But Still Coming Out with 50 units
Many, many people give up on real estate after just one bad deal, one bad tenant, or one bad flip. But what if you lost all you had from real estate deals, would you still be willing to bet on real estate? What if you lost it all twice? Welby Accely, has been in that position. He lost all he had, two separate times through dicey real estate deals. He never did give up on real estate, and now he’s sitting on 50 rentals and over 70 completed flips.
Welby grew up in Brooklyn, and knew that his godfather was doing well in real estate, so when he got older, he decided to give it a shot. He invested in a multifamily deal in Atlanta, overleveraged himself, and had it foreclosed on him. A few years later, he had another Atlanta property taken from home. Welby was wiped out. He got scammed, lied to, and dove in too deep a couple times.
After these tough experiences, he knew he had to do whatever he could to make sure his due diligence was top notch. He was later told about Connecticut, and decided to take some serious time exploring the market, building relationships, and networking. Then, he started flipping. 1 house a year, 2 houses a year, then 15 houses a year, and now 20 houses a year.
And my biggest issue that I had was that, I kept skipping the process. I kept trying to find the easy way to do it. I was betting on other people, I wasn betting on me. Every time I was waiting for other people to show me how to do it, they were finding a sucker and they were taking advantage of me. So here I am now, these hundreds of thousands of dollars I destroyed that I lost, I would bet on other people. And I said to myself, the hell Welby, you won bet on yourself? Why you not going to bet on yourself, but you bet on these other people? So I said, going to take this $90,000 and I going to lose this money. That what I going to do.
You listening to BiggerPockets radio, simplifying real estate for investors, large and small. If you here looking to learn about real estate investing, without all the hype, you in the right place.
What going on everyone? It Brandon Turner, host of the BiggerPockets podcast. Here with my cohost, Mr. David Cinderella Story Greene. What up man, how are you doing?
Thank you for that, Brandon. But I think the real Cinderella Man is going to be today guest, who has a story that will leave you inspired at the edge of your seat and just might get a little bit tear out of your eye. And this was an incredible interview.
It was an incredible interview, yeah. I super excited to bring you guys, Welby. His awesome dude. We been Instagram friends for a while, but I never heard his full story. And he has a tremendous story of losing everything multiple times. You going to hear about that and some of the reasons that he lost everything in real estate, so you can avoid those things. He talks about how literally had an FBI probe against a business venture he was involved in, where someone went to prison and he got this crazy story. But in the end, you going to hear how he overcome that stuff and today he done over 70 flips. He owns over 50 rental units, he has this amazing model where his advice on finding and developing contractors is something you never heard on this show before that could change your business forever. Now there a lot of good stuff in the show, so I just want to get to it. So before we get into the interview with Welby, let get to today quick tip. David, you have a quick tip for us?
Today quick tip is, don look for shortcuts like finding the perfect property right out the box, or finding the perfect agents or the perfect employee. If you want to be successful in this life, you have to make the deal, not just find the deal. Now this philosophy goes across many different aspects, but what we talked with Welby today, is ways that he is taking the contractor that he needs and developing the person to play that role in his company. And he went through bad agents, he did the same thing. He found the right agent, he taught them how to help him with what he needs and now he got a faithful employee. So when you frustrated and things aren working out as well as you like, stop thinking about, I wish I could just find the perfect person, and start thinking about how you could help develop the perfect person.
Yeah. We do talk about that later in today show as well. So make sure you guys are listening for that. That said, it about time to get into today show.
For sure, man. Well, let dig into your story. Let go to the very beginning. I know you went in real estate and several phases. So let go to the very, very beginning. What was your first venture into real estate investing?
My first venture in the real estate, if I could maybe go back a little bit, if you don mind. My first idea of ever being in real estate is when I was about maybe seven to eight years old. I was living in the projects in Brooklyn with my parents, my family. And my godfather, he was doing pretty good for himself when he would come and visit us. And he would always have these nice fancy cars and dressed nice. And later on is when I found out and understood that he was in real estate. He owned one or two properties, he had his own brokerage and stuff like that.
And I would be able to go visit him in the suburbs of Long Island. And I was always intrigued by the fact that I was able to ride my bicycle in the middle of the street, versus where we were living that we couldn do things like that. From that point when I understood that that what he did was in real estate, I knew that someway, somehow, somewhere in my life, I was going to be involved in real estate somehow. So fast forward, my first time actually purchasing my first home in real estate was sometime around 2004, is when I purchased my first home.
And what was that? Was it just a house for yourself to live in?
No. Actually, I lived in New York and I decided to buy a multiunit in Atlanta. And this is right where the subprime mortgages were going crazy. And as long as you had a pose, you be able to get a mortgage. So, I was able to get a mortgage, 106% financing. So I didn really come out of pocket anything. And I was able to acquire a four unit building. And from the day I bought it, it was a disaster from the day I bought it.
Explain that. Why was that so bad?
I never had anybody educate me in the business. Even though I did mention my godfather, he never personally educated me. I never had anybody take the time to explain anything to me. It was a desire that I wanted and I figured because I went on YouTube real quick and I read quick books that had these large acronyms, HOAs, ARVs and everything else like that. I figured that I was prepared to go out there and spend some money. So I went out there. Not only I went out there, I also have a twin brother. So my twin brother went out there with me simultaneously, my cousin went out there simultaneously, another person on our block went out there. We literally at the same time, all flew out to Atlanta, November 2004. And we all came back December 2004, with a property, four units, two units, single family homes.
When I bought it, I didn understand acquisition. So I don know why I bought it for, why I paid the amount of money I paid for it. I didn understand cash flow. I didn understand rehab. I didn understand anything. And I thought that at that young tender age, that the realtor that was smiling and talking to me as if she cared, I thought that maybe the information she was providing me was factual information, it was correct information, and I was doing the right thing. But obviously it wasn I paid way too much money for the property. The numbers that was represented to me that the property would be able to generate per apartment was extreme. It was several hundred dollars less per unit. I didn have a contractor. So the contractor that I did find, robbed me, ran off with the money. And it was just a disaster. It was a disaster.
Thankfully, at the time I was employed. So the only way I was able to maintain that property was because I was taking the money I was making from my employment, I was still living at home at the time, and I was feeding the difference that the property was short in terms of rental. The property manager was making more money than me in that property, put it that way.
You know what? Atlanta at that time became the Mecca that everybody was going to. That was the new place everybody was going to. I from New York city, and everybody knows how expensive the city is. I figured that maybe I could do something in Atlanta because I was making reasonable money. So I said maybe my money will go further. But one thing that I found later on, big city people like myself from other big cities like Los Angeles or Seattle or other big areas like that, we have an ego subconsciously that we don realize, that when we go to these smaller markets, we look at a property that would be in New York a million dollars, that is selling for $200,000, and we would approach it with the same mindset of a property that you would pay a million dollars for and say, all that they want, $200,000. And pay for it. Not realizing and understanding that you will lose your money just as fast as you can in these big cities. I be honest with you, I let my big ego actually get ahead of me and it caught me good.
Well, so what happened to that Atlanta portfolio? You still own that or, I know you said you went into some tough times, did you lose that?
This is also when people were promoting the BRRRR Strategy, and I found out later on the BRRRR Strategy works, but it doesn work aaaaa hermes replica bag
everywhere as efficient as you would like you to work. So I refinanced that property, and I was still not going to cashflow. But, at the time when I did the 106% financing, I only had an interest only loan. So I had to get out of it, so I refinanced out. Of course, because I refinanced out, I had to tag on the closing costs on it which increased the mortgage, but I was in a conventional loan, principal and interest, but the payments went up versus what I was originally paying. So the negative cashflow weren even worse.
Sometime around 2009 or I had another property down there too. By 2009 or I lost it all. I had ended up losing that property to a foreclosure. I had loans on it with Bank of America, upwards of 40, 50 thousand dollars. My credit at the time, before this happened was 750. I had pride with being a responsible human being. So now you imagine that you had to make a decision, you have a family that you taking care of at that time. By that point, I already moved out of my home. You have a family you taking care of, you on your own, and now you have to make a decision. Do I eat or do I let all these things fall? So I had to make a decision of letting those properties go. I had to make a decision of defaulting with Bank of America, and the property that I paid $240,000 for was bought at auction for $60,000. So you could imagine how it was a dark time for me during that period.
Exactly. So I lost it. I cried like a baby. I was embarrassed. I came back with my tail between my legs. I lost everything. I got wiped out. From being wiped out, I decided let me get involved with doing some other things. I always been a hustler, I been always doing something. I decided to stay focus on my employment. I had opportunities to make overtime, I had opportunities to make more money. So I ate ramen noodles, I ate bread, I didn party, I didn buy a car. And I work, work, work, work, work and I built myself up and I saved myself up tens of thousands of dollars again. From saving up that money, I said, you know what? I going to start selling cars. So, me and my brother. Long story short, my twin brother ends up buying a used car line. Selling cars that make you reasonable money. Long story short, because this long dragged us, that failed and it went bust.
I went then and decided to get into the nursing agency route. I had little bit of money and I had decent credit. And I met this lady, and she said that she needed a business partner. And could you go to get a line of credit from one of these banks, which happens to be Bank of America again. And if you give me X amount of money, I going to pay you X amount of money a week. So they say that when things are too good to be true, you need to believe that. I said, I going to skip the process and I going to do it. I went to Bank of America, they approved me for upwards of $50,000, two days later, the money was wired to my account. I have $50,000. I called her up and I said, I got $50,000. She said, no problem. Send it to this account. Because she was with bank of America. 9:00 the money came into my account by 9:15, it was in her account.
She spent maybe a week or two, three weeks of paying me, the agreement, and then she disappears. So now, once again, I in default of another loan, I get wiped out again. I ended up fighting, fighting, fighting up again. I always been good with hustling and finding ways to make money, sacrificing. I ended up meeting this lady, I give her a name, by the name of Liliana Trafficante. Liliana Trafficante approached me and told me that she was looking for an angel investor, because she has a water park that being built in Goshen, New York. So if anybody want to check it out, you can go and type the name, Liliana Trafficante. It public records, that the reason why I probably saying this. You can also type in, goOcean, G O O C E A N, Water Park scam. And when you read it, you going to see a scam where this lady embezzled over $6 million from myself and other investors.
And if you read, they identify the victims by numbers. And victim number four, was me. long story short, the Feds came to my house and came to other investors homes. They were investigating us. They already knew that we didn have anything to do with what she was doing, they were tapping out phones. Basically, they came to my home to make sure and validate what happened. She ends up doing five years in prison. And what we got from the courts was, she has to pay us restitution for the rest of our lives. And till this day, after all the money I lost, if I lucky, I got $50. I lucky.