24/7 Cash Flow: How To Fire Your Boss By Investing In Rental Properties
I took About one hundred one hundred thousand dollars which was saved up over a long period of time and scaled that into three hundred plus property portfolio by doing that strategy literally over and over and over again recycling the same capital so i took all the lessons learned through that process starting off from like everybody school of hard knocks taking your money hiring cheapest his contract and can have run off with forty grand and then waking up and say well i got to get serious for. I'm going to be out of this game. A welcome everybody to the show. Join today by bryan grimes. Brian is the founder of four seven flow university. He's got a heck of a background and he is focusing now on a course. That is specializing in a few nuanced areas. That i'm super interested to dive into their really highly specialized In both the asset types and the locations. There's some unique ripples to what brian is doing. So i think there's going to be a lot of value today for for the listeners. Certainly for myself right really appreciate you coming on today. Thanks for having me. It's my pleasure. So you're a certified financial planner. That's right certified financial planner. So went through that coursework Spent some time Kind of working on wall street managing money for millionaires. I work at a boutique firm right at right out in midtown where we managed about point three billion for three hundred families. So did that for a while. i've done the startup thing as well. my Part of my background and and passion Definitely during that time was in the insurance space so worked at a startup called policy genius which is pretty big now In the insurance startup space work in their call center built that out Lead the call center team there. We were selling insurance nationally. All over the phone all through the internet out then made the jump from there into real estate full-time which is my one hundred percent. You know all consuming passion that kind of took me away from everything else so You know there there always seems to be common threads here so you you spend ten years. You have over ten years now of investing in experience you worked as an option trader clerk at the mercantile. I believe and you had worked your way up into. What was i think one point. Three billion was the number who was managing for a few hundred family. Family offices are families. You've you've graduated from columbia. You have a hell of a background. Wh what was it that prompted you. Say done with you. Know building that career number a gentleman this brand new yet Real estate was kinda. It was always my plant. It was what. I was always kind of how it had saw myself. I was destined to do everything else. That i was doing was was always to get money. Get more capital to put into real estate. Both of my parents were entrepreneurial. So growing up Both my parents essentially worked for themselves. So i kind of my earliest memories are like sitting in the backseat My father's working for xerox. At the time you know late eighties early nineties. He's a regional sales manager. So he's just ripping and running all across the state of new jersey. And you know he had the gift. The gag is always on the phone. He's always selling so. I was kind of addicted to that. that freedom that financial freedom that lifestyle of being your own boss so i knew even at columbia university. They kind of railroaded people who are in The economy field into that investment banking type of path which is a i mean serious grind right eighteen hour days And i knew that what i wanted to do. If i was gonna put a next time. I wanted to be my own boss kind of from day one so i got into that financial planning field where i could control my time control. My hours and i kept building towards putting all my money in real estate so that that cash flow that came from the real estate. 'cause support me and i would be able to continue to build in kind of bemoaned ball so it's really it was really all about Real estate even though you know when you're coming from columbia university versity. People are doing amazing. Things people are going to feels like investment banking. They can tons of money You know right out of college. But i knew i wanted to put that time to residual income financial. So did you have any mentors along the way that we're in the real estate space or i had one Well i had a couple. But one in particular he He played basketball columbia university. I got connected to him through the basketball on that and he He he does commercial real estate from bank of america.
00:05:04 - 00:10:11
So he's i think he's up at the vp level. Some of his partners alike magic johnson. Td jakes you. Know some big Commercial real estate players and he he would mentor me. You know a bit. We still talk to this day. And he gave me some of my best principles. My favorite principle that gave me while they're two one was jumping in net will appear that was transformative from me in my early twenties because You know you're afraid right. You're afraid to take that leap of faith. You don't know that there's a safety net down there because you can't see it's kind of too far down so you have to take a leak. You know off of that mountain and trust that your energy. Your focus is going to support you. It's going to catch at some point. You're going to spring back up. And then i'll get your footing. So he kinda pushed me into that. We talked a lot about portable equity so You know you're working at some of these jobs. He's nine to five jobs. And there's equity that you can take with your equity that you can't so a lot of people are building equity at these modifiers where they have a great reputation or boss like some people like if they got fired or downsize lost that job. They can't take that reputation with them to the next place. So we always talked about portable equity getting credentials. Kinda getting the most out of out of that and from real estate of perspective. When i told him. Hey i wanna get into affordable housing section eight properties and kind of you know really get into the into the The grit their. He gave me this principle. he said. Listen if you're gonna do that. Here's what i want you to do by where you know the who you know. And you always be successful and what he meant by. That was buying neighborhoods. That are similar to the neighborhood that you grew up in Or that you're familiar with that you've walked around in at some point in your life. Rents a people who are like you now or where like you. You were growing up. Were who went to the types of schools that you went to people who connect with you and if you do those two things you'll always be successful and i followed that to the and that was that has been one of my my You know major crutches. i've always leaned on is definitely run true over the years and i think that's the principle that anybody in real estate should be following if you get away from that principle you typically lose a of money and burn out and get out of the business. I love the portable equity thing especially in the space. You came from oftentimes. It's it's too late you you you're right you're building equity but that ain't your equity that's the firm's equity turns equity within and when you're in the grind. I have a lot of friends that that came out of that space when you're in the grind just like in any grind. You don't see it right you think yours and and it's not yet and that's a harsh lesson right. He put in five ten years somewhere. And then you're out the door and you don't have anything to show for it you know that's why about the see three credential on new. Hey if i'm out of here. I go to the next thing. I'm going to be a certified financial planner and the firm paid for it. I just had to put in that that you know sweat equity but that working so definitely so when you were working on this this portfolio were you involved in any real estate place at that point or was it all stocks bonds in that that of stuff. Everything we were doing was all stocks bonds You know passive investments Kind of all stop. No real estate Exposure from the firm the real estate piece was really you know. I grew up one of my best friends that i went to high school with. He was Just always addicted to real estate for whatever reason he was reading at that time. Donald trump books and the rich dad poor dads and whatever he could get his hands on a real estate wise and being my one of my best friends. All we will talk about is real estate so we would talk every day. We talk for hours every day. And it's all real estate so that kinda got him in and definitely need a right after him he graduated before me and then once i graduated i kind of knew that was how it's gonna get into real estate and that was where That was kinda got me into the field. I was saved from studying perspective. Getting my knowledge together. It was really just taken that time. I tell people all the time all of my students. It took me two years even after. I graduated a private studying for five years before that but two years of just studying focused saving before i even bought my first property. So you know a lot of people want to have that get rich quick overnight type of feel real estate and they want to jump in but only they get discouraged because they feel like. They're not moving fast enough. I didn't move that fast. But i made sure my first deal was a great deal. I started making a thousand dollars a month in cash flow when my very first steel. And when you do that. When i deal you're going to be successful so two things you've touched on that are just absolute pillars of the real estate world delayed gratification number.
00:10:11 - 00:15:08
One right absolutely and being a lifelong learner. Putting in the time there are so many amazing books We have a book club here in the office now and you know we started to to recognize is we want to make more and more investments in in our people as people in real estate. You tend to get very system based right and you're always upgrading infrastructure and you're adding this and you're updating that and you're developing new you know meet new ways to to build a better mousetrap and you forget that you can lay only so many systems on people and if they don't have the right foundation if they don't have some sort of a grounding in financial literacy that becomes It's like the old boxes in the attic there there but they're not productive right so club we do all those kinds of books and and you know the the the it's amazing to watch the the the people come back to life almost an these are some grizzled vets that we have you know that are participating in this thing. We do here yet. those are things that for. Whatever reason they're not taught anywhere. The financial literacy stuff is. It's just such a huge deal when you look back now and you think about some of the things that we studied in school how there is nothing about green got. We talked about on this podcast. Every week is just absolutely crazy man yet. it's insane. It really is that resonates with me because of the financial planning background. I view everything is financial planning so even real estate. Like you're saying a lot of the principles are really just if you can't save money you can't be successful at real estate. If you don't know how to have a good cash position or manager credit properly you can't be good at real estate. It doesn't you don't have to start off with good credit but long-term you need to know how to manage yourself manage your finances. Some people get into real estate in their bad asset. Managers are bad money personal money managers and they over lever themselves. They do things that just will lead you down a rabbit hole of disaster so it it really is Doing sense you guys do. Have a book club one book. I'll recommend for the club for people who are interested in affordable housing is this book called the section eight bible I think they have three. They have three Versions now three additions. The third edition just came out. I haven't even read the third of this yet. But the first tour so magical. I'm sure the third is is amazing. It was started by these These guys from philly. Which is which is where. I'm from blue collar guys. They got together and partner back in around two thousand five to two thousand and eight and they acquired four hundred or five hundred rental properties in three or four year period Using bird strategy all section eight and they talk about the trials and tribulations it. It's just an amazing book and it will teaches you everything about the birth strategy and affordable housing section eight residential hustle and bustle It's just an amazing book. So many gems book. And i don't recommend i wouldn't recommend You know a book. If i didn't absolutely love it this book is you know it's amazing. I just recommended of my students asked me Last night during one of our group sessions shooting. Should i get into a a section eight core sort should you know. Should i do not just read. The book reduction a bible. There's no course better than sexually bible so We'll definitely gonna put that on on the list for sure I'm curious your your first deal. You had said that you were a thousand dollars. A month positive cash flow. Would that deal. Look like yeah. Let's let's talk about that deal. So i followed my mentors vice city. I bought a a a triplex right him. Essentially my backyard. It was in a neighborhood that was bordering. The neighborhood that i grew up in very familiar with the mount airy if you're from the philadelphia area so about a triplex there Fha i did a nice house tech there. And i did a seller's assist negotiation on ideal as well so i had the cellar chicken. i think. Three percents where's the closing costs. So at this time i was i was working for exit. Visors as a as a financial planner. So was one hundred percent commission Maybe twenty seven. I was making like twenty five thousand dollars a year living at home making you know just just barely stand by all my money.
00:15:08 - 00:20:02
I would save fifty percent just i. I started save ten percent of my check and i kept increasing. It wouldn't fifty percent every chet Away so i took this money. Put seven thousand dollars down into this deal all in because i got those closing credits and did the fha. So seven thousand dollars deal. It was a turn key property. Which i kinda swear by. If you're just getting started a lotta people were very you know enticed by the hdtv. I wanted to go into full gut. Rehab you're probably not ready if you're very first deal You can get through it with the proper mentorship of course. But if you're just freelancing kinda doing it by yourself go get a turn key to a fha get a multifamily gibson. Cash flow and bengo. But i did that. Play turnkey got it from a guy who This guy was interesting. He actually has spent arm. I think he was in jail for ten years. He learned how to build houses in in prison. Essentially in a program came out. He had ten property that time. So he wanted the offload this and get more properties. So i took his deal and he had like decked it out so i was gonna live in one unit and rent the other two enlist for free. That was like my goal. Because i was one hundred percent commission. I just wanted some stability. But i ended up getting this job in new york at the boutique firm so i rented the whole building out and instead of living for free i was now making a you know a thousand dollars a month in causative flow offer this deal and you moved up to new york and started working at the boutique firm and once i got a taste of that. You know cashflow. It was Not too long. Before i had another duplex none another beyond and another deal. Not on that verse one. How much cash did you have to put into updating it. None i mean it was. It was a it was sweeper bowl. It was boom sleep. When i say turn key i mean they give you the keys. You take the keys. You give attendant cash and you get out of the way. So i didn't put any any money into this deal It was moving ready and it actually had it. Had to tenants in it. In the top. Two units i was gonna live in the bottom unit. One of the tenants moved out Because they were just kinda skittish. And i've had that unit lease back up in two weeks showed a two or three times at least backup so brian mentioned the berm method right by rehab rent refinance. Repeat and there. There are a lot of folks that you know. Take these courses in you know. Read a book or two on it and they jump into these full scale renovations like you had mentioned. There's a lot of deals out there. I don't care how hot the market is. i don't care how cold the market is. There are deals like the one. Brian is describing. Where if you're smart with financing and you've managed your credit you can get in with very little money down especially with the seller assist And you're able to cash flow these things day one as you were. You were gearing up for that that transaction. What metrics were you looking at. Were you concerned with a cash on cash return or was it straight appreciation with just the net cashflow what what was kind of the priority few at that point. I kept it really simple. Honestly like i looked at the principal insurance in taxes and and the In the interest and is if that was less than my monthly nut those coming in that monthly check that was coming in i just figured there was spread so's it was a pure spread play. I was using a i think. Rent was some website To to look at like the rental income. I could've been using zillow at the time on. There are a couple of other websites that you can tap into but just looking at the rental income. I had three units. They could each rent for about seven hundred dollars a month The property is selling for one hundred thirty ks triplex taxes. Were nine hundred dollars a year. Twelve hundred dollars a year or something around there so it was a play where i knew that i would have about a thousand dollars a month on out in two thousand coming in and that was good enough for me i mean was i scared. Of course the only i deal. You're petrified you're in your twenties you kinda don't know what you're doing I didn't really have the right mentor. Ship at that time even my You know my columbia mentor it. He didn't i didn't really involve him in the process. Until i started to get really really serious about it and get past my first deal so You're just horrified right but you gotta jump in.
00:20:02 - 00:25:06
Let's that net appear. It seemed like a reasonable enough spread for me to you know even if i was wrong about the ramp by two three hundred dollars i was still going to be very cash flow positive and i was locked in this on thirty year. Note so it just seemed like the right plate of me. I felt that it was safe. Deal there. Was that feeling when your new investor you kind of feel like as soon as the keys. Get your hands. The buildings just gonna collapse or catch on fire. Your you start imagining things. But the checks come in the people will pay you the rent You'll get over these hurdles. And i think it's important to go turn key for one other reason. A big part of the business on the burr strategy that people leave out is the rental part right when you're renting it. You're the landlord. So the biggest skill set you can have is not necessarily how to build. Properties is actually how to be a good landlord had attendant screen. How to manage your tenants out of property manage all of these long term. Monetization skill sets that people overlook. And you're getting those skill sets you starting to develop them for the long term right away when you go turn key. Don't overlook that piece you can always circle back to the construction element after you mastered being a landlord. Then you know you're going to be successful long term. So many people do the other thing. I they do it in reverse. They learn how to build then they find out. They're a bad landlord and that they don't like being a landlord and then they burnt out. Yup hey it's not easy as you as you start to scale. It's tricky right. When you're you're managing those types of of assets. I had a a deal We were talking about all flying before we got on folks that brian has a course which we're going to get into any does coaching where he has a lot of folks that are investing from a great distance and they're investing in the affordable housing space. Which is a amazing place to be if you you have it on lockdown and i have found personally one of the challenges and one of the reasons i was excited to talk to you was when i have made investments. That are not right in my backyard. If there's not the opportunity to scale where you know a town up in pennsylvania where had bought a buildings great deal it had to commercial offices had a three thousand square foot warehouse a nice parking lot and three bedroom apartments. I bought the deal for low in the low four. Hundreds right across from a park in the courthouse. But for me there wasn't there wasn't enough units available in the town for me to scale so it ended up happening is you're you're trying to manage and keep your tenants happy. You've gotta bring on a super but there's just not enough units to meet that demand right so as you started to grow your portfolio. I'm curious did you reach back and seek capital from You know your investment days that you go back into that kind of book and business and raise capital or was it one time and more of an organic thing for you for me. The bank became my friend right. I think the bank in many ways can be cheaper especially some of these national portfolio lenders. That are out there. They haven't insatiable appetite right there. They're essentially doing these deals. To writing notes on these properties then packaging yelp five hundred million dollars in loans. Every six months in selling it to land trusts out there so if you get in good with them and you can show them that you're going to be able to diversify their books. I was building out philly. Most of their books of business are in new york. North jersey and other dc some of the different major cities so i was able to diversify their book of business and it just ended up being a great relationship where they became a steady stream of capital and we were able to scale in but i used arm combination of portfolio lenders and hard money alan relationships to scale It's a it can be a bit of a tight rope and certainly not the most comfortable path forward certainly If you can raise like family office money it can be a bit more comfortable. But that was just the path that i took That ended up working out for me. So how many respect. How many units do you have or have you had at the peak. How many units under management over three hundred over three hundred properties so however many units and and we can count differently. Because i've done. I've done a little bit of everything and it's a it's part partly because i liked to experiment a bit but partly because you know you wanna find whatevers the most profitable for you at the strategy that that meets your needs.
00:25:06 - 00:30:15
The only thing that. I haven't dabbled in too much student. Reynolds mom just because the turnover can be It's kind of a guaranteed turnover like an annual turnover. Some people love it. Some people of hate it but section eight regular market sentence co living has been really really profitable taking a property in breaking it down to a series of master sweets and renting out essentially by a room that has been extremely profitable and hasn't been as labor insensitive from a management perspective as scantest updated so that has been good too but depending on how you're counting the units it could be anywhere from five hundred to maybe seven hundred units because a lot of these buildings are multi so another reason. I wanted to to get on with you. Today is is the current state of the market. So the of talking about that you know. Real estate is a cycle and people forget. It's amazing to me how people forget that this is a cycle and it's going to go up. It's going to go down. It's gonna come back. This is just what happens right. The tree is trying to identify. When is the turn going to happen right when it does happen. Where are we going to it into next to make sure that we're staying ahead of the curve. So what i'm seeing is. I think we're headed into A really scary inflationary period. I think would rates are going to be increasing so what we're looking to do is to diversify a bit and get the portfolio balanced. Where were you know. We have a lot of different assets that are commercial longer term leases right. And when you get into these inflationary and hyper inflationary periods. You're you're technically devaluing. Your ass and every year because for the most part you're going to have especially if you have corporate tenants you're you're looking at ten percent bumps every five years right you know. If it's it's more the mom and pop the franchise operators you get to three percent a year but that's it when inflation is is at four already four point seven i think in five six seven eight. You're actually losing money each year on on those those deals so that it's time to start thinking about getting into assets where we don't have these long term leases right for a while. The long-term lease was the holy grail. It was like oh yeah how do you want it. But that's starting to scare me a little bit. So what are your thoughts about where we are as as far as a snapshot of the market. What do you think's on the horizon. But i think our thinking Covert really shook things up right so if you look at like march twenty twenty the credit crunch in an anon- cwm space in particular so far all the bur- strategy enthusiasts i know you know developers who had ten million dollar cash out refinances teed up For a closing on. Friday and they got a call on thursday sorry You know to close so i think we're in a in a position where as the economy gets worse. There's gonna be a bit of tightening from the credit of side of things lenders. Get more skittish. It becomes harder to do a deal. You need better. Credit to do deals on less buyers of properties On the residential side. It kim i think pricing if we're talking residential kinda stay relatively stable For the most part depending on what what environment you're in. I mean we're looking at You know multiples of income. So if you're in some place like california where the housing costs is like ten fifteen some in some areas twenty x the average annual income. Were there's a long way down for those housing prices to go if you're in philadelphia Baltimore somebody's affordable housing areas where you know. The housing costs may be five or six x That the average median income of the area will the housing prices are going to be relatively stable. So from how from how i view it for what i do an affordable housing standpoint. It's going to be a little bit. Shakey I think there's going to be a lot of opportunity with the end of the foreclosure moratorium and the the wave of. Maybe i think three million americans are behind on their mortgages right now facing foreclosure. There's gonna be a lot of opportunity to use some creative financing strategy sub to land contracts different types of seller financing strategies to acquire a massive amounts of rental properties and affordable areas.
00:30:15 - 00:35:05
And as long as you know how to just put tenants in and hang on to them you can you can weather the storm pretty well and if you weather the storm that you're going to be able to buy a lot of real estate unite the bottom lastly you also have A lot of these are buyers are just getting crushed right. Now i mean if you haven't seen zillow Lately i mean. They're just getting absolutely destroy. I think they shut down there. I buy a division and letting go of a quarter of their staff and you're starting to see pricing is gonna fall some of these areas. So where's it gonna fall. Just look at the. The multiples of the annual median earned income. If you're over ten fifteen x people can't afford that housing in a in a in a recession you know environment in an inflation filled environment. They can't afford it so the pricing has to come down so it's gonna be interesting. It's kinda hard. I wish i had that crystal ball. I if both had it. We'd be billionaires. You don't pretty soon but Definitely i think affordable housing is a place. That's going to become more more attractive as a the more pain. You're in the more attractive. Affordable housing gets more people who are losing jobs and in pain. They go down. Start getting into the affordable housing properties as well so it drives up demand. All of this pain drives up demand for house. So if you're holding it you're gonna make some money. So you covered a lot of ground there the metric that you're using which i love and i have not heard before by the way and i've been doing this for a long time so kudos to you for it You're looking at the is it the household median income. And then you go and sick. Ten acts that the deal the household median income exactly. So you're just looking at basic. I like to keep things simple with With financial planning with real estate with numbers of general. Just keep it simple. simple things. don't break a scale so simply you know if the average family say philly right the average family Might have of two or three. I have a household income of like. Let's call it sixty thousand emerges throwing numbers out there so if it's sixty thousand than they can afford maybe five six exits so they can afford about three hundred three hundred thousand dollars three hundred and fifty thousand dollars worth of property on average to go out take out a mortgage and they can make that payment comfort with if you take that same number sixty thousand their areas of california that number sixty thousand or fifty five thousand but the housing is two million three million. They can't afford that. So when the average american can't afford the price of the residential housing the price must fall. Because it's a supply and demand scenario. So there's just not enough demand for that supply of housing's the people at the top. We're gonna lose jobs. They're gonna lose those houses but who's going to step into them Nobody because they can't afford him so you you really have to look at somebody cities that have this. It's kind of like a pe ratio and stocks. But you look at some of these stocks trading at one hundred and twenty-five ex you know from a price to earnings ratio on your decide. How how's this gonna continue It's kind of a similar thought process with with housing affordability in once you get very far outside of it when the economy gets hit bad that housing prices to fall back into an affordable range for the average american the average american drives demand. Not the you know the wealthier to one percent or top five percent. They're not driving. All of the demand average americans driving so Another reason i. I absolutely love with this. This model which started happening here folks is some of the big funds and some of the bigger companies that brian mentioned earlier started going in and they started doing what i call buying payments and they were not looking at those sound underlying metrics because there was a need for velocity of money and people were out buying you know when you see these mega funds. Buying huge tranches of single family homes to me that was like. Oh gosh. that's a red flag right because now because they're taking that product off the market. The prices are appreciating at a rate that there are no sound metrics behind it to support But as the properties are coming off the books prices for that period of time are gonna go up right. That's just what's going to happen. And there are some towns where these funds own a humongous percentage of the housing stock right.
00:35:05 - 00:40:01
So a nice safeguard. That ryan's talking about is just take the household median income. What's the what's the number that you don't want to accede. Is it eight times six times ten times four times. I would say i would say once you get past ten. You're starting to get into a a range where you're gonna be susceptible to to shock to serious market shot if you're in like the sixes the sevens you're gonna be essentially below the national average so if you take all of the top cities. We took like the top fifty real estate cities in america half. We're gonna be more than half are going to be below like that that seven the well. That's an percent mark more than half. We're going to be below so you're going to be within the average range of affordability around ten percent is gonna keep you safe. If you're below that threshold the further you get beyond. It is just like a risk reward ratio thing. You're just gonna get exponentially in worse shape if the economy takes it off. So if you're at like fifteen twenty. Xm you just think about it. Not that many people can afford that. And we and we see this overseas to you. Go to Places like paris france. Nobody can afford a house. These places become renter nations because nobody can afford the housing so it just stays in the hands of the wealthy and everybody else rents. Nobody buys anything. So when you're doing this evaluation are you taking a do not exceed. Let's say ten x of the national average or are you looking at the household meeting income for that particular. I'm looking at it for this particular location. Because i want to know the people who live there can afford the house or the people who want to live there Which are reflected by the people who are already there. Most people will buy a house in and if they want to upgrade get like a bigger house in the same area though right they don't wanna leave all of their friends and family. Like if i. I live in new york now i to get a bigger house bigger house so i wanna see out of that local area. What's the median income. And then i'm going like a basic multiple in philly fifty sixty thousand average family household income median household income and now multiplying by five. Six real estate okay. Prices properties are selling like in philly. You could get a nice property in south philly for three. Hundred thousand is still in the affordable range when that gets the five hundred thousand young. You know now. People are stretching. Then when we add in your expectation of well. I think rates are arise. Well then that note is way up on half a million. It adds even more pressure for the price to go out when a hassle. So you know you just have to keep an eye out on it so guys. That is gold more. Brian just gave you okay. If you're able to stick to six seven times to be conservative the household median income for that particular town or city and your cash flow positive to whatever extent or percents. That makes you comfortable. I see people that wanna twenty percent on their debt-service. I see people who wanna see fifty percent. I see people who wanna see ten percent. Whatever the number is that makes them comfortable. Those two metrics should keep you on the right side are right for the most part. That is absolutely outstanding advice bright. So we're seeing over the last. Maybe eight months as things started to emerge this kind of family office money in these bridge. Lenders and these kind of middle market operators are filling avoid. The big institutional lenders are not really lending unless it's a completely stabilized asset and i mean stabilized asset. You're so do you think that the big money gets in the game here at any point before this next turn or are they going to sit on the sidelines. I like big money to sit on sidelines. Because i've seen them do that. You know february march twenty twenty. I mean when it when it gets shaky because they have so much capital and reserves. They can sit on the side like they're playing the long game. They're playing the warren buffett game like bill. Wait forward to go. All the way to the bottom by back for penance. It's kind of real. Estate can be in these big market shifts like we're talking about a game of musical chairs who owns it. You're the bank while you own it now and then the bank owns it.
00:40:01 - 00:45:01
But they're not in the business managing real estate there in the business of lending on it so then it goes back to the new buyers But i'd expect under step out and you know these players like you're saying the portfolio lenders bridge lenders. The people who are kind of small enough to underwrite recall it. They're gonna they're gonna do the underwriting. And i think if anything they'll get pinched out By the the bigger money because the bigger that false it can go off. That's a is one thing i hadn't seen before and i didn't really factor in until March twenty twenty. But you know when the big land trust turns that faucet off and says we're not buying those loans that you see where the money is. The vale is removed. You think your hard money lender has money and then they tell you well. We only have a million dollars. We're actually We actually sell that every month to this other guy who has three million and then he packages and sells it to this. Who has is thirty and it all goes up to the land trust and then it's in your 401k. So it's it's just a crazy cycle so that's another golden piece of of advice I was i was around. I've been in the game. Since literally. I could mike and walk. You know it was. It was in the family so After seeing what happened in particularly in two thousand eight were. Brian is talking about. It literally happens overnight. Libya my The analogy we use is has the switchmen flip as fast as the lights. Come on and go off. That is how fast they stopped buying not paper and when they stopped buying the paper it is over. There is no in period. It stops so. I i think twenty twenty four late twenty twenty four two twenty twenty five. That's where i'm at this point trying to nail kind of wear and when we want to be highly liquid. That's that's the place in the time. Where i think that you're gonna find because what we're also seeing is these these these middle operators that are providing the debt and higher rates and taking a little bit more risk. They're not going long. They're not giving ten year deals here. They're doing to two year one year. Three year deals because when the music stops. They have a pretty good sense for what's going to happen. They're also they wanna make sure that they're on the other side of this and and that's just going to be a a watershed moment in the country. Where folks are going to have an opportunity to really do some damage if they're positioned right. So that's that's great advice. Let's talk about geographically. Are you buying properties all within a certain distance from where you're located. Or are you a proponent of investing outside of your local market which is secret sauce. So i look at it like money manager right. So what is what is a portfolio manager while they're gonna look at all the stocks on the market and they're gonna try to find the undervalued stocks so they're gonna buy undervalued stocks and they're gonna hold them until they reach fair market value. Sell them and they'll make a profit spread. I essentially look to do that with real estate. so i have properties in texas. I'm in i'm in New york properties in texas baltimore philly jersey. I have some in new york. I'll anywhere where. I think the the money can go extremely far Because i want. I'm a value investor. So if i can go down to baltimore and by shells right by john hopkins hospital where i know. There are going to be residents and people moving in an economic activity and i combined for thirty k. Put thirty grand into them and there were eighty. But i know in five years when something's worth eighty k which is if you think about it. In real estate terms it's below the inherent value of the bricks. And of the you know if you try to do a ground up deal it's gonna cost you a hundred and forty thousand or one hundred fifty thousand below inherent value. So i know if i hold that eighty thousand dollar property can double or triple in value. Of course ten years. And that's how a lot of people become multimillionaires is poor half a million to thirty thousand dollars shells ten times they hold him and then those properties triple quadruple in value. I focused on building systems. That allow you scale out of town and go where your money can go the furthest if you're living in new york or california or some of these extremely inexpensive cities you you're constantly kicking yourself saying oh i got on the internet. He can do these deals. But i can't get a property for thirty grand here of course can't but that doesn't mean you can't scale adult town with the right systems. It is twenty twenty twenty twenty one gonul twenty twenty two.
00:45:02 - 00:50:08
I do most of my deals through the smartphone. And i started doing it that way because even when i was stealing philly going from one with two deals a month to going to ten deals you when i started going down the philly driving from new york i would get there and i couldn't even see ten deals in a day because the contractors are pulling to people pulling at you there's traffic you gotta get lunch. I started being able to stay home and do more for my smartphone. Could even going there. So then i dedicated myself building the systems that allowed me to see more from home. You'd sit around your underwear and manage more properties than you could boots on the ground. And that i think is transformative for really any real estate investor today. That's what makes us better than the people who are doing this in the eighties. When didn't have any technology they couldn't do it any other way. We can do it about away today. So i so wholeheartedly believe in what you're saying you know. We have a company that you know. We've we've built over the last twenty years and my whole team. We just picked up in and basically started over We take the best elements of the local community brokerage but we feel that real estate is so ripe for disruption and there are so many tools right now in the toolbox. People aren't even thinking about we will. We're we're building a model now. That is straight up. Scalable allows us to penetrate markets across the country. Because we think that there's that type of opportunity and you're right you can do it in your underwear or up in your vacation home or out by the fire. Pit and You know one thing. People got a good taste of outside. Of course all the difficulties during corona virus. But people got a good taste of you know what i can do this like i can slow it down right. I can do this a different way and not have to be in that position like we talked about earlier. People were tied to a desk. Eighteen hours a day and grinding to build equity. But it's not there's We all fall into that trap. I was guilty number one person guilty of it. I was so busy. And i was running in so many directions that i felt. I couldn't i couldn't even think about not working seven days a week and my whole model exchange now. I'm getting a lot more time with the family and way more productive. Because i'm leveraging some of these digital tools that previously weren't available to so again. I think you're you're spot on. Is this some of the things that you're talking about in the twenty. Four seven flow playbook absolutely I talk about h-how's able to scale in that playbook essentially give you my blueprint for a a working myself out of that nine five. I call it a fire in your boss. That's essentially what we preach at the Twenty four seven flow university. How you can fire your boss. In replace your income with cash flowing rental properties as essentially our mission our path forward offer students. But yeah we talk about how you can leverage stuff outta town tap into the systems that allow you to do more. Stop working so hard for way too little. So it's definitely one hundred percent focused on that so talk to me a little bit about the difference between the university and the playbook what are some of the added benefits through the university the university. So i you know i scaled. I took a about one hundred one hundred thousand dollars which would saved up over a long period of time scaled that in into three hundred plus property portfolio by doing at verse strategy literally over and over and over again recycling the same capital so i took all the lessons learned through that process. Starting off from like everybody does school hard knocks taking your money. Hiring cheapest contractors you can have run off with forty ran and then waking up and say whoa. I gotta serious or i'm going to be out of this game so showing you how to not get burned by contractors. Teach you the ins and outs of what real estate is from. Even a beginning beginners perspective all the way to scale up a national operation how to deal with portfolio lenders how to manage contractors pre covina's managing over one hundred fifty in house a contractors twenty thousand square foot warehouse ten trucks fleet management not with fleet management software program warehouse Inventory tracking system a put two hundred and fifty security cameras all across north philly to watch all of my properties and protect them from breaking. I've done so many things. And i put all of this information into the core so people can tap in and we also have a add on sort of service. I found that even with all of the information all of the knowledge there still one hurdle that almost every investor deals with whether they're in their backyard investing or not if they still have that nine five alcohol it a.
00:50:08 - 00:55:04
I'll call it a burden for lack of a better term. But if they're still in a nine to five and they had that time slit. They're unable to get out and see enough deals and move fast enough to get properties for pennies on the dollar so they just think pennies on the dollar. You know those properties don't exist. I can't get that off a mls. I don't you know. I don't wanna have to cold. Call do stinks. They think it doesn't exist. I've gotten more properties for pennies on the dollar off. Mls than i have anywhere at auction like literally anywhere and the way that i was able to do it was by being i. It is literally the early bird. Gets the worm being to the deal. I as soon as it's listed analyzing getting is in arizona boots on the ground getting videos putting together inspection reports putting together a cash flow analysis reports saying yea nay get an offer out within the first twelve to twenty four hours and getting that that offered to that seller allows you to lock up these properties. That are mis-priced faster than the competition. And if you do that over and over again you can make you know forty fifty sixty thousand dollars per deal even off the mls. So i created a system where my out of town. Investors can tap into my in house team where we'll put boots on the ground. They can schedule. My people go out and see properties for them. We get the videos back. We run the analysis reports and we get those reports right in front of them. All they have to do is say yay or nay. Tell the realtor to put out the offer and they're able to get out ten fifteen offers a week whereas before they could barely get out and see one property a week and that's the difference between them getting that i deal that's gonna make them forty to fifty thousand dollars off the you know the jump versus just never getting a deal never getting started so removed that hurdle to allow people to invest from outta town still. How how long is the university. Is it a set amount of courses at one on one coaching. Plus courses what what is the structure. So would it comes with this. You get you get a the access to the courts work. So that's all on teachable. dot com. That's about fifty hours right now. But it's always growing adding to it right now. On adding a about five hours of creative financing coursework which is covering sub to land contracts. All that fun stuff creative financing. But so it's living and breathing is lifetime access to that. We do It comes with. It's a sixteen week Access in terms of the live group session. So we do for sixteen weeks. We do a covered course like last week. We did how to secure your rental properties when you're out of town and investing c. class neighborhoods. So i have like if i'm in the hood of baltimore. I have strategies for boarding up their property or put steel words in a security guards on that property security cameras so that you don't get broken into so we covered that in the last session and then the next week will do like open office hours q. A ride to sit there. Anybody can join and we talk about whatever you want and those are sometimes even more fun than the guy that sessions at eggos for sixteen weeks you lifetime access to the coursework and the if you want the bat hands on us putting boots on the ground help you out with your deals getting off the ground from that perspective. That's a that's subscription base. So that that comes with like You start with like three months description and then you can always renew that and we'll put our boots on the ground. Go look look at deals that you're interested in coordinate. Where you're a realtor and get boots on the ground out the cd's properties and you have a professional. You analysts team reviewing these deals. You don't buy property this wall going to cave or not. This is a big deal. Structurally sound go ahead and move forward. And then we'll also put our guys on your deal if you're doing rehab outta town. You need to go in and respect these properties. You know every two three days you need to make sure the workers are doing their work so many people get burned by not understanding that in real estate you expect which you inspect and if you don't see it it ain't gonna carry it like there is no. Hey yeah we're ready for the inspection. We did it already if you don't see the pictures of the videos that's not done so we'll send our guys in boots on the ground to review these deals. Make sure the contractors are getting work done. Send you progress reports. So that you know that you're kinda doubly covered even if you're out of town and can't get to these properties or even if you're in your working and your time is worth more To you by focusing on your job than it is you know hustling and bustling how these properties so Again i it's it's kind of crazy. The timing and how aligned we are and we wrote proprietary software.
00:55:04 - 01:00:02
That's part of the new company that were were getting real close to going to market with that ties into every mls throughout the country and allows you to put customized deal metrics in and when the deals hit instantly based on your metrics it'll do the math and populated for you and it has a by now feature on it. I would love to take your course. I'd love to participate in that. And maybe you and i can have a broader discussion on some opportunities because the synergies between us man i. It's remarkable absolutely love. What you're doing. yeah. I'd be i'd be open to that definitely we need to. We should definitely have a side conversation. i love what you're doing this is Maybe arguably the most fun. I've had on on a recent podcast because of where your head is at. I mean we definitely have a lot in common. I'd love to hear more about you. Know what you guys are doing. Because it's a i think you're so right on the ball. This is kind of one of the they've redone banking before getting the real estate. It's so antiquated of industry of a business model that there's so much room for improvement in real estate and the next wave of movers and shakers are gonna change everything. I mean it's gonna give that advantage and that's what's needed because you you kind of touched on this. The industry that we're in it's a mom and pop industry. You'll hear that word all the time. Mom-and-pop mama top. What does that mean that. Means the average investor owned two properties. It's your mom your dad they don't you know a couple of properties and that's it they can't scale two hundred property portfolio because they don't have the software that technology system mojo or the capitol right. Then you have your institutions zillow. Just try to do this and other issues. They want to come in and dump five hundred million dollars into the market. But they're too big because they can't do fifty thousand dollar deal after fifty dollar deal. Those deals are too small. They can't get low enough to the ground while they can hire a bunch of people from harvard. That are brilliant. They're too smart to realize that real estate simple and they overlook some simple metrics like we talked about like the multiple a metric that ended up getting the whole company burn. Zillow got burned and they collapsed. So they're too big to get in this game you really need people who've done it who've Lifted and breathe. We're kinda born and brought up in it to come and really institutionalized this whole industry so that more people Can happen and really reap the rewards. But it's going to happen through people like us not from zillow's of the world and certainly the mom and pop state. They just can't do it. It's really the people like us who are gonna innovative. So there's there's been historically the super smart programmers that are creating these unbelievable programs and systems. But when you're a dealmaker they're clunky and they don't work because they don't know what it's like to be a broker for twenty years or twenty five years and then you've got the other side that is so resistant. Any tech that dave dabbled in is so simple. That it's just antiquated already. Because we're we are the generation. I believe that will unlock this game for everybody else. It's going to take it away from the few. And i believe that we have the ability and almost duty honestly to show people. There's a different way. And then you sprinkle blockchain and little crypto currency into the mix. And wow is this like it man. I'm real excited for you. I love what you're doing. Congratulations on all of your success. I want to reach out. If that's okay. Offline and and have a conversation brian. What's the best way for people to find you and to reach out. You can find me on a few different areas. You find me on instagram That's two four seven flow university. Obviously you can find me on instagram post. A lot of free content. There some trying to you know put videos literally daily which is inspiration Free game morning motivation. If i'm just walking and thinking which i think about real estate which are pretty much every day I'll stop in and drop a lesson. There i have a youtube channel. Brian loves cashflow. b. r. i a. n. loves cash flow so you can check that out on posting videos there as well And those are the best way to reach me. You can shoot me a a message at brian at two four seven casual university dot com if you wanna reach via email You could shoot me.
01:00:02 - 01:02:05
Texts to five ninety seven. Five five to eight euboea text with real estate questions. If you guys have any questions i'll do this. I live breathing it. I love helping people who are interested in c class. I worked so hard at this. Because i love the neighborhoods that were rebuilding right. We're going to you know baltimore philly somebody some of these neighborhoods. That have been disinvested over the course talk candidate in jersey just areas that need economic development and we're rebuilding it and it's the one of the most economically friendly or eco-friendly things. You can do right because you think about it. You can go and do a ground up deal but from a carbon footprint standpoint. That's not it's equal friendly as going into an existing building and refurbish being at rehabbing. It and putting it back together is better for the environment. It's better for the community. The more people we Put back in cities neighborhoods the more money's bouncing around the neighborhoods at the local corner stores. Bodega it's it's just bringing these neighborhoods back to life is restoring community pride and that's a big part of my mission. And why would i do. I could flip houses in the nicest parts of every city. I certainly had contractors and skill sets in the systems to do it. But it's part of my life mission to rebuild these neighborhoods are like the ones that i grew up in brian. Again congrats on all the success. Bryan grimes folks. The founder twenty four seven flow university Tremendous value today. I really can't thank you enough. And i'm going to reach out you just too many synergies for us to not talk man. Congratulations really on everything. Banks and i appreciate you having me on here I don't take it lightly so definitely thanks. This has been a lot of fun. And i got a lot of value from you. Know the synergy that we happens. Well just learning more about what you're doing so kudos on on what you built in your platform as well my absolute pleasure. Everyone out there bryan. Grimes checking out and is always folks they said.