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When 33-year-old real estate investor Alex Charfen stepped out into the bright Florida sunshine one morning in 2006 and opened the Wall Street Journal, he knew with sudden clarity that his world was coming to an end.

There on the first page was an article listing the 10 ZIP codes with the fastest depreciating real estate markets in the U.S. He owned properties in four of them.

Charfen and wife Cadey, then high rollers in the Florida real estate market, were soon to become victims of an epidemic sweeping the country – foreclosure. They lost everything, including their Boca Raton home and 23 investment properties seized in foreclosure.

Alex filed for bankruptcy and went from driving a $100,000 custom BMW 750i to a 1998 Ford Ranger that came equipped with dents, rust and 160,000 miles on the odometer.

Just four short years later, the energetic man with a mission is at the helm of the Charfen Institute, a company that trains and coaches real estate agents and small business owners. Since relocating to the Westbank in 2009, the company’s annual revenue has skyrocketed from $500,000 to $9.9 million and staff has grown from four to more than 70, leading the institute to rank 21st on the 2011 “Inc. 500 List of the Fastest Growing Companies in America.”

Charfen also recently won the 2011 Austin Under 40 Award for Real Estate from the Austin Young Women’s Alliance and the Young Men’s Business League. He has become such a sought-after expert on the housing industry that he has had to build a studio in his offices to accommodate regular television appearances, including spots on Fox News and CNBC.
It’s an amazing turnaround story based on passion, lessons learned and good, old-fashioned tenacity.

Perhaps what sets Charfen apart from millions of other Americans who have suffered in today’s economy is what he learned in the process and what he did with that information.

In the middle of bankruptcy in 2007, the Charfens started the Distressed Property Institute, leveraging a decade of experience with foreclosed properties and new personal insight into useful information for others. They began training real estate agents to become certified distressed property experts qualified to help clients headed down the nightmarish path to foreclosure.

“Our agents sit down with them and counsel them on their options,” Charfen said. “They try to keep them in their homes. But most often, the solution is a short sale – working with the bank to sell the home for less than the mortgage value to avoid foreclosure.”

In 2011, the company expanded to become the Charfen Institute and began to also offer training for certified investor agent specialist designations. Tackling the other end of the spectrum, these agents work with clients to capitalize on the unprecedented residential investment opportunities that have grown from foreclosures.

“In the process, we can help keep foreclosed properties off the bank books and in the hands of families where they should be,” Charfen said.

More than 35,000 brokers have become certified as CDPE agents through the Charfen Institute, and another 2,300 have already become certified CIAS agents. These agents do more than help clients with sales, Charfen said. They change lives.

Charfen noticed that some of the same principles that work in the real-estate business work in all small businesses. His educational goal for small-business owners is to teach them how to grow their businesses the right way. To do that, the Charfen Institute is now offering a new course – LEAD, an intense three-day immersion course for small-business owners.

“Success is how high you bounce when you hit the bottom.” – George Patton

The nosedive of the Florida real estate market played a major role in Charfen’s initial downfall, but he doesn’t blame the economy.

“We were not living a safe financial life,” he said. “We were making an insane amount of money, but turning around and using it all to buy more leverage – incurring more debt. It was an unreasonable lifestyle. When the market crashed, we were not prepared. We had begun believing the myth of our own invulnerability.”

When all that lifestyle came crashing down around him, Charfen did what most people in his Berluti shoes might do – he went toes up on the couch for a while.

“I literally stared at the ceiling for four days,” he said. “It was the longest four days of my life.”

Four days can seem like a very long time indeed to a guy who cannot sit still for four minutes. Eventually, Charfen’s trademark energy got him up from the couch and on the phone to longtime friend Alan Waxman.

“Feeling very directionless and defeated, I told him that I had no choice but to declare bankruptcy,” Charfen said. “He told me that I actually did have a choice and that I needed to own that choice and move on.”

Move on he did. He might be in bankruptcy, but he still had a living to make. He decided to do that debt-free through a business built around his personal values.

“I think everyone knows in their heart that they should align their business with their personal values,” he said. “The big question is how do you do that? It sounds simple, but getting there is hard.”

Charfen doesn’t believe in the idea of balancing life at the office with life at home. He believes the secret lies instead in the concept of congruency.

“Work/life balance doesn’t exist,” he said. “It’s something we’ve been sold. The reality is that, if you are always attempting to balance things, something is always going to lose. I believe in synergy. If you build a business that is congruent with who you are, it gives back to you. Work and life should support each other.”

Muscle memory

Charfen has been just as successful at creating a healthy work culture as he has been at creating a healthy revenue line. His company has been rated as one of the best places to work in Austin by the Austin Business Journal for the last two years.

A trim, 6-foot vegan, Charfen runs 30 miles a week and lifts a purported two tons a day. He and Cadey, the institute’s chief operating officer, sponsor numerous 5K and 10K races in Austin each year. Health and fitness fuel Charfen’s contagious energy. Every Tuesday after work, a personal trainer puts staff members who dare through an exercise boot camp.

“I spent a good part of my life not being fit,” Charfen said. “Now, I’m probably on the obsessive side of maintaining a healthy diet and getting plenty of exercise.”

That could be an understatement. Charfen was named Austin’s Fittest Entrepreneur this year by EvoTrain and the Texas Entrepreneurs Network. No wonder – the man usually manages at least one competitive event a month. He’s up by 4:30 every morning. By 5:30 or 6 a.m. he starts his 2-hour workout.

In addition to the personal trainer, Charfen brings an exercise physiologist, a dietician and a massage therapist to the company staff offices for lectures and advice.

Software engineer Lucius Alexander joined the Charfen Institute in 2010. He was a little skeptical of the Charfen culture initially, but he eventually came around. That choice has worked out for him professionally and personally.

Last November, Alexander weighed 408 pounds. Caught up in the company focus on health and exercise, he joined a gym. Following Charfen’s example, he became a vegetarian, hired a personal trainer and started working out at 6 a.m. three days a week. Soon, he was running every 5K the company offered. In less than a year, he has lost 104 pounds. Working with the company’s goal-setting practices also helped Alexander quit smoking and develop a budget that is quickly leading him to pay off all his debts.

“The Charfen Institute gave me a platform to find my own excellence,” he said. “That type of transformation is one that I doubt most people experience in a lifetime. It’s the type of thing that makes you believe you can move mountains.”

Charfen thinks exercise principles translate into the business world. There is a muscle memory to success, he said. You start having some success, and you begin to expect to be successful.

“If success is important to you, make it a habit,” he said. “Setting goals and achieving – those aren’t innate behaviors. They have to be learned.”

Life for Charfen and his family is very different now. He still lives in a luxurious home, invests in real estate and collects expensive cars. The difference now is that he and Cadey pay cash for everything.

“We don’t finance anything; if we can’t pay for it, we don’t do it,” he said.

As he moves ahead, Charfen remains reflective about the last few years – the crash, the upheaval and the rise to unexpected heights.

“When you have a lot and it all goes away, you realize what is really important to you,” he said. “Who you are is who you are, regardless of how much money you have or where you are standing. Work isn’t a place; it’s a state of mind. Success shouldn’t be measured only in dollars.”

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  1. [...] In a revealing profile, the Westlake Picayune’s Dale Anderson takes an in-depth look at our founders Alex and Cadey Charfen’s humbling fall into bankruptcy and triumphant rise to success. [...]

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