Losing is Opportunity

What happens when you face a loss that leaves you questioning your path? Join us as I recount the early setbacks Cassi and I encountered, including a lawsuit from a house-building project gone awry due to a client’s unrealistic demands. These tough lessons underscored the importance of sticking to our expertise and understanding our limits. I also share a wholesaling misadventure where not thoroughly vetting a property cost us dearly, but ultimately fortified our resilience and deepened our understanding of the entrepreneurial landscape.

Discover the power of embracing losses and converting them into stepping stones for future success. Reflecting on a failed golf course project in Fort Worth, Texas, I reveal how saying no to misaligned opportunities and learning from failures can drive long-term success. I discuss strategies for overcoming setbacks, from simplifying goals to focusing on small, consistent wins. Listen as I emphasize the importance of maintaining long-term commitments over chasing risky ventures and how these principles can lead to more sustainable business practices. This episode aims to inspire fellow entrepreneurs to navigate their challenges with unwavering resilience and a clear focus on their priorities.

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Transcript

Speaker 1: 0:00

What's up guys? Welcome to the Titanium Vault. I'm your host, rj Bates III. Today we are going to discuss the topic of losing as an entrepreneur and your reaction to a loss. Now, personally, I feel like losing is inevitable as an entrepreneur. And why is that the case? Because, as an entrepreneur, we are constantly pushing the boundaries. We're constantly trying to create and we're trying to find new ways to generate revenue, to create our own reality, and at some point in time, we're going to push the boundaries too much. We're going to go out of our wheelhouse and you're going to suffer defeats, you're going to lose. The reaction to that is what is most important being an entrepreneur over the past 14 years best decision I've ever made. But I will say there have been times where some of the losses that we have suffered but I will say there have been times where some of the losses that we have suffered, I mean they just quite frankly, have felt like death blows, like I don't know how we're going to come out the other side of this. I don't know how we're going to recover. I don't know what the lesson is that we're supposed to learn from this. I don't know what I could have done differently. So I want to talk about that today. Let's go all the way back to the beginning.

Speaker 1: 1:28

Early on in our journey as an entrepreneur, cassie and I were general contractors, one of the early losses that we had. That was such a stressful time. I didn't know how to handle the situation because we had never been in that situation before and, quite frankly, from a okay, we're losing perspective, I didn't feel like we had done anything to deserve a loss and so, looking back at it, it was like well, what lesson could you possibly learn in this? And what happened was is, as general contractors, we got a lead that came in and a potential client was asking us to build them a house. Now, what we had done up until this point in time was simple remodel jobs and, like specific trades, like hey, we want you to remodel the bathroom, remodel the kitchen, do an addition to my back porch, things like that. There's nothing to take away from that. But it's a completely different scope of work, skill set and just a whole different level of being a contractor to building a house from scratch.

Speaker 1: 2:45

We took on the job, we made a bid, we knew all the subcontractors that we were going to use and we took on that project and we actually were moving along pretty decently and we framed the house up, foundation was poured, you know. Everything was roughed in. Then we started closing it up, putting the finishing touches. And now we know because I'll tell that part later on, but now we know that seller or not seller, the client actually had mental health issues and she decided that some of the finishes that she wanted in the property were going to be far exceeding the budget that we gave her for certain finishes you know, tiles, the wood-burning stove that she wanted. She wanted much higher end finishes and we explained hey, in order for you to get these, you know we're going to have to increase the budget for some of these items that you're choosing. She didn't like it. She didn't like our response to that. She thought, you know, she should be able to just choose whatever she want. Again, doesn't make sense. Everyone listening is probably like well, rj, how's this a loss? You didn't do anything. She sued us. She sued us.

Speaker 1: 4:11

Project came to a screeching halt. We were in a position where, financially, that was crushing to us because we were pretty much all in on this project. We were a very small operation. We had only been contractors for a couple of years at this point, and so it was a crushing blow to feel like this project that we were pouring our heart and soul into now it's come to a screeching halt. We're getting sued for it. We felt like we were already just trying to keep our head above water and we got sued and we had to go through that process and eventually it led to a settlement and the settlement led to us paying I think it was like $6,000 to walk away from the project.

Speaker 1: 4:56

Now again, not a major loss, but at the time all of that effort of going through everything that we needed to do from a contractor's perspective to essentially build a house and get it all the way to 97% complete, not make any of our profit and have to pay to all this different stuff, and honestly I just I paid for peace of mind to walk away. And I remember when it was all over with it was like man, this sucks, I just did that entire project. I'm making no money. In fact I'm losing money on the deal. I built a house to lose money. That's definitely not what we're in the business to do. And I remember thinking to myself we should have just never done the project. We could have gone out. We could have done how many bathroom remodels, kitchen remodels, roofs, flooring, paint all these different jobs. We would have made money on each and every one of them. But I saw this huge opportunity to go to a new level, and so I pushed the boundary and we took the loss. And so the reaction to that was is we went back to our wheelhouse and we got back into it and a couple of months later it was as if nothing had happened.

Speaker 1: 6:32

Fast forward 2015,. We get into wholesaling and we have similar stories. You know we had a wholesale deal that we lost a significant amount of earnest money on. I remember chasing that deal. I never chased a deal before. If you don't know what I mean by chasing a deal. It was a deal that we had under contract. It sat on a golf course it was actually on Golf Club Circle and we assigned the deal. Now it was here in Fort Worth, texas, but we never actually went and saw it.

Speaker 1: 7:06

This was early on in our days of being completely virtual and wholesaling and we never went and saw the property and our buyer, the day of closing, went out to the property and said the golf course is extremely overgrown and they called the golf course and then did some research and found out that the golf course had been shut down. So the house is sitting on the golf course is not sitting on a golf course, is sitting on just a field now, which of course impacts the value of a house sitting on a golf course. So the buyer terminated. We reached out to the seller. The seller says oh, I thought you knew that the golf course had been shut down. Nope, that wasn't disclosed to us, we absolutely didn't know.

Speaker 1: 7:57

So in order to extend the contract because instead of just terminating which is frustrating looking back at it, this is my ignorance at the time I should have just terminated the contract, moved on to the next deal. But I didn't want to do that because I could taste the win, I could taste the money that I was anticipating. And so the buyer said hey, if you go get this price reduction, then I'm good to move forward. So I got the price reduction. But in order to get the price reduction, the I'm good to move forward. So I got the price reduction. But in order to get the price reduction, the seller said you're going to have to put non-refundable earnest money down. So I said okay, fine, I've already got non-refundable earnest money down from our buyer, so not a big deal. So I put non-refundable earnest money down. That buyer came back before they put their earnest money down because I said, hey, I'm having toable earnest money down. That buyer came back before they put their earnest money down because I said hey, I'm having to put this much down, you're going to have to put more down. And again, I was early on. I was ignorant. I should have waited on my buyer to put down their non-refundable earnest money. I deposited mine. Buyer says my lender doesn't want to do a deal because we have no idea what's going to happen with the property values and days on market, with this golf course being shut down. So we're out. We're out all together.

Speaker 1: 9:10

So then I chased. I chased even harder. I wanted the win. I refused to accept the loss and so, instead of just cutting it, I asked for another extension. I'm going to go find another buyer because this is a deal. They said more non-refundable earnest money. I got all the way up to the point where I had $25,000 non-refundable earnest money and I was never able to find another buyer and I had to sign a release of earnest money and release $25,000 that I had earned to that seller. That was a loss At the time. That was a huge loss. I literally sat there and thought to myself why it was just a couple of years ago where $25,000 meant everything to me and I just chased after something. Why? What was the lesson that I learned there? I should have said no. I should have said no, this is not what we did, got my earnest money walked away from the deal, but I could taste the wind. I chased it so hard Instead of saying I'm going to go get another deal. I was forcing the bad deal to go down and it didn't, and so it cost me. I lost.

Speaker 1: 10:35

I did a lot of that in 2018, 2019. When I could feel the losses coming on one deal, it said let's just go get another and went on that one to cover this loss. And over the course of those two years then I learned about hey, that was all me. I was being a poor leader. Instead of stopping what I was doing and saying we have to deal with the problems that we've created for ourselves with these bad projects, these flips, these failed rental properties. Whatever it was that was going wrong, I tried to solve that problem by buying more and saying, well, we'll win on this one and then we'll cover that loss. It didn't. I had to lose over and over and over again because what I could win in other ways, I could win with wholesaling, I could win by acquiring a new deal, I could win by getting more private money on another deal. And I wasn't accepting those losses. I wasn't learning until eventually I got to the point where I had to learn and the difference there is is most people would have looked at that and just given up, but we refused to do that because we knew that we could do this.

Speaker 1: 11:51

And again, these were mistakes that we were making and over the course of time. Every time I look back and the losses that I just shared there that's three examples over the course of a decade, right, that's three examples over the course of a decade. Right, those three losses over the course of that decade. I learned so much about the decision-making, the moment of truth, when you make a decision to chase something, to do something, to push that boundary. But then, when the loss actually happens, when you take that L, what is your reaction to that? Is your reaction to sit there and feel sorry for yourself Is your reaction to take ownership of. Feel sorry for yourself Is your reaction to take ownership of that and try to push forward. We haven't been perfect in that. Sometimes it took years to actually take ownership over it, to even think about it, and still, to this day, we're taking taking losses, most recently with the TV show taking that loss, getting canceled.

Speaker 1: 13:00

Having deals that we essentially had flipped for TV that never made TV, we didn't get any of the benefit of filming a TV show. Yet we filmed a TV show. Most people don't understand what it takes to film one episode, much less eight episodes, which is what we had completed. We had other episodes that were already partially filmed, which is enough to be a full season of a TV show that we had done and we got none of the benefits from that show that we had done and we got none of the benefits from that.

Speaker 1: 13:40

I remember stepping back into this office here in early 2023 after we got canceled and seeing the shambles that it put our wholesaling operation in because Cassie and I were so absent from it and literally sitting here for months thinking what have I done? Did I just ruin everything that we had built over 13 years, from being multiple different types of businesses to finally finding wholesaling, to finding real estate, investing, to building this up, to getting to the point where we had a team and we had the opportunity to be on television, to then failing. Is that going to be the story? Is that going to be my legacy? And then saying no and doing what? And getting back to my wheelhouse and what we should have been doing the entire time Talking to sellers, solving their problems, getting back to the basics and keeping it simple, simplifying things.

Speaker 1: 14:41

Simultaneous to that happening, what else happened? We bought a golf course. We bought a golf course that had creative financing with it. There was bank funding that was supposed to come along. We had partnerships on it. This was supposed to be a legacy play here in Fort Worth, texas. None of it panned out the way that it was supposed to pan out.

Speaker 1: 15:04

That project failed miserably. It's a huge loss. I look back at it to this day and it's upsetting. Look back at it to this day and it's upsetting. It's upsetting because I know the opportunity that existed in front of us. I'm not happy about anything that took place, but realistically, what I'm most upset about is the fact that I even said yes to the opportunity. I should have known better at that point. I should have said no to doing that project. I should have said no to TV. I should have said no back in 2018 and 2019, when projects weren't going good, to buy new properties. I should have said no to the earnest money deal when the deal wasn't a deal on a golf course. I should have said no to building a house when we were just a remodeling company.

Speaker 1: 16:03

The opportunity that exists with losing is your ability to learn from your mistakes. What are the things that you can take away from this? Well, for me, one of the biggest takeaways that I've always taken away from losing is I probably should have said no a lot more. Why are people afraid to say no to opportunities? Why are we afraid to say no? That's not what I'm doing right now. For me, it's been a struggle. Obviously, I've said no thousands of times in there, but those examples that I just gave are times I should have said no and I didn't. Now I look back at it and I go where was I? Was it the excitement, was it that inner entrepreneur that was coming out that pushed me to say yes to that opportunity in comparison to the other 995 that I said no to. Quite frankly, I can't answer that because I still don't know, but I do know that from that I've been given an opportunity to learn from it, to not repeat that mistake. I'm 39 years old. These defeats are not going to define my legacy, but it does give me the opportunity to make much better decisions moving forward.

Speaker 1: 17:29

And I'm not saying that opportunities that come your way you should always say no to. Opportunities that come your way you should always say no to. But you do need to make sure that you're prepared and you understand what you're signing up for and it's what you want to be all in on. The other thing is is sometimes, when you lose, it's just out of your control. Several of these things I look back at and I say that was the problem. I wasn't completely in control of that situation. So when I look back at the loss, I go man, that sucks, because I'm taking the L there, but I wasn't in control of my own destiny there. But it wasn't in control of my own destiny. That's a common thing when it comes to being an entrepreneur is that the collaboration, the ability to partner up, the ability to join forces with someone opens up an opportunity, make sure that when you're doing that, you're creating a partnership and an opportunity the people that you want to be doing business with 15, 20, 30 years from now to see the finish line with that opportunity.

Speaker 1: 18:48

I will say, over the years, the way that Cassie and I have best responded to a loss is by not sitting and thinking about the loss repeatedly. It's about simplifying things and getting back to the basics of how can I win today. This goes back to that win the day mentality. You're not going to be able to just immediately make up for the loss the next day, but if you do, can't. If you can go out the next day and win that day and focus on what are the little things that I can do. So, for example, tv show Woodhaven not going good, all right, let's do the 50-day challenge. Let's focus on doing 50 deals and 50 states and 50 days again.

Speaker 1: 19:48

How did we do that with day one? What happened during day one? I had to place the dial, the first dial and the second dial, and I created momentum. On day one I felt good and day two I came back, called all the new leads, called all the no answers, the follow-ups. Next thing you know you're in the teens, you're in the 20s and you've got multiple properties under contract. You feel that momentum and that compound effect of momentum starts building up for you. And then the next thing you know you've got some wins under your belt and now you can really start thinking about that loss a little bit more and be like, okay, what really happened? The emotions have kind of settled down a little bit more and be like, okay, what really happened? The emotions have kind of settled down a little bit and you can really start analyzing like how did I get myself in that situation and how do I avoid ever getting back there?

Speaker 1: 20:43

Losing sucks. I hate it more than anything. I hate it. I see, anytime I take an L and it's public knowledge people will take swings at us. You know they want to talk about the losses that we take.

Speaker 1: 21:03

Personally, I don't really get wrapped up on what many other people are doing, so I don't know the losses that they take Apparently. There are people out there that will want to pay't know the losses that they take Apparently. There are people out there that will want to pay attention to the losses that we take. They'll want to talk about it. That's okay. That's their prerogative. That's the kind of person that they want to be and the legacy that they want to leave for themselves. I hope they're proud of it. Personally I wouldn't be, but for me I don't look at it any different. No one's more ashamed of those losses than I am. I'm not happy about them. I don't plan on having any more moving forward, but I also am realistic in knowing that I'm probably going to take another L. That's okay, because I'm going to keep pushing the boundaries.

Speaker 1: 21:54

We keep trying to find new ways to create our reality that we want. We have big goals, an insatiable desire to do great things and along the way with doing great things, yeah, you're going to take something else. Listen, you guys know I'm a sports guy. I love sports analogies. Two of my teams right now are in the Western Conference Finals Dallas Mavericks and the Dallas Stars. You guys know I'm a huge hockey guy too. These Dallas Stars are special, special, special team.

Speaker 1: 22:35

Repeatedly, every single series that they're in so far, they've fallen behind, lost game one In the first round against the Vegas Golden Knights. They lost the first two games, first two home games, going on the road down 2-0. First game against Colorado Avalanche lost First game against the Edmonton Oilers, lost Game three against the Edmonton Oilers, loss Game three against the Edmond and Oilers. They were down 2-0. Nothing looked good, but they responded.

Speaker 1: 23:00

You know what they did every single time they simplified their game. They said, hey, let's just get back to the basics. Get the puck deep Four, check hard, put pressure on them when the puck goes the other way. Get the puck deep four, check hard, put pressure on them when the puck goes the other way to our defensive zone, skate your ass off and back, check and play good defense. And when you have a chance to get the puck on net, get a shot on net. Don't try to make the fancy play. And the next thing you know, they win by simplifying it. The same thing that we've done in our business. We take losses, we simplify our business.

Speaker 1: 23:37

So how do we avoid losing? What is the opportunity that losing creates for us? Well, friendly reminders. Keep it simple, simplify your business. Say no, embrace no more than you do saying yes to an opportunity. You create more opportunity for losing by chasing something than you do by saying hey. I'm sticking to my hedgehog concept. I'm going to say no to that and I'm just going to embrace what I'm creating right here. There's a reason why you chose that to be your business. Embrace that and keep chasing after that. The other thing is is think about the people that are relying on you.

Speaker 1: 24:21

I had a conversation with my son the other day and I love my son to death and I know every parent says that, but I love my son on a different level than just father son. I love it when he does moments like this, because he teaches me a lesson from a kid's perspective that some, somewhere along the way, we lose it, or it's like, or maybe it's just the fact that he's still a kid. He's 11 years old and he can think this way and and it impresses me sometimes why? Because I think, as his dad, I should have taught him some of these things and I can't remember a specific moment, so hopefully he just learned this from being around me. The other day he had a choice to make. It was to chase a new opportunity or stick to the commitment that he had already made. And the new opportunity was a good one, it was a really good one and he looked at me and he said let's not do the new opportunity, not that I don't want to do. The new opportunity it's everything that I've wished and dreamed for and hoped for, but I've already made a commitment over here my coaches, my teammates, all of the work that I've put in for that opportunity that's my priority. I have to say no to the new opportunity, the one that he's hoped and wished and prayed for for years. He said no to that because he already made a commitment and he said that's where I have to keep my priorities to that commitment.

Speaker 1: 26:11

When you think back to the majority of the losses that I shared with you today, it's because I didn't keep my commitment to the things that I had already said were my priority. I changed that and I went and I chased something the new opportunity that came along, and because of that, we took an L. So what can we learn from losing? Many things, but the one that's probably most important is let's avoid it. Let's avoid it by keeping things simple. Let's avoid it by keeping our commitments. Let's avoid it by keeping our commitments to the priorities that we've already set for ourselves. This is our business, this is what we do.

Speaker 1: 27:00

I'm not going to chase that, because that could potentially lead to a loss, and there's people that are relying on you, your family, your team, your partners and, quite frankly, you. You are relying on yourself right now that you, today, will have an opportunity next year, next month, three years from now. Are you going to chase that and change that priority? Three years from now, are you going to chase that and change that priority, or are you going to say no? Three years ago, a year ago, a month ago, I made a commitment that this is my priority and this is the decision that I'm making.

Speaker 1: 27:50

Wish I had done that several times. I wish I had done that several times. It would have saved me a lot of stress, a lot of heartache and avoided quite a few losses. That's what I got for you today, guys. This message resonated with you. Leave me a comment, share with me how this message resonated with you. Make sure you like the video if you listen on Spotify, apple Music, wherever you're listening. Make sure you guys leave us a 5 star review. It means the world to me. I see each and every one of them. I appreciate you, guys. We'll see you tomorrow.