Latest / The Capitalizing Your Life Podcast / Movie Theater Manager to Millionaire
Transcript
- Episode 6 – Tom Brickman Glenn Hello everyone. I'm Glenn, your host of the Millionaire Journey Podcast. The goal of this podcast is to guide and empower you on your journey towards financial independence. Today my guest is Tom Brickman. Welcome, Tom. Tom Thank you for having me - excited to be here today. Glenn Yeah. So, I found you on Twitter and I tried to look more into your background. And I follow you on Twitter and we conversate, but if you could just tell me a little bit of your back story of real estate and your financial background? Tom For sure - I am 41 years old. I'm based in Dallas, TX. I hit financial independence at 39. I technically hit it at 37 but stayed working at my job till 39 out of self-doubt, and I hit financial independence by buying real estate. I focused on the ugly stuff that everyone else ignored. I started at 21 and bought one in Toledo, OH, while I was in college. And then I started buying at least one a year in Dallas starting in 2009. And that ugly real estate helped me ditch the 9:00 to 5:00, and I've done some upgrading over the years, and I went back to Toledo. OH, and really expanded my portfolio in 2018 when the numbers stopped making sense in Dallas. And that's how I got here today. Glenn Awesome. I like to get started - just to have a few questions on how you got started. It's just through I think… did you did you work in a movie theater or is that…? Tom That was my full-time job for 15 years. So, I started that at 23, and I finished that at 39. And I started while I was working at the Gap. They had tuition reimbursement. So, I worked with them all through college and they also had a stock purchase plan. So, when I was 16, I got the job, I started buying stock, and I cashed it all in at 21 and used it as my down payment on my first multifamily. So started at GAP and I had one job in between Gap and the movie theater. But yeah, I had a very average salary at the theater. I think I started at $32,000 and when I left I was making right below $80,000. Glenn Wow. So, with the first house was that like a house hack? Or you moving in and then you rented out the rooms or…? Tom So, the first one was a house hack, but I didn't call it a house hack. I was 21 and they're like, “You make $8.50 an hour, you qualify for nothing. But if you get a multifamily, we can use some of that rent and qualify you for a whole lot more house.” And I'm like, “Sign me up.” And I had my dad and my grandma come out. There were - there was one house that I wanted, and I put two others on the list just to show them something when they came out. And of course, they picked the one that I hated the most. And I remember standing there with my grandma. And she's like, “You're going to buy this, and you're going to live in the ugly unit upstairs. And this is the one to buy.” And grandma was right. I still have that in my portfolio. That's my door one and two in my portfolio and it's a great property for me. It's been a great property for me almost 20 years now. So that was how I started. I rented out the downstairs for $600.00 and my mortgage tax and insurance was $738. So, I didn't know anywhere I could live for $138. And that was how the wheels started rolling was with that one. 00:03:30 Glenn So how long did you live in that property? Tom I mistakenly only lived in it about a year because I got cocky, and I took a no money down loan in 2005 on a house in Cleveland, which is the exact definition of why we had a financial crisis there. I had no business buying this next house. And I remember when I was signing paperwork - I was like, signing the application at the time when I was getting the keys - and there was all kinds of craziness on that paperwork. But I moved into that for a year. And I was 22 - and I tried to rent that one out for 10 years. I held it from 2005 to 2015, and I finally sold it off. And I sold that second property at a loss of $22,000. Plus, I lost money on it every year I owned it, but I really started to take off in 2009 when I started buying in Texas. Glenn So, I guess let's go back to the first one. I liked the house hack. Is there any crazy stories about people you've moved in? Tom I mean, I was a terrible landlord at first, so I made like every mistake possible. I fought with the tenant downstairs over her smoking weed on the front porch. I just… It was a mess because I didn't know what I was doing. I thought, “Okay, $168. We can do this.” Well, the first winter when the furnace went out and I was living there, that was quite a hustle trying to come up with $2,500 at the time. So, I was a messy first-time landlord, and that's what I delivered. I had moved in some rough tenants at the beginning. I kept accepting personal checks from the one that moved in after I moved out. And like, the third time you thought I would have learned. But when that third check bounced - because it's not like I just lose the rent from the check - I lost an extra $30 from the bank. That was like, “Okay, I'm done taking personal checks. It took me 3 times and $90.00 to learn this lesson. I'm not going to do it anymore.” So, I had lots of that at the beginning because I just didn't know better and I picked fights that, looking back on them now, I would never dream of like picking this as the fight of the day. Glenn Yeah, I would imagine that marijuana is the aroma for a lot of rentals, so. Tom It was just different cause I was living upstairs, and I was like, “Hey, I'm gonna get in trouble at work. They're gonna think I'm a pothead.” And it was just a fight that looking back on it - she ended up moving out, so I had to replace that downstairs tenant. And it just was, I would say, a costly fight and an unnecessary fight. And if I could go back in time, I wouldn't do it again. But there's a lot of things that I would go back in time and not… I would not buy a zero-down property in Cleveland, OH, with no team or no plan in place either. So, you live and you learn. 00:06:07 Glenn Yeah. So, let's talk about - we'll skip over the second one - we'll talk about the third one. I feel like underwriting might have been a little bit more stringent, Right? About what time, what year was that do you think? Tom So, I actually applied in 2008, right when it was all falling apart. And they're like, “You're a mess. We're loaning you nothing.” And what they meant by that was I had $17,000 in credit card debt. And they're like, “You need to get this under control if you want to borrow anything from us.” So, I went, and I got a part time job, because I was making very, very little at the theater, and I would take my checks from that job and drive across the street to Citibank and hand them my full checks every two weeks. And it took me about a year. So, it was 2009 when I actually bought door #4 technically. And yeah, underwriting was… it was night and day. It was like scary at that point from what I had gone through in 2004 and 2005. So, I house hacked then, and again I didn't call it house hacking, but I bought a 2-bedroom, 2-bath, 2-1/2 bath condo. Because that's what I could afford, and I kept getting outbid, outbid, outbid by other investors. So, my realtor’s, like, “Try these condos. No one will take them. And they're cheap.” And she was right. I had no competition on the condos. And I started with those because that's where I could get my foot in. And those were affordable at the time. And that really got me going. I was buying at least one a year and there were some years that there would be two or three that would fall into my lap, and I'd figure out a way to get them purchased and fixed and rented. And that was all part of… the fun part of the journey, I'll say. Glenn Yeah, which feels like when you're going through the bank all the way up until closing, you’re you're just waiting to hear the “no.” It's just even today for us, it's like we're buying properties. I'm like, “They're just gonna tell us no. For some reason that we can't even think of right now.” Tom I had one almost fall apart because - and this is my one and only FHA loan - but I'm supposed to drive in and sign the paperwork in like an hour. And they're like, “There's no range in the house - we can't loan to you.” And I'm having this meltdown and I'm like, “I already bought it from Best Buy. Here's the receipt. It's coming on Friday.” And it went through. But yeah, it's nerve racking up until the paperwork is signed, the money is wired, and you actually have the keys. And I think that that freaks people out too because it goes slow, it goes slow, it goes slow - and you're just waiting for that denial. And then sometimes it makes it over the finish line. And there are times that it won't. Glenn Yeah, I had this one that - last minute, same story - but they made me, because there was no carpet on the floor - like it was like cement floor. They made me put $500 into escrow at the last minute. They're like, “You need to put $500 in escrow and then show us receipts that you put carpet on the ground.” I was like, “What…” You know. That was my first property ever also. 00:08:50 Tom Yeah. I learned from those mistakes. There are some loans that I won't take. There are some banks that I won't do business with. I learned late in the game. I would say maybe 10 years into it to stop trying to take loans from the big banks and go to a credit union. Glenn Yeah, yeah. Tom And since I formed these relationships with smaller credit unions in both states, it's just been another night and day process where it's a whole lot like - you'll hear nothing for weeks and then you're like, “Hey, we're supposed to close tomorrow. Anything going on?” And they're like, “Oh, yeah, your paperwork's good. Go sign.” You know. So, I learned that late and that's another one if I could go back in time, I'd stop trying to take loans from these bigger banks and just stick with the local credit unions because they want to see the money go back into their community and they're not going to make you put $500 in escrow for carpet over dumb stuff. So. Glenn Yeah, yeah. We just had a yeah, same story. So, you're up to how many units today? Tom I have 24 today, 9 in Texas and 15 up in Ohio; and I have a property manager on 12 or 13 of the doors up there, and I have a management company on two of the doors up there. And I self-manage the ones in Texas still myself. I just signed a lease yesterday on my latest one that I just completed a couple weeks ago. Glenn So, when you self-manage, do you actually show the vacants? Tom I do. Yeah. I show vacancy. I respond to messages. I have a good team in both states, so I have people to, like, go out there and do the work if something's wrong. But yeah, I still go out there and show - I did one of the two showings - so I had a friend go out and do a set of showings for me on Wednesday, and then I did showings on Saturday this week. Glenn Yeah, that was - in my transition that was the first thing I outsourced. I self-managed and then I had somebody start to show the properties just because I was… couldn't answer the phone enough or follow up leads and stuff like that. 00:10:47 Tom I don't want the phone calls. I have that in the listing. Like, “Don't call me. You can text me or e-mail me.” But yeah, I've gotten some crazy calls over the years - and like calls that I wish I could have recorded and gone back and played people because they were the most insane. Like, “How many guns are permitted?” I remember that phone call vividly. I'm like, “I don't know even how to legally answer this question.” I–I… it was just… Yeah, I've gotten some crazy calls. So yeah, no calls. Glenn Was that in Toledo or Dallas? Tom That was that was in Dallas and – AND he showed up for a showing too. And he's like, “What about this?” And I'm like, “You need to put in an application before I can answer any of these questions.” Glenn Yeah. Tom And he never put in the application, so I was thankful that that is the direction that it went, but yeah. Glenn So, there's one question I like to ask - this might be a hard question to think of, but it would be like - tell me a financial belief you had when you started that you had to change through where you're at now. 00:11:43 Tom A financial belief that I had when I started was that this is going to be crazy good money. It was going to be easy. It was going to be a great source of income. And I can tell you that there are units or there are years where it is not the case; where everything breaks at once and you're putting in - you're fixing crumbling foundations, and you're fixing furnaces, and you're fixing air conditioners - and all that profit from the year can get ate up with enough duds in the road. So, at the beginning I had this vision of this is what it's going to be. As I got into the middle, I'm like, okay, maybe it's not going to be like that. And then now I'm at the point where it makes sense to try and sell off some of the problem ones, or the ones that are just not generating the income like others, and hold on to the great properties that I have bought over the years and improve them, and continue to rent them and generate income. So, I'm at that point where I'm not stewing over, “What about this deal? What about that deal?” I'm more, “Is this property that I already hold generating income? Or should I sell this one off and trade it into something else?” Glenn And what would be the ultimate goal of what you're doing? Tom So right now I'm looking at doing some trade ups and selling some off and maybe going into - I do have a small commercial with some mixed-use residential, but I've been looking at maybe it makes sense to sell off three or four of them and turn it into like a hotel. Or turn it into a different source of what I'm doing - maybe more commercial maybe… You know it just depends on the deals that come across and there was a deal that came across on a salon recently and I'm like I never in my life ever pictured owning a salon, but this deal might make sense. So maybe this is something I want to put under my wing. So, I think my ultimate goal is where I'm at, where I've hit financial independence. I could just stay with my portfolio, continue to pay off what I do have, and continue to improve what I have because I have ownership of my time now, which was the goal from the beginning. But… maybe some strategic sell up will make sense. And that's a question and a DM I get constantly is: “What's next? What are you working on? What are you going to do?” I like to stay busy. People give me crap for going and showing my units. I don't have to go over there and show them, but I enjoy it and I actually went and showed on Saturday because I wanted the feedback of: • Do you like what we did here? • Did this work? • Did this not work? Typically, when I do a project, I'll carry the finishes through every phase. And this house that I just finished down here in Dallas - all these finishes are going in up in Ohio in a house, and I don't want to make the same mistakes in Ohio if they're not working down here. So, being there for an open house and seeing what they're responding to and what works and what doesn't is important. I used to put flashy fancy finishes in when I started because I'm like, “Oh, these are great. But the first time I put it in an IKEA floor, and it was like shot before we got to the first year, I'm like, “I'm not doing that crap again.” Like, it looks great for 10 minutes, but once you get a tenant in there… So, I've learned from those mistakes over the years, too. So that's, that's where I'm at. I think that I would strategically take on a bigger project if the numbers made sense, but I don't feel the stress to take on a bigger project if I don't have a deal that is attractive or something that I want to put my time, energy, and effort into. 00:15:00 Glenn Have you like bootstrapped at all, or have you raised money or…? Tom Very, very little. I've taken on a few partners over the years, and it feels good to be able to say, “No, I'm not interested in that,” because I get a lot of those DMs where people are like, “Hey, I have this, I want to allocate this.” I don't want to take on a project if I don't want to do it, and I don't feel the need to take on a project if I don't want to do it. And I know that there's a lot of people out there that are like, “You're an idiot. You should do this.” But I haven't found that right project that I'm like, “Oh yeah, we need to do this. We can raise this money. We can do this.” So I haven't had a need quite yet to do that. Glenn Yeah. So that I guess could bring us to our next subject. You're very active on social media as far as, I think, mainly on - I'm not really anywhere else except for Twitter- so that are you across all boards? Tom Most active on Twitter. That's where I used to like to go and hang out, and it gets uglier as the more people follow you, and you almost get nervous to post stuff at this point. Like I have a friend who's about 30,000 followers behind me and she's getting right to that point where it's starting to not be so much fun. But yeah, I grew really rapidly on Twitter when I started sharing my story. I had a couple of reporters reach out and do articles for a few different publications and that kind of like exploded it. But, I do have a presence on TikTok, and on Instagram, and YouTube as well. Glenn And we'll make sure we put any ways to contact - send him more DMS on Twitter. I have to get the right Twitter handle. I went to go look for you today and there's one guy that's so almost identical to you. I couldn't figure out where…. The only way I knew was the followers. He had like 90 followers. You have over 60,000… I was like, freaking out because I was like, “Did I just get conned on this podcast?” I was like, “I didn't know if I was talking to the real Tom or… “ Tom Yeah, that started really early, where bots were replicating my profile, trying to scam people out of money. So, I try and tweet that once a week that, “Hey, I'm not going to DM you and ask you for money.” If I run out of money, I'm going to sell this eBay stuff right behind me, and I'll start selling purses and makeup. I'm not the type that I'm going to send you a DM and ask you to invest in an investing club. But I feel guilty over them using my picture and my tweets to try and scam people. So, I try and tell them to block and ignore these crazy scammers. Glenn When I was researching you, it said that you liked investing in crypto and I was like, “Hold on. This…this is weird…” And I was like, “He only has 90 followers.” It was actually kind of hard to find you after that. I was like… it kept coming up with the same bot that I couldn't figure it out, but… Tom I'm going to click follow right now so it's easier. Just so this is… Glenn Yeah, yeah. I mean, I did… I did find you, but it was like, “Did I just get conned into this podcast with somebody that's not Tom?” Tom Some crazy crypto guy? No, but I clicked follow, so now you'll see that I follow you. So, anyone else that says “the frugal gay” just block or report. And I will say this, as quick as I get them down, new ones pop back up. So, when I get DMS, my answer is, “I'm trying, I'm blocking, I'm reporting, and they take them down.” Glenn Yeah, I reported it, yeah - Tom But they keep popping back up. 00:18:23 Glenn So, you have a podcast and it's got a few other people with Twitter that I've seen. Tom Yeah. Glenn Tell us about the podcast. Tom Sure, it's called the House Money podcast. I co-host it with Lauren Keen Aumond. She is a short-term rental host based right above Tampa, and she has 14 doors in that vicinity that just got the direct hit from the hurricane. But she did not have any go out of commission besides the power out for a couple of days. And my other co-host is Alan Corey, Real Estate Maximalist is what he goes by, or Real Estate Max. And he's based in Atlanta. Currently has 300 doors. He has taken some of that money and really gone out in style. He is an author of House Fire. And on our podcast, we try and bring on everyday people like I had my photographer come on and talk about taking real estate photos, and what people should and shouldn't do. Or my pest control, or I mean we try and bring on a little snippet of education into every piece, and then we share our do’s and our don'ts. And my segment is called “Teatime with Tom” and I pretty much just pick whatever topic is bothering me, or in the top of social media for the week, and just kind of dig into it a little bit and give my two cents. So that has gone really well. We have a newsletter that has done really well where we drop tips on getting started. Like I said earlier, I've already bought 4 properties this year. I'm still buying, even with 8% interest, and that like is mind blowing to people. But I also am in a market where cash flow is abundant, and not like a Tampa or a Dallas, where nothing really makes sense. Even when you slap down like the huge down payments, you're like, “This still doesn't make sense.” So I am still buying even in the high interest rate. So, we share that on the show as well and yeah… Glenn Yeah, that's when you see the post about how much do you think this house cost and it looks like a mega mansion in Ohio for $500,000. 00:20:22 Tom My short-term rental is one of my favorite in my portfolio. It will be like one of the last ones that I get rid of and it's in a neighborhood called the Old West End and it was the “it” neighborhood 100 years ago, and mine was built in 1905. And whenever - because I love to go for long walks there because they're all different houses. The architecture, it's just stuff that you'd never see in anything that's built now. So, I love to snap pictures on my walks and show off these houses and you get a lot of house for your… There was one that came through today. I got an alert and I'm like, “Oh my God, I want it.” It's $160,000, but it looks like this 5,000 square foot mansion. So, yeah, it's a different neighborhood, it's a different economy, and there's some really unique parts, but there are also some pitfalls. Like I'm in a historic neighborhood, so I have to keep those old wooden windows, and going through Ohio winters with old wooden windows is something I wish for no one. Glenn Yeah, that's when you get the maintenance calls. Tom Yeah. Or the boiler stops working - like it has boilers in there too. That's another thing that we have in the historic house. Glenn All right. Well. Yeah, I guess. Did you have anything to add or? Tom I am an open book. I get DMS on everything. I still actively sell on eBay. I still do work - like there are times where I'm doing a project on one of my houses and I have to step in and do it because I've run out of money. So, if anyone has questions, you guys - like you just like you did - you are welcome to shoot me a DM anytime you have a question. If you want me to look at a deal, that's something that I try and help others with a lot of times. What I'm seeing is people will send me a really bad deal and I'm like, “Wait a minute. Did you not see that this flipper bought this last month for $60,000 and they're trying to sell it for $200,000 right now? And I guarantee that in the three weeks since they bought it and relisted it, they have not done any of the actual work. They just put lipstick on a pig. So, I try and just tell people - and that's also why my account's grown. I'm available. DM me if you need help. I still think that there are opportunities out there. We're in a time where I think people are afraid because the interest rates are so high, so they're kind of standoffish on some of it. So, I'm seeing in in both my markets, the inventory starting to grow a little bit. That's my plug. You can find me through Twitter, Instagram, TikTok, all on the same name. I have a newsletter and I have a podcast. Glenn Awesome. I guess on that note, if you'd like to like and subscribe, rate, comment, give us some feedback, we're on our way. And thank you Tom, for coming on. Glad to talk to you. Thank you. Tom Glenn, thank you for having me.