E120 – The BiggerPockets Way of Raising Capital – Brandon Turner
1. Real estate is a hustle business
2. You MUST have knowledge of your subject in order to raise money
3. You can be conservative, but you can’t ALWAYS take the most conservative approach
4. Present yourself (your business / website /etc) the way you want to be received. Pay attention to detail, it matters!
5. Have a VIVID vision of where you want to be
- Unscripted – MJ DeMarco (https://amzn.to/2Z0uKHr)
- Profit First – Mike Michalowicz (https://amzn.to/2MX3DpZ)
- Deep Work – Cal Newport (https://amzn.to/2oxi2Qh)
- Rich Dad Poor Dad – Robert Kiyosaki (https://amzn.to/2PNWhsz)
- The Wealthy Gardener – John Soforic (https://amzn.to/3cBcEzu)
- Vivid Vision – Cameron Herold (https://amzn.to/3bANxeS)
Brandon Turner is the founder of Open Door Capital LLC, VP of Marketing for BiggerPockets, and a best-selling real estate author worldwide. Over the past decade, Brandon has established a strong track record investing in multifamily, including apartments and mobile home park assets. In addition to his accomplishments investing and publishing, Brandon is also host of the BiggerPockets podcast, which is the most downloaded real estate podcast in the world.
Brandon achieved financial independence at age 27 and currently resides in Maui with his wife and two children. He has several driving purposes: he started with the ambition to be successful enough that he had the time freedom to be present in every moment in his kids lives, plus have the freedom to travel.
Today his driving purpose is to find happiness through continuing to chase the moving target of success.
Read the Transcript Here
Title: E120: The BiggerPockets Way of Raising Capital – Brandon Turner
Interviewer: Steven Pesavento
Interviewee: Brandon Turner
[00:00:00] Steven: In order to succeed in real estate, you have to have one of three things. You got to have hustle, you got to have knowledge or experience, or you got to have money. And in today’s episode with Brandon Turner of BiggerPockets, we’re going to be diving in to how to go and find that money, how to raise capital, and most importantly, how to build the trust and relationships to do it over and over and over again. We’re going to dive into some specific strategies that you can use and apply directly in your business, and the mindset that Brandon uses that’s allowed him to succeed and grow to being one of the world’s top real estate authors and podcast hosts. You’re not going to want to miss it and let’s get right to it.
[00:00:44] Intro: This is The Investor Mindset Podcast and I’m Steven Pesavento. For as long as I can remember, I’ve been obsessed with understanding how we can think better, how we can be better, and how we can do better. And each episode, we explore lessons on motivation and mindset from the most successful real estate investors and entrepreneurs in the nation.
[00:01:05] Steven: All right guys welcome back to The Investor Mindset Podcast. I’m very excited and grateful. I have Brandon Turner of BiggerPockets in the studio today. How you doing Brandon?
[00:01:14] Brandon: I am doing fantastic! You know, it’s Hawaii, I woke up this morning, it was 71 degrees and sunny and I’m looking at the ocean so it’s a rough life but you know somebody has to do it so I volunteered.
[00:01:25] Steven: Well, I’d say that you are definitely living a life on your terms. I can appreciate. We’ll definitely dive into that here together. And as you guys know, Brandon Turner is the founder of Open Door Capital and VP of Marketing at BiggerPockets, and is the bestselling author worldwide in most real estate topics, and over the past decade, Brandon has established a strong track record of investing in multifamily including apartments and mobile home parks. In addition, he is an unbelievable host of the BiggerPockets podcast, which has been the most downloaded real estate podcast in the world. So Brandon, you’re taking a lot of these tops for the real estate space, and you hit financial independence at age 27, and now you’re living the good life out in Maui with your wife and two kids. So are you ready to jump into things?
[00:02:15] Brandon: I am and by the way, I will say, that sounds like really a lot of cool stuff. Like, I got incredibly lucky to come into BiggerPockets at the right time. So I will say that like I rode that wave and happened to have a big wave come behind me that pushed so that was definitely helpful in that.
[00:02:31] Steven: I love the humbleness man. I mean, life’s all about luck and skill and you put yourself in the right place, and you definitely made things happen because you’re a big reason that bigger pockets is what it is today.
[00:02:41] Brandon: Well, thanks man. Appreciate it.
[00:02:43] Steven: So with all of that success, why don’t we start out by looking back – what events or influences from your childhood shaped who you are today?
[00:02:52] Brandon: Ooh, such a good question. I’m going to go with — I’ll start here. When I was young, my mom entirely has always been and continues today, is a garage sale mom. You know, garage sale mom’s like every Saturday morning, load up all the kids in the minivan and we just go door to door to every garage sale in town. She’d plan her route ahead of time. We knew exactly where we’re going and we hit all the good garage sales, and then she’d just buy stuff and then sell it again at her own garage sales. She was a garage sale mom. So I grew up with the garage sale mentality. What that means is, number one is like get a bargain, like learn how to get a bargain. Buy low, sell high, so that we are good at that. And also just that hustle, that hustle mentality that she had. Neither of my parents were rich at all and mom did daycare besides that in her house, and my dad was a meat cutter. So, you know, we had to hustle how we could so it was a lot of like, how do we do cool stuff in life? How do we go on vacation to Disney World? Well, we’re going to have to hustle if you want that. So I watched my parents, I learned to hustle at a young age.
[00:03:53] Steven: And thank goodness that you fell into real estate because, you know, in most areas of real estate, it’s a real hustle business. That’s how you really make things happen.
[00:04:00] Brandon: Yeah, you really do. I like to say that real estate really is composed of like three parts, right? There’s like the, you’ve got to hustle. You got to actually have something that does the work. You got to have money to be able to fund it or somebody has to have the money. And then you have the knowledge and know what you’re doing. If you’re lacking any of those three, real estate deals fall apart, right? So now you can have all three of them in one shot, or you could bring in other people. You could be the hustle, somebody else could have more knowledge and somebody else might have the money, or any combination thereof. And so, yes, the hustle is so important. And so in the beginning I had no knowledge but at least I was, I could say, stupid enough to just keep going and persistent enough to like — it’s like, you ever see a video where they’re pulling somebody behind a boat like waterskiing and then the person falls but they’re hanging on to the rope sails, which is like, bam, bam, bam and they just keep hitting and skipping across the water. That was like the first 10 years of my real estate journey. It’s like, just hang on, and you’re going to get through it. You’re just going to get some bruises and is water burn a thing — like rug burn, water burn. I don’t know, we’re going to make that up. It’s a thing.
[00:04:55] Steven: Man that’s such a good description, because like when you’re first getting started in real estate, I mean sometimes you just hit it big and sometimes you feel like you’ve got a lot of success, but it’s a grind. It’s a heck of a journey. You know, hold on and, and try to get through. I love that explanation of hustle knowledge and money. Because I think so often times, you know, when people are getting started, they don’t have money and they don’t have knowledge and they want to start out without wanting to do the hustle. And it’s such a good reminder that, you know, if you don’t have one of those two or one of those three, then you’ve got to think about something else to focus on.
[00:05:30] Brandon: Yeah, especially if you’re listening to this right now and you don’t have money yet, focus on the knowledge and the hustle. Focus on those two pieces. Because if you can bring those two pieces to the table, I can guarantee you, you will find somebody with some money who doesn’t have the hustle or the knowledge and you will find that if you are hustling and have the knowledge and you know what you’re doing. Case in point, a buddy of mine, I’ve met him out here in Maui. He and I are now partners on a flipping business. We’ve done two flips this year already made over 200 grand total on those flips. He hasn’t put a dime in. I mean nothing, no money in. I put all the money in but you know what I do on a typical day, not flipping houses. He deals with the contractors. He deals with finding the deals, he deals with everything. He’s awesome. He’s a rockstar, but I put the money in. So again, we formed a partnership together, because he couldn’t do it alone and I wasn’t going to do it alone, because I didn’t have the time and he didn’t have the money. So why not do it together, and you can create some magic. So yeah, if you’re new, if you have no money; knowledge and hustle.
[00:06:21] Steven: I love that partnership perspectival. Well in just a second, we’re going to get into talking a little bit about raising capital, because I know you’ve done it a lot of times in a variety of different sizes of deals. But tell us a little bit about what your current focus is on the real estate front? I know you’re working with your new company, Open Door Capital, and you’re raising money for mobile home parks. Tell us a little bit more about that.
[00:06:4] Brandon: Yeah. So when I mentioned the flipping, really the reason I flip houses is one because it’s fun, but two because I use the money from flipping to be able to hire team members for Open Door Capital so we now have five people on staff. So we have five team members who are buying mobile home parks. We’re buying mobile home parks across the country not Because mobile home parks are the end all, be all, best investment ever made as much as I do like them and I can go through a million reasons why I like them. But it really was more important that I chose something. You know, so many people are out there like they hear this and they hear this and they hear this and at one point, I just had to say like, take my own advice and like shut up, Brandon. Just pick something and go with it with all your focus, all your drive, all your energy and just do that. And so that’s what I’m really — most of my time is spent on Open Door Capital, The Mobile Home Park, acquisition, and running the business.
[00:07:29] Steven: Yeah, that’s great. And to see your progress of growing into the commercial space. I mean, it’s just so inspiring. I think a lot of people can really appreciate that. So when you get to the point, when you get to that point in your career, whether you’re just getting started or you’ve been in it for a long time, like you have, and you’re making that transition into starting to raise capital for these kind of deals where you’re going to bring multiple investors into a deal and you’re going to do some type of syndication or some type of, you know, public offering. Where does somebody start as far as going out and raising capital? I mean, how should we be looking at this when we are going after bigger deals?
[00:08:05] Brandon: Okay, so the first thing is if you want to raise money, you have to have that knowledge. Like you have to know what you’re doing, and you have to have the hustle. So going back to what I call the deal-delta, those three things, the knowledge, the hustle and the money. If you’re going to raise money, you need to have the other two like dialed in. You really got to know what you’re doing there. So the first part is again, if you haven’t got that yet, you need to get that. Which means you may have to start with smaller deals and you may have to do some smaller deals on your own. You may have to start and people might say, well, I don’t have the money for the smaller deals. You may have to figure that out. You meant to bring in a partnership. I mean, like you may have to — Imagine this. Imagine you spent the next five years of your life working 20 hours a week making no money at all in real estate. All you were doing was building connections, knowledge, experience and confidence. Those are like the four things that everyone needs. And it grows over time. You need experience, connections, knowledge and confidence and you build those with every deal that you do. And so you may have to start small. And let’s say you were working for five years making no money just helping somebody else get their deals. Like you were just working for them for free. I’m not saying you should, I’m just saying what if you did. After five years, you’ve helped them by, let’s call it hundreds of deals, or they flipped dozens of houses and you lost “five years of your life?” No, now you’ve got the experience to go raise money because you’ve been a part of all this stuff. Again, not saying you have to do that. But just hypothetically, like, you might have to start at a level like that where you’re working for someone or volunteering to be able to start building the credibility, the knowledge, the experience, to be able to actually pull something off. So that’s the first thing. But really raising money all comes down to really what I call, I think with two or three things. Number one, people have to trust you. Like trust is — I’ll go three things. Number one, they have to trust you and when I say trust, it’s kind of similar to the word like. Like they have to like you. If they don’t like you, they’re not going to put money with you most likely. But really, the most important thing is trust. Like there’s people that I don’t like but I trust and I’d give them money, but you have to build trust. How do you build trust? By credibility, by having a track record, by doing this over and over and over by always being a man or woman of your word like that’s how you build trust over time. There’s other ways to build trust, for example, podcasting, which is weird, right? But you probably find this in your own life, right? By podcasting, people naturally trust you more. And it might be silly. But the fact is, like, you hear somebody over and over and over, you get to know them, you feel like you know them better. So maybe you’re podcasting. Maybe you’re going on podcasts, maybe you’re speaking at local meetups, maybe you’re hosting a local meetup every single month in your market for the next two years to build that trust. So level one — so the first thing you have to have is trust. The second thing you have to have is a good deal. Like you’re not going to raise money if you don’t have a great deal. So what does that mean? It means you got to get really good at finding good deals. You got to get good at the acquisition, good at the underwriting, the analysis parts, to be able to funnel in good deals, so that you can bring your investors good returns. And then third, awareness. People have to know what you’re doing. I mean you could have all the trust in the world. You could be a trustworthy person and have a great deal but you don’t want to tell anybody about it, you’re never going to raise money. So really all three of those things come into play when you’re raising money; trust, deal and awareness. How do you do awareness? Again, the same things, go on podcasts, go to local meetups, become a speaker at things. Talk about it with everyone you know. You just got to get the word out there that you are raising money or you are a money raiser. Now you have to be careful with that, because you can violate some SEC rules if you’re not careful. But yes, those three things really is how you raise money; trust deals and awareness.
[00:11:27] Steven: Yeah, that’s huge. And it’s interesting when you say that, because really building a thought leadership platform, whether that’s through writing, whether that’s through connecting and in person at meetups and speaking at those events, whether that’s on podcasts, the first thing of course, you have to be an expert, you have to have some expertise, or surround yourself with a team of experts so you can build that credibility on something. But by going and doing those things, it actually knocks out many of the things on the list. It might actually help you get a deal. But for sure, it’s going to help you build trust, and it’s going to help you build awareness. So that’s huge. Once we’ve got that trust, and we’ve got people who really believe in us, they know that we’re doing, you know things the right way. They’re seeing us on a regular basis so we’re staying top of mind and obviously, we’ve got a great deal and we’re starting kind of down that process, what happens next? How can we make sure that without a doubt, we’re going to be able to close this round of funding, and there’s not a question or a mind that it’s going to happen because I’ve heard people with great deals still sometimes can’t raise the money.
[00:12:32] Brandon: Yeah, it’s true and especially in a time like this, where the worlds kind of in like a weird kind of what’s going to happen next, where’s the virus stuff going? There’s a lot of uncertainty. So it’s getting probably harder to raise money, though we found in our business that there’s actually a lot of people that — we’ve actually raised more money at least verbally in the past few weeks than we did before the virus, which is interesting. I’m thinking people are just terrified of the stock market so they’re pulling out and they’re giving a toss instead. But a lot of it comes down to having a lot of ducks in a row, right? So there’s the lawyer stuff, you got to have all the agreements and stuff. You have to have all that stuff lined up perfectly so that way you can handle those calls. We actually brought in a full time investor relations person, because I knew that I didn’t have time to deal with all the phone calls I knew I’d have to deal with, with potentially hundreds of investors. And so we brought in somebody that can just do that full time and just be able to handle that. So that was a big part of it. We do a lot of like — because sometimes we’re raising money in a fund, for example. Well a fund basically means as we raise a lot of money, and then we go buy multiple deals with that money rather than like one deal, one money raising. But a similar situation would be if you’re just getting started, and you don’t have a deal yet, but you want to start raising money, or at least start that conversation with people, you can put together like a sample deal. So this is what it looks like. This is the kind of deal we’re looking for. That’s kind of what we do in the fund. This is an example of what we’re going to buy within the fund. But I don’t we don’t necessarily have one locked up yet that we’re going to invest in so I can’t give you all the details. So anyway, having those things in place definitely helps. Again, having the lawyer stuff in place having this software. There’s a lot Different companies out there that will help you with the software side of things. And when I say software, I’m talking about working investors log in and upload all their documents to where can they get the wiring information? Where can they see the current value of their investment, and all that is tracking. And there’s different companies that do that. And so you’ll want to have all that in place as well, but then at the end of day, sometimes it’s just hard to raise money. Sometimes you just don’t have enough in your network and you may have to go outside your network to other people’s network, and maybe even give away a chunk of your equity to raise money. And there’s some people’s jobs, they’re whole business is they just go raise money for other people, which is not a bad business. I probably should have just done –I’m glad I didn’t, but like I would have made probably more money by just going to other people who are doing big deals and being like, hey, can I raise money for you? And then just bringing in my name and my trust to other people’s deals; my awareness, my trust to their deals. But you know, it’s just not as fun as actually running the like, I’m going to go and take down that moose myself.
[00:14:54] Steven: Sure. And sometimes maybe somebody like you, you want to have control. You’ve been doing this a long time. You’ve got that track record, you want to make sure you protect it. So I think that makes a lot of sense. And, you know, I kind of went down a similar path myself. I’ve been in, you know, the single family game for three years going on four. I’ve done over 200 deals, about half of those were flips and half of them wholesales. But I realized that okay, well, I’m not making cash flow by doing this transactional business, and how can I quickly get into a position where I’m going to do that. I could go buy rentals, single families and you know, pick off some from that space. Okay, well, that’s an option. Done a little bit of that as well. But then I realized that oh, well, if I go and invest in large multifamily or large commercial assets, I can quickly move into that space, but I don’t quite have the expertise. I have the awareness and I have the trust, but don’t have the expertise to manage and operate that business. So what I went out and did was go find you know, some other operators and build a long term relationship with them over time and understand and vet their deals and then I can step into that role of investor relations and raise capital for them. And that is the kind of things you have to be looking for in the world. And then we can bring great returns for our investors. I get to focus on my core skill set. They get to focus on theirs, and then we all get to flourish together. And that partnership might be the way that you as the listener might want to go down that path. If you feel like you’ve got something to bring to the table, you know, go find somebody you can work with.
[00:16:24] Brandon: Yeah, you know, you said two really, really good things in there that I want to point out. I’m switching now, I’m like the interviewer here. So two things that I love that you said. Number one, you said, you vet and understand their deals. That’s so important, because as we talked about earlier, trust matters so much. So if you’re just going to go raise money for somebody, and you don’t know anything about their deals, you’re just hoping they’re going to be good. If that deal goes south, your name, your trust is going to be hurt, right? So I love that you said you vet and understand that. Like you’re putting your name on the line so you better understand what you’re getting into. And then the second thing you said, oh, your unique skill set, right? So there are things that everyone is good at. Like my guy Mike, who’s my Investor relations guy I said I brought in. Mike is the most happy, personable, like friendly, amazing guy. Just everybody loves Mike, they just love him. You talk to him for one minute and you’re like, this is the best guy I’ve ever known. And so like he’s the investor relations guy because he’s so good at that. And like he likes get on the phone and talking with people. I hate the phone. Like people who know me well know that I do not answer my phone if you call. I will not answer it ever. I have my voicemail literally turned off. You can’t leave me a message. The only way you get in touch with me is by texting me because I just hate the phone. But Mike loves the phone. So guess what? Mike’s the Investor Relations guy, not me. You know what I like doing? I like podcasting. I love this. I love talking on podcasts. Is that weird? I like podcasts, but not phones. I don’t know. It’s like, what’s the difference? You and I are talking the same way. But there’s something different about this, right? So what do I do? I’m the awareness guy. I go out there and I give awareness out there, what we’re doing and why we’re doing it. I write books. I do that kind of stuff. My asset manager and one of my partners Brian Murray, guy is a rockstar. He’s bought thousands of units in his life. He is really good at Asset Management; making properties that aren’t performing well perform really well. So the point you made was just put people in the roles that they are like born to do, and you’re going to see your business just fly. That’s probably the biggest reason for all the success we’ve had the past year and the growth we’ve seen. I mean, we started a year ago, we had basically as Open Door Capital, we had no properties a year ago. We have I think six right now and like 600 units. We’re under contract for another couple hundred units. We’re going to be at about over 1000 by the end of the year. And so like, where does that come from? It comes from having the right people on the bus and in the right seats to use a I think Jim Collins thing. Let’s get people on the bus, the right people in the bus and get them in the right seat.
[00:18:38] Steven: Yeah, that’s big. I mean, finding the right people is really important. So you talked about something I want to come back to; right people in just a second. But you talked about something underlining the importance of doing due diligence. So I’m doing due diligence on these operators. I’m building rapport with them, I’m building connection. I’m reviewing their deals and I’m going out and understanding all of the intrinsic pieces that go into this to make sure that when I bring in my investors, that we’re in this together. So walk me through your process or what you recommend that passive investors or others would be looking for. Because I’m sure that as you’re going out and vetting these multifamily deals that you guys are going to do yourself, you’re probably having some of these conversations. And I think it’s important as a capital raiser to understand what that conversation might look like.
[00:19:23] Brandon: Sure, good question. So what I look for, first of all, is I want to know the math. I want to really understand the math. I mean, real estate is a math game. It always has been and always will be. There’s obviously a lot of other components that are important, but I want to understand the math, where they came up with those numbers. And I dive really deep into the assumptions that they make. Real estate’s also a big assumptions game. And what I mean by that is we’re just guessing. Like we don’t know how much it’s going to snow in upstate New York next year. We have no idea. So should we budget $5000 for snow removal or 500 for snow removal? I don’t know. It’s a judgment call. And this is interesting, but you can’t always take the most conservative approach, because then every single deal in the world is going to not work out. Like nothing will work out if you always take the I’m afraid, it’s the worst case scenario, the worlds melting down. You can be conservative, but you can’t always say, well, it could be anywhere between $500 and $100,000, if a hurricane hit. Let’s go 100,000 because it just doesn’t work that way. So you have to balance that of where you’re practical and where you’re conservative. So I want to see where they did that in their numbers, and how they came up with all those things. So I’m a math nerd. I spend a lot of time on math when I’m looking at those kind of deals. But also I spent a lot of time — we look at like the team itself. This is what I advise other people is look at the team itself. Do they have the right people on the bus? Are they in the right seats? What are they doing? And do they have trust? Do they have credibility? I didn’t feel like I as a as an operator, or as the syndicator, I didn’t think I had enough credibility. And I hope people like understand, like, I mean, I’m the guy that wrote the book on rental property investing and all these other books and like, I’m on the podcast and I have a lot of trust, but I personally don’t think I had the credibility to take down 500 units this year. And maybe that’s just a limiting belief, but like, I had not done anything over 50 units. So I was like, well, if I went and bought 500 this year, that’s a lot of work. So what did I do? I went and grabbed other people’s credibility like Brian Murray, who’s bought thousands. I said, Brian, let’s be partners. Let’s work this together. Ryan Murdoch, who is one of the best. He owned a property management company and ran a big real estate company. He’s a legit guy. I brought these people in and now it’s not just me, it’s the team. Again so if you’re going to raise money for somebody, you got to go and make sure that their team is like solid, and they have the experience needed to be able to pull that out. So yeah, between the team and the math, those two things I’m going to really dive into. I’m not sure if that answered the question, but that’s it for me.
[00:21:40] Steven: 100% answers it. So I think we’re going down this path, its starting to make a lot of sense. So we’ve built the trust. We’ve got a great deal. We’ve got the awareness, we’re out there. We’re talking with investors. What’s the conversation when we’re talking to folks about investing $100,000 or a half a million or a million dollars into a large deal. And I know that it’s a little bit different than when we’re talking about just this little fix and flip, but it’s probably similar. I’d love it if you could kind of compare and contrast the two.
[00:22:10] Brandon: Yeah, it’s an interesting conversation. And I’m glad that Mike has to have it more often than I do, because he’s like the Investor Relations guy. But I do have to have it, I have to have it a lot. What we try to do is we tell the truth and that’s the main thing. We just tell what we’re doing. And people get excited about what we’re doing and about progress. Like, I don’t have to try to convince somebody to put money with them. All I have to do is tell them what we’re doing and they get excited. Now there is some marketing involved with that. I’ll talk about that in a second. But really I just tell them what we’re doing. I’m like, yeah, this is what we’re buying, and here’s why I like it. This is why I’m excited and people will feed off my excitement. I mean, if I tell you like, yeah, you know, I just I like apartments because you know, rent comes in and stuff. Like no one’s going to want in. But if I’m like, no, here’s why I love mobile home parks. So here’s why I love this thing, right. Because if the economy crashes and people lose their jobs, what’s going to be easier to pay $200 for rent or pay $2,000 for rent? $200 a month for rent, they could go sell plasma and get enough to pay for rent right? So I love that, that in a down economy that mobile home parks are recession resistant. I love that I think in a recession that we’re going to be fine by owning mobile home parks. I’d be terrified of owning high end rentals in this thing. So there’s a little bit of marketing there right. So I’m explaining why I like what I am but I’m also passionate about it because I really believe it. Like I put my own money into every deal that we do because I really — I tell investors, the whole reason I started Open Door Capital is because I make stupid money right now and I need somewhere to put it. Like that’s just the truth. I make really good money and I need somewhere to put it and I don’t want to just stick it in the bank. I don’t like the stock market. I don’t trust it. I think a recession is coming and I’ve been saying that for a year now. I mean, not that I’m a genius because recessions always come right, it’s up and down. But I need somewhere to put it so now other investors go yeah, I make stupid money and I need somewhere to put it. You know, I might not say stupid money but like the fact is I make more money than what I need to live right now. I have an excess and so I had a problem and I solved it by putting it into real estate. I didn’t trust a lot of other syndicators out there, because I think a lot of people were in stuff that I was considering kind of sketchy, in terms of like, yeah, you know, if the cap rate drops every year for the next couple years, and if we raise rent by 30% a year, man, it’s going to be an amazing investment. I’m like, is it like, really? Like you’re looking like rose colored glasses. And when I say these things to investors, they naturally like nod their head. Yeah, I see that too. Yeah, that’s a problem. Yeah, I feel the same way. I’m right there with you. So I’m not like this, like, I’m the king of the syndication. I’m like, I’m one of you. I’m in this because I need my money to grow, and I think there’s a lot of value when you’re talking to investors to approach it from that way.
[00:24:44] Steven: Yeah, talk to them like you completely understand what they’re going through. Like you understand the life that they’re living and that they’ve got money and they’re looking for a place to place it and they’ve got to find a home for it and you happen to have a great home for them to place that money because you’re placing all of your money there. And, you know, if it’s good enough for me, I hope that it’s good enough for you. But if it’s not no big deal, and no pressure, because we got more than enough people that are going to be coming in. So that makes a lot of sense. From a capital raising perspective, do you vet your investors? In other words, do you ever deny investors from joining a fund because maybe there’s not a right fit culturally or is there things that capital raisers should look out for on that front?
[00:25:26] Brandon: Yeah, so I mean, we obviously do the legal distinction because we are a 506(c) fund so we can only raise from accredited investors. We can’t take money if you’re not an accredited investor. So that’s like an obvious. If you are not accredited, we can’t take your money. I wish we could. We can’t. Blame the government. Now beyond that, we would really only refuse somebody’s money if they were just a pain in the neck. Like there’s just people you just don’t like working with. And that might be they’re calling you constantly and harassing you and giving you a hard time and they’re — I don’t call nitpicking a deal because I’ve had some investors really want to dive into the numbers really, really carefully and that’s fine. It’s actually kind of nice to have those people because they keep me honest. But there are people that are just not worth it. Like Tim Ferriss is big on this in the four hour workweek. He’s like it’s okay to fire your customers. It’s okay to say no to money, if it’s going to cause you more headache in the long run. And that actually reminds me of something you said a second ago and I wanted to revisit was that like, I don’t ever want to appear — and I’m not desperate for their money. Because when you’re desperate for money, you’re in the weaker position. And so not only do I not show that I’m not desperate, I really am not desperate because I believe that there’s lots of money out there. I have a very abundant mentality. And so when I first started raising money, when I first tried to raise money, this is like four years ago, I was trying to raise money for like one fixin flipper or a small multifamily I can’t remember what it was. And I went to some friends of mine, I was like, hey guys, got a kind of a good deal and I really need some money for it. And I really wish I had some for it. And they’re like, ah, man, sorry. So I came begging basically. So what I learned is that when you are a syndicator or raising money for a duplex, I don’t care anything in between. If you’re trying to get money from someone else, you are not asking for a favor, you are offering an opportunity. And when I realized that I need to approach this from an opportunity standpoint. Look I don’t need your money. There’s a lot of people. I’ve got a great deal. Deals are hard to find right now. I got it. I got a team that is made up of rock stars. I got this thing figured out. If you want in, great, we’d love to have you. And I do need money, but I don’t need yours if you don’t want to be in. I know I’m not going to say it that way. But the attitude is one of if this works for you great, if not, I wish you well. Because it’s got to fit with what they want. Some people just don’t like mobile home parks. They hate them and so they won’t invest with us.
[00:27:52] Steven: That confidence comes through when you’re talking to them and that confidence makes them confident. Like when you’re talking to me, I’m thinking, man, I got to get it on this. It sounds like a great deal. There is kind of a lack of deals right now; finding really, really great deals. They’re there but they’re harder to find. So if you happen to be on that other side, kind of where you were a few years ago, and you’re having some of those conversations, and you don’t feel like money is abundant, because you’re not sitting on more money than you can handle.
[00:28:25] Brandon: Yes, you’re not stupid rich.
[00:28:27] Steven: You’re not stupid rich. So how do you stay in that right state of mind and what would you recommend to people who are just getting started and thinking to themselves, I’m talking to millionaires, but I’m not quite there.
[00:28:38] Brandon: Yes, that’s a really good question. Well, you know a lot of it comes down to it’s not about you, it’s about your team. It’s about the people around you, and it’s about the deal. If you didn’t have a ton of experience or a ton of money, you’re not dumping a lot of your cash into it, then you’re going to have to push harder on the deal aspect on why the deal makes sense. And you’re going to have to do some more homework. To be honest, I get to cheat a little bit. I’ll be honest, I get to cheat in that I don’t actually have to do the level of work that I probably do or the work that a lot of people listening are going to have to do to raise money. Because I’ve got $125,000 people on my Instagram, right? So I just put a note on Instagram, hey, guys raising money, and people are like, I’ll give you money. And like, I bet you 80% of my investors never open the ppm. They never open the paperwork till they actually see what deals I’m investing in. And that’s because they trust me, that’s the power of trust, right? So if you don’t have that yet, if you don’t have the money, the credibility, the wealth, you’re not that confident yet, you’re going to have to go overboard or at least do a really thorough job of the marketing material around the deal itself. Show them why the deal makes sense. Show them why the team makes sense. Show them why you have all the pieces put together and why you are on top of it. Why you have all your ducks in a row. Like I think people underestimate the importance of like a really nicely designed executive summary when you’re putting together a deal and a really nice looking website and all that stuff. When you’re talking like duplex and triplex and five-plex or whatever in those smaller deals, people spent too much time designing business cards. When you’re talking a 100 unit and 200 units syndication, people spend way too little time designing their business cards and designing that kind of stuff. So presentation matters a lot, because presentation is a outward display of your inward capabilities. So if you have a disheveled look to you, they’re going assume that your business is disheveled. If you have an ugly website, they’re going to assume your business’s ugly the way that it operates. So you have to compensate in that way.
[00:30:33] Steven: Yes, making sure that you’re presenting yourself the way that you want that deal to feel to that investor who’s going to be trusting you with their money.
[00:30:43] Brandon: Yes for sure.
[00:30:45] Steven: So, this has been amazing. This has been really great. I really appreciate you sharing with the audience. I know there’s some huge takeaways here. I hope to all of you listeners out there that you guys are ready to take some action and that you’re ready to follow up and you know, put some this into practice. Kind of closing out this conversation on raising capital, what would you want to leave the audience with if there’s somebody who’s just getting started raising capital or maybe somebody wants to take it to the next level?
[00:31:12] Brandon: Yeah, a couple things. Number one, have a strong vision for where you want to be. So what I did is I actually put together like what I called the vivid vision. It’s from a book called vivid vision by Cameron Herald. And I said, I’m going to own $50 million. It’s not just like a mission statement. It’s not I own $50 million of real estate. Mine I wish I could show you but my camera is the wrong way. But it’s like, probably 2000 words long. It’s a newspaper article I wrote about my company in the future. So I said, Open Door Capital is an investment firm unlike any you’ve ever seen, rather than blah, blah, blah. And it’s like an actual outline. It goes through like, how many units we have, how much money we’ve raised, who’s on the team, like what roles are all involved? So we have a very clear picture of exactly where we’re headed. So now I know I can work backwards from the vision to lineup a team. So that’s how I knew I needed an investor relations person, I needed this, I needed this, I needed this and how I was able to build a team around that. So I would just start with a really strong vision and I think a lot of people lack that. They just kind of get into it and like well I’ll figure it out as I go. Because at the end of the day, the book “Traction” says this quote, I love it. It is more important that you decide than what you decide. So like I said, I chose mobile home parks. That’s great. You could choose apartments, you could choose low income housing, you could choose you know, senior housing, you could do vacation rentals, I don’t care. It doesn’t matter. I can find a millionaire in any one of those niches. I can find somebody super successful raising money, whatever, doesn’t matter. What matters is that you pick something and then you become the expert at it and you go all in with all your heart, soul and mind into that niche.
[00:32:37] Steven: I love it. I love it. Well, this is beautiful. We’ve made it to the growth rapid fire round where the questions are quick, but your answers definitely don’t need to be so tell me Brandon, how would you define success and what is success to you?
[00:32:50] Brandon: Success — when I was writing the — I’ll say this. When I was writing this — it is going to sound super cocky but I’m going to say anyway because I’m proud of myself. When I was writing the book on rental property investing, there’s a liner that said, I’m not a millionaire, I don’t drive a Tesla, and I don’t live in Paradise, but I still do bla bla bla. Today I drive a Tesla, live in Hawaii, and I’m a millionaire. And I was like, oh, so success is your vision becoming a reality. Like I didn’t even remember that was in the book. But it’s when you have a vision, and that becomes your reality and those to align, that’s success. And that could be hey, my vision is to have a six pack. When that aligns and you’re saying, hey, I did what I said I was going to do, that is success. If I want to be a good father, which I do, what does that look like? What’s my vision for being a good father? And then am I living up to it? Am I doing it? That makes me successful. So the success is when your vision aligns with the reality.
[00:33:49] Steven: That’s incredible. And with that vision, do you feel successful?
[00:33:54] Brandon: I am not successful yet in the mobile home park space because I don’t own $50 million of real estate. I don’t have a 1000 pads yet. I think I’ll be there by the end of this year and then I’ll say, yes, I’m successful. However, anybody who’s successful just immediately goes on and creates a bigger goal. So like even in writing, right, my original goal was to write a book. I wrote a book. And so I felt successful for about five minutes. And I said, well, you know, I really want to book in Barnes and Noble. That would be cool. That’s success, right? And then a year later, I had a book and Barnes and Noble I was like, oh, that’s success, but not anymore. So now New York Times bestselling author is successful, right. So I think success is a moving target. You’ll never achieve it. You celebrate it for a few minutes, you move on so no, I’m not successful really in any area of my life whatsoever right now.
[00:34:36] Steven: Just keep on moving that goalposts.
[00:34:39] Brandon: Yes, that’s what it is.
[00:34:41] Steven: What are some of the keystone habits the things you do on a daily or weekly basis that have led to some of that success?
[00:34:47] Brandon: Yes, so I am a such a big believer in intention living like intentionally living your life. And I do that through habits. Like a lot of it is through your habits. What do you do every single day? Nobody got super in shape and became a bodybuilder going to the gym once a month. It’s an everyday thing for them. So I put in certain habits in my day that I just don’t deviate from. For example, every single morning I wake up at 5:55am. That’s what I do every single day. It’s very rare that I break that. Well, I shouldn’t say that. It’s very common I break that but usually it’s earlier because I have a five month old baby who wakes up at five every morning or four or three or two. But I wake at the same time, latest is 5:55AM every single day. I have a journal I actually made it for BiggerPockets because my own personal like success journal I built and designed and then I brought it to BP. Now we sell it. It’s called the intention journal. But in there, there’s a spot for habit tracking. So first of all, every week I have like a weekly battle plan session, which I call it. So every Sunday night, I plan my week. What are my three big goals? What are my three big goals for the quarter? What are my objectives this week? What am I going to work on? What’s my process look like? Then every day I do the same thing. Every morning I re-write down my three goals. What am I going to do this week, and then what is my today task? What do I have to do today to move this goal forward? And then I track my habits. So things like every morning — I actually track every single day, I put a checkmark if I did it or not. Did I wake up at 5:55am? Did I drink a full glass of water when I first woke up? First of all, do I get some five minutes of exercise in the morning and then do I work out later in the day? Do I read a little bit in a book? Do I write the number of words? I write 2000 words a day for my new book that I’m writing? All those things are habits that I track very deliberately. If you’re brand new to real estate, I’d add to your list, do you analyze one deal a day. If you analyze one deal every single day, that’s 365 deals a year from now. You’re going to be like such a rockstar at that thing — whatever it is you’re analyzing. You want to buy apartments, you want to buy senior housing, I don’t care, like if you analyze 300 senior housing, you’d be like the one of the best senior housing deal underwriters in the history of senior housing. Imagine what that valuable skill can bring you in life.
[00:36:57] Steven: Those are some great habits. Some of them I implement myself and so I’m excited to add in. So thanks for sharing that with us. What’s a book that’s impacted your life the most or one you’re excited about right now?
[00:37:08] Brandon: Good question. Let’s go — I got a ton of them behind me. I’m going to say — man, can I say more than one because there’s so many good books.
[00:37:16] Steven: Please.
[00:37:17] Brandon: Okay. All right, let me give you a few recommendations. There’s a book called — This is one of my new favorites called “Unscripted” by MJ DeMarco, it is fantastic. It’s not a real estate book. It’s all about entrepreneurship and how much hustle and work it actually takes. That was really good. “Profit first” is all about, like, accounting for — I love that one. It’s like accounting for entrepreneurs. And that sounds super lame, but trust me, it’s super amazing. Any entrepreneur should read that thing. “Deep work” from Cal Newport is back there is amazing. It’s all about like just putting your head down and just getting work done. What else we got here? I don’t know. Of course, like the “Rich dad Poor Dad” is amazing. I love Rich Dad Poor Dad. “A four hour workweek.” All of those books are just fantastic. And then there’s one called “The Wealthy Gardener” that I’m reading right now and I’ve been reading for a while. It’s a long book, but it’s really really good. It’s like every personal development book ever written, all condensed into like, one big book. You could read 500 different personal development books or read this one. There’s 500 chapters in it. Not really, but close, and you get everything. So those are a few books that have been on my table.
[00:38:20] Steven: It’s like the one book you need to read right there on personal development, “The wealthy gardener.”
[00:38:25] Brandon: Yes, “The wealthy gardener” by John Soforic. It’s kind of like a story format, where every chapter is a story of this wealthy gardener, but then they also go into like actual lessons. And there’s just tons of content in this thing. I don’t even know how many are in here, but so good.
[00:38:41] Steven: That’s huge. That’s awesome. So inspiration, what impact have mentors made on your life and how do you look at going out and finding great mentors?
[00:38:51] Brandon: That’s a really good question. So mentors are I would say they’re important, but I actually have kind of a different view than a lot of people. I think mentors — what most people use a mentor for is what they want is somebody to do their push ups for them. They want a coach, not a mentor. They want somebody to be down there like pushing them on the ground. So in other words, I’ll tell you about Kyle. So Kyle was my, the closest I’ve had to a mentor. Kyle was my best friend’s landlord when I was 21. And I went to help my buddy, my best friend Adam, paint this house for his landlord, because he was working off rent or something. And I met Kyle and I started talking with them and we got we hit it off. And then not a week went by for 12 years that we didn’t have a conversation in person or on the phone. We just talked all the time. But Kyle never told me necessarily what to do or how to do it. Kyle was just a guy who was more successful than I was, who I wanted to be more like Him. So he was just there as a sounding board and I was more of a student of his work, but it wasn’t like a teaching. It wasn’t a coach what most people are looking for. See, I think the problem was — and it was hugely influential. Like I love Kyle. He was amazing in my life. That said, here’s what the difference is. Kyle’s advice is good, but it wasn’t always good. And this is what I don’t think people realize about mentors is like, Kyle was a local investor. He did great work, but his philosophy of real estate was different than mine is today. So like, for example, when I got into mobile home parks, he was like, I wouldn’t do that, bad idea. Like those people aren’t going to pay. But I love mobile home parks and they are paying, right? So mentors are good for bouncing ideas off of, for getting inspiration, for following what they’re doing, for asking for help occasionally, but they’re not going to just take you there. I think when most people say they want a mentor, what they’re really saying is I don’t want to do the work. I don’t want to actually hustle, I don’t want to go do this. I just want somebody tell me what to do. I just want to get on someone’s back and make them do pushups for a while, while I just ride like a horse — Push harder. Like that’s what people I always see saying. Well I just I just don’t have a mentor so I can’t get started. Like have you analyze 100 deals yet? Have you read 30 books? Have you listened to 500 hours of podcasts yet? If not, you have no business saying you can’t start because you don’t have a mentor. You got a million mentors. They are called books and podcasts and — hustle. So there’s your mentor.
[00:41:04] Steven: I love that. I mean, digital mentorship is so available and it’s free. And it’s such a great place to start. I mean, you can listen to thousands of hours. And that’s how I got started listening to every BiggerPockets podcast episode there was. Like 200 episodes within like a four month period of time I listened to like 50 books that year. It was just nonstop two times speed soaking in information. And not all of it was retained, but the stuff that mattered, you know, was. And so I just think that it’s such a good reminder that you got to put in the work.
[00:41:37] Brandon: Yes, you have to put in the work. And if you want somebody to show you how to do a push up, you might have to spend money on a coach. I don’t love that idea, especially if you’re just getting started because I think you need to do the work and you need to figure it out and make mistakes. But if you have some money and you want to spend it on an expensive coach. That’s fine. Go do it then and you’ll get your coach but don’t think a mentor is going to do that for you.
[00:41:56] Steven: Yes, sometimes what happens is that people will spend the money on the coach because that’s them committing to themselves to actually do it. And the more money they spend — they they end up getting the result. But that’s only if they do the work because sometimes they spend a bunch of money and then they don’t do anything. And they blame the coach and it’s really them
[00:42:15] Brandon: Yes, it’s very common. It’s like those two sides. Some people spend a lot of money and that motivates them and other people –There’s like this thing, I can’t remember the actual name of it. The psychologists have a name for but it’s basically like a lot of people will say, I’m going to lose weight and they go post on their Facebook. I’m going to lose 30 pounds this year. What they found is that actually lowers your chances of losing weight than if you didn’t post that. The reason why is because you get that dopamine hit. You get that like excitement when everyone goes, good job way to go. The same thing is true is like I’m going to be a real estate investor. And I think a lot of people put down money and think that they are going to do it but it actually hurts them because now they’re like, well, I did something I took action. So I’m going to watch some TV tonight because I already took action. Where I would caution people against being the first instinct, I’m going to go throw money at something try to make me successful. You got to get in the trenches. You got to work.
[00:43:02] Steven: Get to the point where you’re fully committed yourself before you throw any kind of money at anything whether it’s an investment deal or investing in some education.
[00:43:11] Brandon: Yes, that’s exactly it. Today, would I pay $20,000 or $30,000 for a legit mobile home park successful real estate investor to come and teach me or me to reach out to them and teach me all the stuff I don’t know? Probably because I’ve already proven 15 years worth of like I am in this thing. I’m not going to give up. I probably would get that value out. But you’re just getting started and you haven’t proven that to yourself yet so don’t go and waste that money until you’ve proven to yourself that you are legit going to do that. And that means listening to the podcast, reading the books, doing all the work, analyzing deals, maybe do some small deals, see where you are. And if you’re still in it a year from now, then yes, make it can happen.
[00:43:46] Steven: That’s huge. Well, finishing on this; purpose. What drives you to live your best life everyday Brandon?
[00:43:52] Brandon: I just want to like you and your kid you watch that show DuckTales, remember that show at all? I think it was DuckTales right. Scrooge McDuck on there had a gold vault — I just want to swim in gold coins. Like if I can just jump into a pit of gold — no. In reality, I’ll go three things. The two things that got me into it originally was one, my dad like I said was a meat cutter. He worked a million hours a week when we were young, so I didn’t see him all that much. And he tried his hardest. He did what he could do but he had to work a lot of hours to be able to support the family. He hustled like crazy. I said, even when I was a kid that when I have kids someday, I want to be there for every ballgame, every ballerina session, every whatever, every single event, every field trip, I want to be there for my kid when I have one. I want to be the most present father ever. And that drove me to say that’s not going to work with a job. I can’t have a nine to five and be that present father. I have to choose one or the other. I can be homeless and a good father or I can be wealthy and not a good father. I said I don’t want those two options. I want to get both. So that drove me in the beginning. Also travel drove me. I love the idea of traveling. I hate the idea of you can’t go anywhere because you get your two weeks vacation and they call you the whole time you’re there. The third reason though, that drives me today is that success thing I said earlier. I think happiness is largely found in growth. Like never achieving the top of the mountain. There’s always another level. And I think that’s what happiness is. It’s like having a vision, achieving that vision and then you’re happy for a little bit. And then you do it again. You have a vision and you achieve that vision. And so like it’s the continual quest for achieving vision. It doesn’t mean necessarily money. I could have been, my vision is to save 5000 people from death in Africa. And I work towards that and I would be happy achieving that goal because I’m working towards my vision. And that drives me. If I just want to sit on the couch all day I’d be playing like Oculus quest, like the whole virtual reality thing the other day. I could just sit and play that all day long. Just like beat sabers or whatever it’s called, but I would not be happy.
[00:45:50] Steven: Yes, that’s huge. Well, this has been an amazing experience. It has been so fun talking with you Brandon. Where should people go to find out more about you or get in touch?
[00:45:59] Brandon: I’m a 13 year old girl with Instagram. I’m on there all day long. Talking about the habits — I actually track my screen time and set a limit. 20 hours a week is all I get every week on all my phone for all my phone time. But I am on Instagram the vast majority of that screen time. So you can find me at @BeardyBrandon –
[00:46:21] Steven: Wonderful. We’ll include that in the show notes. You guys can easily click on over there. I’ll leave you guys as I always leave you, as a reminder to live a life with inspiring others and you can do so today by actually taking action and applying some of what Brandon taught us in your life directly. So thank you so much Brandon and I look forward to the next time we get to do this again.
[00:46:40] Brandon: Awesome man, thanks
[00:46:47] Intro: Thank you for listening to The Investor Mindset Podcast. If you like what you heard, make sure to rate review, subscribe and share with a friend. Head over to theinvestormindset.com to join the insider club where we share tools and strategies from top investors and entrepreneurs on how to take it to the next level.