When a natural disaster destroyed his real estate business in 2004, Jorge Newberry was saddled with $26 million in various debts that he couldn’t pay. Through years of fighting with creditors that were trying to collect non-stop, he discovered tactics to settle those debts for pennies on the dollar – including some for nothing at all. Today, he is the founder of American Home Preservation and DebtCleanse Group Legal Services helping people navigate challenging financial times. On today’s show, he discusses his incredible story of perseverance to create a real estate empire, lose $26 million and use his experience to help others battle their debt. Be sure to check out this very special episode!
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Key Market Insights
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Started investing in 1992 before amassing about 500 units in Los Angeles
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Bought 298 units in downtown Los Angeles for $850,000
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Started buying out of state and in 2002, purchased 1,100 in Columbus
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Previous 3 buyers were put in jail
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Given 6 months to fix up the SRO and was fined
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Charged with 36 criminal housing violations and paid a $10,000 fine
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Was on probation for 3 years
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11 months later had completed the rehab and passed with no violations
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Sold it for a multi-million dollar gain
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Emboldened him to buy bad properties
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Bought properties in Oklahoma City, Kansas City and then Columbus
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Woodland Meadows – nicknamed “Uzi Alley” as it had 8 murders the previous year and was overrun by gangs, prostitutes, and drug dealers
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Put $1.35 million down at 10%, needed another
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Put down $3.5MM and found a lender to bring the balance of the $13.5MM
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Bought a KC property for $1.6MM, invested $1MM and had it appraised for $6MM
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Fired all the security after 2-3 weeks and hired community patrol
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Christmas Eve 2004 – ice storm hits Columbus, largest natural disaster in Ohio’s history
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Pipes burst on the boilers due to the storm and the insurance company refused to pay the claim
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Borrowed money to get Woodland Meadows up and running and by summer he ran out of money
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Got the insurance company to pay off $32 Million, but it was not enough to cover all the repairs
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6 months later the building was vacant and they demolished it
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In 2008, started American Home Preservation and worked with debtors to help them relive back debt
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In 2013, started crowdfunding – last fund raised $36MM with 1,400 with minimum investment of $100
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AHP Servicing is now a servicer for AHP notes and others
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Was enlightened that creditors made mistakes and had some of the debts wiped out
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Led to AHP and Debt Cleanse Group Legal Services
Bull’s Eye Tips:
Winning Your Market: If you cannot afford to pay your debts, the best way to resolve it is to stop paying it
Tracking Market Changes: Listening to others
Daily Habit: Each evening, he plans his calendar for the next day
Resources:
Burn Zones by Jorge Newberry
Debt Cleanse by Jorge Newberry
Best Business Books:
The Making of a CEO by Oswald R Viva
Digital Resources
Slack
Tweet This:
“The insurance company’s strategy was to deny the claim, make you sue them and look for a settlement”
“The complex was nicknamed Uzi Alley as it had 8 murders the previous year”
“I realized the property had a jail onsite”
Places to Grab a Bite:
Connect with Jorge:
Website: Debtcleanse.com
Email: jnewbery@debtcleanse
Phone: 312-386-5679
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