How To Handle A Major Loss Like a Champ – Damion Lupo

You have to be willing to be a true farmer and you get that in California because it’s a farming, you know, Mecca. Man, if you farm, there’s nothing that you can’t create. I mean all my money was made because I had three or four years of letting things grow naturally. I blew everything up when I was trying to jam it too fast.

Hey everyone, and welcome to another episode of the Everything Real Estate Investing Show with Sean Pan. Today we have Damion Lupo again. This is a special episode where we continue to chat after our conversations about the EQRP. In this episode, Damion talks about his failures as an investor during the last down cycle and how he recovered from it. It’s a very raw episode and I want to share his advice with anyone who’s going through hard times of their own. If you enjoyed this episode, subscribe to the show and leave a review. We release episodes every Wednesday and Sunday and release the show notes on our site, everythingrei.com. Enjoy!

Sean: Honestly when I read your book it really resonated with me because I was going through a very similar situation where… like I didn’t make five million, right? I made half a million, but I thought it was hot shit too. And then I had to fall. I’m still going through it and I was wondering what did you do to recover?

Damion: You’re in the middle of the fall?

Sean: Kind of. Like I did three projects at once and all three went sour. So I have one more left to just finish and sell off.

Damion: You know with it, the biggest thing was detaching from that thing. So is this all your money or did you have other people’s money too?

Sean: I have other people’s money too.

Damion: Okay, so I had people… I mean I share this sometimes, it’s a little brutal. So it’s not online very often but one of the guys that invested with me early after I’d done like 20 deals, he heard what I was doing. He goes, “I want to invest” I said, “Okay, so you invest”. Everything’s good for about five years. And then when things went south, he had most of his retirement money and he had retired, so he lost his money and basically had to go back to work. But instead of making a hundred and twenty thousand, I know that’s minimum wage in your area, but he was making that. All of a sudden you can get a job making more like than 40 or 50 thousand bucks a year. And this is a guy that was retired. He was in his late 50s early 60s, and I’m going, I mean, “I hate this, but I can’t fix this”, and that was the problem. I really wanted to write a check for all these people but I couldn’t do it. And the hardest thing was going to people and saying, “Look I want to fix this. I will find a way to make this right at some point somehow but I can’t write a check. I just don’t have it” One lady said, his sister said, “we’ll go get a job at Starbucks. We don’t give a shit what you do, just go do it.” I go, “You know how many lattes I have to make a day? About 12 million to write a check. So it’s not realistic.” And the reason it was so brutal was when he said to me, this is a guy I knew since I was three years old, he said “You know what, I just wish I never knew you” and his sister said, “There’s a special place in hell for you. You’re literally the worst thing that’s ever happened to us.” This is the kind of problem. And it can really damage you. You have to understand that when people are investing, there is risk and when things go bad it happens and you know, you don’t have 30 years of experience to tell somebody every little thing that goes wrong and the reality is it’s not your job. So just understanding that and it may not be easy to say, “Okay”. You don’t want to be flippant. You don’t want to say, “Okay. Well whatever, they took on the risk.” But it’s hard and it’s just part of this game. I mean you have to understand that this will happen, it’ll probably happen again and you are not the sum total of your net worth or your investments or your decisions. You’re just beyond that and that’s really hard in the middle of losing other people’s money because that shit sucks. I mean, I know it sucks. It’s bad.

Sean: And you know more than I do, which is so interesting.

Damion: And I did it again. I mean I had projects and not too long ago that they didn’t work. It was a business, it wasn’t real estate. But so I had gone through the stuff 10 years earlier and then when that business didn’t work, and it was because of an attorney filing something incorrectly. So I’ve got a new book coming out called “Unicorn Amex”. It’s the making of a unicorn, how you do it, and setting it up right. And one of the lessons is you get confident legal talent too that’s specifically experts in whatever it is you’re doing like filing documents with the SEC. You want somebody that that’s what they do. If you get the wrong attorney, they file the wrong thing, your business is dead from the beginning because you can never get any more financing from your initial route. I didn’t know this, it’s called a “busted filing”. Company blew up, lost almost a million bucks and I’m thinking, “This sucks man. I did this 10 years ago. Here we are again.” But it was different because I went to people and I just point blank said, “Look, this didn’t work. Here are the problems.” I went into some additional personal debt to do my best to try to revive it; didn’t work. I’m more of a professional now because I’ve gone through it. You will be more of a professional on the other side of this because you’ll understand it and you’ll be at a different level. I don’t invest with people that haven’t lost money because I need to know that they can go through it and they get it. And it makes them a lot more sensitive to doing whatever it takes. People that haven’t lost money don’t get that.

Sean: I mean like if they never lost money before and when they do these money, it’s like how are they going to handle it? People are like, “Sean, you standing up, you smiling. You look like a champ!” and I’m like, “Yeah, I guess so.” But damn it doesn’t feel good though.

Damion: No, it doesn’t feel good. It shouldn’t feel good. I mean there should be a concern. I see a lot of people syndicating and they’re not concerned enough about making a mistake and they do it way way too overzealously. And they’re raising money and people are anxious around investing their money. They don’t want to miss out on real estate, and they want their money work. And then I say slow down like you’ve spent the last 20 or 30 years building up your half knowing your million bucks and you’re going to throw it at somebody and shit like you had happened happens. Sometimes it’s malfeasance and sometimes the market and sometimes there’s termites. Like there’s a million things. I just… it’s scary to me how many people are doing things right now and I’m actually glad that you lost money and you lost other people’s money because it’ll make you a better investor and a better business person.

Sean: Yeah, I think so too. But thanks for the words of encouragement. By the way, I don’t know if I ever heard, but were you able to recover from your downturn or you kind of still in the middle of your process.

Damion: No, I’m back. I mean, you know, I’m back to… we’re well beyond where I was. And so it takes time. I mean that was 11 years ago. And so it took four years just to mentally get over or through mostly and it was still… like I didn’t even want to look at real estate or talk real estate or anything for a while and I went through a lot of second-guessing myself. So it took years and then it took… there’s a maturity around understanding timing and most people are too anxious. They want things to happen overnight. And what you realize is that you can create anything if you’re willing to give it the proper time because it’s a seasonal thing. You have to be a farmer. I heard this stuff before. You can’t just go out there and shoot everything. I know in California, you don’t shoot anything. You probably just, I don’t know, you trap it or something. But you have to be willing to be a true farmer, and you get that in California because it’s a farming Mecca man. If you farm, there’s nothing that you can’t create. I mean all my money was made because I had three or four years of letting things grow naturally. I blew everything up when I was trying to jam it too fast. That’s a huge lesson.

Sean: So I guess just keep doing the basics, right? I guess prospect, talk to agents, and just build your social presence, build your, I don’t know, network base. And then it’ll eventually work out for you later.

Damion: Here’s how it works out, you do a lot. You do a lot of work without getting paid, meaning you look at a lot of deals you don’t get paid for. And you’re doing, you’re connecting with people and you’re building that relationship and you’re empowering and educating people. I mean, I probably spend about a quarter million dollars on sending books over the next year. That’s a lot of books that I’m sending out to people that I’m never going to talk to. My focus is on educating people. I’m planting a lot of seeds and taking time and investing in you and people that are listening. And see, keep doing that, it pays off. But most people go, “Well, how am I going to get paid for this and when’s it going to happen, next week? Next month?” And I go, “You’re never going to be rich. You’ll never be wealthy because you don’t get it.” So you just have to be willing to say “Okay. I know these things take time” and then all of a sudden you end up in a river a-cash. And you have people that are sending you letters saying, “you changed my life”. That takes time and it’s worth it.

Sean: I mean I’ve heard on other podcast and people saying this, it’s like money isn’t really… like people have weird concept of money but money should really just be like a proportion of the value you give to other people. So you’re educating people, you’re helping lives. Yes, then you’re gonna get the money.

Damion: And you have to understand along those lines that money is the side effect. It is not the focus. And if it’s a focus, you’re going to turn into a tool and a huge douchebag. I mean, it’s true, it’s what I was. I mean, I was the biggest douche. I look back and if I met myself 10 years ago, I would not hang out with that guy. I’d run the other direction. And when you realize that money is a side effect, that if you’re on purpose on something that matters that people care about that’s serving them, money is not going to be a problem. The problem would be too much money. And that is a different problem. It’s a better problem. I think too little money creates war and poverty and pain whereas too much money is just more of an annoying factor where you’re paying a lot of people to figure a lot of problems out with taxes and stuff.

Sean: I like that. Yeah, thanks again for your advice and words of encouragement.

Damion: Yeah, happy to help man. And reach back out to me. Not very many people are willing to admit when they’re going through stuff. They just hide. I mean, I basically hid and didn’t want to share and didn’t want to get help. So kudos to you to even bringing that up. And most people don’t want to admit that they screwed things up. Learn from it, share from it, be vulnerable. It will pass. How old are you right now?

Sean: 29.

Damion: Okay. I’ll just say you’ll hit 30 in the next year and you’ll be like, “oh that was the interesting 20s, like wow!” And then what will happen though is that you’re going to go through things that most people are going to be scared of ever going through their whole life. So they will hesitate most of their life. The benefit of blowing up in your 20s is that you have a completely different skill set and mental toughness that you’re going to take into your 30s, 40s, and 50s. And it will accelerate you past everybody else.

Sean: I totally agree with that because it’s kind of bad to say, but I’m not scared of getting blown up again because I know what it feels like.

Damion: Did you die?

Sean: No. Like my standard of living is exactly the same.

Damion: I know but people are afraid they’re going to be eaten by a wild animal. Like that’s what our reticular activator says and our amygdala and all these things are like, it’s literally keeping us paralyzed because we think something in the bushes, the mistake, is going to jump out and tear our leg off. I was like, yeah, I hear this and I say “unless you’re in Alaska where I grew up, you might get eaten by a bear. Or if you’re in Africa and you’re dumb enough to get out of your Jeep and line up a bunch of cubs, which a lady did before my trip and that and a lioness ate her. I mean unless you’re doing one of those two things, you’re not going to be eaten. So what are you worried about?” People go, “Well, you know what, judgment?” Like you went through this and it sucks. It’s painful. So, you know, grow a pair. Give me a break.

Sean: Exactly. Yep.

Damion: It’s a good job.

Sean: Thank you. Thanks again for the words of encouragement. Thank you so much for your time. And like I said, I read your book “Erase”. I feel like I already know you so well, and I hope to see you around at some of these conventions that you mentioned.

Damion: I’ll be there. Say “hi” if you’re there and email me and let me know how things are going. Seriously if I can help you… I was on my own; I didn’t have anybody else out there. I was basically in the desert. And did I send you “Reinvented Life”?

Sean: That book with you and your buddy?

Damion: And Chris. Yeah, so the trigger event with the door and the whole thing with the IRS, the part that sucked about that was I was on my own and I didn’t have anybody to reach out to that had been through anything. And my mom read the book after like when my dad was dying. She read the book. She said, “Why didn’t you tell me?” I said, “What am I supposed to do? Call you and say I lost 20 million dollars; can you give me some advice? What are you gonna tell me?” She had been through it. So this is the value in people that have been through shit, which is the difference between a mentor and a coach. A coach has good ideas, but they haven’t necessarily been through it. A mentor has actually been through the crap. They know that, they understand the emotional pain. So let me know if I can help you man. It’s nice to have people that have been through stuff.

Sean: Hey, I’m not going to lie. It doesn’t feel pretty awesome. Like who else would say “I lost 20 million dollars”?

Damion: I wish I’d done more. I mean, here’s the thing. Somebody said, “Well, I lost a little bit of money” and I go, “Yeah, you know the next round, don’t borrow that little”. And they go, “What do you mean?” I go, “If you borrow a hundred million and the market collapses, which the market will cycle the collapse again, you’ve got a partner called the bank. If you have 20 million, you’ve got a bank suing you literally. So who do you want, a partner or an adversary? So go borrow more.” And people are like, “Oh my God!” But it’s the truth. It’s how it works.

Sean: I totally believe that. Yeah. I totally believe that. Next time go bigger.

Damion: Go bigger or just go home. I mean seriously, it’s not worth doing the middle.

Sean: Exactly. All right, man. Thanks for your time.

Damion: You bet. Take care.

Sean: Take care.

Here are some of the key takeaways from this episode. Everything will be okay if you keep going. Bad things happen and you just need to find a way to deal with it. Always focus on providing value. Damion had a good thing going but blew everything up when you try to jam it and go too fast. Finally, you won’t die from failure. Shoot your shot and go for it. You can find the show notes on our site everythingrei.com. Hope you all learned a lot. Thanks and have a great day.