In my intro I talked about having lost $20 million in the crash in 2008.
So a little bit about me to give you a little bit of my backstory: I have been a real estate investor for almost 25 years, I’ve done just about everything there is to do in real estate investing.
But the interesting thing is that real estate chose me, I did not choose real estate.
I was in my mid 20s. My grandmother passed away and had a very large estate with holdings both in California and Arizona. Those properties were about $4 million in debt. In Arizona we had 38 townhome units, some land, and we had a sewer treatment plant.
Off I went to Arizona to handle the Arizona properties, knowing nothing about real estate or real estate investing. And I had to surround myself with people because I knew nothing about real estate or real estate investing, I had to surround myself with people who had the answers to the questions that I needed to ask.
I was able to work with people and tell them what I wanted to do. And they helped me, which was very fortunate. But I also followed through and I did what I said I was going to do.
And within a three year period of time, I was able to turn all of that debt from the red into the black.
But I also realized that we had these broken properties, the 38 townhome units were only about 40% occupied, and the rest were either vacant or broken or in some state of need of repair.
And so I was able to work with the local contractors, and they helped me to bring those units up to speed and I was able to get them 100% occupied within about 18 months to shy of 18 months, which was tremendous.
So we were cash flowing those properties.
But I realized fairly quickly that we were not going to be able to sustain that property. Because the ongoing expenses were starting to exceed the amounts of money that we could generate in rent.
And so as a result, I went to my family and I said, I want to sell these units. And then I want to take those that money and build on the land.
And I also of course wanted to sell the sewer treatment business, which we did. Now, my family had no desire to do any building so I ended up knowing nothing about corporations or running companies.
I bought the corporation from my family, and I set off on my own to build on this land.
I leveraged the assets that we had remaining and took some loans out to build on this land. And I designed a project and I hired a contractor, and fortunately I realized very quickly he was going to bankrupt me before I was even coming out of the ground.
So I fired him and I started my own company, my own corporation that focused primarily on construction.
We had land acquisition and construction. And so I was able to, again surround myself with people who had the answers to the questions I was asking.
I found a qualifying party to for the construction company, meaning he was the one that had all of the experience and took all the licensing tests and so he was the qualifying party for my Corporation.
My corporation was the one that held all of the different construction licenses and we held all of them with the exception of HVAC and roofing.
The only reason we didn’t go for those is because the liability insurance was just way too expensive.
So we held all of our licenses, we’re building our own projects, we’re building other people’s projects, we grew very fast. And of course this is prior to the 2005 boom.
We within three years we were the largest private employer in this small county in Arizona that we were working in.
We were just literally making money hand over fist and I was extremely successful.
The problem was is that I was working seven days a week, 18 hours a day. And it was putting me in an early grave.
The stress alone was was off the charts. And it was starting to really affect my health.
Further. I was in Arizona, my whole family was in California and all my friends were in California. So I was isolated here in Arizona.
I was very successful, smart with my money, and I invested in other cash flowing properties.
I bought property, I had liquidity, I had big equipment. I had a lot of assets, and I was really lucky.
Now I saw the crash coming, I knew it was going to happen and I saw it coming. I figured out there was no way that the market could sustain what was happening.
But my mistake was being young and naïve.
I thought just because I was not fully encumbered, meaning I was only encumbered about 10%, that this crash was not going to affect me, I had established relationships with my lenders, my vendors, my invest, you know, my Investment Partners.
So I didn’t think that it was going to happen to me…
Boy, was I wrong, I was really wrong.
The problem was that there were other people who owed me money.
And when you’re in big construction, you’re footing the bill for about 90 days, 90 to 120 days. So you’re absorbing all of those costs. And then you’re being reimbursed by the project head and whoever hires you as the contractor.
Well, I was running at the time a minimum of $25,000 a week in just payroll, not to mention the supplies to build all these other people’s projects. So I was really footing the bill for and carrying quite a load.
And what I didn’t see is that those people that owed me that money. Their lending froze up in the crash. And so they couldn’t pay me.
So I really was out quite a bit of money and a lot of them filed for bankruptcy. I chose not to do that.
Instead, I liquidated everything at fire sale prices, pennies on the dollar. It took me about three years to do all of it and clean up all the mess.
But at the end of the day, I ended up paying everybody that I owed money to I paid them in full, I did not go down the bankruptcy route.
Even though I could have, I just I wanted to be able to sleep at night, I wanted my investors to be made whole. I wanted my vendors to be made whole.
And because I made that decision, I actually had investors that invest with me today, because I chose to walk in integrity and do everything I could to pay everybody off.
In so doing however, I lost everything. And that amount totaled just about $20 million. So I went back to California, having lost $20 million.
And and I don’t mean to be cavalier about that, because that’s a tremendous amount of money.
But I will tell you this, I would not change a thing.
I was able to build that money up in the first place. Don’t get me wrong, it hurt a lot to lose $20 million.
However, it taught me about myself.
It taught me about how I interact with money. It taught me my risk tolerances. It taught me who I am as an investor, and how I want to be with other investors.
So it really ended up being a blessing.
Also, it brought me back to California.
Okay, now granted, I did go away from real estate investing for a little while I I had to lick my wounds, I had to figure out what I was going to do.
And I did some other entrepreneurial things that just didn’t make me happy. My passion really was real estate so I decided to come back into real estate investing.
But I wanted to do it in a different way. When I started out, I was young and I was bold, and I was fearless. And I had a tremendous risk tolerance.
Well, having lost the amount of money that I did my risk tolerance went down to nothing. I’m very risk averse now.
And so when I came back into real estate investing, I wanted to find something that checked all the boxes for me that allowed me to be in control of my investment dollars that allowed me to mitigate my risk and that allowed me to help people, and make money at the same time because life happens every day to everybody, all of us have a story, myself included.
So, knowing that that happens to people, I really wanted to choose a vehicle that enabled me to help people stay in their homes, instead of kicking them out.
Now, don’t get me wrong, sometimes that does have to happen.
I go into an investment strategy with my I call it my “heart hat”, I put my heart hat on, meaning my intention is to try and work with my borrowers and try and help them, and and Notes allows me to do that.
Notes allow me to help people.
But there are some times where people have already vacated the property and so we have no choice but to perhaps foreclose, or one of our borrowers is deceased. And so that’s the option that we have to take.
And then there are some borrowers that do take advantage of the system. And that’s when the heart hat comes off. And the hard hat goes on.
Because we are a business. I am a business, I am not a philanthropy.
And even though my intention is to help people, sometimes I don’t have much choice other than to do what’s best for my business and my investors.
So I just wanted to share a little bit about me and what brought me to the Notes space because it checks off all the different boxes.
And I think that you’ll realize as we go along, and as I start talking more and more about Notes with you, you’re going to realize why it was a blessing for me when I got to the note space, because again, there’s such control in this space.
It’s a gentler form of investing and we don’t have the craziness that’s going on in terms of real estate and overbidding.
And people paying exorbitant amounts for properties. There’s none of that in the Notes space.
It’s much gentler, it’s a gentle form of investing and we’ll talk about that another time.
I generate chunks of cash and streams of monthly cash flow in the same investment vehicle.
I can actually make money TWICE on the same asset.
So that’s another video that we’re going to discuss. But I did want to give you at least an intro to me and what brought me to the note space and give you a little background of you know about me and what I’ve done in my past and and why I’m here and so excited about being a Notes investor.
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Paige Panzarello is the “Cashflow Chick”. Having been a Real Estate investor and entrepreneur for almost 25 years, Paige has experienced many facets of real estate investing. Her experience includes founding and running her own Residential and Commercial Construction and Acquisition companies, Buy and Hold residential and commercial real estate investing, Tax Deeds/Liens Investing, Fix and Flip (Residential Remodeling), and other forms to name a few. She currently focuses on Non-Performing Notes that she purchases all across the United States. Whether in notes, residential or commercial real estate, in California, Arizona, or nationwide, Paige has been successful in completing over $150 million in real estate transactions to date.