BIO: John Lawson is an award-winning entrepreneur and best-selling author. His entrepreneurial spirit helped him achieve a level of success that few obtain.
STORY: A friend convinced John to buy a house and flip it. He took a loan and got into the project. The friend was in charge of the renovations and made changes, which reduced the home’s value and made it impossible to sell for a profit. John was stuck with the home for eight years.
LEARNING: Never depend on other people to watch your money. Monitor your investment consistently.
“Never depend on other people to watch your money.”
John Lawson is an award-winning entrepreneur and best-selling author. His entrepreneurial spirit helped him achieve a level of success that few obtain. After consulting Fortune 100 companies at Accenture, he took his expertise to the world of small business, today mentoring entrepreneurs on topics such as social commerce, online marketing tactics, and e-commerce strategies.
John is a small business power player listed as one of the Top 50 SMB Influencers by All Business. Recognized for his work in e-commerce, John received two Small Business Influencer awards from SmallBusinessTrends.com and won “Business Book of The Year” for his book “Kick Ass Social Commerce for E-prenuers.”
Worst investment ever
Around 2000, John worked in consultancy, making a decent salary. A friend suggested to him that they start flipping houses. The idea was for John to finance the project and the friend to oversee it, then split the profit 50/50.
The house was in a bad neighborhood in Georgia but close to the city. Some gentrification plans were going on where the whole neighborhood would be turned into a more livable area. John took a loan to buy and repair the house. The loan terms were that he would pay it back after three months. From his calculations, this would be enough time to flip and sell the house. So John signed the paperwork, and work started. He was still working full time, so he couldn’t follow up with the project in person. John visited the house a few days before selling, and everything looked good. But he noticed they had turned the three-bedroom home into a two-bedroom one. This change reduced the house’s value, and now it was going to be hard to make any money back and pay the loan.
John got a 30-day extension from the bank but had to come up with $21,000. There was no way he would make that kind of money from the house that had just been turned into a two-bedroom. John started looking for other ways to make money. A friend told him about eBay, where he sold old programming books and made some money. He ran out of books and needed more ways to make money.
John read in a Sunday morning newspaper about getting free inkjet printers after a rebate. He went on a mission to collect as many free printers as possible. John would then sell the printers and the ink cartridges separately on eBay. He then got into selling Tickle Me Elmo dolls and made enough money to pay off his loan, but he was still stuck with the house. He only managed to sell it off eight years later.
- Never depend on other people to watch your money.
- No matter what you’re experiencing, just persevere. That pressure will make you stronger.
- Turn your pain into motivation to make a change.
- Don’t just start a partnership with someone you don’t trust yet.
- Monitor your investment consistently. Otherwise, it could go south pretty quickly.
Be careful with real estate. Understand what you’re getting into because real estate will bind you for many years.
John’s recommended resources
Feeling overwhelmed and want to get your time back? Get his FREE How To Hire a VA guide.
No.1 goal for the next 12 months
John’s number one goal for the next 12 months is to go to Thailand and live there for at least three months.
“I’m totally stoked. Thank you.”
Andrew Stotz 00:02
Hello fellow risk takers, and welcome to My Worst Investment Ever, stories of loss to keep you winning. In our community, we know that to win in investing, you must take risk but to win big, you've got to reduce it. Ladies and gentlemen, I'm on a mission to help 1 million people reduce risk in their lives and that mission has led me to create the Become a Better Investor Community. In the community, you get access to our global asset allocation strategies and stock portfolios, our investment research weekly live sessions and the risk reduction lessons I've learned from more than 500 guests go to my worst investment ever right now to claim your spot. Fellow risk takers this is your worst podcast host Andrew Stotz from A. Stotz Academy, and I'm here with featured guest, John Lawson. John, are you ready to join the mission
John Lawson 00:53
I paid for?
Andrew Stotz 00:57
Well, let me introduce you to the audience. Ladies and gentlemen, John Lawson is an award winning entrepreneur and best selling author, his entrepreneurial spirit helped him achieve a level of success that few obtain, after consulting fortune 100 companies that Accenture, he took his expertise to the world of small business today, mentoring entrepreneurs on topics such as social commerce, online marketing tactics, and E commerce strategies. John is a small business power player, listed as one of the top 50 S, M B, influencers by all business recognized for his work in E commerce, John received two small business influencer awards from small business trends.com And one business book of the year for his book, kick ass social commerce for E printers. John, take a minute and tell us about the unique value that you bring to this wonderful world.
John Lawson 02:00
When the unique value is, I've just been here a long time at this point, you know, really recognizing that it's not about the hustle for me anymore. It's about the experience and what I have gone through and utilizing that wisdom, knowledge and understanding to move forward and propel myself past the wannabes. About that. That's
Andrew Stotz 02:25
exciting, I think, yeah, the key thing is you probably make less mistakes. That's what I like about getting older. When I was younger, at uni, you have to run so damn fast. Cuz you got to make up for all the mistakes that you make.
John Lawson 02:37
Absolutely. But you got all the time in the world, then.
Andrew Stotz 02:41
Yeah. So tell us a little bit about you know, what you do and how you help people so that the audience can understand your business, and you know what you're doing?
John Lawson 02:51
Well, now I am doing a lot of business coaching. So I have my own independent business coaching. business that I deal with most of the clients, you know, know me by word of mouth, and I helped them to launch products, with their digital marketing strategies, and their e commerce businesses and getting them launched. So that's what I'm doing today, currently. Excellent. Well, of course, you know, I still own my own ecommerce business. still cranking. Yeah, but I don't, you know, have to do any of that work. Great, I built it up, it runs itself.
Andrew Stotz 03:35
That's where a lot of the audience is, you know, aiming for they want to be at that point. So now it's time to share your worst investment ever. And since no one goes into their worst investment, thinking it will be. Tell us a bit about the circumstances leading up to and then tell us your story.
John Lawson 03:51
Now, okay. So, like you said, I was working at Accenture, doing consulting, I had a pretty decent, you know, salary. This is around 2090 99 2000. And a friend of mine came to me and he said, Man, we need to be flipping houses. Like really, you know, it's like, yeah, we could flip the house, we could probably make 10 grand apiece, and, you know, be in and out in two months. I was like, that sounds great. You know, it's like, and you don't have to do anything. All you have to do because you'll be the guide with the finance. And I'll be the guy that, you know, oversees the project. I'll make sure that the house gets redone. All that footwork. I'll do and you'll just be the guy that comes in and does the finance. Okay, sounds good. And then we'll split it 5050 Fantastic. So he took me over to see to house it was in a bad neighborhood in the Atlanta area. I live in Atlanta, Georgia in the United States here at So it was in a bad neighborhood, but it was close to the city. And there was supposed to be some gentrification going on where, you know, the whole neighborhood would be turning into a more livable area, an investment area, all that kind of stuff. So we decide to get a property over there, he just showed me the house. I'm like, okay, and him and another guy was walking through talent, you know, here's what we need to do, here's what's gonna cost blah, blah, blah, blah, blah. So we got financing for the home, that included buying the property. And on top of that, which is called a hard money loan. So hard money loan basically is, was enough to do the work on the property. And there was a balloon payment on that loan in 90 days. So we have basically three months from the time we take ownership to the time we need to sell it, to get the money out so that we can pay the hard money. Take our 10 grand apiece, and walk away from the closing table. happy campers. Yay, you know, so I signed the paperwork, we get the house. The work starts. Now I'm working my full time job. So I can't really go over there and check things out. And you know, I was kind of hands off. I call my boy, you know, Hey, Ronnie, how's it going? He's Oh, everything's good. We're doing that out. Okay, great. So here's the the big day, big day comes. And it's time for me to do the walkthrough. And I drive up to the property and I was really impressed. I mean, they put in a new lawn, put siding around the home. I mean, a new age back system, new kitchen, new carpeting, everything painted. It really looked good. And I'm walking through them. There's the living room, you come in and living room. Fantastic. Looks good. Looks good. Kitchen. Wow. Nice. You know, I mean, it wasn't like, Taj Mahal. Nice. But I mean, it was a good, you know, livable home now. Then we start walking through the bedrooms. I go through the first bedroom. Cool, good size. I go to the second, not the second bedroom between the first bedroom, and the next bedroom was a bathroom. They had done a nice job on the bathroom. I go to the back of the house. Now we're in the master bedroom. Awesome. All right, cool. Where's the third bedroom? Well, we didn't, we turn that part into part of the kitchen and part of the master. So they took a three bedroom, one bath and turned it into a two bedroom, one bath. The difference in rent that you can get on a two bedroom house versus a three bedroom house is pretty substantial. Okay, so we couldn't even section eight this house. Section Eight is where you put in low income, you know, families, and then the government pays for it. But they pay for it based on the number of rooms. Right? So there's two things we can't flip the house to get our money back out, because there's only two bedrooms now. And it was a three bedroom when it started. Right. So that declined the value enough. Not a whole lot. But enough so that I wouldn't be able to pay off the hard money loans, which is the one I'm worried about, you know, the other ones a 30 year mortgage. I don't care. Right. But like, where's the third bedroom? And the guy says we're going to put it in the basement. Okay. Dodo, the deal is anything underground does not count as a rule. So you can't have a three bedroom house when one of the bedrooms is in the basement. Because that's a basement, even though it's refinished, it doesn't matter. So anyway, what was going to happen is I have to put somebody in the house, because now I don't know what I'm going to do. So what I did is I was able to negotiate an extension on the hard money loan, right? So I think I got another 30 days or something extra out of it. I needed to pay $21,000 had to come up with this money. I don't think I'm gonna come up with it. And at the same time, I gotta get somebody in the house so that they can pay for the first mortgage. And the deal is if I had a three bedroom apartment, just peek, peek the difference. I could get $1,200 a month since I only have two bedrooms. They'll only pay me $800 a month. That's a substantial difference. And I'm already working a job, I already got my own house, I got my own bills. So no matter how much I make, I'm spending that anyway. So I don't have enough money to pay two mortgages and come up with a balloon payment. I'm stressed. I'm so stressed out. At this time, I don't know what to do. And I happen to be talking to a friend of mine telling him this story. He's like, Well, why don't you start selling stuff on eBay? Remember, this is 2000. Right? And I'm like, eBay. What? Isn't that where you sell old underwear or something? I don't know. You know, he's like, now you could sell anything on eBay. Right. And so I was an IT person. And I would have a whole lot of it books. And you know, they used to be these big dicks, thick books, they would cost like 5060 bucks. Once you read them, you learn the language, you don't really need the book anymore. So I started listing use books on eBay. And lo and behold, they started selling matter of fact, started selling so much that I was able to make my mortgage payment, the second mortgage pain. And so I kind of got hooked on it. I'm like, what else can I sell? So I'm going over to my sister's house, my mom's house, I'm trying to find things to throw on eBay. And the stuff is starting to work. Then, that kind of ran out. And I had to come up with more ideas on how to sell one day me and my partner, were sitting in a waffle house. And it's not a real Waffle House. It's it's a chain restaurant, here in the south of the United States, where they sell waffles in breakfast for really cheap. That's one of the best places to get a good breakfast, but they're open 24 hours a day. And so one night after partying in the club on a Saturday night, we decided to go grab some waffles before we go home. Right? And in, you know, on the way in, I grabbed a Sunday morning newspaper. Now for those of you that are millennials or you know, Digital's or Gen Z or you know, a B, I don't know. But look, a newspaper is a dead tree that has ink on it that you would read. That's what that is, right? You probably know no doubt about that. Just think of a blog printed out. But I'm reading the newspaper, it's Sunday. And on Sundays, they have the sales insert in there, where they tell you all the sales that are around town and department stores. And this is during the time when inkjet printers were just coming out. And they would give you a inkjet printer, basically free after rebate, just so they would get you hooked on the inks. Because when it came to printers, and still today, you know the printer industry is based on the ink because none of the inks are interchangeable. So if you buy the printer, they know they've got an ink customer for at least three to five years, you know. And so what we used to do is we'd get these free after rebate. And my spouse he was good at you know, filling out the rebates. So we made sure that money would come back in and I would get the printers and open the box. And I would take out the inks because the box comes with a starter set of ink. And I would then reseal the box. I would sell the box on eBay. The printer has an open box printer with no ache. Right. And then I would sell the ink cartridges separately. So I was getting this absolutely free product and turning it into two products. That was the best money I've ever made. Right? Because I mean, the return on investment is like infinite. do that all day long. I can do it all. And I did. I literally did. This was my hustle. And I would go around to multiple office supply stores because I live in Atlanta. It's a metropolitan area. We had several around the inner city and the outer belt of the city. And I would you know, on a Saturday or Sunday, that was our job. Okay, I'm going this way you I'm going north and east. You're going south and west. We're picking up as many printers as we can free after rebate. And that's kind of how I got started with the business. So after creating a lot of goodwill in the stores, mind you, I still have this house, right? But I'm paying it off. The bills aren't freaking me out anymore. I got the 10 Grand that I needed to put down on the hard money and then got the next one in the following month. So I'm good on the hard money got that out of the way. It's they'll have the house that is still sucking for $500 a month out of my pocket. But you know, I'm not noticing it because I'm doing really good on these printers. So the deal is, this is when it turns from really poor to really great. They follow following Christmas comes around, and there was a hot selling toy called Tickle Me Elmo. And it was like this Sesame Street, Kitty show character, that was a doll that would talk and laugh if you tickled it. And it was the hottest selling toy of that Christmas. And since I knew a lot of the people at the stores, when it hit the shelves in September, it's sold out immediately. For those who don't know, you know, toy drops actually start first in September, then they sell out, then they know which one is going to be the hottest. And then it comes back in, you know, October, November for Black Friday into Christmas. So when it's sold out the first time, I started calling my friends at the stores that knew me from doing the you know, hustles with the printers, like look, next time to call me on those get in, call me. I don't care what time of day it is, what day of the week it is, I will be there, like you want me to hold them. I'm like, Nah, you don't have to hold them, just let me know, I'll be there at 8am You know, store opens at nine I'll be sitting in the parking lot. Lo and behold, I ended up with an entire van full of tickle me almost. I mean, like there was old ladies trying to beat me up in the parking lot trying to get these dolls, right. And I had them and I held on to them. Until a week before Christmas. I didn't sell any of my stock until a week before Christmas, when they were absolutely sold out. And I was getting up to $300 for a $35 toy. And like I said, I had a whole van full. And literally, that is how I got out of that one house into my own home. And you know, fast forward about four months later, I ended up leaving my corporate job and doing eBay full time. And
Andrew Stotz 17:17
you know, what happened with the house? And the partner that you had in that? Oh,
John Lawson 17:22
so the partner I never, I really did see, after it went south, it was because it was all in my name. Yep. So he kind of just disappeared, you know, so I really didn't get to see him anymore. The house, I think we ended up holding on to this house for another eight years. And it was because of my spouse didn't want to let it go. And I finally talked him into just you know, because we kept waiting for the neighborhood to turn around. And it never turned around. So we had this decent looking house in the middle. And then we had problems with, you know, bad tenants. And it just it was it continued to be a drain and a nightmare for the next eight years, honestly, you know,
Andrew Stotz 18:10
but can you remember the day that you sold it?
John Lawson 18:13
I can remember the day I stopped making payments on say, because that was the thing I kept telling him I'm like, stop making the payment, then they have to do something, you know, because we would call and like can you guys take it back and we don't want it and we can't do anything bla bla bla bla bla. So you know, and he didn't want to mess up his credit. Right? And unlike, you know, we just got to stop making payments on. And once we stopped making payments on it, then the city finally took it over for taxes, because we weren't paying the taxes on it either. Right? And they fought but I mean, for me, that was like, two, three years. So they finally took the house and resold it. And you know, it takes seven years to get things off your credit. But hey, if we just started five years earlier, we would have had the credit back. Anyway, I've got a credit score today of 840. So I'm not really pressed about that. But it did take the time to get it back. It's just, you know, how
Andrew Stotz 19:21
how would you summarize the lessons that you learn?
John Lawson 19:24
Oh, God, you know, actually telling the story is bringing back the pain. So, you know, one of the lessons definitely is, you know, you can't depend on other people to watch your money. You know, and that's what I did. I let him if I just went over there, you know, halfway through the build out I would have known where we were going and I could have already, you know, taken care of this issue. And I didn't really realize that I will was the guy that was on the hook, it was all the time was like our house, right? But I was the only one that sign for it. So it was the reality was when he just walked away free and clear, I was the one stuck with the house and having to deal with a situation I did not know anything about. So I mean, lesson learned, that's there. The other lesson learned is the greatest motivator is a foot up your ass. And that's what that house was for me. If it wasn't for that, I wouldn't be the entrepreneur I am today, I wouldn't have the success that I've had. And so I actually, in my mind, have turned that negative into the most positive thing that ever happened to me. Because if it wasn't for that, I probably still be working in an office hating my life still, you know? Yep, no.
Andrew Stotz 20:55
So maybe I'll summarize a couple of things that I took away, I think the first thing I wrote down is pain is a partner of growth. You know, the pain that you're suffering today, for the listeners and viewers out there, the pain that we're all facing in different areas of our life, personal professional, you know, our fitness, whatever, whatever that pain is, take a lesson from John, and turn that pain into motivation to make a change. So that's the huge lesson out of this, that I think I get, and I think the listeners and the viewers can get, the second thing that I wanted to mention is that, you know, I have received more than 500 written stories of loss. And I've interviewed Now many people about their losses, and I've come up with six common mistakes. Good news for you, John, you didn't make mistake number one. Mistake number one is failed to do your research. But I think that you did okay with that. The second one was failed to properly assess and manage risk, you did okay with that, as it number three, driven by emotion or flawed thinking, you probably did okay with that. But number four, and number five is where I think this comes in. And it number four was misplaced trust. And I think that that's where, you know, you just thought, hey, this sounds like a good idea. And, you know, this guy's good. And let's do it. And so, and I think the lesson that we want to take away from that is that, you know, don't just jump into something, you know, with someone, you got to be able to trust and that trust takes time. The second thing, so number five, is failed to monitor their investment. And you know, you're busy guy, you know, you got your corporate job, you don't want to let that you don't want to mess up that. And hey, this guy is gonna take every knows what he's doing. I'm trusting him. Unfortunately, ladies and gentlemen, that's not enough, you have to monitor your investment on a consistent basis. Otherwise, it turns south pretty quickly. Anything you would add to that,
John Lawson 23:00
you know, that old saying that it takes pressure to make diamonds out of coal. It's so true. It's so true. It's always about going through whatever you're going through, if you stop in the middle, it's going to kick your butt. But you've got to get through to the other side. And if you just persevere, it'll get you through. And that pressure makes you stronger every time
Andrew Stotz 23:25
as Jim Morrison said, from the doors break on through to the other side. So based upon what you learned from this story, and what you continue to learn in your life, what one action, would you recommend our listeners take? Let's say they walk up on this deal, like you did to avoid suffering the same fate?
John Lawson 23:44
Well, I mean, if you walk up on this deal, like I did, like you said, all those rules, the five rules, make sure you handle them. However, if I had to give you some advice. I you know, it's like, be really careful with real estate, because the real weird thing about real estate is that it binds you for many years. It's a trial. It kind of is a trap, right? It kind of is a trap, although it can be a good trap, but understand, you know, what you're getting into, because it's not the same. I mean, I'm just thinking about that thing cost us maybe $70,000. I mean, today, you can buy a car for $70,000 and have it paid off in five, six years, you know, maybe seven, if your credits bad, you know what I'm saying? But it's just if you do that with real estate, it's gonna lock you in for 30 freakin years.
Andrew Stotz 24:42
Yeah, and that's its liquidity. You know, that's one of the things that's nice about investing in the stock market is that you can get out you don't like what's going on with the investment you can sell. So what's a resource that you'd recommend for our listeners?
John Lawson 24:56
A resource, you know what guys? There's one thing, I think the most important thing that people talk to me about is about time and how to have better, you know how to use your time better. And I have something that I think is the number one easiest way to get your time back and to stop the overwhelm. And that is by hiring somebody to be a virtual assistant for you, usually offshore, right? And if you go to how to hire a va.com, how to hire a va.com, I got a free resource for you to help you stop the overwhelm.
Andrew Stotz 25:37
Hmm, that's exciting. I have. There's a few people involved in this particular podcast, there's Stella, who's excellent in Kenya, who works on the blogs. There's Celia, and she works on the audio and video. And there's Juna, Juna works on booking guests and helping me with that. And all of those guys are VAs in one way or another, that have been involved in this podcast from day one. And I can tell you, that they have really helped me to reduce the overwhelm. So ladies and gentlemen, I'll have the links to that in the show notes so that you can click on it and go to it. But learn how I wish I knew in the beginning when I started hiring vas, all that so great resource. All right, last question. What's your number one goal for the next 12 months?
John Lawson 26:31
My number one goal for the next 12 months is to get to Thailand. And probably live there for at least three months.
Andrew Stotz 26:44
And you're gonna come and have lunch at my house with my mom and me. And we'll enjoy mom's from the south. She's from Virginia. So she knows Georgia, and love to hear and see you in person. All right, listeners. There you have it another story of laws to keep you winning. If you haven't yet joined the Become a Better Investor Community just go to my worst investment ever.com Right now, as we conclude, John, I want to thank you again for joining our mission and on behalf of A. Stotz Academy, I hereby award you alumni status for turning your worst investment ever into your best teaching moment. Do you have any parting words?
John Lawson 27:29
for the arm? I'm totally stoked now. Thank you.
Andrew Stotz 27:35
It was great to learn from you. And that's a wrap on another great story to help us create, grow and protect our wealth fellow risk takers. Let's celebrate that today. We added one more person John to our mission to help 1 million people reduce risk in their lives. This is your worst podcast host Andrew Stotz saying, I'll see you on the upside.
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