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#18 How This Real Estate Investor Purchased 250+ Units in 5 Years (Brad Johnson) · Own More Doors

• 0:00
  SPEAKER_02: What's up everyone?
• 0:00
  SPEAKER_02: Juan Weezar here with the Own More Doors podcast.
• 0:03
  SPEAKER_02: This specific episode was first shared on our YouTube channel, Sage Real Estate.
• 0:08
  SPEAKER_02: Check it out.
• 0:08
  SPEAKER_02: And we're excited to bring it to you here.
• 0:11
  SPEAKER_02: We hope you enjoy the interview.
• 0:13
  SPEAKER_02: Do you want to know how you go from a four-unit building to 250 doors?
• 0:18
  SPEAKER_02: Well, today we have the privilege of interviewing Brad Johnson in a five-year span.
• 0:23
  SPEAKER_02: He bought one Four Flex and five years later he owns 250 doors.
• 0:28
  SPEAKER_02: How did he do it?
• 0:29
  SPEAKER_02: We're going to dive into that today.
• 0:31
  SPEAKER_02: My name is Juan Weezar, president of Stage Real Estate, where we teach you how to build wealth through investing in real estate.
• 0:37
  SPEAKER_02: We have a lot to discuss.
• 0:39
  SPEAKER_02: Let's jump right into it.
• 0:40
  SPEAKER_02: Hey everyone, so we are going to continue with our investor series.
• 0:44
  SPEAKER_02: This is where we interview successful investors right here in our backyard, the city of Long Beach.
• 0:49
  SPEAKER_02: And I'm here with my good friend Brad Johnson.
• 0:52
  SPEAKER_02: Brad was introduced to me by my younger brother David.
• 0:55
  SPEAKER_02: They went to college together.
• 0:56
  SPEAKER_02: And so Brad graduates from college.
• 0:59
  SPEAKER_02: They went to UCLA.
• 1:00
  SPEAKER_02: And I remember Brad called me and he said, Hey, I'm buying my first fourplex.
• 1:05
  SPEAKER_02: And at that moment I hadn't met Brad.
• 1:08
  SPEAKER_02: And Brad had a corporate job down in Irvine or Orange County somewhere.
• 1:13
  SPEAKER_02: And he's, I'm like, Well, where are you buying a fourplex?
• 1:15
  SPEAKER_02: And I believe it was on Linden, kind of like uh what I would call not the best area of Long Beach.
• 1:21
  SPEAKER_02: And so Brad went from buying a four-plex, actually living in it, using FHA financing to get his first four-plex, and he buys it.
• 1:35
  SPEAKER_02: I don't hear from Brad for years.
• 1:36
  SPEAKER_02: He calls me five years later.
• 1:39
  SPEAKER_02: And within that five year span, Brad went from four doors to somewhere around 250 doors.
• 1:47
  SPEAKER_02: Okay.
• 1:48
  SPEAKER_02: And so I was shocked, caught off guard.
• 1:50
  SPEAKER_02: And the reason we're interviewing Brad today is how did he do it?
• 1:54
  SPEAKER_02: How did he do it?
• 1:56
  SPEAKER_02: And can we take anything away from what Brad's done so that you could do the exact same thing?
• 2:02
  SPEAKER_02: So, Brad, thank you so much for being here.
• 2:03
  SPEAKER_01: Oh, thank you for having me.
• 2:05
  SPEAKER_02: So, so Brad, let's go back to your first fourplex.
• 2:08
  SPEAKER_02: Yeah.
• 2:08
  SPEAKER_02: From my perspective, having sold a lot of fourplexes, it's like the gateway to bigger investments.
• 2:15
  SPEAKER_02: So talk to me about your very first one, what you learned, and walk us through after the first one.
• 2:21
  SPEAKER_01: In 2013, I closed on my first uh Forplex.
• 2:25
  SPEAKER_01: It was February 8th, 2013.
• 2:27
  SPEAKER_01: I have a college buddy that uh your brother David knows, um uh, and we had the idea of purchasing a four-unit building.
• 2:35
  SPEAKER_01: We were roommates at the time.
• 2:37
  SPEAKER_01: Um, you know, it started, I was working my corporate job, I was in property management, I was managing office and industrial buildings, and you know, I was I was working so hard to you know maximize the cash flow, to minimize the expenses, just working these these industrial and office buildings so hard.
• 2:57
  SPEAKER_01: And you know, I would receive a bonus at the end of the year, and you know, you can go back and forth in your in your corporate job of hey, is that you know commensurate with the amount of time and effort I put into it, put into it.
• 3:12
  SPEAKER_01: So I knew I had to do something on my own if I wanted you know more upside.
• 3:19
  SPEAKER_01: Okay, but with that I knew I had to probably take a little bit more risk.
• 3:22
  SPEAKER_01: Sure.
• 3:23
  SPEAKER_01: Okay, and so yeah, at the time I'm living in Irvine, you know, we're in a three-bedroom apartment.
• 3:30
  SPEAKER_01: I rent a room with a few other buddies, and I'm looking in all the neighboring markets and looking at okay, where can I afford?
• 3:38
  SPEAKER_01: What's somewhat close to my job, and what property is gonna cash flow?
• 3:44
  SPEAKER_01: And so I had done a lot of research on, you know, people who had built wealth over the years, how they could generate passive income, you know, what strategies they used, and um also how I could maximize my cash flow and to continue to try to scale, you know, and honestly, my goal in the beginning was really like, oh, if I could generate a few thousand dollars every month or five thousand dollars, then that would be enough to cover my, you know, my rent, my car payment, my you know, other expenses.
• 4:19
  SPEAKER_01: And and then I was thinking, wow, I'll just then I'll just retire, you know, and if I could retire and make five to ten thousand a month, and that'll just be my job, you know, and I and that's what I'll do.
• 4:29
  SPEAKER_01: And it just continued to morph over the years.
• 4:34
  SPEAKER_01: It was fun, I enjoyed it.
• 4:36
  SPEAKER_01: Um, so so yeah, and so uh let me take you back to my first deal.
• 4:40
  SPEAKER_01: So my first deal, I'm living in Irvine, I'm I go to Costa Mesa, Huntington Beach.
• 4:46
  SPEAKER_01: Man, the the deals, you know, I bought my first fourplex for 470,000 in 2013.
• 4:52
  SPEAKER_01: The other fourplexes I was looking at maybe 600, 700, you know, in Costa Mesa, Huntington Beach.
• 5:00
  SPEAKER_01: I was like, oh, that's a little out of my price range.
• 5:03
  SPEAKER_01: I was concerned about the payment.
• 5:05
  SPEAKER_01: And so the the property, the first property we bought was off of Atlantic and uh Anaheim, essentially.
• 5:13
  SPEAKER_01: Yeah, and it was a four-unit property.
• 5:15
  SPEAKER_01: My dad um was a teacher in the city of Long Beach for uh 20 years.
• 5:20
  SPEAKER_01: He taught at Cabrillo High School.
• 5:22
  SPEAKER_01: My dad owned um some real estate off of PCH and Cherry.
• 5:27
  SPEAKER_01: So I had come up here as a kid.
• 5:29
  SPEAKER_01: I knew Long Beach a little bit.
• 5:31
  SPEAKER_01: My parents went to Long Beach State, you know.
• 5:34
  SPEAKER_01: Um we we ate down here, we we you know came down here to visit.
• 5:39
  SPEAKER_01: Um, and so that there was a little bit more of a comfort level with this, with the city of Long Beach, knowing that.
• 5:45
  SPEAKER_01: And then I I was kind of looking on a map.
• 5:47
  SPEAKER_01: I go, where can I be coastal um and be affordable?
• 5:53
  SPEAKER_01: But may think, wow, long term, this should have upside to appreciate as well.
• 6:00
  SPEAKER_01: Um, and so that's it kind of if I wanted cash flow, it was pushing me closer to Long Beach or more up in the uh in the LA or North Orange County.
• 6:10
  SPEAKER_01: And then I still wanted to maintain the affordability.
• 6:13
  SPEAKER_01: So that's that's basically how I I landed here.
• 6:16
  SPEAKER_02: You you know what's interesting, a lot of people that we work with now hear you talking and they're gonna say, That's me.
• 6:24
  SPEAKER_02: I'm looking for something that's affordable.
• 6:25
  SPEAKER_02: I want it to be coastal, I want it to maybe make some cash flow.
• 6:28
  SPEAKER_02: And so those the those types of things that you were going in uh or going through or feeling in 2013, that people are feeling right now in 2023, saying that's me.
• 6:38
  SPEAKER_02: Like that that that's what I'm doing.
• 6:41
  SPEAKER_02: You find a fourplex, you buy it with FHA financing, which which we talk about.
• 6:47
  SPEAKER_02: That means you know you came in with as little down as possible, and so he's he's gonna borrow as much as you as much as you can, which is which is good in a lot of situations, and you actually live there, yeah.
• 6:57
  SPEAKER_02: So it was how long do you live in the units?
• 7:00
  SPEAKER_01: Yeah.
• 7:00
  SPEAKER_01: So it was uh it was four one bedrooms, yeah, and I bought it with a buddy, and I live in the living room, and he lived in the bedroom, and we initially did the renovation work ourselves, and we found out we're not very good contractors, and you know, we were tired of taking showers at the 24-hour fitness because we couldn't figure out how to finish the plumbing or finish the bathroom.
• 7:25
  SPEAKER_01: So then, you know, I think we probably did two units on our own, and then we and and my friend's dad actually helped us on one of them quite a bit.
• 7:34
  SPEAKER_01: But anyhow, so then we hired someone to do the rest.
• 7:37
  SPEAKER_01: But so yeah, so I wasn't, you know, my my dad was like, hey, you know what, if you really want to find out about a property, maybe like and you're concerned about the area or you just don't know, let's go there at night, let's go there at eight o'clock, nine o'clock, ten, you know, we'll walk the streets together, we'll just kind of figure it out.
• 7:53
  SPEAKER_01: And when you realize, like, you know, it's it's not, you know, everything's illuminated, you know, people generally keep to themselves.
• 8:02
  SPEAKER_01: It wasn't there wasn't people roaming the streets, it wasn't, it wasn't very transient, you know.
• 8:07
  SPEAKER_01: So it just felt like, well, I could, I could live here.
• 8:11
  SPEAKER_01: And at the time I was on a mission, I had a dream, I had a goal.
• 8:14
  SPEAKER_01: I I knew nothing was gonna stop me, you know.
• 8:17
  SPEAKER_01: And I had a girlfriend at the time, and she thought I was kind of crazy for doing this.
• 8:23
  SPEAKER_01: And we actually we got engaged while I was in that place, and she lived there for nine months, and uh, you know, we we managed uh we managed together.
• 8:32
  SPEAKER_01: My buddy actually ended up getting engaged and lived in a separate unit, so we we shared a hallway.
• 8:38
  SPEAKER_01: But um, but yeah, it was uh I I knew nothing was gonna stop me.
• 8:44
  SPEAKER_01: I knew I I didn't um I was gonna persevere no matter what.
• 8:49
  SPEAKER_01: And we we overcame I we made so many mistakes.
• 8:53
  SPEAKER_01: You know, I probably tore out some great kitchen cabinets that I just should have left in there, but you know, uh we were thinking, oh, we need to do a full gut and remodel and make it look nice, you know.
• 9:04
  SPEAKER_01: And then you you learn, well, you get tenants, you know, and stuff breaks, and then you gotta fix it.
• 9:09
  SPEAKER_01: And then, you know, the cabinets we put in, I mean, the cabinets that they built in the 20s, they're they were like solid wood, you know, maple or whatever they use, but it was they're good quality.
• 9:20
  SPEAKER_01: And so you can get around with putting on new hinges or just new countertops and salvaging a lot of the bones that generally are really good in some of these properties.
• 9:29
  SPEAKER_02: You know what I like, Brad, is that you're, you know, we're walking through kind of your your first investments, and what did you hear?
• 9:37
  SPEAKER_02: He co-invests with a friend, they get FHA financing, Brad's living in the living room.
• 9:43
  SPEAKER_02: So none of this is lavish at this moment, right?
• 9:47
  SPEAKER_02: And you're making a sacrifice.
• 9:48
  SPEAKER_02: You you're used to probably living in a better neighborhood, but you're but you're making that sacrifice because we have that dream.
• 9:53
  SPEAKER_02: Yeah, right.
• 9:54
  SPEAKER_02: And so that talks to a lot of people out there because I know sometimes they come and and they want to be in a better area, but like it it starts with making those sacrifices, you know, because certainly Brad is no longer living there.
• 10:08
  SPEAKER_02: He might still own it, but after that first one, what's the next natural purchase after the first fourplex?
• 10:14
  SPEAKER_01: Yeah, so um we did that, and then I was kind of on to something.
• 10:19
  SPEAKER_01: I I saw the market changing, I saw the rents moving a little faster than maybe some other people had anticipated in the market.
• 10:29
  SPEAKER_01: And so then I'm like, wow, I gotta do this again.
• 10:32
  SPEAKER_01: And so then I teamed up with another friend who a co-worker at the time.
• 10:36
  SPEAKER_01: I had changed jobs, and I teamed up with another friend that I had actually known for probably 10 years at the time, and we knew each other through friends of friends through high school, but then reconnected in a in a separate job.
• 10:49
  SPEAKER_01: And we said, hey, let's team up together and let's buy this forplex.
• 10:53
  SPEAKER_01: So then we we um basically shared the down payment to come up with another fourplex off of like with the time it was a PCH in Atlantic.
• 11:04
  SPEAKER_01: So it was, you know, maybe five blocks up a neighborhood we kind of knew.
• 11:08
  SPEAKER_01: We bought it for 480.
• 11:10
  SPEAKER_02: Was this the same year, Brad?
• 11:11
  SPEAKER_02: I'm just trying to get this is 2015.
• 11:13
  SPEAKER_02: Okay, so two years later, more or less, yeah, you partner up with someone else, gather money, you save up money again to do it all over again.
• 11:20
  SPEAKER_02: Yes, okay, but in that one, were you gonna live in it, or you're not living in that one?
• 11:24
  SPEAKER_01: Uh that one we did not live in.
• 11:26
  SPEAKER_01: Yeah.
• 11:27
  SPEAKER_01: So so we purchased that one in 2015, and then another building goes up for sale uh two blocks away for for$10,000 less than what we purchased that for.
• 11:38
  SPEAKER_01: And at that time, I had so I had eight units in 2015.
• 11:43
  SPEAKER_01: So um, yeah, it took me two years.
• 11:45
  SPEAKER_01: We kind of started slow.
• 11:47
  SPEAKER_01: We we I think my the rents on the first fourplex I bought, the three rents covered the mortgage.
• 11:53
  SPEAKER_01: So I was basically living rent-free, but we were still putting money into our joint operating account so we could pay for renovations, right?
• 12:01
  SPEAKER_01: So then once we renovated units, we were able to bump rents with market.
• 12:05
  SPEAKER_01: So so we buy, uh so then I owned eight units in early 2015, and then a property goes up for sale down the street.
• 12:13
  SPEAKER_01: Um, longtime owner uh who was kind of sitting on the market.
• 12:18
  SPEAKER_01: And at that point, I was able to talk to my dad, and I'd say, Dad, I kind of think there's a unique opportunity here.
• 12:27
  SPEAKER_01: You know, I'm here's the rents I'm getting on this property two blocks away and five blocks away.
• 12:32
  SPEAKER_01: I think we should buy this together and co-invest in this together.
• 12:37
  SPEAKER_01: Um, and at that time my dad owned another property off of PCH and yeah, and uh and cherry.
• 12:44
  SPEAKER_01: And so he kind of knew the real estate market.
• 12:47
  SPEAKER_01: And so, anyhow, we were able to figure out a way to close that transaction.
• 12:52
  SPEAKER_01: So by the end of 2015, I had owned 12 12 units.
• 12:57
  SPEAKER_02: So here's what ends ends up happening.
• 13:00
  SPEAKER_02: Um, Brad's a perfect example of what I've seen where it's four doors to more doors.
• 13:08
  SPEAKER_02: And it's not there's this learning curve that that happened not just with Brad, but I see this with every client.
• 13:14
  SPEAKER_02: They go from asking a lot of questions on their very first investment, whether it's two units, uh, three, four, or even more.
• 13:21
  SPEAKER_02: They ask a lot of questions in the very beginning.
• 13:23
  SPEAKER_02: But after their first investment and they're actually in it and they're doing some renovations, they're working with contractors, they're dealing with tenants, uh, move ins, move outs, um, they're taking in applications, that learning curve happens immediately.
• 13:37
  SPEAKER_02: And all those fears that you once had start to kind of step aside, and all of a sudden you're like, it's a business.
• 13:45
  SPEAKER_02: I understand it.
• 13:46
  SPEAKER_02: But really, what I'm trying to tell you, it starts with that first one that changes everything in your mind because what's happening with Brad is now he's seeing opportunities and now he's realizing I could take on more units.
• 13:58
  SPEAKER_02: Yeah.
• 13:58
  SPEAKER_02: So, okay, so now we're at 12 units.
• 14:01
  SPEAKER_01: So we're at 12 units.
• 14:02
  SPEAKER_01: Now what starts happening?
• 14:03
  SPEAKER_01: So in 2015, and around that same time, my um my dad had these one bedroom apartment units, and he was um, I think his rents were like 40% below market, but he didn't have the money to fix them up.
• 14:17
  SPEAKER_01: And so at that time, so then I'm uh I'm at 12 units.
• 14:21
  SPEAKER_01: I have, you know, I'm generating a few thousand bucks a month in cash flow, right?
• 14:26
  SPEAKER_01: But then I also still have my day job, so I never quit my day job.
• 14:30
  SPEAKER_01: Uh, I got married in 2015, so now my wife and I both make a little, you know, have a dual income.
• 14:37
  SPEAKER_01: And so I'm able to, my cash flow is good, but I don't have a ton of money in the bank at that time.
• 14:44
  SPEAKER_01: I've been investing my money.
• 14:46
  SPEAKER_01: So I was able to uh partner with my dad on a 12 unit on the 12 unit property that he owned and and work out something to say, hey, I'm gonna increase the value of this property by putting out my own cash to fix up these units, and in return, I want an ownership percentage of the property.
• 15:06
  SPEAKER_01: And so I said, okay, I'm gonna fork out the 10 to 15 grand a door to fix these up so we can improve the quality of the apartments.
• 15:14
  SPEAKER_01: And and in doing so, I think we can increase the rents to this amount.
• 15:19
  SPEAKER_01: And so I work through, and and and you know, my dad is a my dad was a teacher, my dad, but he was an investor for many years and pretty um, you know, somewhat savvy.
• 15:32
  SPEAKER_01: I would say he's very somewhat savvy real estate investor, but not my training for my, I kept learning at my day job too.
• 15:40
  SPEAKER_01: So all of a sudden I'm working for big institutions, we're buying office and industrial buildings for 50 million, 100 million, you know.
• 15:49
  SPEAKER_01: But I knew that that wasn't attainable to me because it was like, well, I can't just go to some big bank and say I need a$30 million loan and I want to buy this.
• 16:01
  SPEAKER_01: Like, you know, I I just it didn't feel like that was reachable for me.
• 16:05
  SPEAKER_01: So I knew I wanted to kind of start small and then continue to continue to grow.
• 16:10
  SPEAKER_01: So so I'm a partner in that deal.
• 16:14
  SPEAKER_01: We still we still own that deal.
• 16:16
  SPEAKER_01: Um, and then that was 2015, and then I go to 2018, I was able to add maybe another 20 units or so.
• 16:26
  SPEAKER_01: So then there was a little a little gap.
• 16:28
  SPEAKER_01: Well, in 2017, I actually bought two deals.
• 16:31
  SPEAKER_01: So in 2017, I bought seven units.
• 16:33
  SPEAKER_01: So I bought another four unit and a three unit in 2017, and then 2018 I added probably another 20 units.
• 16:40
  SPEAKER_02: So you're right around 2018, about 50 units, 50 to 60 units, 50, 50, 50, 50 to 60 doors.
• 16:48
  SPEAKER_00: Yeah.
• 16:49
  SPEAKER_02: You brought up something interesting, which I want to get into, which is a topic that we haven't really gotten into at all, which is syndication.
• 16:56
  SPEAKER_02: Can you simplify what syndication is?
• 16:59
  SPEAKER_02: Because one of my buddies called me um on Monday and he's like, hey, this guy's raising money.
• 17:05
  SPEAKER_02: What's syndication?
• 17:06
  SPEAKER_00: Yeah.
• 17:06
  SPEAKER_02: Can you we just like simplify it so people understand what that is?
• 17:09
  SPEAKER_02: And then I'm gonna say, explain how you've been able to use it to your advantage.
• 17:13
  SPEAKER_01: Yeah, very good.
• 17:13
  SPEAKER_01: So syndicating equity basically means you know, you're trying to raise money.
• 17:19
  SPEAKER_01: You come up with a business plan to buy whether it's a business, a restaurant, a you know, uh a company that sells shoes, or you are syndicating a real estate deal and you're trying to raise money to purchase the property and you come up with a business plan.
• 17:34
  SPEAKER_01: We're gonna buy it for a million dollars.
• 17:37
  SPEAKER_01: Um, we have to put 40% down, so I need$400,000 of equity just for the down payment.
• 17:43
  SPEAKER_01: And then I probably need some money to run the property for operations, to pay my mortgage, to pay my electricity bill, water bill.
• 17:52
  SPEAKER_01: And then if you have a business plan that you want to fix up any units, or you have to address a roof repair or paint the building, then you're gonna need this to raise additional money for those capital improvements.
• 18:04
  SPEAKER_01: So, you know, you can raise anywhere from probably, you know, if it's a a million dollars, you know, maybe you have an extra hundred or two hundred thousand dollars you're gonna invest into the building to improve the quality, to address any deferred maintenance, to you know, make any improvements that you think are necessary to potentially increase the value.
• 18:26
  SPEAKER_01: Or if the property is already improved, you don't need to do any capital improvements, but maybe you still raise a little bit of additional money beyond your down payment just to keep in your operating account for a rainy day, you know, to address any items that may come up: a plumbing repair, a roof leak, a window replacement, you know, things like that that should come up.
• 18:47
  SPEAKER_02: So, what we're saying in the first example, property is a million dollars, you're gonna raise$400,000.
• 18:53
  SPEAKER_02: Okay.
• 18:54
  SPEAKER_02: Someone's gonna say, Who the hell's gonna invest$400,000 with me?
• 18:57
  SPEAKER_02: Yeah, talk to us about your very first syndication or the one that you would consider your first.
• 19:02
  SPEAKER_00: Yeah.
• 19:02
  SPEAKER_02: And how did that work?
• 19:04
  SPEAKER_02: Why, why would an investor want to do that?
• 19:07
  SPEAKER_02: What's in it for them?
• 19:08
  SPEAKER_02: What's in it for you?
• 19:09
  SPEAKER_02: Yeah, uh, and and the roles that they both play.
• 19:12
  SPEAKER_01: Yeah, so um, so in like this was an something that I had to learn, and I kept, I'm, I was like a really people like to work with me because I said what I was gonna do.
• 19:26
  SPEAKER_01: I returned phone calls, I returned, I was responsive, I like just treated people how I wanted to be treated, you know?
• 19:33
  SPEAKER_01: And so um I'm buying these real estate deals, and then my name starts popping up, like, hey, this guy closed on this property.
• 19:41
  SPEAKER_01: And then I would get a phone call from another broker, like, hey, I saw you bought that building down the street.
• 19:46
  SPEAKER_01: I have a client who's interested in selling.
• 19:48
  SPEAKER_01: Would you be interested?
• 19:49
  SPEAKER_01: I go, okay, we work out the details on the price, and then I would buy another transaction that way.
• 19:55
  SPEAKER_01: Um, and I and I do what I do what I said.
• 19:57
  SPEAKER_01: I I said, okay, I'm gonna buy it for this price.
• 20:00
  SPEAKER_01: Uh is there any different maintenance?
• 20:02
  SPEAKER_01: Can you disclose anything to me up front?
• 20:04
  SPEAKER_01: Hey, this these are the things we're gonna disclose.
• 20:06
  SPEAKER_01: Okay, I know that going in, and I can price some of those things going in.
• 20:09
  SPEAKER_01: And then if we discover things that weren't disclosed and they are detriment to me, then you know we can negotiate with the seller on on those details.
• 20:18
  SPEAKER_01: But essentially, so I'm doing a lot of these deals, I'm like putting up 50% of the down payment, you know, I'm partnering with my um um friends, with co-workers, with family.
• 20:34
  SPEAKER_02: Um, and then I get to a point at this point when you're when you're saying that, just so people have perspective, when when you're partnering with them, and I get it, hey, you're buying something for a million dollars, you're putting 50% out, it means you're raising money.
• 20:45
  SPEAKER_02: How much are you asking people to give you?
• 20:47
  SPEAKER_02: 25,000, 50,000, 100, or does it matter?
• 20:50
  SPEAKER_02: Like, what are you looking to get to to get to that half a million dollar down payment?
• 20:54
  SPEAKER_01: Yeah, yeah.
• 20:55
  SPEAKER_01: So on the fourplexes, you know, you're I was able to, or the triplexes, I was able to buy with a 25% down payment.
• 21:03
  SPEAKER_01: So at the time, if it's anywhere from, let's just say the average purchase price was around$500,000.
• 21:10
  SPEAKER_01: So that would be uh something like$115,000 or so.
• 21:15
  SPEAKER_01: Um, so we we needed that money to close, and so I my partner would put in 50% and I would put in 50%.
• 21:22
  SPEAKER_01: Right.
• 21:22
  SPEAKER_01: So I'm continuing to scale, and then I'm like, keep finding more deals, right?
• 21:28
  SPEAKER_01: So there's we talk about syndication, but there's there's so many ways to structure a purchase, you know.
• 21:35
  SPEAKER_01: I um I also would uh receive a member loan.
• 21:38
  SPEAKER_01: So let's just say you buy a property for a million and you put on$400,000 of equity.
• 21:45
  SPEAKER_01: So my my partner, if we want to be 50 50 owners, my partner can put up$300,000 and I put up$100,000 and he gives me a loan for$100,000 and we fix it up, we refinance, or we sell it, and then the loan gets paid.
• 22:00
  SPEAKER_01: off and then we share the profits 50-50.
• 22:02
  SPEAKER_01: In a syndication model where maybe there's a um there's a preferred return you know and and then you share some profits be f beyond the preferred return that's generally the way that uh that those that that syndications are are structured.
• 22:21
  SPEAKER_02: Brad the number one question I get is how do I know if it's a good deal?
• 22:25
  SPEAKER_02: So how does Brad Johnson know when it's a good deal?
• 22:28
  SPEAKER_01: Yeah.
• 22:28
  SPEAKER_02: So what's like the main metrics that you're using.
• 22:31
  SPEAKER_01: Yeah so okay I'm looking at um you know generally the what comparable buildings are selling for in that market.
• 22:41
  SPEAKER_01: Okay.
• 22:42
  SPEAKER_01: Obviously And so that's the comparison approach.
• 22:44
  SPEAKER_01: That's the sales comparison.
• 22:46
  SPEAKER_01: I'm also looking at what kind of income the property will generate.
• 22:50
  SPEAKER_01: And then I'm looking at maybe the location or the actual the physical real estate you know um and so uh with that I would gain appreciation.
• 22:59
  SPEAKER_01: And so um I can focus on a market where um maybe I'm gonna be closer to the ocean.
• 23:06
  SPEAKER_01: So my cash flow might be less but my renter base is going to be generally better or I can charge a premium to the rents I can obtain on my uh on my apartments.
• 23:18
  SPEAKER_01: And so generally I'm gonna get a better credit worthy tenant, you know, versus if I'm you know more inland, I'm in a maybe uh less desirable community um then my rents would be lower.
• 23:33
  SPEAKER_01: Maybe that property will cash flow a little bit more but it won't appreciate as much.
• 23:38
  SPEAKER_01: And so that trade-off is really made by the investor and you deciding what the best thing for you is.
• 23:45
  SPEAKER_02: So you're looking at every building individually because there's no one market that you're trying to hit it just depends.
• 23:51
  SPEAKER_01: That's right.
• 23:52
  SPEAKER_01: And and my my investors you know I have some people that say hey I want to max I I'm looking for five per six five to six percent return on my money let's just say but I also want to have upside and appreciation and I want to have a renter base that is high credit great quality you know generally they're gonna be less harder on the building the number of occupants in the building might be less and I'm gonna get a you know a the the qualifications of that renter are going to be a premium.
• 24:24
  SPEAKER_01: Okay we're gonna buy in these markets okay and then have another investor hey I want to maximize my cash flow you know but maybe we're okay you want to maximize your cash flow that's fine we're gonna buy in these pockets these are the markets that we're gonna look in and generally those buildings uh maybe have uh several occupants in a one or two bedroom um there's always trade-offs you know maybe there's not the parking that you need you know the functionality of the building maybe it's older quality building you know it's a 1920s of 30s or 40s building the buildings that sell at lower cap rates that are generally sell for a premium are going to be newer buildings uh adequate parking you know uh in Long Beach that would be anything built after the 80s um that maybe has underground parking maybe has parking in the back um maybe the the the square footage of the bedrooms is bigger maybe they're you know maybe the of one bedroom is 700 square feet or 800 square feet on an older unit and then built in the 20s or 30s maybe the one bedroom is 500 square feet and so you know if I'm looking to rent um and maybe um I have enough income to qualify for both units then I go I I it's gonna be more comfortable for me to live in a bigger apartment.
• 25:45
  SPEAKER_01: I can afford it I'm a better credit worthy tenant and so that's where I'm gonna go.
• 25:51
  SPEAKER_02: Yeah so so what you hear Bradley talk about is well naturally he's bringing all of his experience down to making these decisions.
• 25:58
  SPEAKER_02: He's not solely focused on what metric.
• 26:00
  SPEAKER_02: So it's not all about the income it's about more so about the the opportunity on what you could do with that property.
• 26:05
  SPEAKER_02: Yeah and and that only comes with experience.
• 26:08
  SPEAKER_01: And yeah exactly and and I I would pay a little bit more money to have a better quality building that was more functional meaning I had parking maybe maybe there's separate buildings on a lot you know and I have a yard or you know maybe I have in in uh in-room laundry you know you gotta factor in all these qualities because at the end of the day you know you're also competing with your neighbors and the building down the street and the block away and so you have to figure out hey what kind of differentiates ourselves maybe there's opportunities to maximize revenue and other facets through parking through building back utilities so anyhow yeah there's there's several different components that we look at.
• 26:54
  SPEAKER_02: Got it no thank you for that what's the necessary skill set you know we saw you go from four doors to more doors but I mean you went to a lot of doors like what skill sets would you believe help get you to this point?
• 27:06
  SPEAKER_01: The skill set you need uh you definitely don't need to be a rocket scientist or be the smartest guy in the room every time but you need to be humble you know you need to be willing to listen and learn from others.
• 27:22
  SPEAKER_01: Ultimately I I think we really need perseverance.
• 27:25
  SPEAKER_01: You need to be able to understand um how to overcome problems.
• 27:32
  SPEAKER_01: You're gonna have encounter problems no matter what and I think you do in your life and generally whether it's uh going on a family vacation and you have a disagreement or you have a real estate transaction and things are never just gonna be absolutely perfect every time.
• 27:47
  SPEAKER_01: So you become comfortable with that and then you also become comfortable with the unknown oh what if I can't rent it out for that price or what if my construction costs are 10% or 20% more or what if um I have to do more repairs and I didn't forecast that how do I overcome that you know or the interest rates have moved faster and so now I'm gonna pay a little bit more interest than I originally thought I was.
• 28:16
  SPEAKER_01: So you learn ways around that you learn how to overcome some of those problems and and too you're investing you know the the market is all happening around you the market is you know thousands and thousands of investments around you so you're there's other people that you're competing with or your neighbors that are facing the same problems and so how do you communicate that to your investors?
• 28:40
  SPEAKER_01: How do you work through those problems internally?
• 28:43
  SPEAKER_01: And so and yeah and and so you you also the skill set of uh yeah you you become more accurate over time you build up experiences you know so I'm definitely way more knowledgeable today than where I was you know it 10 years ago or so but also um but I have more experience you know and and I think the to come across someone who has the drive and the energy and the motivation like the other people feed off that and if you're just honest with people and you say hey this is what I'm doing I made a mistake I'm sorry maybe you give up some of your profits maybe you you know you you compensate someone for a mistake that you made but you know what it'll pay off in the long run I I never was you know robbing Peter to pay Paul it wasn't like oh I gotta hold everything myself it was like no I have a bigger vision I want to grow something you know to be grander and so what do I have to do to get there now thank you for that I mean clearly you could hear it from him the skill set that drive and just that uh just being authentic is it's definitely there he's not pretending to be somebody he's not thank you for that let's talk about preferred return real quick like when we see that what does that mean is that the maximum amount is that is that a guaranteed amount tell us what because we do see you know people are out there raising money still today and people get these these um you know kind of these applications or these performas and it says uh that this is a preferred return tell our folks what that even means to someone yeah so the preferred return should probably the the rate on the preferred return should be commensurate with the risk profile of that investment and also the commensurate with you know maybe like a risk profile of of another comparable investment in the market whether it's a uh a bond but maybe you would add a premium to a bond to commensurate for the risk profile of like a of this of an investment in a you know piece of real estate and and then also like are you investing in uh Newport Beach or Long Beach or Santa Monica so so here some rough math is like let's just say you have a 10% preferred return um at the let's just say someone gives you 100,000 yeah and you told them 10% uh preferred return.
• 31:10
  SPEAKER_01: What does that mean to them and their 100,000 let's just say you so you have 100,000 so that means a 10% return on your 100,000 that means you're gonna earn 10$1000 let's just say a 12 month period.
• 31:22
  SPEAKER_01: Okay.
• 31:22
  SPEAKER_01: You're gonna earn$10,000 on that first right and then if there's any profits above that$10,000 then usually there's a there's a split but it's generally not pro rate pro rata so if we raise$2000 and you put in a hundred you know you are generally you're 50% of the equity so right so instead of getting 50% of the profits above a 10% maybe you get 40% or something you know because the the partner the me I'm the general partner I'm working the deal I found it I'm working the renovation reteneting you know I have my whole business plan I'm probably gonna get slightly more of the profits above a 10% return.
• 32:10
  SPEAKER_01: I mean you you the when you look at the math of these um of these syndications it's like there's a project level return let's just say it's a 20% IRR and then there's an investor return right and then there's a general partner return or the whoever's syndicating the deal return.
• 32:30
  SPEAKER_01: So you know the there's some general rules you know maybe uh the the splits you know someone can earn maybe 20 30 40% of the profit sometimes 50% of the profit above a 10% sure but um you know it shouldn't generally shouldn't be any more than that and then you and then you look so you're gonna earn at least 10% return on your money and then you're gonna participate in the profit so your overall return might be 15% or 17% or 18%.
• 33:01
  SPEAKER_01: So and the the benefit of that instead of buying a REIT a publicly traded REIT is I'm gonna buy blackstone publicly traded REIT that covers a certain market or product type okay but you know I have I'm a little more savvy or I trust you know certain people who I know who have you know executed on business plans and I go wow this guy he has a niche in this market I'm gonna be able to invest in this single piece of real estate and I like the business plan and I and I think that he's gonna perform and I looked at the rent comps the sale comps I know the market I I live two blocks down the street or I live 20 miles away so I can actually go see the property I can go to this guy's house I can call him he's trustworthy so so you know you you take um I'm not sure if it's essentially more risk but you're able to you know maybe participate a little bit more you're able to you know the the there's a the that investment is a little bit more tangible versus looking at a ticker symbol and trying to comb through you know a 10k every every year or whatnot to try to digest maybe what the so what you're saying and in in some of our clients you know we we always we're very uh invest you know kind of go where where you know invest locally so that you could essentially kick the tires and so what Brad's talking about is um you know should someone invest in his syndication put up some money on a project that Brad has decided this is the right one for us to to hopefully be profitable with um it's you know typically investors for Brad it's it probably started off with family and friends and then he built a reputation of hey he's performing well everyone's getting a good return they're happy maybe it's a better return than other investments and so probably more money continues to follow you but what's good for them is that they could essentially if you're telling them that you're replacing windows this one week they could go see that windows are being replaced.
• 35:09
  SPEAKER_01: That's right yeah yeah they they they can if I you know I write up a report and say hey we finished painting the exterior we replaced the roof we replaced the windows then they can actually go and see that right and check that out they can go and if we have a listing on the you know we're trying to rent an apartment they can go online and probably see pictures of inside the unit they if they wanted to tour the unit they could as well but you know what I was saying earlier where wow I'm building relationships I'm doing what I say I'm honoring my word I I've made so many mistakes but I but I corrected them and then I would try not to make make the same mistake again.
• 35:48
  SPEAKER_01: So as my business has grown and I've made promises to my investors and I've executed on those promises then all of a sudden Juan talks to his friend talks to his friend and he goes hey this is the guy I'm investing with this is what I'm doing with my money this is where I've seen some opportunity you know these are maybe the the returns that we're getting on these other deals and so I'm gonna continue to invest with that person because I I believe in that market I believe in the story and so it's so yeah and and again you're focused in on generally one or two pieces of real estate and not a big portfolio that maybe you're not familiar with you don't know you can't drive to you know you don't have as much um I guess uh attachment to so what's ended up happening if I if I understand this correctly you you start the syndication and now you're able to grow bigger you know everyone everyone talks about scaling and scaling just means the best way that I can describe it is faster uh efficient growth okay we're not talking about like hey I'm growing 1% 5% per year this is explosive growth if it's done right I mean that's really what scaling is would you say that syndication allowed you to get to that point yeah because you know at some point you just run out of money you know you just like a syndication model is that I'm able to put up 10% of the equity uh 15 20 of the equity so like you put up less equity um but you can participate in some of the profits and some of the upside and like you know we all wish we had a hundred million in the bank or what whatever to continue to invest and you know in hindsight I would have bought them all my own and and owned the ball but I I couldn't and I still can't today um and it's also good to kind of diversify your money you're not in you know uh all your money in one basket in one deal we're investing in several different deals and so um even in all my investors I tell them like you know you got however much money don't yeah sometimes it's not the best to put it all in one deal maybe you put in half or 20% or whatever you feel comfortable with and then see how we perform and then if you want to invest more in the future you can but anyhow the syndication model helps you scale and so with that you have attorneys that help you with operating agreements you have reporting that we do we're investing in software to run our business obviously hiring employees to help run our to help manage the portfolio um and so you just you you you make$10 but then you reinvest$5 back in the building and then you make$15 and then you reinvest half of that back into your the your company your the building you know your um software your accounting team you know so um you it's two steps forward and one step half a step back and then two steps forward again and so we continue to kind of climb.
• 38:57
  SPEAKER_02: Brad how many how many units are you at today?
• 39:00
  SPEAKER_01: Plus or minus 250 today.
• 39:03
  SPEAKER_02: Got it okay let's talk about let's talk about the market today and a lot okay so clearly you're um an expert investor you've done syndication you own multiple multiple units are you still buying today or are you afraid of the market because I want them to hear because a lot of them are saying it's high interest rate the values are high the cap rates are low I'm never buying what is it that you like what how are you looking at what we have in front of us today?
• 39:35
  SPEAKER_01: Yeah so um so if I go back to 2022 I only purchased uh maybe four or five a portfolio but it was like four or five properties and then I didn't really do anything and I tied that up in like January of 22 and then I didn't do anything the rest of the year and I I saw the market shifting pretty quickly I saw what was happening in the interest rate environment and I knew that wow I I couldn't digest you know they said something called negative leverage where your interest rate would be higher than your stabilized cap rate.
• 40:12
  SPEAKER_01: And so I I was thinking oh there's there's got to be an adjustment so I'm I'm gonna wait and I'm gonna wait and I'm gonna wait.
• 40:18
  SPEAKER_01: And then today I have two properties under contract.
• 40:21
  SPEAKER_01: One I'm probably gonna close tomorrow or Monday and then a second one towards the end of February.
• 40:28
  SPEAKER_01: But um yeah so so I'm seeing a lot more opportunities in the market today.
• 40:34
  SPEAKER_01: So what in general I think we're seeing asset values level out or even come down.
• 40:43
  SPEAKER_01: The problem in today's market is there's not a ton of inventory on the market today.
• 40:48
  SPEAKER_01: So the inventory that is on the market maybe it's sitting there for a little bit longer and I think if you have a net seller at the end of the day then they're gonna be willing to transact and you can have an opportunity to get a favorable value.
• 41:04
  SPEAKER_01: You know if there's not a ton of buyers or there's not a ton of credit worthy buyers you know I'm hearing a lot of stories about people putting properties under contract and then falling out of escrow because they can't get their financing lined up you know they I I I can't um I outside of any like maybe there's one deal that I fell out of contract on but it was like this catastrophic thing that I couldn't work through with the seller but that that's another thing like if you want to start building a reputation and you know buying more properties then you know you could generally come in at a price that you've underwritten that you feel comfortable with and then you close on that transaction and then you know the seller's agent recruit represent uh understands that the listing agent understands that and so then you again you start to build a rapport you know you do what you say you honor your word you just you just make things right you know so so let me try to summarize what what Bradley's just told us.
• 42:02
  SPEAKER_02: So he's still buying deals it's 2023 in January of 2023 he's he's in escrow right now he's gonna close something tomorrow so clearly you still believe in the market because there's less buyers out there that puts you the buyer into the driver's seat financing at five plus units which is probably all that you buy now I would imagine you know for the most part just larger units he's more experienced he could do that financing has is down by like 80 90% at the commercial level okay so financing's hard but that's like the negative part all that um in my opinion just makes opportunities and that's what you're able to find.
• 42:42
  SPEAKER_02: Yeah I want to touch on something Brad in the very beginning you said hey when I was buying my first fourplex I wanted to make uh cash flow net worth you talked about early retirement did you achieve those goals?
• 42:56
  SPEAKER_02: Did you achieve those goals?
• 42:58
  SPEAKER_01: You know I um I feel like I have um I've certainly accumulated more today than I ever could have dreamed of and I ever could imagine but you know it's not just me you know you um I've invested money on behalf of my family you know my sister's a nurse my uh parents are retired teachers you know um uh there's other people that have invested with me that are just regular people that are working regular jobs and instead of putting your money in the stock market you invested in a piece of real estate instead of buying a bond you bought a piece of real estate so um and then yeah my like other other retirees you know I still talk to some investors that are retired that worked at a car dealership and you know he he calls me once a quarter and he goes hey how are things going uh thank you for the distribution um you know I'm this is what my wife and I are doing at this time in our lives you know And so I'm helping other people achieve some of their financial goals that they had set out to do.
• 44:08
  SPEAKER_01: I don't have a gun to my head to, you know, invest money every day, every quarter, every month.
• 44:17
  SPEAKER_01: You know, I do it because I find a good deal and I think that other people should participate with me in investing in these.
• 44:26
  SPEAKER_01: And too, at the end of the day, we're we're improving the housing quality.
• 44:32
  SPEAKER_01: You know, I've I have different business plans.
• 44:35
  SPEAKER_01: I house over 100 U.S.
• 44:36
  SPEAKER_01: veterans.
• 44:37
  SPEAKER_01: I have a partnership with the Long Beach VA.
• 44:40
  SPEAKER_01: You know, we house uh veterans that are in a program called HUD Bash.
• 44:44
  SPEAKER_01: Um we have uh some of our properties have just regular Section A tenants, and we work with those.
• 44:50
  SPEAKER_01: We have market rate units that we work on.
• 44:52
  SPEAKER_01: So um no matter what, um, you know, we try to kind of improve the overall quality of our housing.
• 45:01
  SPEAKER_01: And, you know, at the end of the day, I'm these are all units that I would live in that I, you know, and I have lived in in similar neighborhoods and similar uh uh building quality.
• 45:12
  SPEAKER_01: And so I can point to pictures that I still have today to say, look, I've done it.
• 45:17
  SPEAKER_02: Right.
• 45:17
  SPEAKER_02: So, so one of the things when when when when Brad and I kind of got reunited after the five or six years had passed, I said, Brad, with that many doors, do you still have a day job?
• 45:28
  SPEAKER_02: And he said, I just quit my day job a while ago.
• 45:31
  SPEAKER_02: But but so let me just paint the picture of what of what I of what I've heard.
• 45:35
  SPEAKER_02: He was he was honorable in his dealings in a couple different ways, not just with his investors who believed in him.
• 45:41
  SPEAKER_02: But but let me tell you what happens in a real estate transaction.
• 45:43
  SPEAKER_02: So Brad is the buyer, he's being represented by a um a buyer's agent.
• 45:48
  SPEAKER_02: And when he tells the seller and the listing agent, I'm gonna buy it from this price, he actually does that.
• 45:54
  SPEAKER_02: So it and it let me give you an example.
• 45:57
  SPEAKER_02: Oftentimes there's buyers out there and buyers agents with horrible reputations, horrible reputations in our industry where you do not want to accept their offers because they consistently try to renegotiate after the fact, try to get a massive discount, and then they don't close the transaction.
• 46:13
  SPEAKER_02: And why do we not like that?
• 46:15
  SPEAKER_02: Because the seller then wastes all this time, it's a lot more work for the agent.
• 46:18
  SPEAKER_02: So I'm telling you this because if you end up being a buyer who ends up buying a lot, your reputation matters, okay?
• 46:26
  SPEAKER_02: Listing agents know who the buyers are, uh and so these are the people selling the properties.
• 46:31
  SPEAKER_02: And if Brad has purchased so many properties in the last year or so, then his reputation starts getting better.
• 46:38
  SPEAKER_02: So a lot of times the deals that Bradley's buying, uh they don't hit the market.
• 46:43
  SPEAKER_02: He gets a call from the agents.
• 46:44
  SPEAKER_02: Why?
• 46:45
  SPEAKER_02: Because he's he's got it to that point where his reputation speaks for himself, and they know he's a buyer, honorable in his dealings.
• 46:53
  SPEAKER_02: And so this was, you know, and I don't know if this was his plan from the beginning, but he's put himself in a situation where guess what?
• 46:59
  SPEAKER_02: The deals are chasing him.
• 47:00
  SPEAKER_02: He's not out there chasing the deals, the deals are chasing him.
• 47:03
  SPEAKER_02: And furthermore, on the financing side, because I remember you told me that you have everything organized, and when you find a deal, you send it directly to the bank and one uh, you know, one file, and it just speeds up the process of you getting the transaction.
• 47:16
  SPEAKER_01: Yeah.
• 47:16
  SPEAKER_01: And so I was a little lucky with my day job, is that I learned a good process from a big company.
• 47:22
  SPEAKER_01: And so I learned how they dealt with transactions and how they stayed organized.
• 47:27
  SPEAKER_01: And so, um, but you know, just like in any other job, you know, you have a filing system, you have, you know, you learn how to work in Excel and to calculate your cash flows and your rents and your mortgage.
• 47:39
  SPEAKER_01: And so it was just all just practice.
• 47:41
  SPEAKER_01: And there's a lot of things I didn't know how to do, and I just learned and I practice and I made mistakes.
• 47:47
  SPEAKER_01: I mean, we're here talking about some successes I've had, but I've had a lot of failures, you know, and I've had I've made mistakes on um, you know, thinking the the where the construction costs were higher, or where maybe our our rents, you know, where we were pushing market rents, I, you know, was off a little bit.
• 48:06
  SPEAKER_01: But, you know, you figure out a way to overcome that.
• 48:08
  SPEAKER_01: Maybe we can get more rent if we charge for parking, or you know, if we put in laundry and outside the unit, then we can increase the value of the property.
• 48:18
  SPEAKER_01: So I I I I I talked about some of them helping my investors, right?
• 48:24
  SPEAKER_01: I talk about obviously I like I like the chase, I like the real, I like the negotiation, I like you know, trying to work in under the gun to you know figure out God, how do I close this thing?
• 48:37
  SPEAKER_01: What do I what pieces do I have to put together?
• 48:39
  SPEAKER_01: But my I've also learned like, wow, I I owe um I I owe some of my what I've learned to my tenants, to my investors, to my commun, to the community that we're serving.
• 48:56
  SPEAKER_01: And so probably over the last, I would say two years, I kind of hit a little bit during COVID, you know, and I saw some of the struggles that people had gone through and realizing like, wow, there's something, there's more to life than money, of course, you know, and there's more to life than just maximizing, you know, your energy.
• 49:18
  SPEAKER_01: I have three kids now, and so I was spending more time with my family, with my wife, but also I helped the tenant purchase um a duplex, you know, and I kind of coached them into what to expect in the process, how to, you know, structure their lease agreements.
• 49:36
  SPEAKER_01: Maybe they were doing some repairs or remodeling.
• 49:39
  SPEAKER_01: I kind of coached them through that.
• 49:41
  SPEAKER_01: And so that is um, I helped that one of my contractors purchase um a triplex.
• 49:49
  SPEAKER_01: Um, I actually let him co-invest with me.
• 49:52
  SPEAKER_01: Um, I'm helping another contractor purchase a duplex.
• 49:56
  SPEAKER_01: And so um, you know, there's people that have these dreams, right, of owning a piece of real estate.
• 50:02
  SPEAKER_01: And it just might be the first home for them.
• 50:04
  SPEAKER_01: It might be an investment property, but for me, if I can give them some guidance, if I can help them along the way, I mean, they they don't have a resource to go to, they don't have a rich uncle, they don't have, you know, and so your resources are, you know, kind of your network, and then who you can reach out to, who you can, you know, be thoughtful and you have questions and you want to, you know, uh learn from someone who has more experience, um, you'd be amazed how many people helped me along the way and and gave me their time.
• 50:35
  SPEAKER_01: I mean, you know, we talked about raising equity and and syndicating and all that stuff, but like there's so much you can do on your own time to learn from other people.
• 50:46
  SPEAKER_01: And so there's there, I, you know, someone that I thought I could would go to to give me money to buy a real estate deal, I actually got more value from them by just spending more time with them so they could educate me on things that I needed to understand or know, or or maybe introductions they did for me and the business, so then I could have another resource to help me kind of continue to grow.
• 51:11
  SPEAKER_02: Yeah, and I could speak to that.
• 51:12
  SPEAKER_02: You know, in the last couple of years, when when I've been speaking with Brad, he's it's it's it's shifted from, of course, listen, you know, he said, I love the excitement of chasing a deal.
• 51:21
  SPEAKER_02: There's there is a thrill that we get.
• 51:24
  SPEAKER_02: Uh, you get goosebumps sometimes, and you know, he's done a lot more than I have, but I understand what that is.
• 51:29
  SPEAKER_02: I've seen this kind of more of a passion project coming out of Brad where he's like, Juan, what can we do to reach out to uh the underserved, teach them about the importance of home ownership?
• 51:41
  SPEAKER_02: So it's it's kind of shifted, and it could be that some people might say, Well, Brad made it, and so then you know, in their version of made, and so now so now you're in this position of where you legitimately want to give back.
• 51:52
  SPEAKER_02: Yeah, you legitimately want like all the contractors that worked with you, which which I've had a chance to meet, and you bring them around and we have events and you bring them there, which I think is awesome.
• 52:01
  SPEAKER_02: Uh, you know, you bring them to the lunches and stuff, and it's it's exposing these people to maybe resources like you said that they wouldn't have had, but I I think that it's amazing because I don't want anyone to watch this and be like, oh, it's just get rich, you know, in your case, just build wealth in a very quick time.
• 52:18
  SPEAKER_02: But I I think what I really see is the sincerity of you wanting to give back, being an example, and and again, paying it forward, which I think is amazing.
• 52:26
  SPEAKER_01: Yeah, but even it's all effort into, you know, you give people time, even my contractors or my attorneys, or people I've worked I've worked with over the years, and you give them time, and then they give you, you know, there's a there's something you get in return, whether uh it's you know, they work on their job a little bit harder, or you know, there's some advice you're able to give one of their nieces, you know, who was interested in purchasing a piece of real estate, or someone was interested in starting a company and they needed to understand how to maybe they wanted to create an LLC and what the process was and the formation documents that they needed.
• 53:07
  SPEAKER_01: So, anyhow, and then I'd I would never charge for that.
• 53:11
  SPEAKER_01: I would never hang up, I would never say, Oh, I'm too busy.
• 53:14
  SPEAKER_01: You know, it was like I would just figure out a way to make time to to help them, to accommodate them, to maybe point them in the right direction.
• 53:24
  SPEAKER_01: And so, yeah, it's just um I've learned so much over the years.
• 53:29
  SPEAKER_01: And again, my dream was never to like get, I, you know, I still my my dream isn't to get to 10,000 units or 20,000, or you know, it just I like being able to be impactful in my community and um yeah, continue to help uh investors that are looking to, you know, achieve a um a market return on their money and achieve some of their financial goals.
• 53:54
  SPEAKER_02: So so let's touch on that.
• 53:57
  SPEAKER_02: Um a lot of folks out there follow our channel.
• 54:00
  SPEAKER_02: Um, someone's gonna watch this, they're gonna say, you know what, Brad is very sincere.
• 54:04
  SPEAKER_02: And I watching this video, I believe in Brad.
• 54:06
  SPEAKER_02: If someone wants to invest with you, is that are you taking people in?
• 54:10
  SPEAKER_02: Clearly, there's qualifications, income qualifications.
• 54:13
  SPEAKER_02: Are you looking to do that or are you pretty set with who you have now?
• 54:17
  SPEAKER_01: Yeah, certainly.
• 54:18
  SPEAKER_01: I mean, um more than happy to talk to people and whether you invest with me or you invest with someone else, or maybe you were sent an investment, you know, and you're just like, hey, what are your thoughts on this?
• 54:30
  SPEAKER_01: You know, I get people that do that to me all the time.
• 54:32
  SPEAKER_01: My friends, I'm in a running group.
• 54:34
  SPEAKER_01: Some guy sent me a deal.
• 54:35
  SPEAKER_01: He goes, Hey, what do you what do you think about this?
• 54:37
  SPEAKER_01: And I can just give him my general thoughts.
• 54:39
  SPEAKER_01: I mean, in general, you're like you're investing with the person, you know, we we can because I'm gonna come up with assumptions, right?
• 54:48
  SPEAKER_01: Where I think the rents are, what I the loan I can get, what um, how much the cost to renovate it is, but like, you know, those are those are assumptions that how do you believe in me?
• 54:59
  SPEAKER_01: Do you believe in the person that you're gonna invest with?
• 55:01
  SPEAKER_01: You know, what what's their character?
• 55:03
  SPEAKER_01: What do the other investors say about them?
• 55:05
  SPEAKER_01: What other deals have they done?
• 55:07
  SPEAKER_01: And so I learned that in the institutional world where people were asking questions about they wanted to get to know who the operator was and and what kind of person they were and how they interacted or reacted in certain situations, you know, and so things aren't always great.
• 55:23
  SPEAKER_01: You you have problems, there's struggles that you that you come upon.
• 55:27
  SPEAKER_01: So it's how do you overcome those, you know?
• 55:29
  SPEAKER_01: And so uh, yeah, certainly.
• 55:31
  SPEAKER_01: I I mean, I will uh we can share my contact information, and I'm certainly open to helping um anyone and and uh from anywhere, you know, whoever either wants to talk to an experienced investor or has a question, something as simple as you're buying a single family home to a 50-unit, a hundred unit apartment building, and and you have questions regarding that.
• 55:53
  SPEAKER_02: It's very honorable.
• 55:54
  SPEAKER_02: Uh everything that you've talked about.
• 55:56
  SPEAKER_02: Brad, give us you know, some top tips for people getting started or for people, maybe, maybe they're maybe they're the next Brad.
• 56:05
  SPEAKER_02: They have 12 units, a couple fourplexes.
• 56:07
  SPEAKER_02: Hopefully they worked with us, and now they're ready to syndicate.
• 56:10
  SPEAKER_00: Yeah.
• 56:11
  SPEAKER_02: Give me some tips that you're like, if someone would have told me these three things, man, I would have done things differently.
• 56:16
  SPEAKER_01: Okay.
• 56:17
  SPEAKER_01: Be uh, I have a couple, be comfortable being uncomfortable.
• 56:24
  SPEAKER_01: Be, you know, we when you're making investments and you're taking risk, you know, I mean, you you could be uh risking money that you took you several years to save up, 10 years, five years, whatever, and all that hard work you did over the years to save up that money.
• 56:42
  SPEAKER_01: So you're taking risk, but you're also receiving a return for that risk, right?
• 56:48
  SPEAKER_01: And so I think Warren Buffett says, you know, make investments but never lose your principal.
• 56:53
  SPEAKER_01: So generally, like you probably shouldn't be losing your principal in these deals if you're doing some general research on the market values and where other properties are trading, and you know, you so you're gonna preserve your equity.
• 57:06
  SPEAKER_01: So, so um, you know, I get I remember playing sports and getting butterflies in my stomach before games, and I still I get those butterflies when I'm buying real estate today.
• 57:16
  SPEAKER_01: And I'm an experienced investor.
• 57:18
  SPEAKER_01: I have 250 units, I buy I'm buying a 10-unit property.
• 57:22
  SPEAKER_01: I I'm nervous.
• 57:22
  SPEAKER_01: I what if things don't go the way I think, you know?
• 57:26
  SPEAKER_01: But I know the risk profile, I know the return I can get on my money, and so I'm more comfortable with that today.
• 57:33
  SPEAKER_01: And and that obviously has improved over time.
• 57:36
  SPEAKER_01: Okay.
• 57:37
  SPEAKER_01: The other component is you know, there's a saying of underpromise and over-deliver.
• 57:44
  SPEAKER_01: You know, like some syndicators out there will try to push their market rents, will try to push their assumptions, maybe they try to skimp on some of their renovations so they can shave down their renovation costs.
• 58:00
  SPEAKER_01: My general theme was kind of like underwrite something that's conservative that I would tell anyone, you know, that hey, that this is kind of where I have comps where the I think the market is.
• 58:14
  SPEAKER_01: And then great, if you if you beat that, then your investor is gonna be happy about that.
• 58:19
  SPEAKER_01: If you, you know, outperform, then they're gonna be happy.
• 58:23
  SPEAKER_01: But it's a much, much tougher conversation to come back and say, hey, we thought we were gonna have to get this, but we're 10% below.
• 58:32
  SPEAKER_01: Sure.
• 58:32
  SPEAKER_01: Hey, we thought we were gonna spend this, but we spent more.
• 58:35
  SPEAKER_01: Um, and and yeah, I mean, have fun, have fun.
• 58:39
  SPEAKER_01: It's it's you know, it's all about be authentic, have fun.
• 58:43
  SPEAKER_01: It's a journey, you know.
• 58:45
  SPEAKER_01: I think about my journey and how my life has changed, but I really haven't changed personally.
• 58:53
  SPEAKER_01: I think um, you know, I'm still having fun today.
• 58:56
  SPEAKER_01: That's why I'm I'm still doing it.
• 58:58
  SPEAKER_01: I I enjoy the learning process.
• 59:01
  SPEAKER_01: Um, I enjoy, you know, seeing people around me grow and be smarter and you know, um kind of just enjoy the journey with me.
• 59:13
  SPEAKER_01: And and I always know like I can't just elevate myself, I need to elevate the people around me because we're gonna be a team, and you know, I can't tell you how many phone calls I've been on, 10 o'clock at night, Saturday, Sunday, you know, but I I enjoyed it.
• 59:31
  SPEAKER_01: I loved it.
• 59:32
  SPEAKER_01: I it's a journey, I it was a passion of mine, and I still do.
• 59:36
  SPEAKER_01: And so I I I still have those calls, you know.
• 59:38
  SPEAKER_01: My wife will yell at me if if uh we have dinner and I gotta get off the phone, and I know I gotta hang up, I gotta be with my kids and be present, and and we we we have a lot of events that we plan, but also I just I I I I love it and and I wanna help as I I know I want to help as many people around me and also new people.
• 59:58
  SPEAKER_01: I'm learning, I'm meeting new people every day and uh figure out a way to help them.
• 1:00:03
  SPEAKER_02: So no, I love it.
• 1:00:04
  SPEAKER_02: So being uh comfortable with the uncomfortable, over-delivering, which of course, and then having fun.
• 1:00:11
  SPEAKER_02: Let me focus on being uncomfortable because for anyone out there who is saying, Hey, in 2023, New Year's resolution, I'm gonna buy my first investment property.
• 1:00:22
  SPEAKER_02: You're gonna tell them that they're gonna be uncomfortable, right?
• 1:00:24
  SPEAKER_00: Yeah.
• 1:00:25
  SPEAKER_02: Because I I know you're gonna be uncomfortable.
• 1:00:28
  SPEAKER_02: So there that you're never gonna have this comfortable feeling going in, whether it's your first one or it's your hundredth one.
• 1:00:34
  SPEAKER_02: That uncomfortable feeling is still there.
• 1:00:36
  SPEAKER_02: Now, granted, Brad has that experience, but I'm glad he said that because you know, even when I'm buying something, you still get nervous.
• 1:00:44
  SPEAKER_02: And there's always these what ifs.
• 1:00:45
  SPEAKER_02: And I know that you uh tuning in have those what ifs because I talk to you.
• 1:00:49
  SPEAKER_02: You're you tell me these concerns, but it's one of those where we got to get you guys off the sidelines.
• 1:00:55
  SPEAKER_02: We got to stop being spectators and we got to take action.
• 1:00:58
  SPEAKER_02: And when you do, it's when you're gonna learn and you're gonna see that success.
• 1:01:01
  SPEAKER_02: Uh, and more importantly, reach out to Brad.
• 1:01:03
  SPEAKER_02: Brad wants to help, he's definitely a resource.
• 1:01:06
  SPEAKER_02: Um, he's local, and we just can't thank you enough for being here.
• 1:01:11
  SPEAKER_02: So there you have it.
• 1:01:12
  SPEAKER_02: I've hoped you've learned a lot from Brad.
• 1:01:15
  SPEAKER_02: Um, he's a genuine person.
• 1:01:16
  SPEAKER_02: What you're gonna see on camera, what you saw on video, that's exactly who he is.
• 1:01:21
  SPEAKER_02: Calm, collective.
• 1:01:22
  SPEAKER_02: So certainly now tons of confidence.
• 1:01:25
  SPEAKER_02: You know, he's had so much success.
• 1:01:27
  SPEAKER_02: I hope you learned a lot.
• 1:01:28
  SPEAKER_02: My biggest takeaways is he stuck with his word.
• 1:01:33
  SPEAKER_02: He researched his stuff, he had the goals going into it.
• 1:01:36
  SPEAKER_02: And the deals are chasing him now because of the reputation that he's built.
• 1:01:42
  SPEAKER_02: So let's take away from that is that if you do things right from the very beginning, you're consistent.
• 1:01:48
  SPEAKER_02: I think more and more doors are gonna open for you.
• 1:01:50
  SPEAKER_02: So I hope you took away that message today.
• 1:01:52
  SPEAKER_02: A couple several announcements that I want to make.
• 1:01:55
  SPEAKER_02: If you're in Southern California, we are starting a in-person meetup group.
• 1:01:59
  SPEAKER_02: This is where we're gonna meet together to learn and network.
• 1:02:03
  SPEAKER_02: So these are free events hosted at our offices the last Thursday of every month.
• 1:02:09
  SPEAKER_02: So please stay tuned.
• 1:02:10
  SPEAKER_02: Send us a message if you're interested.
• 1:02:12
  SPEAKER_02: Again, if you're looking to acquire a property, um, maybe get a quote on a loan, uh, please remember that we do have a Sage Trust Mortgage.
• 1:02:21
  SPEAKER_02: And last but not least, big announcement, we are gonna partner up with Brad Johnson and we're gonna bring to you a course on syndication.
• 1:02:30
  SPEAKER_02: I'm collecting an interest list, so if you want to learn, we briefly went over what a syndication is, but we're gonna dive deep into this course so that you know how to do it by the time that you're ready.
• 1:02:41
  SPEAKER_02: Okay, so send us a quick message, let us know that you're interested in this syndication class, and we'll make sure to send you the details as soon as we have them.
• 1:02:49
  SPEAKER_02: That's all for now.
• 1:02:50
  SPEAKER_02: Thanks for tuning in.