[00:00:57.9] MF: Hey Everyone, it’s Mark Ferguson with InvestFourMore, welcome to another episode of the invest four more real estate podcast. I have a really exciting guest on today, really excited to talk to him, learn how he got to where he is now and what he’s up to. Nathan Brooks with Bridge Equity is flipping 60 to 70 houses a year. I thought I had a lot going on with 10 flips at once and I can’t imagine how he handles it but that’s what we’re here to find out.
Nathan, thank you for being on the show, how are you doing?
[0:01:29.7] NB: I’m well Mark, thanks so much for having me.
[0:01:31.3] MF: Yeah, great, glad you could be on, I know we’ve talked before a little bit and whenever I start with my guest, I want to get the story on how they got into real estate, what attracted them to the business. Maybe we can start out with that. How did you first want to get into real estate and what drew you to it?
[0:01:50.9] NB: I always kind of had that desire, interest in real estate, even as a kid, building stuff in the backyard I’d go run through construction sites and try to barter for as much wood, whatever I could get off of sites. Goes by a few years and I’m actually looking more and more of interest at real estate and getting out of college and I find myself sitting at a restaurant with my wife and we’d overhear a guy talking about flipping houses and into real estate and whatever and start chatting him up like I always do for everyone.
Two or three weeks later I found myself buying not one house but actually about two houses, the first day I ever bought one. Pretty much everything in my life I took the all in approach. I really wanted to have the lifestyle of getting to kind of make my own hours and I’ve always said I’m not a very good employee. I just kind of jumped into it and really learned through the school of Hard Knox so they say.
[0:02:55.7] MF: That’s pretty impressive buying houses that quickly. Where did you get your degree in college for and then what were you doing at the time when that happened?
[0:03:04.6] NB: I actually toured and played music professionally and I was just a couple of credits shy of my vocal performance bachelors. So I have a very lengthy minor in music and I have a humanities degree as my major.
[0:03:18.8] MF: Okay, very cool.
[0:03:21.6] NB: Yeah. So at the time I was literally playing music, touring the Midwest, I had a song on the radio and doing a lot of fun stuff with music and I still to this day love to play and play professionally for many years but I really, really enjoyed and was fired up and felt really called to the real estate side and particularly passive income and understanding — trying to see how I could put those things in motion in my life to where I could have things that would generate an income without having to trade time for dollars in other words.
[0:03:55.2] MF: No, that makes sense. That’s pretty interesting that you were in the music scene. I’ve talked to a number of people who were athletes, in the military or in very strict kind of you had to work extremely hard, have an amazing work ethic to succeed. Was it similar in music with the competition there? Did you have to have a crazy work ethic to succeed in that business or was it more talent?
[0:04:18.7] NB: I think it’s all the above, I think when you get in to the realm of high caliber musicians, it’s just like anything else where there’s so many years and years of honing that skill and so much time and attention to where you focus it and you might be this really brilliant classical musician but you don’t have any stage presence or you might have all of the stage presence in the world and no talent.
All the varying degrees in and out of there but all the guys that I know in the music business even to this day are unbelievably talented, unbelievably driven and have to absolutely put in the time and effort so I think there’s a great similarity there.
[0:05:03.6] MF: Yeah, I think I’m finding there’s no coincidence between hard work, work ethic and success. Seems to come hand in hand for some reason.
[0:05:12.6] NB: Absolutely and plus, I think when you look at something like an instrument so it takes you decades potentially to be come just this master or I’m just learning, I’m going to my third class of Brazilian Jiu Jitsu. I’m totally the white belt in the room, getting my tail kicked and everything takes time and energy and you have to decide whether you want it or not. In the case for real estate where you go after something and you learn one and do one and then, I don’t know about you but I think about the rehabs I did 10 years ago compared to the rehabs we do now and it’s just… there’s no comparison.
[0:05:51.0] MF: Right, I know exactly what you mean, you learn so much and then realize how to do things so much better the longer you do it. Going back to those first two houses you bought, did you flip those, did you wholesale them, what did you end up doing with those properties?
[0:06:05.7] NB: They ended up being sold, that was not particularly good deals nor was it particularly with a good partner. It was really more of one of those things where I all of a sudden found myself buying a house which I had never done before, trying to renovate a house which I’d never done before and be the investor, brains of the operation and responsible for the dollars which I had never done. None of them really ended up very well and frankly I’m pretty sure losing money but out of that came my knowledge that I really was into it and really wanted to learn and get better at it.
[0:06:43.3] MF: Right, I’m guessing you didn’t give up at that point, but you used it as a learning tool. Were you doing the work yourself? Were you swinging the hammer and doing all the work yourself on those or did you hire contractors?
[0:06:55.4] NB: Well, let’s just say I had not planned to be swinging a hammer but I really ended up in a bad situation with that contract or on that project and they just left me with this two houses which I had no idea what to do with and so yeah, I was swinging a hammer, painting and putting in toilets and all kinds of crazy stuff which I really had no idea what I was doing. I do not swing any hammers today Mark, I do not do that anymore.
[0:07:28.8] MF: I don’t either, one of the worst mistakes I ever made was trying to repair a flip myself. That’s why I ask, and sometimes it comes out as a necessity, especially when you’re first starting, you want to save money, you want to get things done. But yeah, over the years I learned, I have much better uses of my time than out there swinging a hammer or trying to figure out how to install a window, all of those things.
[0:07:52.4] NB: Exactly. Yeah, I’ve quickly learned that that amount of time that I was “saving” — money rather that I was saving quickly became apparent that it not only was I not saving time, it took me 10 times as long and I did half as good a job for not that much less money.
[0:08:10.4] MF: Yup, exactly my experience too. The stress it put on me was just crazy at that time because just trying to do all that work yourself is not fun. Cool, how did you progress after those learning experiences, did you jump right in, did you go to the education phase? How did you improve the way you were doing things?
[0:08:31.1] NB: In my life, I have definitely been big on mentors and so I just started seeking out people who were doing what I wanted to be doing and looked for opportunities and ways that I could continue to be doing real estate but with people who actually knew what they were doing. I would just kind of slow down a little bit and there’s a great line, I’m trying to remember, it’s [Jaka Wulink] book I believe it was. I could be wrong but, “Slow is smooth, smooth is fast.”
I love that idea and the more I think about it now in my business even where we’re flipping a large number of houses at one time where I go back and look and think, “Okay, well we finally slowed down and we were able to understand and maximize this one thing and therefore we could take all those little one things and put them together which become much larger impact on your business and your time.
[0:09:28.9] MF: That makes sense, yup. I completely agree. Focus too, just kind of focusing on your tasks at hand and not getting ahead of yourself has been — it’s tough sometimes but that really helps me out as well.
[0:09:43.4] NB: I think that’s exactly white and I think one of the things I do spend a lot of time on is trying to think about what am I spending my time on and should I be spending my time on this and if I shouldn’t be, who should be and how do I train them to do something that will be fulfilling for them and that they can do and execute what I need in that situation too?
[0:10:06.2] MF: Right. As entrepreneurs, it seems like every time I hire someone or I teach someone how to do tasks I don’t need to be doing, I fill up my time with more tasks and it’s a constant struggle.
[0:10:20.7] NB: Yeah, I totally feel that. I love the opportunity to think about it and I think if we’re not thinking about it as entrepreneurs and business owners, we’re really missing on the opportunity to make better decisions, hire better people, have better and bigger problems and if you’re not doing that, then you’re solving problems that probably other people on your team or your spouse or your friend or your business partner or whatever could be solving and really continually trying to eliminate and not add to things that you're doing.
[0:10:52.0] MF: Right, yup. I’m constantly doing that and I find myself getting too busy sometimes and just stepping back and saying, “What am I doing, do I need to be doing all this? Is it accomplishing anything?” And most of the time, there’s someone else that can do it and I’ll probably do it better than me because they’re not scatter brained and they can focus on it.
Yup, very cool. You found a mentor or mentors, started really thinking about the business, slowing down things, how did you — did you just slowly build your business over time to get to a point where you’re at now, were there are major breakthroughs? How do you get to a point where you’re doing so many deals a year?
[0:11:29.4] NB: I think really, the impetus started to be kind of my desire to not be working in anything else where I wasn’t — didn’t have full control, at least over my own destiny if you will. I found myself at the time working through Christmas at the largest United Methodist Church in the US as a worship leader and flipping seven houses during Christmas, which is not a good idea. I was like, “All right, that’s it.”
So my wife and I, we really spent a lot of time thinking about this and saying all right, I had quit my job there and kind of began doing them myself and during this time I really started getting a little more attention on my business and some different people interested in partnering. I did some partner deals which help further fund more deals.
And eventually ran across my partner to this day and we all of a sudden went from doing just a couple to I think at the moment, there’s probably a few that I’ve ticked off the list and have either ticked on, but I think we have something like 20 active renovations right now.
[0:12:45.4] MF: Wow, that’s incredible. How big of a team do you have to manage that?
[0:12:52.7] NB: So with that 20, let’s say just in the demo phase, there’s three or four or five that are like square in the middle, actually probably more like seven or eight square in the middle of a rehab and then a couple that are 95% to the finish line. So I have my business partner and myself and then I had a couple of GC type people and one or two main guys that run most of the rehabs and then I have a director of operations on my team who is full time and I have a property manager full time on my staff and then I also have a transaction coordinator who is kind of by contract but we’re actually getting ready to hire two new people as well. So currently two full time staff and then one part time.
[0:13:37.2] MF: That’s awesome, and one reason I ask is because my biggest struggle when I’m flipping a lot of houses at once is finding the contractors, keeping them in budget, keeping them working and it seems to be a constant struggle and a lot of turn over. Do you run into those problems as well? Are you using a lot of general contractors like you said or do you also have a lot of subs that you’re using? How do you structure that?
[0:14:02.7] NB: We’ve had the same problems and I do think that that’s kind of a normal thing that we struggle with. I will say that there’s a couple of guys, two in particular who we have kind of gone back and back with who understand our process and also having a good line of communication. At that kind of scale, it’s really not necessarily about that one specific person, is a GC I don’t think, I think at that point it becomes more about their ability to handle operations.
Did you start with an actual budget that made sense? Did you start with a budget that that person actually built a little buffer into it. Because I’d rather have the peace of mind with a budget that I know the guys making some money and he has a little buffer built in than one that’s so tight that every little thing, they’re going to come back and try to nickel and dime me on it.
There’s some trust built with those contractors to say, “You had your budget, we had our time to walk the property, you understood what the scope was because we did this house and this house together,” and both of these guys we’ve done dozens and dozens of houses together. We’ve already picked out the paint color, we’ve already picked out what kind of vanities we use in outlets and all that kind of stuff. Those decisions don’t have to be made every time, those are repeatable processes with repeatable results.
[0:15:31.9] MF: Right. That makes sense. So basically you want your GC to be more of a businessman and manager than you do swinging a hammer, just like you don’t’ want to be doing it yourself, you want them to be able to manage everything and see the big picture and not get tied up in individual tasks.
[0:15:49.0] NB: Exactly. One particular of the guys who handles a much larger load, he has all those skills and he can swing a hammer, he can literally do every trade and so with one of the guys, one of his crews might be a little bit not as strong in plumbing or whatever. He can go plum a whole house or do whatever he needs.
So he knows that on that job, “Hey, I need to set aside two afternoons of next week to go plum in this new plumbing stack or whatever. These guys over here, they’re really strong with plumbing but maybe they’re not — we need to tee up the master electrician or whatever on this project because it’s got a bigger rehab with whatever the constraints are within that project.”
[0:16:31.4] MF: Yup, that makes sense and I’m hoping I find someone like that on one of my last flips, we’ll see. I always get my hopes up and then sometimes I get disappointed but they workout once in a while. Awesome.
[0:16:44.7] NB: I think the other thing with that too is just to be able to say, with that contractor, really saying, “This is the vision buddy, I want you to be able to handle this number of projects,” and like with my guy, I think they’re on eight or nine houses of ours right now. So I keep asking him, “Can you handle another project? Can you handle another project?” They say, “Yes.” Are we able to also supply the increasing demand. He’s looking at saying, well if I have 20 guys or 25 guys I’m responsible to put on job sites every week, are you going to have enough work for me that next week I’m not sending all these guys home with no pay checks?
So making sure you’re building it slowly, making sure you really have the work for those guys and making sure they understand the bigger picture too. I think I’ve lived by this motto a long time, “Ask for what you want but be prepared to get what you ask for.” So if that’s what you want, you want to do five flips at a time then you better go get those deals and be ready to buy them, be ready to rehab them and be ready to have a little reserve for everything that always goes wrong.
[0:17:53.7] MF: Right. That’s really good point. It’s not just the contractors who have to work for you but you have to make sure the contractors have work too or else they’re not going to be able to run their business smoothly. Awesome.
Doing this many deals and having that many properties, how do you find your deals, what’s the primary way that you’re buying those properties?
[0:18:14.5] NB: We have a number of wholesaler relationships that we use, I have probably four or five active realtors who are always looking for deals, we find some off market ourselves. We really are open to any and all ways to find deals and we’ve also gotten better about kind of knowing how to pretty quickly put together a budget and after you do so many properties, you can think about the last time you did this kind of layout of a property or whatever that might be. So I think that the more you do them, the more you can recognize upfront what is the deal and not is a deal and go after them and then have the time to actually find them.
[0:18:58.3] MF: Right. That makes sense. Another question I have, which I’m curious too, is having that many deals going at once, are you using private money primarily or are you using some bank money? How do you finance all those deals?
[0:19:10.4] NB: We have a pretty significant amount of private money and then we do have some banking relationships as well. But we do fund some deals ourselves and we fund with the private money that we continue to seek out and grow that as well and then we also have the banks which really we use that more on the kind of long term financing side than we do on the upfront side.
[0:19:33.6] MF: Right. That makes sense. Very cool. 60 to 70 flips a year and you mentioned before, maybe even more than that when we’re talking earlier this year. We know how you’re kind of buying them, how are you selling them? How is the — what’s been your best strategy for getting these properties sold and making the money that you’re looking to make on each deal?
[0:19:53.1] NB: Yeah. So we do probably, gosh I don’t know? I don’t have the specific percentage but probably 80, 90% of them are turnkey. We acquire them, flip them, market and lease them and then sell them occupied and cash flowing and we take a really different approach than I think most turnkey guys out there and which really kind of help differentiate us. We do a full on rehab, almost basically to a flip level, retail flip and so when our clients come to town, they walk through our properties and they see a really nice tile back splash and a tile floor and a gutted bathroom, redone hardwoods and brand new windows and roof and all that stuff. The product really sells itself in two fold.
Then we also have a property management company that automatically, those properties are marketed and run by the property management company. So it’s been a great win for us and great win for the client because they have been able to have the seamless experience through the rehab, they get communication from myself, my business partner and our transaction coordinator and then they get handed off to our property management side and an on-boarding call and just really clarity of communication. So they know kind of what they’re walking into step by step and then at the end of the day they want to have a great product and they want to make money and hopefully not have to have a bunch of maintenance issues and stuff.
[0:21:31.2] MF: That makes sense and I’ve talked to a lot of different turnkey companies, some good and I’ve heard some really horror stories about other ones that like you said, kind of putting lipstick on a pig. They aren’t really rehabbing the properties, they’re kind of making them look nice and they may not last very long.
[0:21:49.2] NB: I like to sleep at night and I know that each time I’ve walked properties with clients that come to town or whatever and we spend that time together and talk about the way we rehab and talk about our approach and I’m not going to say, we don’t have things that come up on our inspection reports and those kinds of things and so when we have those happen, we internally look at that problem and say, “Okay, well we keep getting dinged on this thing. Let’s actually incorporate running the main sewer line every single time before we sell the house or windows or whatever that is. Insulation in an attic.” So it’s really simple to handle on the front end of a rehab and it’s really kind of a pain when you have an occupied leased property.
[0:22:35.1] MF: Right. Yeah it’s funny because I almost never ran into sewer line problems in the last year I think I’ve had three separate sewer lines that either the inspection or happened after closing. And I’m like, “Oh man!” So we started checking those as well because it just recently that popped up. Awesome. So you are in the Kansas city area. Did you choose that area because it’s good for rentals or are you from that area? How did that end up being where you set your location at?
[0:23:04.6] NB: I’m from Kansas city and it’s kind of my home market. It also happens to be like where a lot of action and activity is right now, which is great. It’s a great balance of big city but also has lots of kind of smaller neighborhood feel to it. So it’s just a great market, it’s a great area and it’s really been a wonderful place to grow and grow our business both on that kind of turnkey and flip side and also on the property management side.
[0:23:35.7] MF: Nice, what’s your typical turnkey deal look like? What price range are you looking at? What are the rents tend to be? I know, they can range greatly from a $30,000 properties in Ohio to a couple of hundred thousand dollar properties in other parts of the country.
[0:23:51.0] NB: Yeah, that’s a great question. So our typical turnkey deal is usually between say $80, $85,000 and say $130, $140,000 and that’s in a great neighborhood, usually say as low as we go, say C minus to a solid A property and anywhere from one, two, one, three rent multiplier to on the upper end it’s right about a one. So $1,200 rent, $120,000 property.
[0:24:23.3] MF: Okay great. Those are fully rehabbed with renters in them already, which is pretty good numbers compared to what most areas of the country are seeing right now?
[0:24:32.4] NB: Yeah, it really is and I think the interesting thing has been kind of looking at our competition or looking at how we want to show up and being able to say, not only to the tenant too, what tenant’s not going to want to stay in a property that’s just totally blinged out and has awesome space to live in and it’s really safe and one of the things we talk about as a property management and a turnkey is safe, functional housing.
We have two clients, we have a tenant and we have a donor and if the tenant’s happy, they’re going to stay and if the tenants staying and the owner’s getting paid, then they’re happy. It really is hitting a win on both sides of that.
[0:25:11.3] MF: That’s awesome, in Colorado, I used to be able to buy properties $80,000, $130,000, rehab them, rent them from like $12 to $1,500 and I thought those were great deals and those properties have close to doubled in price now in the last four years. Rents have not kept up with the prices. I have completely stopped buying rentals here because our market’s so crazy. It doesn’t sound like it’s — have you seen market increase at all in Kansas city or has it been pretty stable?
[0:25:42.3] NB: I would say we’re definitely getting some increases and by the way, I have a couple of buddies in that market there. It is crazy what you guys are seeing. I remember somebody sent me a flip deal that was like a $480 buy and a $200 rehab and $800,000 ARV or whatever and not that to say that those deals aren’t here because there is a market for that but I can’t remember what your gross or your median sales price is over there but it is definitely a lot higher than it is here in KC.
[0:26:13.3] MF: Yeah, I think I’m in north of Denver so it’s a lot lower where I’m at but we’re at about $250 for our median sales price and in 2011, 2012 we were at $120
[0:26:26.3] NB: Wow.
[0:26:28.0] MF: Yeah and Denver is on the same thing except it’s higher, they started higher and they’re even higher, they were $400 now, they’re closed to it I think for median price.
[0:26:37.5] NB: That’s wild. I will say, we are definitely seeing some increase in the pricing and honestly not just an increase in the pricing as far as on the buy side of properties but also just a decline in inventory too just in finding deals too.
[0:26:54.8] MF: Right, yup, there’s almost no inventory here, that’s what’s been driving us up and up. I don’t think it can go up forever but for the time being, it’s been pretty crazy. Very cool. Kind of changing subjects, turning stuff around here. I know one thing you really like to talk about, I’m curious to hear your theories on this. We call it lifestyle design and we talk about how you built this business and growing it, what’s your ultimate goal out of life? What are you looking to do? I’m curious to hear.
[0:27:25.6] NB: That’s the big question. From kind of a low level part of that question, really just enjoying life and appreciating how small and infinitesimal the lifespan is of what the bigger picture and life moving forward and that’s kind of maybe a very deep way to approach your question but really appreciating life, appreciating my family, my wife and my kids and appreciating the little things and taking the time with your folks or your family and your friends and do a barbecue and have an awesome bottle of wine.
Within the lifestyle design idea, I think obviously there’s certain needs we have. Food and shelter and water and then goes from there. Then asking bigger questions like, “Can I travel and take my family to go do something or what kind of experience do I want to have?” For me, it was, “How do I first cover my monthly nut of what it costs me to live?” Then I don’t have to live extravagantly, I don’t have to buy the biggest house. I want to just live well and enjoy that and I want to go out to eat and I want to buy good wine.
We love Florida so we want to go to Florida as often as possible, and then how do we stay for two or three weeks instead of three or four days? Those are the kind of questions where I love to have, shall we say, a big problem which is how can I live in Florida for two or three, four weeks or two or three months and be able to still have a business that operates?
[0:29:01.6]MF: That’s awesome, I don’t know if you know Chad Carson or not. Bigger pockets and has his own site and I interviewed him a couple of months ago and he is moving to, I think it’s Argentina for a year. That was his kind of big goal in trying to see if his business could run without him while he is in another country, basically for a year. I was impressed by that.
[0:29:24.3] NB: That’s amazing and I love that idea and my kids, we’re also home schooling our kids for many reasons and my wife is a very talented teacher with multiple degrees and stays home with our kiddos now but we want to be able to go to Europe for three months if we want to or Airbnb all the way across Central or South America or whatever and just do it, that to me is the quintessential lifestyle design idea question.
[00:29:52.2] MF: Right, that’s awesome and the real reason I wanted to ask you that question too is because you just bought a pretty cool car and I happen to be a car guy. So you got a Porsche 911, I’m curious, was that a goal of yours for a really long time that helped motivate you or is it something that popped up? How did that happen?
[00:30:11.0] NB: Yes, so I definitely shared and appreciated since you have gotten yours as well and I love seeing the pictures and you talk about it, for me I saw a movie back, back, way back in the day, I belief it was called Flight of the Condor and I think it was mid-80’s or early 90’s where they had the boxy Porsche 911 with the big giant fin on the back.
There was five black ones and one white one, the black representing the bad guys and one white one being the good guy and I remember ever since that day I was totally in love and enamored with the Porsche car, style, sound, everything. I always told myself I would never drive one until I could buy one. So I think it was late last year, things have been really going well and I went to a local car place that has lots of the really cool Porsche, Maserati and Mercedes.
So I walked in the dealership and said I want to test drive the 911 and I was fully expecting them to bat their eyes and ask me for a financial statement and seven blood samples or whatever but they’re like, “Okay great, no problem. Let’s go.” So for the next hour, I proceed to have the world’s best car driving experience and I’ll never forget.
I distinctly get in, in a Porsche, the key goes into the left hand side of the dash and so I turned it on and the guy looks at me and he’s like, “All right Nathan, let’s go have some fun.” So I pulled down into the stop light and the very first thing that he does is like, “All right, green light, let’s let that car and go ahead,” and a little further and then he’s like, “All right, floor it,” and it from moment one, this car was just spectacular.
Everything that I could imagine and I am six foot three, so I was really terrified that I’m not going to fit in the car and so not that short of a story, six or eight weeks later, I saw one that was an incredible deal and actually driving out of town, I make a phone call to the dealer, I put a deposit down never having seen it, touched it, driven it or anything and spent all weekend blabbing to my wife about how I was bummed that I couldn’t drive this car until Monday when I got back.
[00:32:34.8] MF: That’s awesome, and did that car motivate you at all in business? Did you think about it? Did you set any goals for it or was it something that in the back of your head, “Some point I will get that,”?
[00:32:48.1] NB: I definitely set goals for it and I wasn’t just going to go buy it and put myself or my family at risk and so it’s definitely one of those things that one of the goals was getting my wife home from work and being able to stay with our kids and one of the goals was a certain amount of money and passive rental income, I know which I know is a big thing for you.
I read the article with the “10,000, 10,000, 10,000” and we had similar things where we really have goals whether it’s our property management company or rental income or flip income and those sort of things where the car was really one of those things that it just — if you’re going to work that hard and you really want to say, “I’m just going after this,” then I would put that thing up there and said, “All right, now we’re going to make this happen.”
And part of that is going to be able to not being an 80 year old man and going out there and getting your car which if you’re 80 and you’re getting it, then good for you. So not to take away anything from that but I wanted to be enjoying it in my prime and I have all of these amazing memories already with my kids in the car so it’s really been a special thing.
[00:33:54.5] MF: That’s awesome and I ask that question because it was the same for me where I’d always wanted a Lamborghini when I was younger and I lost that dream and that goal of going through college and life just thinking, “Oh man, that’s not for me. That’s for other people who are rich,” and I think once I got that goal back and I started to realize maybe someday I could have it, it became a motivating factor that it really did help my business.
It helped me achieve more by having that vision, that dream of, “Man, I can really do this” and the more believable it came, the faster things happened and it was a pretty amazing thing when I got it. I never saw my car, I never drove it, I never looked at it before I bought it and it was actually in Seattle and I was in Colorado.
So the minute it showed up, it was Father’s Day and I was at my parent’s house and I got a text message from the driver saying, “Oh I just arrived.” I thought he was going to be here three hours later and so I was like, “All right honey, we’ve got to go, come on let’s go. We’re out of here,” and we drove home and there was these group of people sitting outside in my neighborhood looking at the car and that was an awesome feeling.
[00:35:00.8] NB: That’s awesome and it’s also funny that you had a very similar experience with the whole buying process that I did. I bet you get a lot of looks when you tell that story.
[00:35:11.4] MF: Yeah, people were like “You never drove it?” Well it’s not easy to get someone to let you drive a Lamborghini so I never even drove that model before I bought it, so that was a new one too.
[00:35:23.8] NB: That’s so funny and that’s the same thing, I think when you go back and look at it, it’s not really necessarily about the money anymore. It’s really about the thing that you dreamt about and I think if you let the thing or the experience or the vacation or whatever it is and that becomes the motivator and the more that you are able to hone in on the experience you’re going to have and not just the fact that it’s going to cost X amount of dollars or whatever and you can focus on that.
Then I think to me, you’re able to get past no matter what it costs. It doesn’t matter, you can say I can figure out a way to achieve this goal and then you line up the goal on the business side to line up with your lifestyle or car or Florida house or whatever it is on the other side.
[00:36:13.7] MF: Right and you made a really good point too earlier about not sacrificing your family or your wife being able to come home from work for those goals as well. You’ve got to set them up so that it makes sense, that you’re not, “As soon as I get $50,000 I am buying a $50,000 car.” That doesn’t work very well.
[00:36:31.9] NB: No it doesn’t and I think there’s a learning experience to that too where all of a sudden, you start making a lot more money than you’re used to and all of a sudden it’s a lot easier to go spend more money doing X, Y and Z. For us like eating out, oh man I love a really nice dinner or a nice wine at a three hour five course meal. I just love that but it doesn’t mean you need to go do that every night or whatever. It’s a learning experience of how to have a balance through all of those things for your work and family and fun and all of that.
[00:37:08.1] MF: Yep, I couldn’t agree more and it is really easy. You get that mindset where it’s like, “Oh I’m making good money. I can spend good money here and there,” and a lot of people get into that trap where all of a sudden they are making more money but they’re even in the worst position than they were before they made that money because they spend so much, they get into debt and it’s not always easy to get ahead in life.
[00:37:30.7] NB: It’s not and then you also have to go back and say, “All right, what were my goals? Was it to eat out every night of the week or was it to have the freedom to go do what I want to do?” And then within that confines, if it’s X number of dollars that you can spend or whatever, then great but you already built it before you got there so you knew what your parameters were and if you live within those and you’re still saving some money.
I know that both of us are interested in acquiring rentals and those types of things where you can put those dollars back into something that’s actually is an asset gaining you more income or wealth or whatever that is that you still have a balance of I can have some play money and I should also put this back and work for me.
[00:38:14.8] MF: Yep, exactly, exactly. Great stuff. Now I know we talked about the turn keys, how you got started and of course some lifestyle design. One question that I always like to ask too is for people who are new investors maybe they’re just starting out, have a little bit of money, do you have any advice on them on how to get started investing in real estate? Is there a certain side of real estate they should look at or is there a certain tip you just have one thing to let them know before they get going?
[00:38:43.3] NB: I get that question quite a bit and I think that when you look at the new investor and I think back to when I was first starting, I don’t think that there’s one particular thing that you should or shouldn’t get into whether it’s wholesaling or rentals or flips or property management or notes, whatever it is that gets you really fired up.
If you want to go buy a 100 unit apartment building, okay. Well find out who’s doing that and ask and ask and ask until you find somebody who is willing to either ride with them and just listen to conversations or you pay for some mentoring or coaching or whatever, you find a partner who is doing deals and you might get a very tiny piece of the pie, who cares?
I think that at the end of the day, you have to decide if you really want it and if you want it that bad, what are you going to do to go get it? If it’s interning for the summer with an investor and you make zero dollars and zero deals but you get to experience a wealth of information and time or whatever it is and then now you have some context for what questions you’re going to ask.
I know for me, the more deals I’ve done, the more prepared I am for the questions that the guys with money have to ask you like, “What is your exit strategy, and how are you going to fund it? And you’re asking me to put money in but what are you going to do? What are you going to bring? What money do you have to support this project?” If you’re new, you have to start listening, hone those listening skills to what the guys who you’re talking to are asking you.
Go to the local investor meet ups and just really put your time and energy and learning into whatever that side of real estate that really gets you fired up because that’s where you’re actually going to spend the time. That’s where you’re actually going to do the work and that’s where you line up the most opportunity for success I think.
[00:40:48.1] MF: All right, that’s great advice and I couldn’t agree more with you. Finding people who’ve been successful already takes so much time off the learning curve and then I got stuck when I was a real estate agent when I first started back in 2001, 2002 and I tried to do it all myself. I tried to do everything without listening to anybody and I realized that it’s so dumb to just try and let my ego drive things and say, “Oh I did it all on my own.” What’s the point of that when you can get there so much faster if you get a little bit of help and just take so much time off the whole process?
[00:41:20.8] NB: That’s totally accurate and it’s not like we’re still going to screw up a bunch of stuff. You’re still going to screw up and I still make mistakes and I still have rehabs that go over budget and I still have problems on rental houses and I still have vacant units with a tenant that I had to evict. No matter how badly or hard you try not to have that.
I think that there’s as much of a mindset and as much of a determination and a gut check that you’d have to have and I was just listening to a Timothy Ferriss podcast. I can’t remember the climber’s name, I think its Alex Arnold or something like that? Honnold and he is this brilliant rock climber and he’s talking about fear and where, I don’t know about you but I am not climbing a 2,000 foot…
[00:42:13.8] MF: No.
[00:42:14.8] NB: …granite rock, no way. I’m not doing that but in the same context, you could say, “I can take the fear and I can put it in its place among all of the other emotions that I am having which might be where the logic of what that real estate deal looks like,” and so, “Do I want to be this and then how bad do I want it and what am I willing to do, give up, learn in time to spend on to really make this happen?”
So I think when you go back and look at it just like anybody else, you get into real estate you could lose your money, you could lose your house, you could lose your spouse or whatever. So if you can take that fear away and say, “If I wasn’t fearful about this and I’m just making a logical sound decision,” that will really help your ability to see clearly in whatever avenue of real estate you’re trying to do.
[00:43:08.0] MF: That’s awesome and I always like to say, “Hope for the best but plan for the worst,” and usually the worst doesn’t happen but so many people got hung up on the absolute worst case scenario and they don’t realize how great things could be. Even if things don’t go perfect, a lot of times it will work out in the end.
[00:43:28.3] NB: Yeah, it will and the other thing that I think is funny is when you think about “perfect”, when I think about how many real estate deals we do and how many flips we do or whatever and I can’t tell you one project that went exactly as planned. None of them, ever. So if you’re not a person who can’t say, “Okay, what’s the problem? Okay, cool. Here’s one way and one way and one way,” or, “Who do I call for this problem?” So you don’t know how to lay out a bathroom? Well, call your contractor.
That’s a skill for me so I don’t have to call on that but I might have to call on a new way to structure a big giant apartment complex deal. Well guess what? I have talked to those guys. I have friends in the business who do that. So as you learn, it opens up more questions that you don’t know but you know who then to ask and I think that, just like anything, when we talked about learning an instrument or Brazilian Jujitsu or a rock climber, these guys did not just become world class overnight. They had to practice and fail and practice and fail and get better.
[00:44:33.8] MF: Yep, exactly and it’s easy to look up in awe at some people who are awesome at different things but like you said, they were not awesome their entire life. They stumbled and they tripped and they fell, but they kept getting back up and didn’t get up.
[00:44:48.9] NB: Exactly.
[00:44:49.6] MF: Well Nathan, I know we’re getting short on time here, awesome job on the podcast. I love talking to you about how you’ve built your business, your turnkey model, what’s the best way for people to get a hold of you if they want to talk to you about turnkeys or anything else, that’s going on?
[00:45:05.4] NB: Well thank you again for your time too Mark and there’s a couple of ways. We’re on Facebook. You can just Google Nathan Brooks on Facebook, find our page but it’s facebook.com/fixfliprentkc or you can check out our website, which is really not much. It’s just a shell right now but it’s undergoing. It’s a 2.0 version right now, which is bridgequity.com.
[00:45:35.8] MF: Awesome and then yeah, I will provide links in the write up for this podcast as well on my site and thank you so much. I really appreciate you being on the show and I like your car, it’s a good choice. I have a Porsche 928, it’s an ’86 it was an older one.
[00:45:50.5] NB: But it’s still a sweet car though.
[00:45:52.3] MF: Yup, I love that car and it’s funny because that one, the key is on the right side of the steering wheel. It’s not on the left.
[00:45:58.0] NB: Is it really?
[00:45:59.1] MF: Yeah, no it’s a little different. It’s a lot different, it’s a front engine V8 which is completely different but it’s a fun car though still.
[00:46:07.2] NB: Fun nonetheless, I love it.
[00:46:09.3] MF: Yep, cool. Well thank you do much Nathan and I’m sure we’ll be in touch and yeah, have a great rest of your week.
[00:46:14.5] NB: Thank you Mark, you too man.
[00:46:15.6] MF: All right, take care.