Building a $30 million financial egg usually takes a lifetime … unless you’re Josh Altman from Million Dollar Listing Los Angeles. Not only did Altman create his fortune in about a decade, but he also did it after going completely broke.
Altman’s “rags” to riches to then rags story is a personal finance cautionary tale. He and brother Matt Altman rose quickly in the real estate game shortly after the turn of the century. The brothers first flipped homes, riding on the 100% financing concept. But as they quickly flipped and sold more homes they wanted more. They entered the mortgage market, opening their own firm, and staffing up with their friends.
History is a painful reminder of how this economic chapter ends. And Altman’s story is not entirely unique. He was making more money than ever and became a millionaire at age 26. But as fast as his bank account grew, he spent even more. The market crashed and he lost everything.
The team kept buying properties they couldn’t afford
One of the biggest personal finance lessons from the 2007/2008 crash was to live within your means. Altman shared on the So Money podcast how he lost everything so quickly.
He and his brother collaboratively invested $10,000 to purchase a property for $400,000 using the 100% financing option. They flipped it and made $200,000 but then they kept re-investing their profits to flip larger and more luxurious homes. The problem is they couldn’t afford the homes, Business Insider reports.
“I ended up getting stuck in a house that I couldn’t move,” he shared. “I had lost all the money that we kept enrolling into the next one and into the next one.”
He shared the biggest lesson he learned from losing everything. “I thought that I’d never be able to get back to where I was. But now, looking back, it was one of the best learning experiences I could have ever had. I learned I’m never going to be that person who’s buying stuff that I can’t afford.”
Altman admits he was completely devastated
The 2007/2008 real estate market crash was the first domino to spark one of the worst recessions in U.S. history. Altman was one of millions who not only lost business but lost everything. “I couldn’t get out of bed for eight months, but I’m lucky enough to have my brother,” he told Entrepreneur.
“We motivated each other,” he continued. “We found ourselves on the weekends driving around to check out houses just because it was free. And it was like, ‘Look, why don’t we just become realtors again? We love this!’ So we started doing that and slowly worked our way out of our hole.”
The team slowly began to climb out of their financial depression. “We sold about $12 million, then the next year sold $38 million, then $88 million and kept building. In a 24-month period, we sold about $500 million residential real estate. We built the business now up to you know selling over a million dollars a day.”
His net worth climbed to $10 million by 2016
The real estate market struggled after being on life support following the crash. But Altman powered through and re-established and exceeded his original net worth to reach $10 million. As Million Dollar Listing viewers recall, the market has been on fire until only recently. By 2020, his net worth stands at $30 million.
Today Altman has more to worry about than supporting himself. He is now married and is the father of two small children. So he applies his smart money sense to everyday life and hasn’t forgotten the harsh lessons from the market crash.
One money move he makes is to make sure his family is financially stable before he reinvests in the business. He pays himself first, according to Business Insider. “The second I get a check, I take half of it and put it into a separate account that I can’t touch,” he insists. “That’s my No. 1 rule. I don’t even think I have more money than I have because it’s already in a different account that I don’t even look at.”