get right back into the game and get another hand going and that’s the only way that you’re eventually going to win. That’s what I realized is that my situation sucked. I mean I had a lot of friends that were invested. I had a lot of people that were affected by where we were and I realized the only way to right the ship, to make the situation better was to do what I know how to do which is build businesses, which is grow opportunity, not sit in the corner and cry about my situation but go make it happen again. I’ve done it a couple times and I can do it a couple more times. You know what I mean?
JAIME TARDY: Definitely. So then the last question I have for you, I mean I know inspiration, you have a great inspirational story and I know that they’re absolutely great to listen to but what’s one piece of advice that you can give to everybody that they can take action on this week? I’m going to interrupt you for a second because it might be go check out your website Property 23 but what’s one thing that any entrepreneur can do this week that can really move them forward?
SEAN WHALEN: It’s actually not. I mean it’s not go to my website or this or that. It’s funny that you mentioned my blog because I started blogging because my friends were telling me that I should. I just got on Facebook not too long ago. I know that sounds funny because we’re in that data age and I was kind of like Facebook is stupid, who needs Facebook? That’s dumb. Why would you want to do all that and now I love it.
But I started blogging just because I looked at it as a resource for myself to write what I wanted to write and to put out there what I wanted to put out there and that really truthfully was really therapeutic for me to put out there what it is that was really going on in my life and whether people liked it or didn’t like it or believed it or didn’t believe it didn’t matter to me. It was just me being able to say what I wanted to say in a form that I could do it and there was nobody to say otherwise and I think if there’s one thing that I could recommend or suggest people do it’s you’ve got to shut everything off and you’ve got to go back to what you know and what I mean by shutting it off is we’re completely inundated with media, with technology, with iPhones. I’ve got all that stuff. I’ve got more ways to communicate. I can talk to aliens in planets I’m sure. Somehow there’s some app on my phone that I could call the space station or something like that. I mean all of that stuff is at your fingertips and I think we look at all that as a way to become more effective.
We look at that as a way to become more successful and truthfully what I did is I just, I shut all that off. I had to go back and just truly think to myself what do I want to do? What am I good at? Who am I? I’m reading what everybody else is saying that I am and they say that I am an idiot and that I filed bankruptcy and why in the hell would anybody want to listen to what Sean Whalen has to say because he’s filed bankruptcy. Well show me, how many times has Donald Trump filed bankruptcy? Three times now and he has multiple top selling books. People want to know what he is saying. People want to know what he’s doing. You know what I’m saying?
I realized that I had to shut what everybody else was saying off and I had to sit back and I had to realize and set goals and priorities for what I wanted to do and I had to be fiercely adamant about going after those things and I could not alter that because of what somebody else said so truthfully what I’d say for an entrepreneur that might be struggling, might not be struggling would be to at some point in time shut everything off and just spend time by yourself, go play golf, go do whatever it is that you want to do and just think and give yourself some clarity and I know that sounds really simple and it might sound really lame to somebody like I’m supposed to have some magic potion or go do this and it’s going to make your millions of dollars, but I genuinely believe that the power that you have is within yourself. The power of your future is within yourself. I mean I believe in, that’s what I know. My life is about I can’t be a good father by reading other books. I have to be a good father by me being a good father. I have to be a good leader in my company by me being a sound, if I’m running around like a chicken with my head cut off, how effective am I as a father? How effective am I as a husband, as a business leader, as an entrepreneur? Not very.
You’ve got to find that calm and that piece to be able to just kind of lush everything out. Reset the buttons if you will and have clarity in what you’re doing because we’re just in such a tumultuous time. The market is up, people are losing and everybody is so chaotic and I think really what people have to do is they’ve got to just stop, take a step back, get quiet for a minute and I promise that if you do that things will come into your mind. Ideas will become clearer. The core of who you are and what you do will come back to the front of what makes you successful and that’s what I think has made me be so fiercely passionate about Property 23 and about what I’m doing is, there’s a lot of press, there’s a lot of people saying that I’m an idiot for what I did and why would anybody want to listen to me because I filed bankruptcy. What do I really know? Well I know that my company has grown over a thousand percent in one of the worst economic downturns in human history so we’re obviously doing something right, you know what I mean, and really what I did is I just keep doing that. I do that pretty regularly, just try to shut everything off. I kind of mediate whatever you want to call it and just realize that I’ve got to have clarify and I’ve got to have very, very good clear direction and focus. That’s like probably the longest answer anybody has ever given to that question, huh? Do I get an award for that or something?
JAIME TARDY: I love it. Yeah, you should. I should, I’ll send you an award in the mail.
SEAN WHALEN: The longest answer ever. You went way over your time limit for that answer. So really, just shut everything off. I mean just be quiet, shut it off and think about who you are and what you want and that will give you the clarity that you need.
JAIME TARDY: Excellent advice. And I’ll invite everybody who is listening right now to, before you shut off this, take out your calendar and actually pick a time because if they don’t actually do it right now, you know, it all sounds good and well until you actually do something. So, excellent advice, Sean, thank you. So where can we find more information on you online about Property 23, everything that you guys have?
SEAN WHALEN: Property23.com is our website. I’d encourage everybody to go check it out. We have a lot of really good information, informative information on who we are, what we do, how we do it specifically with our real estate, with our properties. As we’re growing we have a lot of new information that’s coming out. We’re, I know it sounds ridiculous, but we’re coming into the technology age in a way that, as a company I mean, we’re trying to find better ways to communicate, better ways to do deals and to bring us to our client. Then you can also find information on me on my website seanwhalen.com and on my blog there and different things that I have on my website. We have a lot of fun stuff that’s happening right now so give us a call or email us. I’ve put my personal information out there quite a bit because real people with real questions that are sincere are the ones that will email me or call me and I love that. I love being able to know that we can help people out and help them actually achieve what it is that they want to do.
JAIME TARDY: Excellent. I know when I was looking at Property23.com I mean you guys have a 100 percent guaranty and all that sort of stuff of no liens, no back taxes, that sort of stuff.
SEAN WHALEN: Right.
JAIME TARDY: I mean everybody should take a look and just learn because there’s a lot of information on it. So thank you so much for coming Sean. I’m going to go check out your website again even though I did research.
SEAN WHALEN: I appreciate it.
JAIME TARDY: I hope you have an amazing day and thanks for being here.
SEAN WHALEN: Appreciate it. Thank you so much. Appreciate it, Jaime.
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