Eleven years ago, Armando Montelongo was $50,000 in debt, had a credit rating of 501, and was living with his wife and toddler son in his in-laws' garage. He changed his fortunes by learning to flip houses: buying them on the cheap, fixing them up, and reselling them for a profit. That led to a three-year stint on the A&E show Flip This House, and then to a business selling books and DVDs and giving seminars to would-be flippers around the country. As told to Darren Dahl.
I grew up in San Antonio; my dad worked in the construction business. But in 1986, the economy changed dramatically, and the real estate market tanked in Texas. A lot of people lost a lot of money, including my family. We lived through some hard times, and it made a lasting emotional impression on me.
By 2001, I had gotten married and had a son, but I hadn't done much with my life.
My son was two and a half. I remember thinking, One day, he'll think of his dad as either a winner or a loser when it came to money. That's when I decided to enter the real estate game.
I made a few friends who knew the business and who helped mentor me. My dad let me borrow $1,000, and I began buying and selling distressed houses locally. At that time, there was a huge mold scare in Texas, and houses were dropping in value by up to 40 percent overnight. At the same time, homeowners were in litigation with their insurance companies over paying their claims. I began offering myself as an expert witness to the attorneys. I would put in an offer to buy a house, which helped them establish a value for the house in court.
"It's like if someone had been out there studying how Hearst or Getty or Trump did it from the ground up. That's what I'm offering."
Whenever I didn't know what I was doing, I adopted the philosophy of "fake it until you make it." I would walk into any situation the way I did with the lawyers in the mold lawsuits. I would act like the biggest and best real estate investor around who would buy any house in any condition. By working extremely hard and finding people with a need, that's what I started to become.
With the help of an investor, I would buy a house for $60,000 that was originally valued at $150,000. I then put $20,000 into repairs and got a microbiologist to certify that it was clear of mold. I would put the house on the market for $120,000, and it would sell within 30 days. I kept doing this over and over again. It was a volume game. Within three years, I had made $3 million.
The TV show was probably one of the greatest things that ever happened to me. It was a life changer, and I'm grateful for it. It will be cool to show the videos to my grandkids.
There are two types of people: those meant to be on camera and those who are never meant to be. I was meant to be on camera, because I have a lot to say. When you're the seventh of eight kids, you learn how to speak up.
I once told my wife that if I ever learned how to make money, I would teach the world. That's the truth. Flip This House became the platform for me to do that. So I made the commitment to build a $100 million business teaching people to get rich—or I'd go bankrupt trying. We did $74 million in 2011 and are on track to hit $100 million this year.
Since starting the company, we have come in contact with 300,000 of what I call our "students," people who want to learn the real estate business from attending our seminar or buying our books and videos. Our seminars are held in anywhere from six to 18 cities a week. I personally do nine three-day advanced seminars a year.
We teach people how to assess houses by looking at things like the roofline, the foundation, and the condition of the paint. When you flip houses, you can't afford to get the rehab numbers wrong. We can teach only part of that in the classroom. The rest comes from seeing and touching the house itself.
I am building the next great American brand associated with wealth. That's why I've sponsored Indy 500 cars and the final table of the World Series of Poker. It's like if someone had been out there studying how Hearst or Getty or Trump did it from the ground up, following what they did every day and seeing how they banged their head on the table and overcame challenges. That's what I'm offering.
I still invest heavily in real estate. I'm out there making deals. That's separate from the seminar business. I will only teach people how to flip houses if I'm doing it myself.
When I was 25, I wrote a list of goals. I found that list the year after I started my seminar business and realized I had surpassed every goal I had set. It's my belief that if you have a dream, it should be your only action in life to go after it without a backup plan.
The foreclosure market has created an incredible inventory of distressed properties. If people aren't getting educated about the real estate market, foreclosures, and banks, they are missing a phenomenal time to get really rich. When I look around, I feel like a shark in a minnow tank.
DARREN DAHL is a contributing editor at Inc. Magazine, which he has written for since 2004. He also works as a collaborative writer and editor and has partnered with several high-profile authors. Dahl lives in Asheville, NC.