Ep 544: Unfair Verdict When The Lawbreaker Prevails In Court

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hello my name is D Martinez today we
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have returning guest Dale Willis if you
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have not seen the episode please go
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check it out we talked about investing
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and building and developing in cows who
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knows if you interest you please go
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check out the other episode but we have
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returning best for deal breakdown we
Chapter 2: The Lawsuit Experience.)
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cover cool interesting
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stories Dale said he has two of two
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interesting stories I don't know if he's
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going to tell both of them but I think
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one is intriguing about a lawsuit you
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want to jump into detail about that yeah
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we we had a project that we had hired a
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broker to sell for us and the the broker
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came in and their their job was to sell
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this community and they brought in a
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real estate agent that was Manning the
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model and selling the homes well we
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discovered this agent didn't have a real
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estate license and so we said wait a
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minute we can't do this we own a
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broker's license you know we'll lose our
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license this is against the law and so
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we terminated them immediately and in
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this particular case we were selling a
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Town Home Project it was 80 units or
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something and we said well you know
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we're only going to be able to pay you
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part of what you did because we've got
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to bring somebody else in to finish it
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you sell a unit well there's still a lot
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of work to be done from the time that
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they sold to the time they close you
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know you're working with them on
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selections concerns walking through the
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home with the uh
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the project managers am again time so we
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we did that and we said we're only going
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to pay you half they ended up suing us
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and saying hey you you've got to pay us
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all of us this is the
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agreement we're not sure about paying
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you on an agreement when you've broken
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the law so we end up going to court
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through the suit and they went and they
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sought a summary judgment summary
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judgment effectively says you know we're
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going to not take this thing to trial
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and we're going to find in favor of one
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or the other party so we go in we're
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sitting there and I'm I'm actually there
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with our attorney sitting at the table
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the attorney walks in not the attorney
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the judge look looks looks down looks at
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some papers for a few minutes nothing's
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being said and then looks up looks at my
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attorney and said he broke the law so
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what and it was like it just sucked the
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air out of the room like he broke the
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law so what you're you're a judge how
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can you say he broke the law so what and
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so you know our attorne talks about why
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it's a so what and their attorney says
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well it doesn't matter we have a
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contract and we go back and forth right
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there on the spot the judge finds in
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favor of them and says no you owe them
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the money you have to pay we don't care
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if they broke the
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law wow yeah we were just like how is
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this possible this can't be possible so
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we leave and my attorney you know he's
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with a pretty good siiz law firm and and
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he goes back and he and he just stunned
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by this and he brings all the critical
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people in and the lawsuit was I think
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over
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$40,000 and uh so he brings in key
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people litigators in his firm and said
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you know this is what happened and
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everybody's just stunned they're like
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how could this be How could a judge say
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I don't care about the law they broke it
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so what pay them
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anyway and so he you know after
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Consulting they come back and said you
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know if you file an appeal guaranteed
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you're going to win this you know win it
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on an appeal
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they said you know we can file the
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appeal it'll cost you about
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$80,000 you'll win the appeal we see no
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scenario where you don't win the appeal
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the problem is though the way the court
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systems work is when you win the appeal
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you'll spend $80,000 it'll get then sent
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back to the original judge saying your
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ruling was incorrect you need to proceed
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so we go back and we'd be back at square
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one preparing for a
Chapter 3: The Buried Gas Station Discovery.)
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trial they said and we don't know what
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that'll cost you but it'll cost you 80
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grand to get back to there I said so so
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what you're telling me is I could just
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pay this $440,000 judgment and he wins
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even though he broke the law or I can
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spend 80 grand appeal it go back and
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then spend some absurd money to actually
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win they say yeah that's
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right so I went home Angry ready to
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ready to destroy everybody and woke up
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the next day and went you know sometimes
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you have to
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say just walk away you know it's not
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worth the stress so so we ended up
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writing a check for $440,000 and
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sometimes I go man I can't believe I let
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my ego do
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that it's Prett it's pretty wild I look
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back and I just still to this day look
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at I go how's that possible the judicial
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system is crazy in the United States and
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whenever people mention lawsuits it's
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always a uh a big round circle that
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leads to nowhere and the only people
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they fate is the attorney yes yeah it's
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it's almost not worth it to sue people
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you Al almost want to go to like
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mediation or some other form to shortcut
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that because once you go that route it's
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it's terrible man there's no there's no
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winning in a lose lose outcome yeah that
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that summary judgment you know we
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probably spent
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$20,000 you know so it was you know all
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done I was 60 Grand the uh the other
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attorney I'm sure was probably about
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$20,000 so all said you know the guy
Chapter 4: Lessons Learned and Resilience.)
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that sued me ended up with 20 ,000 in
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his pocket and the attorneys ended up
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with 40 yeah and I ended up with 60,000
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less than I had but you know the
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principle I take from it that I do
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remind myself is you know what's the
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opportunity loss you know I've been
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involved in lwuit and it just it
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stresses you out it's it's you're just
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carrying this heavy burden on you all of
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the time and you know there's no way you
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can perform at your best and find that
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next deal and make good business
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decisions when you're you know you got a
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lawsuit over your head so you the
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hindsight it's like yeah we did the
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right thing because how many deals would
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I not have done if we were focusing on
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that but it doesn't change the fact that
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it just
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sucked yeah the it's just it's I feel
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bad I'm really glad you brought the
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story because this is the experience and
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when you do business for a long time
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there's going to be lawsuits that come
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up and you can't really prevent them
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people are just out there they feel they
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feel unjust and they're going to sue you
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yeah it is what it is yeah and and then
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you have to you know sometimes we get SU
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it's like well do you need to defend it
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all the way to the end because you also
Chapter 5: Closing Remarks and Contact Information.End)
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don't want to get a reputation for
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settling frivolous suits because then
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you're just inviting people to come in
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and sue you absolutely absolutely yeah
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it's a tough one it's a double-edged
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sword for sure do you want to tell the
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other story as well or you want to yeah
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yeah we had a project you know it's one
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of those it doesn't matter how good you
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do your due diligence yeah absolutely we
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go in and you know you do your soil
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borings and make sure and you do your
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soil samples and you do your wetland
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iation if it's needed and you you do all
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the due diligence so we had a project
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that we did all of that and you know we
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did the soil borings and the soil's
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great and we did soil testing it's great
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because it was a Redevelopment we knew
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there was buildings on it before and
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everything came back excellent and uh so
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we're we're thrilled we go in and and uh
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it's an infill piece and they go in to
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dig and we find a buried gas station
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that was done in the
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1930s wow just like oh this is a
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disaster you know we're finding all this
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stuff it's like how did this get missed
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well it just so happened that where they
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did the borings there was no
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contamination and they just barely
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missed hitting these different spots
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because we did several borings and so we
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had to OV excavate this entire site and
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we had to pull out um gas station uh gas
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gas tanks buried gas tanks foundations
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that were under there tear it all out
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and you know as one of those it's like I
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don't know what you learned from that
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experience you know because it's not
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practical to go put a soil boring every
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five feet on a site that you're trying
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to develop we it just happened to be
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that that we missed it you know luckily
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the the you know reclaiming the site you
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know didn't delay us too much only
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delayed us a month or two and you know
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the cost was a lot more than you like to
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spend but in the the big picture of the
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project it didn't kill us and make us
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lose money but you know it's one of
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those that you it doesn't matter how
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hard you do your due diligence it
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doesn't matter how hard you review and
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and make sure that you're you're doing
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everything right there's just sometimes
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that you know part of real estate
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there's a risk yeah you you
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don't you got some really good stories
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those those two are really good like you
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never know you never know what you're
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going to get when you buy something yeah
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yeah you stick in the business long
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enough and you're G to get some stories
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to tell that are funny and some stories
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that are to tell that aren't so
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funny I should have saved the funny ones
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for you they're they're funny now
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they're funny now
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yeah they're funny now and that's all
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that matters is H you don't have to it's
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it's in the past you don't to think
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about it
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anymore yeah yeah yeah yeah if you go
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long enough though you get some you get
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some funny ones that are funny in the
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moment and others that it takes some
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time to become funny absolutely
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absolutely well I have you as Central
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Capital Partners work us funny online
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again Central Capital partners.com
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that's where our investment arm where
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people can uh build wealth with us we
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also have Centra companies.com which is
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the bigger picture where we do
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apartments and and other real estate and
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then d r wills at LinkedIn yep if you
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haven't not seen the episode please go
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check it out we had a good time thanks
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for coming on again I appreciate your
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time and for here go like share
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