Welcome back to the show! Today, we’re here with my buddy Brad Bone from California. Brad has a rich background in working with family, from the family farm to real estate investing. A lot of us work with family and make a lot of mistakes, but there’s a lot of benefits too if you do it right and that’s what we are going to talk about today.

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    [00:00:00] Mike: [00:00:00] Hey everybody, welcome back to the show today we’re here with my buddy Brad bone out of California. And, uh, he has a rich background of working with family from family farm that’s coming up on being around for about a hundred years, almost into real estate investing. So a lot of us work with family. A lot of us make a lot of mistakes, but there’s a lot of benefits if you do it right.

    That’s what we’re gonna talk about today.

    Professional real estate investors know that it’s not really about the real estate. That real estate is just a vehicle to freedom. A group of over a hundred of a nation’s leading real estate investors from across the country meet several times a year at the investor fuel real estate mastermind. To share ideas on how to strengthen each other’s businesses, but also to come together as friends and build more fulfilling lives or all of those around us.

    On today’s show, we’re going to continue our conversations of fueling our businesses [00:01:00] and our lives. I’m glad you’re here.

    Brad: [00:01:11] Good to be here, Mike. Thanks.

    Mike: [00:01:12] Hey Brad. Good to see you. So, um, it’s interesting you have a really rich family background in terms of, uh, I guess entrepreneurship, at least I started with, with farming out there.

    Brad: [00:01:23] Yeah. Yeah. So my, my grandpa started farming. Uh, but you know, back in the, I think it was like the thirties.

    And then my dad, my dad started farming farming after that. So we’ve always been kind of entrepreneurial in our, in our family. So yeah, it’s kind of natural, kind of kind of feeds into what we’re doing now.

    Mike: [00:01:43] Yeah, and I grew up, so I grew up in the Midwest. You’re out in California, and I didn’t live on a farm.

    And. And have no farming experience, but it was a very much a farm. Agriculture was very much an agricultural areas. John Deeres based there, and there’s just a bunch of stuff in the Midwest. It’s farming based. And so, [00:02:00] you know, I like to believe I have a really strong work ethic and my whole family works really hard.

    You know, a lot of blue collar background, but I feel like farming and things like that really create. A really solid work ethic of just overcoming obstacles and doing whatever it takes to get the job done.

    Brad: [00:02:16] So, yeah, yeah, yeah. I remember planting cotton during spring, but spring break when all my friends were on vacation.

    I think we even got pulled out of school sometimes to do that, but yeah, I’m thinking for now. Yeah,

    Mike: [00:02:32] yeah. Yeah. So kind of tell us your background. I mean, you’ve got this rich kind of farming background, um, and then somehow you found your way into real estate investing. So tell, tell us more about that.

    Brad: [00:02:43] Yeah, so, so I, I actually, my background is, is, um, so we, we grew up.

    In farming, but I kind of went forwards, construction and things like that. So I, um, I worked for a couple of, like a commercial builder for awhile after college [00:03:00] and then, and then for a government, a construction contractor. And then I was always interested in real estate and always interested in investing.

    Um, so we, I started working with a cousin, like, uh, that his, his family had been in real estate for a long time. Started kinda buying some houses. Courthouse steps back in 2014 and the deals were real skinny, but we ended up buying a couple, a couple of houses, and then, um, made a little bit of money. But my brother and I got interested in doing it together.

    We bought a rental in early 2015 and, uh, and then. We got all excited about that. And then we, a couple months later, we had a flip under contract to buy. And I told my brother, I said, like, if we buy this house, I’m gonna quit my job. And, uh, which seems crazy now, but, but, uh, but I did. And, and the reason why is because I felt like if we’re going to do this, I’m going to need [00:04:00] to market.

    I’m going to need to answer calls, go on appointments, things like that. And so we bought this house from a wholesaler. I quit my job. And I went to my dad, and instead of, Hey, this is what we’re thinking about doing, can you float me for six months? I think we’re going to, we’re going to be doing good in six months.

    We’re going to have find a bunch of houses. So he goes, sure. Um, and we, we start marketing didn’t buy anything in six months, had nothing. So I went back to him and said, Hey, can you do another six months? I think for sure it will be good. And for some reason he said sure. And we started just trying to make stuff happen and we started buying out of state.

    Um, we had this idea that if we can buy something at 70% of ARV minus repairs, we were going to make money. And I don’t know if I’d really recommend that for someone as new as us back then. But, but that was what we believed. And so we tried to make it happen and we started getting some traction and things.

    Things start going

    Mike: [00:04:56] back to that kind of work ethic. I think ultimately, [00:05:00] uh, persistence pays off in real estate investing cause a lot of people. Well, really, probably any entrepreneurial eventually, because so many people

    Brad: [00:05:07] do. You know, if

    Mike: [00:05:08] you want, in real estate, if you watch HGTV,

    Brad: [00:05:11] you know,

    Mike: [00:05:12] if you follow any big name gurus or anything like that, it’s generally more work than what you were led to believe,

    Brad: [00:05:20] right?

    Mike: [00:05:20] So persistence pays off because sometimes you need a longer runway. There’s always, you know, we, I do a lot of coaching whenever I have somebody that like. Uh, I had to coach a student like a year and a half ago. They bought their first two leads. They bought two houses and they were really good deals. And I was like, this isn’t necessarily a good thing because you haven’t, you’re not overcoming any adversity yet and you’re going to get it

    Brad: [00:05:44] right.

    But

    Mike: [00:05:45] for the average person, I mean, it took me four months of full time to buy our first house and we had an office and a staff, we were like, came out of the Gates, like, go trying to go big. And it was, it was a hard four months. It was a hard time to, you know, [00:06:00] every day you’re like, what are we doing wrong?

    And it’s like you just, you just need runway, right? You just need

    Brad: [00:06:04] experiences. Yeah. Yeah. I think, I think it’s kind of mindset too. It’s like for whatever reason, we just felt like, okay, we can buy in any state at 70% of ARV, and that’s not necessarily true, but it did get us, it caused us to start buying out of state.

    Like. When you grow up in California, so to speak, as a real estate investor, you’re always, you’re always thinking about trying to get out of the state. I’m trying to buy somewhere else. Um, so we always kind of had that mindset even from the beginning. And so that’s helped us now where we’re, we’re doing a lot of deals in Jacksonville, Florida.

    Um, and so know. Yeah. We’ve never been afraid to be out of state, but we have learned there’s, there’s a lot of things that we’ve learned too, that we’ve done wrong, that we’ve figured out a little better now. Yeah.

    Mike: [00:06:53] Yeah. So let’s talk a little about kind of working with family. So you, uh, you work in the business with your brother, [00:07:00] right?

    Um, and just because you told me previously that, uh. When your dad inherited the farm or a part of it that he had, he was one of 12, or he had 12 brothers and sisters. That huge family. Right.

    Brad: [00:07:12] And so,

    Mike: [00:07:13] um, you know, I’ve seen Mo, most people with big families, I’ve either seen they’re trying to get away from their family or, or they find a way to like collaborate and work together just because they had to probably.

    Um, and so, um, you think that’s, uh, you do a bunch of stuff with family, which we’re going to get into your channel.

    Brad: [00:07:32] Do

    Mike: [00:07:32] you think that that’s part of it is kind of that legacy of big family and we help each other out? Is that, is that where that came

    Brad: [00:07:37] from? I think partly that’s, that’s part of it. Um, you know, it’s, it’s kind of interesting, like Justin and I are twins, so.

    In a sense, we’ve always been partners, um, not necessarily business partners, but we’ve always been, had a close partnership because we’re twins. So that’s something a little bit unique, um, even more unique than just being siblings. So when we started, um, working together, I wasn’t really [00:08:00] sure how it would go because we’re similar in a lot of ways, but in other ways we’re different.

    And I wasn’t really sure if it would be good or, or how it would go, but we actually grown, grown closer because of it. And, and. Um, and, and we found our niches, like we’ve found what he, he’s really good at certain things. He’s good with watching the money and doing that kind of stuff. And I’m, um, I’m good with the operations side.

    So we’ve kind of, and we didn’t know that at first. We figured that out, but I think it is really been. Net Terry is, we have always had the same goals. We’ve never fought over goals and what we want to go forward towards. We completely trust each other. There’s never been a question as to whether, uh, we can rely on each other as far as that goes.

    So I think those are things, and we have, we have the same kind of, we have the personalities for it. Like you, you can have a great family member who’s really a great person, but they just don’t have. The mindset to do something like that. And that probably wouldn’t be, it wouldn’t be a good partnership.

    But [00:09:00] yeah.

    Mike: [00:09:01] So we talk a lot about like, you’re a member of investor fuel. We’re always to, everybody’s going to be talking about building their team, right? And, um, and you know, the hardest thing is like, sometimes, uh. Notorious as small business owners for hiring the wrong person.

    Brad: [00:09:18] Right?

    Mike: [00:09:18] Yeah. And there’s like personality profiles and stuff like that that you can do, but I think some of it is you just, uh, sometimes we’re just like, Oh, he’s, he’s got a sales background, really good at sales.

    Like he probably be great in this role. And that’s like good enough to like, bank your whole business on like way too. But the reality is, is you get to know people over time. But I think, you know, one of the. Problems that we have is sometimes we’re too trusting

    Brad: [00:09:45] with

    Mike: [00:09:45] hiring the wrong people. And I think sometimes, and I have a little bit personal experience on this as well,

    Brad: [00:09:51] is

    Mike: [00:09:53] a little bit too much trust, even in family members or people you’re related to or friends or people that you know, you’re just like.

    [00:10:00] Brad: [00:09:59] They’re not

    Mike: [00:10:00] really the perfect solution, but you’re just like, well, he’ll be fine. Yeah,

    Brad: [00:10:04] yeah, yeah. So I didn’t

    Mike: [00:10:06] talk about that a little bit. Just like making sure your skill set is the right thing and it’s not a charity case.

    Brad: [00:10:12] Right. So that, that’s another really important thing as well. So I’ve worked, so obviously Justin and I worked together where we’re, we’re 50 50 partners in all the, all the.

    Both businesses. We have rental and, and the flipping business. But then I’ve also worked with some cousins. Um, I, I’ve, we’ve worked and some friends and yeah, so one of the kind of the principles is that, and we’ve talked to them up front about this. Is, it always has to be where we’re both adding value. So if, if, if we’re working together, it’s gotta be something where you’re bringing something that we don’t already have and we’re bringing something that you don’t have.

    Like if you can go out and do this on her, on your own, don’t work with us. And, and if we can do something. You know, so. So one of the ways we’ve done it is they’ve, we’ve had some of our cousins that have been interested in it. They’ve [00:11:00] paid for marketing, and then they get cut in on the deal when we buy a house through their marketing.

    So that’s a real clean way of doing it. But yeah, very important to not make it a charity case because they’re not going to like it either. They’re not gonna feel good about just getting money for nothing. You know, and you want to work with people that feel that way. And all of you, all of these people we’ve worked with.

    Yeah. They would feel that way anyway. They don’t want to get paid if they’re not bringing value.

    Mike: [00:11:23] So, yeah. No, that’s good. That’s good. So talk a little about like how, how you. Maybe something unique you do or something you learned, like kind of communication wise. Cause no, clear communication is important.

    And sometimes people’s goals change over

    Brad: [00:11:36] time. And if,

    Mike: [00:11:38] I mean that’s kind of probably why there’s, the divorce rate is so high as people kind of grow apart, right? Or their, their goals or their interests aren’t misaligned over time. So, you know, talk a little about, so that when you’re working with family members especially,

    Brad: [00:11:51] yeah.

    So you know. For example, we were doing a lot of direct mail early, earlier on when we were working with one of my cousins here in [00:12:00] town, and we stopped doing direct mail. And so it didn’t make sense to have the same type of partnerships. So we were always, we, we talked a lot up front about what, what’s gonna look what’s gonna make sense and what’s not going to make sense.

    And, uh, and that, that was really important. Um, one another, another thing we’ve talked about is like. You know, there’s no, there’s no way we put it as like, there’s no royalty fees that you have to pay. Like if, like if you, if you learn about different, um, if you network with people we know by working with us, um, and it makes sense for you to go and do work with them.

    Like you don’t have to, you don’t, unless anything or, you know, it’s just keep it really clean. I think that’s been the main thing is keep it really clean. Yeah. And that’s worked out good. We’ve never had any problems with that. And everyone’s, everyone’s, it’s worked out good. Yeah. Yeah.

    Mike: [00:12:52] And I recall, so you’re set up now as you’re working with a cousin, it’s, it basically plays the role of the acquisitions manager and boots on the ground [00:13:00] in Jacksonville.

    And I remember you talking to me a couple of meetings back about working with family with how’s this work? How would this be structured? And so it worked out pretty good.

    Brad: [00:13:10] It has. It’s worked out really good. Um, yeah, he’s, uh, he’s kind of a strict commissions structure, which is a clean way to do it. And he’s great.

    You know, he’s a sale. He’s a salesman, which I’m not. I’ve learned that that’s been a, that’s been kind of a lesson learned thing. Um, he’s much better of a salesman than I am. So he’s adding value. He’s in, he’s in the market, he’s boots on the ground. He knows how to market a network with people. So he’s adding huge value to us and we’re adding value to him.

    So, um, so that’s really, really been good. And I think that’s, those are, those are things that you want to, that it’s good to keep in mind. Yeah, we’re working with people. And

    Mike: [00:13:50] so when you get comfortable investing virtually, and you have a massive family, it sounds like it was just a matter of where all the cousins at.

    Right. [00:14:00] And so other opportunities to go into other markets, you’ve got like a distribution network there, maybe.

    Brad: [00:14:07] Yeah. Right, right. Yeah. So, um, yeah, it’s been interesting working in Jacksonville because, um, it’s a. You know, when we first went out there, we started in early 2019 when we went out, when we started buying in Jacksonville.

    Before that, we were buying in Northwest Indiana a little bit. We’ve done probably like five or six flips in Indiana, but one of the things we realized is it’s probably makes sense to not be spread out everywhere. But pick, pick a couple markets and be good in those markets and it’s kind of nice to have the diversity.

    If one market starts to dry up, it’s good to have connections in another market. So that’s one of the ways we’ve thought about it. But we went out there in 2019 and met a bunch of people and I tried to buy over the phone for the first year and we actually did buy some houses that way. I don’t know how, but somehow we did and we made a little bit of money.

    [00:15:00] But I think the thing I’ve learned since then is, um, is, uh, get myself out of the acquisitions role. Get someone in who’s who, who is good at sales. Like, like my cousin. And um, and then it’s a lot easier to scale that position because if you’re trying to scale yourself, you’re just naturally not going to want to do it because that means you’ve got to work harder.

    But if you can scale somebody else, a system that you built, they’re excited about it. Um, and like my cousin, he wakes up every morning wanting to buy a house. That’s not, that’s not at all how I was thinking. Yeah. You gotta have a guy thinking that way in that position. So

    Mike: [00:15:36] I think one of the important things when working with family is, uh, I think it’s probably better to fit them into a, like a typical role, acquisitions or maybe a administrative assistant type role, something like that.

    And I think when people get into problems is when they try to create a role for a family member. Just like you could probably, I’ll make something up for you. You know.

    [00:16:00] Brad: [00:16:00] Yeah.

    Mike: [00:16:01] If you have to make something up, it’s probably not that important of a role anyway,

    Brad: [00:16:05] and yeah. Yeah.

    Mike: [00:16:07] It’s only going to end badly because, you know, sometimes they’re doing something that’s not really clearly defined, mean if it’s not clearly defined, um, you

    Brad: [00:16:17] know, it’s just your

    Mike: [00:16:19] metrics, your KPIs, stuff you’re tracking are just not going to be as clear as to whether they’re performing or not.

    And that’s just probably going to end badly because you’re going to get to a point to where you’re like. They’re not really pulling their weight. And, uh, I don’t know. I think a role, like a sales role, acquisitions role is very clear to find your, you’re either performing well or you’re not. You know,

    Brad: [00:16:38] we’re by, no, and that’s true.

    And it’s good to have even even my cousin out there, he’s good at, he wants to know, he wants to know the numbers. He wants to know his KPIs. And, uh, whether it’s family or not, you want someone in that role who. Who is thinking about that. Yeah. You know, and they’re motivated by that. [00:17:00] So personality takes comp is a big part of it as well.

    You know, just his personality. So

    Mike: [00:17:05] while we’re a little bit on the topic of virtual investing too, so talk about, you know, I get that in some California markets. Market’s either too volatile or difficult. I mean, California is a different animal all together with real estate and with a lot of other things too, but you know that.

    But in terms of a virtual investing, maybe you could share, take a minute just to share some of the bigger challenges you’ve had with virtually investing. Basically, you’re going, you’re literally going from West coast to East coast, right? So long ways away.

    Brad: [00:17:35] Yeah. It’s, you’re, you’re trying to learn a brand new market.

    And a, you’re, there’s so much nuance in, in every market, every neighborhood. So you’re trying to learn, learn a new Mar, a new trend to try to figure out, um, who the people are you want to work with. So there’s a lot of that here. We were kind of, uh, [00:18:00] my cousin was living out there, but he was doing something else.

    He was, he was working, he wasn’t directly working with us. Um, so we were, I was trying to buy over the phone and I didn’t know the market. I was just looking up comps. And people do that. And there’s, there’s some really smart people that have figured out a way to do that, but it’s a, for people our size, it’s probably not the right move.

    You want someone boots on the ground. Um, so there are definitely some challenges, but. Ultimately, if it takes a little bit of time, but once, once you go through that process of learning who the people are learning about the market, getting someone there who knows the market, um, I think it’s, I feel pretty comfortable in Jacksonville, um, in a lot of ways, almost feel more comfortable there than here because we have a system and a team built out there.

    So

    Mike: [00:18:49] that’s what we were talking about this ahead of time. I think that the beauty of. Making the virtual model work is a, inevitably in my experience, when you’re investing only in your market, which is [00:19:00] primarily all I’ve done, but when I look back over the years, it was too, like for example, I literally was talking to my contractor today, he was rehabbing a house for us and he’s like, do you want to come out here?

    And just like thinking they thought the floors were good. It’s this old parquet that’s been refinished, but then it turns out, well, it’s not okay. And he’s like, you want to come walk through and just like help make a decision. And I was just like. Uh, no, no, I don’t. I don’t want to, but it’s, give me a second.

    I almost caught myself like, yeah, I’ll run over there. But it’s like, you know, by the time I get there, it’s 45 minutes away from here, and by the time I, by the time it’s all said and done, it’s going to be a half day, you know? I’m like, yeah, pick out flooring or see if we can salvage what’s there. I’m like, I don’t want to do that, but I had to think about it, you know?

    And so it’s easy to get sucked into stuff when it’s local and when you’re far away, you have to rely on a process that probably allows you to make a decision within seconds or a minute.

    Brad: [00:19:55] Let me, let me

    Mike: [00:19:55] dive in and roll up my sleeves a little bit if I have

    Brad: [00:19:58] to. So, yeah, I [00:20:00] mean, I’ve even thought like, we haven’t really marketed here in California for the past six months just because we’ve been pushing everything to Florida.

    But I thought like when I, when we start marketing here again, which we will always buy here in California, but. When we do that, I kind of want to get an acquisitions guy here cause I’m the acquisitions guy. If it’s in California, and I want to build out a system here like we’ve been forced to do in Florida.

    So that is, that is an advantage. You’re forced to build a system completely out. Yep. So that, that’s, that’s been, uh, you can, you can sort of, you know, not do that for a long time in your own market. Right, right. Yeah.

    Mike: [00:20:39] Yeah. That’s great. Awesome. Well, uh, read you, you guys have been members of investor fuel for a while now, and, uh, maybe you could just share some experience, maybe a little testimonial on your experience as being a part of the group and kind of what that’s meant for you, your business or your life.

    Brad: [00:20:56] Yeah. You know, um. When we joined, I think it [00:21:00] was about a little over a year ago. Um, w we thought, I thought the way to scale was just throw more money at marketing and do that. That’s, that’s a bunch more direct mail, all that kind of stuff. But coming into investor Phil, you just, you just learn that, Mmm.

    There are so many different ways that people are doing it and we got direction. I think that was a lot of it. We just got direction where we just thought there was kind of one way to scale and one way to do it. And uh, and the other thing I’ve realized is like every, every quarter, like the market is changing.

    And so what hap what? And you hear people say that, but you really don’t believe it until you see it. Like. Things change every single quarter about what’s working and what’s not working. And you don’t realize that unless you’re part of a mastermind, a part of the, you know, this mastermind specifically. So it’s been great.

    I mean we, we’ve re very much benefited from it, so that’s awesome.

    Mike: [00:21:55] Yeah. It helps to have a think tank of people that are, have their ear to the [00:22:00] ground. Right. Cause you, it’s just like anything, like if you,

    Brad: [00:22:03] if you,

    Mike: [00:22:04] if you’re alone, you have to wait to experience each thing yourself. If you’re a part of a network.

    You’re getting those bits and pieces of feedback that,

    Brad: [00:22:11] that

    Mike: [00:22:12] the network is hearing, or you can kind of pivot sooner, right? Or, yeah. Awesome. It’s been awesome having you guys, uh, you guys in the group for sure. So.

    Brad: [00:22:24] Yeah. No, we’ve, we’ve, we’ve, we’ve enjoyed it.

    Mike: [00:22:27] Cool. Cool. So, Hey, thanks. So, uh, so thanks for joining us today.

    Really good having you on here.

    Brad: [00:22:32] Thank you. No, thanks for having me.

    Mike: [00:22:34] Hey, folks, wanted to learn more about you guys, about you, what you’re working on, where can they go to connect and maybe learn more?

    Brad: [00:22:40] Yeah, they can, they can find me on Facebook where we’re prime buyers is the name of our company. We’re on Facebook there as well.

    So just, uh. Mmm. Yeah. Just, just find us there. Or, um, you know, we’re where, uh, you can find [00:23:00] this through investor fuel somehow too, I’m sure. Yeah. Yeah. Yeah.

    Mike: [00:23:02] Good. We’ll, we’ll add a link down below to find you on Facebook there. So, yeah. Again, thanks so much. Good luck with everything. Keep, uh, by the way we even talk about your pistachio farm.

    You guys have a pistachio farm. It’s actually a really cool, it’s a really cool thing. So the bone family is a supplier to our, uh, our, our snacking around here. So.

    Brad: [00:23:24] Sounds good, Mike. Thank you

    Mike: [00:23:26] everybody. Hey, thanks for joining us. I hope you got some value out of this. You know, sometimes working with your family is a good thing.

    My wife and I work side by side and it’s been good and bad. I think anybody that works with family is, has had some ups and downs, but I think the key is to communicate clearly, like Brad said, and make sure you guys have similar goals and everybody has a very clear role in the, in the company so that you’re not questioning what people are doing.

    So appreciate you joining us today. Everyone, if you can, if you haven’t yet, you can subscribe to us. Anywhere where you’re watching, you’re listening to this right now. Uh, and of course you can find all of our shows by visiting an investor, fuel.com if you have any [00:24:00] interest in learning any more about investor fuel, check out the page.

    You can schedule a call with us and we’d be happy to jump on a call and see if it makes sense for you. So I appreciate you all. Until next time, have a great week. We’ll see ya.

    Are you an active real estate investor? If so, and you want to latch onto the power of surrounding yourself with over a hundred of the nation’s leading real estate investors. All committed to building stronger businesses and living richer, fuller lives. You should jump on a call with us to learn more about investor fuel.

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