Leveraging Capital and Smart Investing in Multifamily Real Estate with Brandon Rickman
In this episode of the Multifamily Real Estate Experiment podcast, host Shalon Hutchinson (Hutch the Marine Investor) invites real estate investor and lending expert Brandon Rickman from Flip Genius to discuss strategies for turning capital into velocity and debt into leverage. Brandon shares his journey from single-family remodeling and flipping to establishing a private lending company and investing in self-storage facilities. The conversation covers investment strategies for accredited investors, the three major buckets of lending (institutional, hard money, and private loans), and the benefits of using tools like Solo 401(k) and self-directed IRAs. Brandon also highlights the importance of building trust with investors and flexibility in investment strategies, especially amid market uncertainties. The episode aims to provide listeners, especially veterans, with valuable insights into maximizing their capital's potential and building long-term wealth.
00:00 Introduction and Guest Welcome
01:34 Brandon Rickman's Real Estate Journey
04:00 Understanding Lending Options
06:30 Strategies for Accredited Investors
12:16 Leveraging Retirement Funds for Real Estate
21:37 Adapting to Market Changes
23:58 Focus Round: Personal Insights and Advice
29:13 Conclusion and Contact Information
*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*
Thank you to all of our listeners!!! We would love to hear from you!!!
Email me at:
hutch@hsquaredcapital.com
*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*
Visit our website to find out more:
www.hsquaredcapital.com
Join our Facebook Group:
The Multifamily Real Estate Experiment
Follow us on Instagram:
@hutchthemarineinvestor
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Hutch (00:00):
Wah gwan all you multifamily enthusiast, welcome
to another episode of theMultifamily Real Estate
Experiment podcast.
I'm your host, ShalonHutchinson.
if you're in real estate with mefor a long time, you know me as
Hutch the Marine Investor.
And today, we are joined by aguest who knows how to turn
capital into velocity and alsodebt into leverage.
(00:20):
See.
Brandon Rickman is a real estateinvestor, coach, and a lending
expert of Flip Genius who helpedinvestors scale, intelligently
using private capital.
But this isn't just a flippingconversation.
This, is gonna be a session foraccredited investors who want to
stack their return, acceleratetheir syndication cash flow, and
(00:43):
To protect their liquidity.
So, Brandon, welcome to the lab,brother.
Brandon (00:47):
Thank you, Hutch.
I appreciate it.
Thanks for having me on.
Hutch (00:50):
Yes.
Before we get to the meat potatopodcast, brother, I like to ask
my guests so our listeners canreally tune into who they are.
Do you have a favorite realestate quote or mantra that
drives you?
Brandon (01:03):
Uh, don't fall in love with the property.
Remove the emotions from theproperty.
It's, uh.
I tell people, you know, realestate is the our product, and
so don't fall in love with anysingle product.
I think when people get upsidedown in real estate, they get so
focused on a single property orthis is the only deal I'm ever
gonna find, and they, they makebad decisions because of that.
(01:24):
So I, I tell everybody, don'tget emotional, it's just a
property.
If this one doesn't work out,there'll be another one soon.
So that's my kind of real estatemantra.
Hutch (01:32):
Okay, that's a good one.
Thank you so much, man.
Now, now Brandon, um, can youtell us a little bit about a
journey from operator to,lender, to educator, you know,
what's your focus right now inthis market?
Brandon (01:43):
Yeah, absolutely.
So I started out in, uh, singlefamily, um, remodeling actually.
So had a remodeling company,eventually, um, started building
new houses and then startedflipping houses.
Uh, to date, we've flipped nowover 500 houses and during that
period of time, I, um, learnedthat financing for all these
(02:04):
properties.
Certainly when you have 10, 15houses going at a time, the
financing forum was difficult.
And so we actually over timeestablished our own lending
company.
So we have a private lendingbusiness now where we loan money
out to other investors, um, sothat they can invest in real
estate.
And so.
Um, after doing new constructionand flipping for the last 20
(02:25):
plus years, I realized that thatwas a lot of transactional
business.
And what I mean is that you,whether it's new construction,
you find a lot, you build ahouse, you sell the house, you
make good money.
Now you gotta gotta find anotherlot.
Or with flipping houses, you,you find a house at a good
price, you flip it, you sell it,you make good money.
Now you gotta go find anotherhouse.
So those businesses, even thoughthey've generated, you know, a
(02:48):
lot of cash flow over the years,they're very transactional.
You gotta continue marketing,continue trying to find the next
property.
And so my focus became, uh,trying to find something that
was more generating, um,long-term wealth, generational
wealth.
And so now we are focused on,uh, self storage facilities.
So we are now building a, alarge class, a 115,000 square
(03:11):
foot self storage facilityoutside of Atlanta.
We'll have 865 units in it, sowe're going from a few rental
properties to uh, to 865 doorspretty quick.
Hutch (03:24):
Man, that is awesome, man.
And I like that journey.
I would like to dissect that alittle bit more.
Right?
Because look, um, kudos to youman, going from, you know,
single family to lending to, thelargest syndication.
So in, in syndication, right?
We, we often meet investorswith, you know, a lot of time
they have dry powder, but a lotof time they aren't ready.
(03:44):
To, to go all in, insyndication, you know?
Let me ask you this, man, whatrole, um, does hard money plays
in like in between that stagewhen someone is waiting to place
capital into a syndication Butwant to keep their money moving.
Brandon (04:00):
Yeah, that's a great question.
So I kind of put, uh, lendinginto three major buckets, right?
And so maybe a little differentthan what a lot of people think
of it as.
When I first started in realestate, um, I thought of there
was only one bucket, and thatwas institutional lending, I
call it, which is, uh, using abank.
And so that is one bucket.
Um, but what I found, especiallywhen I was doing new
construction and building newhouses, that.
(04:22):
They require a lot of paperwork.
Um, they want all your W2s.
They wanna see what your incomefor the last couple of years has
been, and then they'll only loanyou a percentage of the money.
So institutional bank or brokersis kind of the first bucket,
usually a lower interest rate,um, but a, uh, much more
difficult to get.
The second bucket that you askedabout, we call hard money
(04:44):
lending.
I call hard money lending, whichis a pretty common term in the
real estate space.
But hard money lenders arelarger companies that pool money
from other investors, and thenthey loan it out to other
flippers, other real estateinvestors.
And so it's much easier to get,they don't require all the, tax
records and documentation andall that much easier to get, but
they interest rate is higher.
(05:05):
And so we're seeing, you know,10, 11, 12, 13%.
On hard money loans, but I thinkthat's as long as you put it in
your budget and as long as youknow what you're gonna pay out,
you account for it.
I think it's perfectly fine.
We, we built our business off ofhard money loans, and then the
third bucket, which I'll coverquickly, we call private loans.
And some people say, well,what's the difference in private
(05:26):
loans and hard money loans forthe way we break it down?
Private lending is from people,uh, friends and family that know
me, they know my business, theytrust me.
That's the easiest type offinancing in my opinion,
because.
I can negotiate the rate, I cannegotiate the terms, I can
negotiate the payback.
And a lot of times they'll, I'llsay, you know, I have a, a
(05:46):
property I wanna buy for thismuch, and they'll wire me the
money, no questions asked.
So private money is certainlythe easiest.
Um, but those lenders also havelimited funds.
Hard money is a little moredifficult than private lending,
but they have much bigger poolsof money to loan out.
Hutch (06:03):
Yeah.
That is awesome, man, becauselook.
Especially when I talk to myveterans.
one of the things that.
That we talk about is their riskcapacity and their risk
tolerance.
Right.
And a lot of time when you, youmeet, a guy or a gal who may
have spent a lot of years tosave a couple hundred thousand
dollars, you know, say 150 to$200,000, and, you know, it's
really challenging for them to,to really let that go in big
(06:27):
bulks of money.
Hmm.
Right.
Yeah.
And with the syndication that wedo, it's like a, it's not like,
it is definitely a long-termrelationship where the money's
tied up for a little bit ofwhile, right?
No, entertain this conversation.
Real quick man.
How can accredit investors use,say their, their private capital
to to lend like a person likeyourself, you know, not just for
(06:48):
flip, but with the biggeststrategy to create a, a dual
strategy that increased thevelocity without, Stacking too
much risk.
Brandon (06:58):
Yeah, I think it's whether if you're, if you're
employed, if you have a, anormal nine to five job and you
have some good income, yeah.
You can obviously take thatincome and save, like you're
talking about, to invest.
And we do, in our particularsyndication with our self
storage facility right now, wehave a minimum investment of
$50,000.
Right.
So you can get involved eventhough it's a$14 million
(07:20):
project.
Um, part of that is a bank loanand part of it's syndication,
but you can invest so.
Uh, if you're an accreditedinvestor and you have a a, a
good paying job, you've saved upsome money, you can use that
money to invest in a largersyndication.
And we're seeing, you know, 1.8to 2.1.
Um, ROI on that money over thecourse, like you said, it's
(07:42):
usually a three to five year.
Hold time, but you know, it's,it's people, you know, usually
coming close to doubling thatreturn.
Um, obviously each deal isdifferent.
So I think that's one strategyfor people who have a, a, a
full-time job.
And then obviously for otherinvestors or people who are
becoming full-time investors, Ithink you can utilize a couple
of different strategies.
(08:02):
One being hard money lending,um, to where you're borrowing 80
to 90.
We have some hard, hard moneylenders who loan up to 95%.
Of the purchase and or rehab ofa property.
And so instead of me having toput a hundred percent of the
money in, um, to do the work,let's say I've got a$100,000 on
the side or a$200,000 on theside, um, I can get a, a hard
(08:26):
money loan and only put 5% or10% down and then take some of
that cash that I've got sittingon the side and invested in
another syndication or twosyndications or three
syndications.
So now I've got money.
Making money, am I active?
Whe whether it's flipping ahouse or whether it's, uh,
whatever I'm using a hard moneyloan for.
And then I have my other capitalout in syndications where I'm
(08:47):
just a passive investor On thoseI.
Hutch (08:49):
Yeah.
Yeah.
So tell me about those passiveinvestors who may want to
increase the velocity of theircapital, right?
But not necessarily want to tieit up for five years.
Right.
What are the options availableto them in, in real estate that,
um, you might be able to helpthem to increase the velocity of
their capital?
Brandon (09:08):
Yeah, I mean, I think, um, so our, our private lending
company is structured similar toa hard, hard money lender.
And so we, we basically, uh,bring in investors and they, um,
invest money into our fund, andthen we turn around and loan it
out at a higher interest rate.
So let's say we pay out 9% or10%.
To an investor and then we loanit out at 12% or 13%.
(09:30):
So that's one way that, um,after the first six months of
investment, you can pull yourmoney out at any time.
So you can reinvest it everymonth, or we pay out monthly.
So if an investor were to putmoney into our particular fund,
this is just an example that I'mconnected to.
Obviously I'm not trying topitch it or any, anything else,
but it's one option.
Um, where someone can put moneyin a smaller amount, they can
(09:53):
get a monthly return on that, sothey can get that passive
income.
Um, and then they can choose topull their money out, uh, with a
90 day notice.
So we kind of structured that.
Again, having real estate as abackground, we wanted to
structure something that we.
Gave investors an option.
Rather than holding their moneyfor three to five years, let's
structure something where theycan get a monthly return.
(10:14):
So it's passive.
They're getting a monthlypaycheck, um, from their
investment, and if they want toreinvest that, they can.
But if they wanna leave, if theywant to pull it out, they can.
And we made it easy for them topull it out.
So that's one option.
Um, personally I think, youknow, trying to have a longer
term view is a, is a goodoption.
I, you know, our, our selfstorage facility over time, same
(10:35):
with multifamily over a coupleyear period, will pay much
better than if you put yourmoney into something for six
months or eight months.
But there are options out there,um, depending on what the
strategy is for each investor.
Hutch (10:46):
Yeah, no, no doubt, man.
Because when you think about it,so for example, um, some of our
retired veterans, right?
So they, if they have somecapital sticking on, um, sitting
on the sideline, that that isnot overly tied up, right?
to your point, one of the bigoption they have for themself is
if they're projecting to use thecapital within the next year and
a half or so, right?
They could potentially, um, usethat money, um, to invest in a
(11:09):
private fund that.
Could gain them that, you know,8% to 12% within that year.
And it's almost guaranteed,almost guaranteed, um, for those
interest rates if they lend itas a private capital.
However, um, the interest ratewill be taxed as earned, or the
interest will be taxed as earnedincome, right?
So you don't get to leverage adepreciation in most cases.
(11:31):
You don't get to leverage adepreciation as you do in a
longer term in investment,however.
Um, to Brandon's point, yourcapital will only be we title
for a very short time.
There's a, a short lockupperiod, usually 90 days to six
months where your money's lockedup.
And then after that you can getyour money back within 90 days.
And that's something that HSquare Capital is working, um,
(11:52):
into as well as far as a debtinstrument fund.
Um, yeah.
Yeah.
So, you know, great, greatpoints.
Um, so let's talk about thissyndication man.
Um, what principles, right?
From, lending risk control, youknow, equity buffer, deal
structuring should, um,syndicated, be using more, um,
more from when they raisecapital or underwriting?
Brandon (12:15):
Yeah.
Um, one thing too that I wantedto mention, um, on that last
point is, um, we have a lot ofour investors who, who invest in
our, um, fund or in our businesswho are, are rolling over a 401k
or an IRA, and I'm sure youcovered that a lot with your
listeners, but.
Um, you know, there's a, a lotof people were not aware of
this.
We used to, uh, get a lot ofinvestors who we would teach'em
(12:37):
how to roll over their, sort,their, uh, 401k into a solo 401k
or their IRA into aself-directed, and then they
have the ability to invest thatmoney into funds and
syndications and stuff likethat.
So, won't go into detail onthat.
I'm sure you have, and youcertainly have the knowledge of
it.
That is
Hutch (12:54):
a good topic.
Let's, let's do that.
Right.
That's a good topic because, um,a lot of folks, you know, we
think that to invest in realestate, we have to use our now
money.
And that's, this is the phraseor phrase that I use quite often
on this podcast.
Um, however we can use our latermoney, right?
Um, to invest into incomeproducing assets that.
(13:15):
Would significantly create morepredictability in, uh, the
self-directed IRA let, let'stouch on that for flip real
quick.
Go a little bit deeper.
Brandon (13:22):
Yeah, absolutely.
I love it.
I love the strategy and I wassurprised when I learned about
it and then started sharing itwith other people.
They had no idea.
So basically, um, when, if youwork for, let's say you work,
you're in the military, you workfor the government or you work
for Home Depot or whatevercompany you're getting, uh,
putting away money and thecompany is matching something,
or the government's matchingsomething into your 401k.
(13:44):
You can move that into an IRA ordifferent retirement programs.
So in the 72, I believe it was71 or 72, the government came up
with, uh, a similar strategy forentrepreneurs, um, solopreneurs,
people who are starting theirown business because we need an
opportunity to invest money aswell.
So if you, let's say you workfor General Electric.
(14:05):
Um, and they're, you're, you'reputting money into a 401k,
they're putting matching your401k in some form or fashion.
They have a custodian who isthen investing that money
usually in some type of mutualfund or stocks and bonds and
hoping to get a return.
Yeah.
So what you can do that thefederal government established
back then is there's a thingcalled a SOLO 401k, and it's
(14:29):
established for entrepreneurs,people who start their own
business or have their own LLC.
And you can transfer that moneyfrom your 401k into your solo
401k, and then you are thecustodian of that money.
And, and this is, applies with aself-directed IRA as well.
Um, so when I transferred moneyfrom my 401k, uh, I've been
(14:50):
working for corporate Americainvesting into my 401k over
time.
Um, had some money in there.
I was able to transfer it fromthat 401k.
Into my solo 401k.
It's a newly created, um, solo401k, right?
I opened the account at my localbank and it's a trust account.
And so when you transfer thatmoney from your 401k into your
(15:12):
solo 401k, there's no taxes, nopenalties, no fees, because it's
the same as if you weretransferring from Charles Schwab
to Merrill Lynch.
You're, you're transferring itfrom one 401k to another 401k,
right?
The difference is when youtransfer it into your solo 401k.
You have checkbook access.
So you become the custodian.
Now you have the right to investthat money into certain things.
(15:34):
And there is a list of thingsthat the federal government
approves that you can invest in.
Real estate is one of'em.
Um, lots of different things youcan invest in, even
cryptocurrencies.
But there are some things thatthey don't want you to invest
in, and there's some regulationsaround how you do that.
But the great thing is someonewho is retired or someone who
has a big 401k that they'resitting on and they're earning
(15:55):
2% or 3% interest through amutual fund, they can now
transfer that into a solo 401kor a self-directed IRA.
And they can then decide, okay,I want to invest in H squared's,
uh, syndication, or I wannainvest in this more passive
thing.
They write a check out of thatsolo 401k checkbook for 50,000,
a 100,000, 200,000, whatever itis, and that they, they're the
(16:18):
ones, they're the custodian whomanages that fund so they can
choose to invest it where theywant.
Get a return on it.
That return as long as it goesback into the solo 401k.
Correct.
And you don't use it for, for tospend on whatever you want.
It's not taxed.
So you invest a hundred thousanddollars outta your, so solo
401k.
I should say it's not taxedright now.
(16:39):
Yeah, it's, yeah.
So, um, whatever you take out,if you take a hundred thousand
outta your solo, 401k, youinvest it, it makes$50,000.
If that whole 150,000 goes backinto your solo 401k, you don't
have to pay taxes on the income,the, the additional income that
you received.
Hutch (16:57):
Yeah.
Um, likewise the self-directedIRA as well, S-D-R-A.
Um, there, there are somecaveats, so please ensure you,
you're speaking to your taxadvisor, right?
Because, um, I know for when youuse a self-directed IRA, if
there's a financial component tothe property that you're
purchasing, um, that couldpotentially trigger, a,
unrelated business income tax.
I thing it's called, UBIT tax.
(17:18):
Right.
That you might need to pay.
But when you look at the, thebenefits from investment
syndication and, the velocity ofwhich a capital is growing.
Some, um, of that, um, taxesthat are triggered, the UBIT tax
that that is triggered ispotentially negligible, right?
Because when you compare whatyou would be making or the
fluctuation in the difference ofmarkets, um, that you don't have
(17:38):
to deal with, um, you could,you, you're potentially making
more money, um, even by, evenwith paying the UBIT tax.
So ensure you speak to yourfinancial advisor, um, or your
tax strategist to ensure thatyou're using the right strategy.
Also, I think would, would, um.
Solo 401k.
There's an employment, um,criteria, right, where if you
have employees, there's someleft and right lateral limits
(17:59):
with that.
so be mindful of, the solar 401kas well.
But however, those are vehiclesthat you can use to create more
predictability, um, to Increaseyour retirement plan or
retirement funds, right, withoutdealing, dealing with a
day-to-day fluctuation.
And it's a little bit moresecured, not guaranteed, but a
little bit more, um, secured wayof growing your capital as well.
Yeah.
(18:19):
Thank you Brandon for, fordissecting that.
Sure.
Brandon (18:23):
Absolutely.
I think it's important to, likeyou said, of course, check with
your tax strategist or youraccountant to make sure.
Right.
And, and there's differentcompanies that can help you do
the transfer.
We did that as well.
The other thing is that.
If you're, and you mentionedthis too.
Um, so I believe the regulationis you have to be a solo, you
have to be a one employee, whichwould be yourself.
You can also include yourspouse.
(18:45):
Um, and then the other thing isyou're allowed to do
contributions, and I think it'sup to$19,000 per year, maybe
19,500 now.
Per person.
So every year I can contribute$19,500 into my solo 401k, and
my wife can as well.
So you know, it's 40, roughly40,000, a little less than
$40,000 a year that I cancontribute into my solo 401k.
(19:06):
So there are some regulations.
If I have five employees, itdoesn't apply.
Um, because it's, it's only forself-employed, correct?
One to two employees, I believe.
So you'll have to certainlycheck with your, uh, the
regulations and your taxstrategist, but some, some great
benefits.
And then again, I can turn that,uh, and loan that out at 8% or
10% or 12% or invest it into asyndication, you know, where I
(19:28):
can double or triple my moneyover the, a longer period of
time, you know, three years,five years.
So some really good vehicles andoptions.
But yeah, check with your.
Your tax folks to make sure thatyou're, you're doing everything,
uh, that you need to do.
Hutch (19:41):
Yeah.
And for the military veterans oreven if you are an active duty
and listening to this podcast,um, keep in mind, right, if you
have been contributing to thethrift savings plan, you can
actually take a loan.
And when you look at theinterest rate for the loan,
we're talking like about 3%, um,sometime less, sometime a little
bit more.
I've not seen more than 4%, um,for the, to take a loan out of
your TSP.
(20:02):
And when you look at.
Pulling a loan out and increaseand invest in it had, in an
income producing asset that hasa significant higher yield,
whether it's through privatelending, where you're gaining
that, um, 8% to 12%.
When you look at a delta, theywere looking at what, um, you
anywhere 4% to 6% or sometimeeven higher, you are using the
(20:25):
money to work at a highervelocity.
Right.
Yeah.
And at the same time, if youstill got military service, you
usually give about five years topay the loan off.
You're still contributing tothe, to, to your thrift savings
plan while you have your moneyworking in two different places.
Right?
So something to look forward toif you want to, um, get into
real estate and, and learn howsyndication work, learn how the
(20:45):
cash flow works, learn how tocapital stack work.
Um, so whenever you do retire,you have a better understanding
of how to, um, different bucketsthat you can pull your capital
into to grow it at a highervelocity, right?
Yeah.
So, yeah, if he, I, I've donethat a couple times.
If he, if you got it, if.
If you listen to this podcastand you want to learn more about
how to leverage your TSB intohigh yield property, um, um,
(21:09):
lemme know and I can walk youthrough the process as well now.
So, um, Brandon, um, one lastquestion before we head into the
focus round.
I wanna be, I wanna be mindfulof your time, you know, so, you
know, post-election, right?
Um, there's a lot of unknownahead, you know, you know, rate
changes, tax, code shift, andeven probably may affect some
banking policies, right?
Mm-hmm.
(21:29):
What is your team watchingclosely and uh, what are you
adjusting now to, um, that mostpassive investor aren't thinking
about?
I.
Brandon (21:38):
I think one of the things that, as I look back over
my 24 year, I guess, uh, realestate career is, um, being
resilient and being flexible inyour strategy.
One thing that I've learnedcertainly over the last couple
years is that, um, even thoughI've seen this multiple times,
you know, I've, I've wentthrough the uh, 08, 09 downturn
and, um, you know, other othersbefore that, and so I've seen it
(22:00):
multiple times.
One thing that I've.
Learned is that we have no ideawhat's gonna happen to the
market.
The stuff that, you know, lastyear when the, change in our
government, you know, peoplethought that was gonna help real
estate, it was gonna improvethings.
Interest rates were gonna justdrop suddenly, and that was just
gonna open up.
The real estate market has notbeen the case.
In fact, I think our, the realestate market has slowed down a
(22:20):
little bit this year.
So, you know, people arehopeful.
The next six months we'll turn acorner, but at the end of the
day, like I said, we don'treally know, um, decisions could
be made that could changethings.
So I think, um, you just have tobe flexible in your strategy.
We've, uh, at, at one time whenthe market allowed for it, we
were buying rental propertiesand stacking up rental
(22:40):
properties.
The market changed.
It became a seller's market.
We were able to sell those at ahigher, much higher, uh, amount
than we bought'em for.
So then we had cash.
Right now, uh, based on where weare, I'm trying to stock
stockpile cash, uh, get as muchcash and hold onto it.
So we've, over the last coupleyears we've sold not all of our
rental properties, but most ofour rental properties, our
(23:02):
single family properties, um,using some of that cash,
obviously to invest in a selfstorage facility, but then also
wait for opportunities as theycome up because if the market
continues to slow down, I thinkthere's gonna be opportunities.
So I think.
Kind of the focus going forwardis we're still still doing our
normal day-to-day business inreal estate.
Not at the scale.
(23:22):
We did back in 2021, 2022.
Um, so a, a smaller version ofthat.
But then we are also looking atwhere can I invest my money in
a, a syndication or in a longerterm deal that has.
Good upside, even though it maybe parked for a little bit
longer.
And then also holding some cashfor opportunities that may pop
(23:45):
up if the market continues toslide.
Hutch (23:47):
Yeah, that is awesome, man.
Thank you so much for that.
Um, we're gonna head into thefocus round Brandon, which is,
um, five question.
Uh, we can go as fast and asslow as you want to.
Depends on how much time youhave on this back backend.
Right?
Okay.
So what do you do for fun?
Brandon (24:00):
Well, I'm a coach, I'm a basketball coach, coach JV
basketball at local high schoolhere.
Um, and I love to fish.
Uh, so have a, a bass boat.
My 15-year-old son loves to fishand so we go in shore fishing
down at the beach and they'dlove to bass fish as well.
Hutch (24:17):
That's awesome, man.
What is one opportunity thatlooked very small, um, but
turned out to be a big gamechanger for you?
Brandon (24:26):
Oh, um, I would have to say the, the self storage, um,
project, it was a, without goinginto too much detail, it was two
single family homes beside eachother that I bought from another
wholesaler.
Right.
And that wholesaler sold it tome, thinking it was a two flips,
two side by side flips.
And during my due diligence, Ifound out that the future land
(24:46):
use map showed it as commercial.
Oh, nice.
I was able to take it through,get it approved for self
storage, so it went from.
Two single family homes that Iwas gonna flip and make, you
know, 60, 70, 80,000 on eachone.
To a, uh, 865 unit self storagefacility that's gonna, you know,
be worth far, far more thanthat.
Hutch (25:04):
Yeah.
That is awesome.
And even just the zoning changein that property increased the
land drastically.
Right, right.
Yeah.
So going through and doing therezoning, um, if you had to
because of the, the, the featureheight and best use of the
property.
Um, yeah.
Zoning in doing all the, thehorizontal work, road work and
all of good stuff drasticallyincrease the land.
Right.
Yes, absolutely.
(25:25):
Um, so like, look, if you listento this and a, a lot of folks
don't know how we can increasethe value of land, but it's all
about identifying the highestand best use, right?
And there's several differentstage.
And if you are a passiveinvestor and you are looking at
ground up development, it'sreally important you get in
there at.
Early as possible so you canride the wave of the growth
(25:47):
within that property.
So you start with all thehorizontal, one rezoning, two
horizontal work, and then whenyou start doing vertical
development, then uh, you juststacking the growth in the value
of that property, right?
Brandon, what's your best pieceof advice for communicating
value to nervous investors?
Brandon (26:07):
I think trust, um, you know, we've, we've always
focused on long-termrelationships.
Um, we have, uh, not personally,um, never not paid an investor
back his return, his or herreturn.
And so in the 20, 24 years plusthat we've been doing this, so,
um, we build relations.
That doesn't mean that I'venever lost money on a flip, I
(26:28):
have.
Um, you know, it's not always,you don't always make money on
every deal you do, but, so I'vepersonally lost money on a flip.
But I made sure that theinvestors got paid back because
we wanted to build a long-termrelationship.
I wanted to work with them onanother property, another
project, you know, anothersyndication.
And so it's not about thatparticular deal, it's about the
relationship that you'rebuilding and building trust.
(26:50):
And at the end of the day, youknow, people have to trust me.
They have to trust you ifthey're gonna invest their money
with you and expect a return.
They've gotta believe that whatyou're telling'em is true.
They gotta trust that you can dowhat you say you can do, and
that you're gonna pay'em backwhat you say, you can pay'em
back.
So.
I think building relationshipsand having trust in your, in
your business partners is key.
Hutch (27:09):
That's awesome, man.
Um, what do you wish moreinvestors understood about using
leverage responsibly?
Brandon (27:15):
I would say the, the biggest questions that I've
always had around it is thefunding piece, um, around real
estate in general.
And I, I, I wish that, you know,I think our, our, um,
educational system does notteach entrepreneurialism.
It teaches.
You know, status quo, um, go geta job, make your hourly income
invested in your 401k, retirewhen you're 62 or 72, and have
(27:38):
this much money.
And, you know, there's, there'sjust so many different
opportunities as anentrepreneur, but even in within
real estate and investing,there's a lot of different ways
to do what we do to be afull-time real estate investor.
Like we talked about with thefinancing, there's not just.
Going to get money from a bank.
There's not just using, youknow, having to save for 20
(27:58):
years and then using all of thatmoney to invest in something and
hope that one investment goeswell.
There's lots of otheropportunities, right, that are
out there.
So educating yourself around thedifferent opportunities and how
to raise capital and how toinvest wisely, you know, how to,
how to create velocity in your,in your investments.
There's, there's just a lot ofthings out there and I wish our
educational system did a betterjob of, of teaching people that.
Hutch (28:21):
Yeah, I know, mate.
Um, last question, man.
Um, to what do you attributeyour success, for consistent
growth in this space, brother?
Brandon (28:29):
Oh, I'm a man of faith, my, relationship with Jesus
obviously is key number one.
I would say my, my wife is a, ahuge part of that success.
Awesome.
Um, we've been married, uh,almost 25 years now, and she's
very supportive of me and all mycrazy entrepreneurial ideas.
Um, so having a supportive wifehas been great.
So yeah, I think those twothings.
(28:50):
We talked a little bit aboutresiliency and, and changing
your, um, focus.
You know, don't get solelyfocused on one aspect of real
estate.
There's a lot of differentavenues where you can generate
money, and as the marketchanges, you need to be willing
to change with it, but.
So resiliency is definitely partof it, but I think, you know,
certainly my faith and then, thesupport of my wife are probably
the two biggest things that havehelped our success over the
(29:12):
years.
Hutch (29:13):
Okay.
Thank you so much, man, Brandon,for the information you passed
with us today.
It's definitely a huge strategysession for any listener
listening all the way to theend.
If a listeners wanna get intouch with you, what is the best
way for them to do that?
Brandon (29:25):
So our website is the Flip Genius.
You can see on the sign herebehind me, flipgenius.com.
Um, they can email me.
It's brandon@theflipgenius.com,so
B-R-A-N-D-O-N@theflipgenius.com.
Um, we, we talk about a lot ofour single family stuff there,
and then, uh, our syndication aswell.
And then there's a, a linkthere.
(29:45):
They can schedule a call with metoo if they have any questions.
I'm happy to help share, shareany knowledge that I have to
help people take that next step.
Hutch (29:53):
Awesome man.
Brandon, thank you so much forshowing us how money is a tool,
right?
Isn't just a tool for flippers,right?
It's also wealth of lever forsyndicators, accredit investors,
and anyone who wants to, anyonewho wants to build liquidity,
um, and also build a momentum oftheir capital as well.
And listeners, if you listen tothis, um.
I hope this is a mind shift foryou of the different ways that
(30:15):
you can leverage your capital toensure that it grows the way you
want it to grow, right?
So you're not controlled byuncontrollable forces, and all
this stuff that we pass into youis to help you, your family, and
future generation own more ofAmerica.
So, until next time, I'm HutchMarine investor out.
Thanks, Hutch.
Wah gwan all you multifamily enthusiast, welcome
to another episode of theMultifamily Real Estate
Experiment podcast.
I'm your host, ShalonHutchinson.
if you're in real estate with mefor a long time, you know me as
Hutch the Marine Investor.
And today, we are joined by aguest who knows how to turn
capital into velocity and alsodebt into leverage.
(00:20):
See.
Brandon Rickman is a real estateinvestor, coach, and a lending
expert of Flip Genius who helpedinvestors scale, intelligently
using private capital.
But this isn't just a flippingconversation.
This, is gonna be a session foraccredited investors who want to
stack their return, acceleratetheir syndication cash flow, and
(00:43):
To protect their liquidity.
So, Brandon, welcome to the lab,brother.
Brandon (00:47):
Thank you, Hutch.
I appreciate it.
Thanks for having me on.
Hutch (00:50):
Yes.
Before we get to the meat potatopodcast, brother, I like to ask
my guests so our listeners canreally tune into who they are.
Do you have a favorite realestate quote or mantra that
drives you?
Brandon (01:03):
Uh, don't fall in love with the property.
Remove the emotions from theproperty.
It's, uh.
I tell people, you know, realestate is the our product, and
so don't fall in love with anysingle product.
I think when people get upsidedown in real estate, they get so
focused on a single property orthis is the only deal I'm ever
gonna find, and they, they makebad decisions because of that.
(01:24):
So I, I tell everybody, don'tget emotional, it's just a
property.
If this one doesn't work out,there'll be another one soon.
So that's my kind of real estatemantra.
Hutch (01:32):
Okay, that's a good one.
Thank you so much, man.
Now, now Brandon, um, can youtell us a little bit about a
journey from operator to,lender, to educator, you know,
what's your focus right now inthis market?
Brandon (01:43):
Yeah, absolutely.
So I started out in, uh, singlefamily, um, remodeling actually.
So had a remodeling company,eventually, um, started building
new houses and then startedflipping houses.
Uh, to date, we've flipped nowover 500 houses and during that
period of time, I, um, learnedthat financing for all these
(02:04):
properties.
Certainly when you have 10, 15houses going at a time, the
financing forum was difficult.
And so we actually over timeestablished our own lending
company.
So we have a private lendingbusiness now where we loan money
out to other investors, um, sothat they can invest in real
estate.
And so.
Um, after doing new constructionand flipping for the last 20
(02:25):
plus years, I realized that thatwas a lot of transactional
business.
And what I mean is that you,whether it's new construction,
you find a lot, you build ahouse, you sell the house, you
make good money.
Now you gotta gotta find anotherlot.
Or with flipping houses, you,you find a house at a good
price, you flip it, you sell it,you make good money.
Now you gotta go find anotherhouse.
So those businesses, even thoughthey've generated, you know, a
(02:48):
lot of cash flow over the years,they're very transactional.
You gotta continue marketing,continue trying to find the next
property.
And so my focus became, uh,trying to find something that
was more generating, um,long-term wealth, generational
wealth.
And so now we are focused on,uh, self storage facilities.
So we are now building a, alarge class, a 115,000 square
(03:11):
foot self storage facilityoutside of Atlanta.
We'll have 865 units in it, sowe're going from a few rental
properties to uh, to 865 doorspretty quick.
Hutch (03:24):
Man, that is awesome, man.
And I like that journey.
I would like to dissect that alittle bit more.
Right?
Because look, um, kudos to youman, going from, you know,
single family to lending to, thelargest syndication.
So in, in syndication, right?
We, we often meet investorswith, you know, a lot of time
they have dry powder, but a lotof time they aren't ready.
(03:44):
To, to go all in, insyndication, you know?
Let me ask you this, man, whatrole, um, does hard money plays
in like in between that stagewhen someone is waiting to place
capital into a syndication Butwant to keep their money moving.
Brandon (04:00):
Yeah, that's a great question.
So I kind of put, uh, lendinginto three major buckets, right?
And so maybe a little differentthan what a lot of people think
of it as.
When I first started in realestate, um, I thought of there
was only one bucket, and thatwas institutional lending, I
call it, which is, uh, using abank.
And so that is one bucket.
Um, but what I found, especiallywhen I was doing new
construction and building newhouses, that.
(04:22):
They require a lot of paperwork.
Um, they want all your W2s.
They wanna see what your incomefor the last couple of years has
been, and then they'll only loanyou a percentage of the money.
So institutional bank or brokersis kind of the first bucket,
usually a lower interest rate,um, but a, uh, much more
difficult to get.
The second bucket that you askedabout, we call hard money
(04:44):
lending.
I call hard money lending, whichis a pretty common term in the
real estate space.
But hard money lenders arelarger companies that pool money
from other investors, and thenthey loan it out to other
flippers, other real estateinvestors.
And so it's much easier to get,they don't require all the, tax
records and documentation andall that much easier to get, but
they interest rate is higher.
(05:05):
And so we're seeing, you know,10, 11, 12, 13%.
On hard money loans, but I thinkthat's as long as you put it in
your budget and as long as youknow what you're gonna pay out,
you account for it.
I think it's perfectly fine.
We, we built our business off ofhard money loans, and then the
third bucket, which I'll coverquickly, we call private loans.
And some people say, well,what's the difference in private
(05:26):
loans and hard money loans forthe way we break it down?
Private lending is from people,uh, friends and family that know
me, they know my business, theytrust me.
That's the easiest type offinancing in my opinion,
because.
I can negotiate the rate, I cannegotiate the terms, I can
negotiate the payback.
And a lot of times they'll, I'llsay, you know, I have a, a
(05:46):
property I wanna buy for thismuch, and they'll wire me the
money, no questions asked.
So private money is certainlythe easiest.
Um, but those lenders also havelimited funds.
Hard money is a little moredifficult than private lending,
but they have much bigger poolsof money to loan out.
Hutch (06:03):
Yeah.
That is awesome, man, becauselook.
Especially when I talk to myveterans.
one of the things that.
That we talk about is their riskcapacity and their risk
tolerance.
Right.
And a lot of time when you, youmeet, a guy or a gal who may
have spent a lot of years tosave a couple hundred thousand
dollars, you know, say 150 to$200,000, and, you know, it's
really challenging for them to,to really let that go in big
(06:27):
bulks of money.
Hmm.
Right.
Yeah.
And with the syndication that wedo, it's like a, it's not like,
it is definitely a long-termrelationship where the money's
tied up for a little bit ofwhile, right?
No, entertain this conversation.
Real quick man.
How can accredit investors use,say their, their private capital
to to lend like a person likeyourself, you know, not just for
(06:48):
flip, but with the biggeststrategy to create a, a dual
strategy that increased thevelocity without, Stacking too
much risk.
Brandon (06:58):
Yeah, I think it's whether if you're, if you're
employed, if you have a, anormal nine to five job and you
have some good income, yeah.
You can obviously take thatincome and save, like you're
talking about, to invest.
And we do, in our particularsyndication with our self
storage facility right now, wehave a minimum investment of
$50,000.
Right.
So you can get involved eventhough it's a$14 million
(07:20):
project.
Um, part of that is a bank loanand part of it's syndication,
but you can invest so.
Uh, if you're an accreditedinvestor and you have a a, a
good paying job, you've saved upsome money, you can use that
money to invest in a largersyndication.
And we're seeing, you know, 1.8to 2.1.
Um, ROI on that money over thecourse, like you said, it's
(07:42):
usually a three to five year.
Hold time, but you know, it's,it's people, you know, usually
coming close to doubling thatreturn.
Um, obviously each deal isdifferent.
So I think that's one strategyfor people who have a, a, a
full-time job.
And then obviously for otherinvestors or people who are
becoming full-time investors, Ithink you can utilize a couple
of different strategies.
(08:02):
One being hard money lending,um, to where you're borrowing 80
to 90.
We have some hard, hard moneylenders who loan up to 95%.
Of the purchase and or rehab ofa property.
And so instead of me having toput a hundred percent of the
money in, um, to do the work,let's say I've got a$100,000 on
the side or a$200,000 on theside, um, I can get a, a hard
(08:26):
money loan and only put 5% or10% down and then take some of
that cash that I've got sittingon the side and invested in
another syndication or twosyndications or three
syndications.
So now I've got money.
Making money, am I active?
Whe whether it's flipping ahouse or whether it's, uh,
whatever I'm using a hard moneyloan for.
And then I have my other capitalout in syndications where I'm
(08:47):
just a passive investor On thoseI.
Hutch (08:49):
Yeah.
Yeah.
So tell me about those passiveinvestors who may want to
increase the velocity of theircapital, right?
But not necessarily want to tieit up for five years.
Right.
What are the options availableto them in, in real estate that,
um, you might be able to helpthem to increase the velocity of
their capital?
Brandon (09:08):
Yeah, I mean, I think, um, so our, our private lending
company is structured similar toa hard, hard money lender.
And so we, we basically, uh,bring in investors and they, um,
invest money into our fund, andthen we turn around and loan it
out at a higher interest rate.
So let's say we pay out 9% or10%.
To an investor and then we loanit out at 12% or 13%.
(09:30):
So that's one way that, um,after the first six months of
investment, you can pull yourmoney out at any time.
So you can reinvest it everymonth, or we pay out monthly.
So if an investor were to putmoney into our particular fund,
this is just an example that I'mconnected to.
Obviously I'm not trying topitch it or any, anything else,
but it's one option.
Um, where someone can put moneyin a smaller amount, they can
(09:53):
get a monthly return on that, sothey can get that passive
income.
Um, and then they can choose topull their money out, uh, with a
90 day notice.
So we kind of structured that.
Again, having real estate as abackground, we wanted to
structure something that we.
Gave investors an option.
Rather than holding their moneyfor three to five years, let's
structure something where theycan get a monthly return.
(10:14):
So it's passive.
They're getting a monthlypaycheck, um, from their
investment, and if they want toreinvest that, they can.
But if they wanna leave, if theywant to pull it out, they can.
And we made it easy for them topull it out.
So that's one option.
Um, personally I think, youknow, trying to have a longer
term view is a, is a goodoption.
I, you know, our, our selfstorage facility over time, same
(10:35):
with multifamily over a coupleyear period, will pay much
better than if you put yourmoney into something for six
months or eight months.
But there are options out there,um, depending on what the
strategy is for each investor.
Hutch (10:46):
Yeah, no, no doubt, man.
Because when you think about it,so for example, um, some of our
retired veterans, right?
So they, if they have somecapital sticking on, um, sitting
on the sideline, that that isnot overly tied up, right?
to your point, one of the bigoption they have for themself is
if they're projecting to use thecapital within the next year and
a half or so, right?
They could potentially, um, usethat money, um, to invest in a
(11:09):
private fund that.
Could gain them that, you know,8% to 12% within that year.
And it's almost guaranteed,almost guaranteed, um, for those
interest rates if they lend itas a private capital.
However, um, the interest ratewill be taxed as earned, or the
interest will be taxed as earnedincome, right?
So you don't get to leverage adepreciation in most cases.
(11:31):
You don't get to leverage adepreciation as you do in a
longer term in investment,however.
Um, to Brandon's point, yourcapital will only be we title
for a very short time.
There's a, a short lockupperiod, usually 90 days to six
months where your money's lockedup.
And then after that you can getyour money back within 90 days.
And that's something that HSquare Capital is working, um,
(11:52):
into as well as far as a debtinstrument fund.
Um, yeah.
Yeah.
So, you know, great, greatpoints.
Um, so let's talk about thissyndication man.
Um, what principles, right?
From, lending risk control, youknow, equity buffer, deal
structuring should, um,syndicated, be using more, um,
more from when they raisecapital or underwriting?
Brandon (12:15):
Yeah.
Um, one thing too that I wantedto mention, um, on that last
point is, um, we have a lot ofour investors who, who invest in
our, um, fund or in our businesswho are, are rolling over a 401k
or an IRA, and I'm sure youcovered that a lot with your
listeners, but.
Um, you know, there's a, a lotof people were not aware of
this.
We used to, uh, get a lot ofinvestors who we would teach'em
(12:37):
how to roll over their, sort,their, uh, 401k into a solo 401k
or their IRA into aself-directed, and then they
have the ability to invest thatmoney into funds and
syndications and stuff likethat.
So, won't go into detail onthat.
I'm sure you have, and youcertainly have the knowledge of
it.
That is
Hutch (12:54):
a good topic.
Let's, let's do that.
Right.
That's a good topic because, um,a lot of folks, you know, we
think that to invest in realestate, we have to use our now
money.
And that's, this is the phraseor phrase that I use quite often
on this podcast.
Um, however we can use our latermoney, right?
Um, to invest into incomeproducing assets that.
(13:15):
Would significantly create morepredictability in, uh, the
self-directed IRA let, let'stouch on that for flip real
quick.
Go a little bit deeper.
Brandon (13:22):
Yeah, absolutely.
I love it.
I love the strategy and I wassurprised when I learned about
it and then started sharing itwith other people.
They had no idea.
So basically, um, when, if youwork for, let's say you work,
you're in the military, you workfor the government or you work
for Home Depot or whatevercompany you're getting, uh,
putting away money and thecompany is matching something,
or the government's matchingsomething into your 401k.
(13:44):
You can move that into an IRA ordifferent retirement programs.
So in the 72, I believe it was71 or 72, the government came up
with, uh, a similar strategy forentrepreneurs, um, solopreneurs,
people who are starting theirown business because we need an
opportunity to invest money aswell.
So if you, let's say you workfor General Electric.
(14:05):
Um, and they're, you're, you'reputting money into a 401k,
they're putting matching your401k in some form or fashion.
They have a custodian who isthen investing that money
usually in some type of mutualfund or stocks and bonds and
hoping to get a return.
Yeah.
So what you can do that thefederal government established
back then is there's a thingcalled a SOLO 401k, and it's
(14:29):
established for entrepreneurs,people who start their own
business or have their own LLC.
And you can transfer that moneyfrom your 401k into your solo
401k, and then you are thecustodian of that money.
And, and this is, applies with aself-directed IRA as well.
Um, so when I transferred moneyfrom my 401k, uh, I've been
(14:50):
working for corporate Americainvesting into my 401k over
time.
Um, had some money in there.
I was able to transfer it fromthat 401k.
Into my solo 401k.
It's a newly created, um, solo401k, right?
I opened the account at my localbank and it's a trust account.
And so when you transfer thatmoney from your 401k into your
(15:12):
solo 401k, there's no taxes, nopenalties, no fees, because it's
the same as if you weretransferring from Charles Schwab
to Merrill Lynch.
You're, you're transferring itfrom one 401k to another 401k,
right?
The difference is when youtransfer it into your solo 401k.
You have checkbook access.
So you become the custodian.
Now you have the right to investthat money into certain things.
(15:34):
And there is a list of thingsthat the federal government
approves that you can invest in.
Real estate is one of'em.
Um, lots of different things youcan invest in, even
cryptocurrencies.
But there are some things thatthey don't want you to invest
in, and there's some regulationsaround how you do that.
But the great thing is someonewho is retired or someone who
has a big 401k that they'resitting on and they're earning
(15:55):
2% or 3% interest through amutual fund, they can now
transfer that into a solo 401kor a self-directed IRA.
And they can then decide, okay,I want to invest in H squared's,
uh, syndication, or I wannainvest in this more passive
thing.
They write a check out of thatsolo 401k checkbook for 50,000,
a 100,000, 200,000, whatever itis, and that they, they're the
(16:18):
ones, they're the custodian whomanages that fund so they can
choose to invest it where theywant.
Get a return on it.
That return as long as it goesback into the solo 401k.
Correct.
And you don't use it for, for tospend on whatever you want.
It's not taxed.
So you invest a hundred thousanddollars outta your, so solo
401k.
I should say it's not taxedright now.
(16:39):
Yeah, it's, yeah.
So, um, whatever you take out,if you take a hundred thousand
outta your solo, 401k, youinvest it, it makes$50,000.
If that whole 150,000 goes backinto your solo 401k, you don't
have to pay taxes on the income,the, the additional income that
you received.
Hutch (16:57):
Yeah.
Um, likewise the self-directedIRA as well, S-D-R-A.
Um, there, there are somecaveats, so please ensure you,
you're speaking to your taxadvisor, right?
Because, um, I know for when youuse a self-directed IRA, if
there's a financial component tothe property that you're
purchasing, um, that couldpotentially trigger, a,
unrelated business income tax.
I thing it's called, UBIT tax.
(17:18):
Right.
That you might need to pay.
But when you look at the, thebenefits from investment
syndication and, the velocity ofwhich a capital is growing.
Some, um, of that, um, taxesthat are triggered, the UBIT tax
that that is triggered ispotentially negligible, right?
Because when you compare whatyou would be making or the
fluctuation in the difference ofmarkets, um, that you don't have
(17:38):
to deal with, um, you could,you, you're potentially making
more money, um, even by, evenwith paying the UBIT tax.
So ensure you speak to yourfinancial advisor, um, or your
tax strategist to ensure thatyou're using the right strategy.
Also, I think would, would, um.
Solo 401k.
There's an employment, um,criteria, right, where if you
have employees, there's someleft and right lateral limits
(17:59):
with that.
so be mindful of, the solar 401kas well.
But however, those are vehiclesthat you can use to create more
predictability, um, to Increaseyour retirement plan or
retirement funds, right, withoutdealing, dealing with a
day-to-day fluctuation.
And it's a little bit moresecured, not guaranteed, but a
little bit more, um, secured wayof growing your capital as well.
Yeah.
(18:19):
Thank you Brandon for, fordissecting that.
Sure.
Brandon (18:23):
Absolutely.
I think it's important to, likeyou said, of course, check with
your tax strategist or youraccountant to make sure.
Right.
And, and there's differentcompanies that can help you do
the transfer.
We did that as well.
The other thing is that.
If you're, and you mentionedthis too.
Um, so I believe the regulationis you have to be a solo, you
have to be a one employee, whichwould be yourself.
You can also include yourspouse.
(18:45):
Um, and then the other thing isyou're allowed to do
contributions, and I think it'sup to$19,000 per year, maybe
19,500 now.
Per person.
So every year I can contribute$19,500 into my solo 401k, and
my wife can as well.
So you know, it's 40, roughly40,000, a little less than
$40,000 a year that I cancontribute into my solo 401k.
(19:06):
So there are some regulations.
If I have five employees, itdoesn't apply.
Um, because it's, it's only forself-employed, correct?
One to two employees, I believe.
So you'll have to certainlycheck with your, uh, the
regulations and your taxstrategist, but some, some great
benefits.
And then again, I can turn that,uh, and loan that out at 8% or
10% or 12% or invest it into asyndication, you know, where I
(19:28):
can double or triple my moneyover the, a longer period of
time, you know, three years,five years.
So some really good vehicles andoptions.
But yeah, check with your.
Your tax folks to make sure thatyou're, you're doing everything,
uh, that you need to do.
Hutch (19:41):
Yeah.
And for the military veterans oreven if you are an active duty
and listening to this podcast,um, keep in mind, right, if you
have been contributing to thethrift savings plan, you can
actually take a loan.
And when you look at theinterest rate for the loan,
we're talking like about 3%, um,sometime less, sometime a little
bit more.
I've not seen more than 4%, um,for the, to take a loan out of
your TSP.
(20:02):
And when you look at.
Pulling a loan out and increaseand invest in it had, in an
income producing asset that hasa significant higher yield,
whether it's through privatelending, where you're gaining
that, um, 8% to 12%.
When you look at a delta, theywere looking at what, um, you
anywhere 4% to 6% or sometimeeven higher, you are using the
(20:25):
money to work at a highervelocity.
Right.
Yeah.
And at the same time, if youstill got military service, you
usually give about five years topay the loan off.
You're still contributing tothe, to, to your thrift savings
plan while you have your moneyworking in two different places.
Right?
So something to look forward toif you want to, um, get into
real estate and, and learn howsyndication work, learn how the
(20:45):
cash flow works, learn how tocapital stack work.
Um, so whenever you do retire,you have a better understanding
of how to, um, different bucketsthat you can pull your capital
into to grow it at a highervelocity, right?
Yeah.
So, yeah, if he, I, I've donethat a couple times.
If he, if you got it, if.
If you listen to this podcastand you want to learn more about
how to leverage your TSB intohigh yield property, um, um,
(21:09):
lemme know and I can walk youthrough the process as well now.
So, um, Brandon, um, one lastquestion before we head into the
focus round.
I wanna be, I wanna be mindfulof your time, you know, so, you
know, post-election, right?
Um, there's a lot of unknownahead, you know, you know, rate
changes, tax, code shift, andeven probably may affect some
banking policies, right?
Mm-hmm.
(21:29):
What is your team watchingclosely and uh, what are you
adjusting now to, um, that mostpassive investor aren't thinking
about?
I.
Brandon (21:38):
I think one of the things that, as I look back over
my 24 year, I guess, uh, realestate career is, um, being
resilient and being flexible inyour strategy.
One thing that I've learnedcertainly over the last couple
years is that, um, even thoughI've seen this multiple times,
you know, I've, I've wentthrough the uh, 08, 09 downturn
and, um, you know, other othersbefore that, and so I've seen it
(22:00):
multiple times.
One thing that I've.
Learned is that we have no ideawhat's gonna happen to the
market.
The stuff that, you know, lastyear when the, change in our
government, you know, peoplethought that was gonna help real
estate, it was gonna improvethings.
Interest rates were gonna justdrop suddenly, and that was just
gonna open up.
The real estate market has notbeen the case.
In fact, I think our, the realestate market has slowed down a
(22:20):
little bit this year.
So, you know, people arehopeful.
The next six months we'll turn acorner, but at the end of the
day, like I said, we don'treally know, um, decisions could
be made that could changethings.
So I think, um, you just have tobe flexible in your strategy.
We've, uh, at, at one time whenthe market allowed for it, we
were buying rental propertiesand stacking up rental
(22:40):
properties.
The market changed.
It became a seller's market.
We were able to sell those at ahigher, much higher, uh, amount
than we bought'em for.
So then we had cash.
Right now, uh, based on where weare, I'm trying to stock
stockpile cash, uh, get as muchcash and hold onto it.
So we've, over the last coupleyears we've sold not all of our
rental properties, but most ofour rental properties, our
(23:02):
single family properties, um,using some of that cash,
obviously to invest in a selfstorage facility, but then also
wait for opportunities as theycome up because if the market
continues to slow down, I thinkthere's gonna be opportunities.
So I think.
Kind of the focus going forwardis we're still still doing our
normal day-to-day business inreal estate.
Not at the scale.
(23:22):
We did back in 2021, 2022.
Um, so a, a smaller version ofthat.
But then we are also looking atwhere can I invest my money in
a, a syndication or in a longerterm deal that has.
Good upside, even though it maybe parked for a little bit
longer.
And then also holding some cashfor opportunities that may pop
(23:45):
up if the market continues toslide.
Hutch (23:47):
Yeah, that is awesome, man.
Thank you so much for that.
Um, we're gonna head into thefocus round Brandon, which is,
um, five question.
Uh, we can go as fast and asslow as you want to.
Depends on how much time youhave on this back backend.
Right?
Okay.
So what do you do for fun?
Brandon (24:00):
Well, I'm a coach, I'm a basketball coach, coach JV
basketball at local high schoolhere.
Um, and I love to fish.
Uh, so have a, a bass boat.
My 15-year-old son loves to fishand so we go in shore fishing
down at the beach and they'dlove to bass fish as well.
Hutch (24:17):
That's awesome, man.
What is one opportunity thatlooked very small, um, but
turned out to be a big gamechanger for you?
Brandon (24:26):
Oh, um, I would have to say the, the self storage, um,
project, it was a, without goinginto too much detail, it was two
single family homes beside eachother that I bought from another
wholesaler.
Right.
And that wholesaler sold it tome, thinking it was a two flips,
two side by side flips.
And during my due diligence, Ifound out that the future land
(24:46):
use map showed it as commercial.
Oh, nice.
I was able to take it through,get it approved for self
storage, so it went from.
Two single family homes that Iwas gonna flip and make, you
know, 60, 70, 80,000 on eachone.
To a, uh, 865 unit self storagefacility that's gonna, you know,
be worth far, far more thanthat.
Hutch (25:04):
Yeah.
That is awesome.
And even just the zoning changein that property increased the
land drastically.
Right, right.
Yeah.
So going through and doing therezoning, um, if you had to
because of the, the, the featureheight and best use of the
property.
Um, yeah.
Zoning in doing all the, thehorizontal work, road work and
all of good stuff drasticallyincrease the land.
Right.
Yes, absolutely.
(25:25):
Um, so like, look, if you listento this and a, a lot of folks
don't know how we can increasethe value of land, but it's all
about identifying the highestand best use, right?
And there's several differentstage.
And if you are a passiveinvestor and you are looking at
ground up development, it'sreally important you get in
there at.
Early as possible so you canride the wave of the growth
(25:47):
within that property.
So you start with all thehorizontal, one rezoning, two
horizontal work, and then whenyou start doing vertical
development, then uh, you juststacking the growth in the value
of that property, right?
Brandon, what's your best pieceof advice for communicating
value to nervous investors?
Brandon (26:07):
I think trust, um, you know, we've, we've always
focused on long-termrelationships.
Um, we have, uh, not personally,um, never not paid an investor
back his return, his or herreturn.
And so in the 20, 24 years plusthat we've been doing this, so,
um, we build relations.
That doesn't mean that I'venever lost money on a flip, I
(26:28):
have.
Um, you know, it's not always,you don't always make money on
every deal you do, but, so I'vepersonally lost money on a flip.
But I made sure that theinvestors got paid back because
we wanted to build a long-termrelationship.
I wanted to work with them onanother property, another
project, you know, anothersyndication.
And so it's not about thatparticular deal, it's about the
relationship that you'rebuilding and building trust.
(26:50):
And at the end of the day, youknow, people have to trust me.
They have to trust you ifthey're gonna invest their money
with you and expect a return.
They've gotta believe that whatyou're telling'em is true.
They gotta trust that you can dowhat you say you can do, and
that you're gonna pay'em backwhat you say, you can pay'em
back.
So.
I think building relationshipsand having trust in your, in
your business partners is key.
Hutch (27:09):
That's awesome, man.
Um, what do you wish moreinvestors understood about using
leverage responsibly?
Brandon (27:15):
I would say the, the biggest questions that I've
always had around it is thefunding piece, um, around real
estate in general.
And I, I, I wish that, you know,I think our, our, um,
educational system does notteach entrepreneurialism.
It teaches.
You know, status quo, um, go geta job, make your hourly income
invested in your 401k, retirewhen you're 62 or 72, and have
(27:38):
this much money.
And, you know, there's, there'sjust so many different
opportunities as anentrepreneur, but even in within
real estate and investing,there's a lot of different ways
to do what we do to be afull-time real estate investor.
Like we talked about with thefinancing, there's not just.
Going to get money from a bank.
There's not just using, youknow, having to save for 20
(27:58):
years and then using all of thatmoney to invest in something and
hope that one investment goeswell.
There's lots of otheropportunities, right, that are
out there.
So educating yourself around thedifferent opportunities and how
to raise capital and how toinvest wisely, you know, how to,
how to create velocity in your,in your investments.
There's, there's just a lot ofthings out there and I wish our
educational system did a betterjob of, of teaching people that.
Hutch (28:21):
Yeah, I know, mate.
Um, last question, man.
Um, to what do you attributeyour success, for consistent
growth in this space, brother?
Brandon (28:29):
Oh, I'm a man of faith, my, relationship with Jesus
obviously is key number one.
I would say my, my wife is a, ahuge part of that success.
Awesome.
Um, we've been married, uh,almost 25 years now, and she's
very supportive of me and all mycrazy entrepreneurial ideas.
Um, so having a supportive wifehas been great.
So yeah, I think those twothings.
(28:50):
We talked a little bit aboutresiliency and, and changing
your, um, focus.
You know, don't get solelyfocused on one aspect of real
estate.
There's a lot of differentavenues where you can generate
money, and as the marketchanges, you need to be willing
to change with it, but.
So resiliency is definitely partof it, but I think, you know,
certainly my faith and then, thesupport of my wife are probably
the two biggest things that havehelped our success over the
(29:12):
years.
Hutch (29:13):
Okay.
Thank you so much, man, Brandon,for the information you passed
with us today.
It's definitely a huge strategysession for any listener
listening all the way to theend.
If a listeners wanna get intouch with you, what is the best
way for them to do that?
Brandon (29:25):
So our website is the Flip Genius.
You can see on the sign herebehind me, flipgenius.com.
Um, they can email me.
It's brandon@theflipgenius.com,so
B-R-A-N-D-O-N@theflipgenius.com.
Um, we, we talk about a lot ofour single family stuff there,
and then, uh, our syndication aswell.
And then there's a, a linkthere.
(29:45):
They can schedule a call with metoo if they have any questions.
I'm happy to help share, shareany knowledge that I have to
help people take that next step.
Hutch (29:53):
Awesome man.
Brandon, thank you so much forshowing us how money is a tool,
right?
Isn't just a tool for flippers,right?
It's also wealth of lever forsyndicators, accredit investors,
and anyone who wants to, anyonewho wants to build liquidity,
um, and also build a momentum oftheir capital as well.
And listeners, if you listen tothis, um.
I hope this is a mind shift foryou of the different ways that
(30:15):
you can leverage your capital toensure that it grows the way you
want it to grow, right?
So you're not controlled byuncontrollable forces, and all
this stuff that we pass into youis to help you, your family, and
future generation own more ofAmerica.
So, until next time, I'm HutchMarine investor out.
Thanks, Hutch.
Popular Podcasts
Stuff You Should Know
If you've ever wanted to know about champagne, satanism, the Stonewall Uprising, chaos theory, LSD, El Nino, true crime and Rosa Parks, then look no further. Josh and Chuck have you covered.
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com
New Heights with Jason & Travis Kelce
Football’s funniest family duo — Jason Kelce of the Philadelphia Eagles and Travis Kelce of the Kansas City Chiefs — team up to provide next-level access to life in the league as it unfolds. The two brothers and Super Bowl champions drop weekly insights about the weekly slate of games and share their INSIDE perspectives on trending NFL news and sports headlines. They also endlessly rag on each other as brothers do, chat the latest in pop culture and welcome some very popular and well-known friends to chat with them. Check out new episodes every Wednesday. Follow New Heights on the Wondery App, YouTube or wherever you get your podcasts. You can listen to new episodes early and ad-free, and get exclusive content on Wondery+. Join Wondery+ in the Wondery App, Apple Podcasts or Spotify. And join our new membership for a unique fan experience by going to the New Heights YouTube channel now!