Strategic Partnerships in REI

Mike: [00:00:00] Hey everybody. Welcome back to the show. I’m really excited to be here today with my buddy Bruce. We’re gonna be talking about strategic relationships. Something very near and dear to my heart. It’s something that Bruce is very passionate about too. He’s a multifamily investor, one of the members inside of Investor Fuel, and uh, it was his idea to talk about strategic relationships.

And I said, Well, that’s music to my ear. So excited to talk about that today.

Professional real estate investors know that it’s not really about the real estate. In fact, real estate is just a vehicle of freedom. A group of over a hundred of the nation’s leading real estate investors from across the country meets 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.

And build more fulfilling lives for all of those around us on today’s show, we’re gonna continue our conversation of fueling our businesses and

fueling [00:01:00] our lives. I’m glad you’re here.

Hey Bruce. How are you my friend?

Bruce: Hey, good. Thanks, Mike for having me on. I’m super excited to be here. This is really a treat.

Mike: Yeah. Well, I’m glad, I’m glad you’re here. And it’s funny because I, I was even at, I was at an event actually this morning with George who was in, uh, Investor Fuel at an event here in Dallas.

And I, and I started talking to somebody about partnerships and the power of your network and stuff like that. So this is like perfect timing and it’s the type of stuff that I talk about honestly every day. So I’m glad it’s, uh, something you’re passionate about. Yeah, George is a great guy.

Bruce: Yep.

Mike: So, hey, uh, I know like me used to be a single family investor transition into multifamily.

You’ve got a rich background, but why don’t you share a little bit more about your background, how you got started in real estate investing, and then maybe a little bit about how you made this transition from single family to multifamily.

Bruce: Oh yeah, that’s a, it was, uh, actually this year, um, or this month is our 20th anniversary at Baker, [00:02:00] so that’s kind of exciting.

20 years in business, kind of a long haul. Been through a pretty. Tragic downturn for the country. And I got, I got some, I got some scars to prove it. Yeah. But, uh, yeah, I got started in single family, actually before Berson. I worked in a. Worked with the company. I was out of work. I had a company that I closed down, broke even on in here in Arizona.

And I thought, you know, I gotta get into something else. And met my friend Gary, and he taught me how to do tax lean foreclosures. And he was buying properties that way. And I said, Man, Gary, you’re leaving some money on the table on these deals. How can we buy ’em? And uh, one of my friends said, Hey, Bruce, you’re in real estate.

You gotta read Rich Dad Poor Dad. That’s a great book. And it’s, it’ll be right up your alley. So I read, And I, I told Gary, Hey, look, it, we could use other people’s money on this. He said, No, you could do that all you want. He said, I, I like, I like my taxing foreclosure business. And that’s what I do. So then I, um, started buying houses, picked up, uh, uh, three houses at, uh, duplex and a triplex in Phoenix, all with other girls’ money and turned them into rentals.

[00:03:00] And it was, uh, it was a good, good deal, but. It was like, Okay, this is kind of exciting, so let’s get into fix and sell. Well, uh, at that point, um, my friend Jack approached me and said, Hey, he wanted, he wanted to do the construction site if I found the deals. And I said, Great. Well, his dad and my dad worked together in a bakery for my grandfather, we’ll, at Bakery in Minnesota, which is still around some 80 years later.

And he. So then we, that’s where Berson came from. We’re, we’re both ba uh, Sons of Bakers we’re sobs. Right? . That’s why I’m a son of a baker. But, uh, so then we, we started in, in, in business and he did the repairs. And I, I was finding the deals. Well, I found more deals than I could possibly fix and sell and the list was just growing and I was like, I gotta do something here.

And I met, uh, Jim Staples out of Arlington, Texas. I flew up to Seattle for a bootcamp in the Streets Bootcamp with Jack’s brother. We did a bootcamp on how to wholesale, and while I was there, I flipped a house in Phoenix and I’m like, Whoa, hold on [00:04:00] here. I said, Jimmy, I have, Here’s a guy from Arlington meeting me in Seattle.

Teach me how to flip a house in Phoenix, and I flipped one during this bootcamp. Okay, This works. This is amazing. Well, that guy that bought that house ended up buying 47 houses from us the next year. And what was exciting about that was I was able to, uh, I was able to just have him go look at the property, say, Joe, go look at the property.

What will you pay for it? He’d gimme a number. I’d subtract five or seven grand, go to the seller, work out a deal, and, and we’d do a flip that way. And it was like super easy. And we did 60 something houses that year, 47 to one, one buyer. So that was how that we entered into wholesaling, entering a flipping houses in Phoenix.

Ended up doing over 2200, uh, transactions in the Phoenix market. And in the middle of that, we did a bunch in the beginning, 2003, 4, 5, 6, 7, and then a bunch in 10, 11, 12, 13. And we know what happened in, in seven, eight, and nine. [00:05:00] Well, what happened was, I, I had a bunch of rentals and I, uh, seven or a bunch at that time was 17 rentals and.

Our partner on that said, You know, I don’t really enjoy doing this. They said, Well, let’s sell ’em. So he sold ’em. The last one sold in Decem or October of 2007. In 2008, the wheels came off. At the end of that, about a year later, the wheels completely came off the market, you know, what was it, September, 2008, I think, Or was it 2007?

But anyway, the, the market started crashing around us. Um, but during that, We took our money from the houses and we were gonna be these big land Barrons and I, I, we secured, uh, our developer for golf course secured a square ac uh, square mile of land in the West Valley of Phoenix. And we were gonna develop in his private golf course with, with, uh, with Norman, Greg Norman.

It was, it was like this with Greg Norman to design the course on it. And we were like, Well, yeah, we’re gonna be something big. Well, The market happened and we had done everything on seller carrybacks. So we called one owner after the other and said, You want your property back? [00:06:00] You want your property back?

Let’s do a Deda Lua foreclosure. Here’s your property. We’re done with it. And I had to close that, and it cost me a ton of money. Basically started all over. And that’s when we got back into whole selling houses, 2000 12, 13, 14. And the second, that was the first mistake was thinking we could do something we couldn’t do.

We, And we were doing it completely alone. We did not form a team of people that have done it before. Second mistake was when technology came in. I did not latch onto technology at first. I like the yellow notes. I, I, I was doing yellow notes before that became a thing. Putting ’em on doors, knocking on doors in the streets.

Internet came completely changed how people buy ho. And I, I didn’t transition very well with that. So then we thought we gotta flip something else. Hey, people aren’t flipping apartment buildings. So we started whole selling apartment buildings. So we wholesale 25 smallest fee, probably being 10,000. Large is with a couple hundred thousand.

We thought, Oh wow, this is pretty neat. Then we seen what they were doing with that.

Mike: And these multi-family, these were, these were what size [00:07:00] typically? Probably all over if you did that. Many of ‘

Bruce: em, but, uh, six of them, probably six yous. The smallest, the largest was a, a 250 space mobile home park. Um, in far East Valley of Phoenix.

Okay. So in everything between apartment building is 150 units. Um, things like that. So, but what we’ve seen when these, these guys that we ran into while we were doing that said, Why don’t we take one down together? So they said, By the way, we have this deal. We have to close. In, uh, 21 days and we don’t have the money lined up, we need some help.

So we said, Hey, we gotta network. So we partnered with them and, and saved them on a deal. And so we did two deals. That was, so we first did our buy, fix and sell multifamily in Phoenix was a 64 unit and 120 unit. And since then we’ve, you know, kind of shrunk our business in some ways. I had a peak with 17 employees.

Now we have, uh, seven, and I’ve also, uh, went different ways. My business partner, we were, we’re still good friends, no issues there. But we, he went into mobile home parks. I stayed in the multi-family. And then the last year [00:08:00] we transitioned from bi fix and sell to legacy, buy, fix, and never sell. We want, we wanna buy cash flow.

And that’s where I got introduced. You know, Cory brought this idea to. Number of years ago, and I said, Corey, you’re crazy. I’m gonna stick with the mobile, the single family houses. I know what I’m doing. Then a couple years ago I was looking at what he’s doing. I said, Hey, I wanna be part of that. And so he invited me to the boardroom and then of course, that’s where I met you.

And so we started doing cash flow a year ago, but that was with Corey poking me and saying, You guys gotta buy cash flow. You know,

Mike: it’s funny, you, I think it is the, that’s the evolution of a real estate investor is you’re, you’re making today money and then you get to a point to where you, you, you know, if you could look back now, you’re the same way.

I’m the same way. If I would’ve just kept everything that I ever flipped, like, oh my God, it would be a totally different game right now. There

Bruce: you can’t, there’s even one

Mike: in 10 . Yeah. You can’t keep everything right. But, um, if you would’ve kept a lot more or found a way to keep more. Right. I mean, in hindsight we know what’s happened with appreciation and I think you get to a point to where you’re.

You know, you make today money and then you [00:09:00] make kind of continuity or ongoing revenue, cash flow, right? And so I think when, when we get later in our careers, some of it’s like, Hey, we realize we don’t wanna work this hard forever. Some of it is like you see other, what other people have done and you wish you had done it earlier about generating cash.

Cash, right? Just revenue that you do these deals and when you’re wholesaling everything. You, you, it’s a hamster wheel. You can never get out. But if you can find a way to monetize those on an ongoing basis, then you do something one time and it’s not like you never have to work again, but that one deal could feed you for a

Bruce: lifetime.

Yeah. Well it’s, it’s, uh, transaction versus annuity, right? Yeah. The transaction you get in and out and get paid in annuity is, is consistently paying you. So, Yeah, exactly. Yep.

Mike: So, let’s talk a little bit about, um, you know, it sounds like you, when you tried to transition into multi-family and you had some partnerships, I wanna talk, dive into the partnership part.

So, um, and I think you and I were, you know, different, different stories. Same realization at one point of like, I don’t need partners. I don’t want to [00:10:00] share my secret sauce or whatever I thought I had with anybody, and I’m just gonna have my head down and kind of work hard to realizing like, wow, if I open up and work with people, then there’s things that I’m not good at and things they’re not good at.

You could find ways to compliment each other. Talk a little bit about your story of kind of that realization that, you know, you can’t do it all yourself and there’s some benefits to working with other.

Bruce: Well, um, you and I kind of briefly talked about that, where that you think you have the secret sauce and also I think when, when you hit a certain part of success in real estate, you think that like, I’m the man, I got the information, I have information nobody else has.

And what’s changed is when you look at the internet, there’s nothing, everything that we’re doing, somebody is doing somewhere. Yeah. You know, when I was doing two tra uh, you know, I was doing double escrow with two title companies. Between me and the title company and their legal team, we put together this plan and nobody else was doing it since then, I found out there was guys doing it in Indiana.

There was people doing it in Detroit, the people doing it on the East coast. It was being done in multiple places. [00:11:00] And so when I find these ideas that I thought were secret sauce, my brother informed me. He says, You know what, When I got to a point, he says, Yeah, that’s, that’s pretty natural at this point in your career to hit that.

I said, Why do you say that? He says, Well, cuz air humans by nature, when they, when they hit a certain challenge, come up with similar solutions. Like the wheel was invented. They say wheel was in, was, was seen in Wheel and Lever were in China, but also in South America around the same time. And they did, There was no Google then.

So how was this happening? Because they were evolutionary, you know, as, as evolution goes, even in business, you’re faced with similar challenges. You have similar results. And then when I realized that I don’t have all the answers, and I found people out there that would share everything, like, Oh, Bruce, here’s my plan.

Here’s what I do here. Come visit my office. And they show on a, on a whiteboard beginning to end what they did. And I said, You’re sharing this with everybody. I mean, Oh yeah. It’s like nobody’s gonna do anything with it. People are too lazy. He said, I could share my whole story with a, with somebody that says a budding entrepreneur.

And two years later I call and he still has [00:12:00] none his first deal. Don’t worry, nobody’s gonna steal your information cuz it’s already out there. And I was like, I don’t know. Well then once I had that realization, then I realized everybody has their own secret sauce, which isn’t secret information. But his secret talents, things that they’re passionate about Yeah.

That they can bring to the attor, bring to the table like an attorney. I don’t wanna be an attorney, but boy, I like passionate attorneys that really know the law. Yeah. Right. But he could teach me this whole, how, how to run a law firm. I’m still not gonna do my on legal work. I’m gonna hire him. Yeah. So that’s kind of the, the mentality that, the shift that happened in my brain.

Yeah. Yeah.

Mike: Most people aren’t gonna hear things with it. The real secret sauce is work hard. Right. At the end of the day, yeah, be willing to do the work. A lot of people just give up at the first sign of adversity, so. Awesome. So let’s talk about, um, you know, ways to partner, um, that, you know, maybe make more sense than multifamily versus single family.

Kind of compare and contrast, like ways to partner, which there’s plenty of ways to partner on single family versus, uh, multi-family and your

Bruce: experiences. [00:13:00] Yeah, so what we did is, um, on our first, first partnership, uh, Jack and I were 50 50 partners in our company, and we ended up doing the deals where I would find the deals and he would find the, he would do the work.

And then when we got into wholesaling, I would find. The deals, and he would find the money if we needed to take it down, or he would find the, the buyers if we needed to flip it. So he worked on, I worked on the acquisition side, he worked on the disposition side, and it worked really well. And then when we decided to start taking buildings down, we brought in a third guy that came in and he owned the properties with us.

And that was a separate llc. So he brought the money and, and the credit. Jack brought the construction side to fix it up and make it nice. And then I, you know, I found the property, so the three of us were able to split the properties just a third each down the, down the, uh, just down the line. And it, it worked well for that.

We did that on a, on a series of houses, but we also found that we had some partnerships that only lasted transactional. We did a partnership on, on a house to buy, [00:14:00] fix, and sell with a group out of. I think it was Ohio, but they had a, they had a presence in Phoenix back in 2006 and no, 10, 11, and 12. And they would find the houses and then we would fix ’em up and sell ’em and we’d do a profit split that way.

And it was very much a strategic transactional partnership. Once that market disappeared, they were no longer here. They, they took up their. You know, took their tool or their, uh, systems went to another, another market. But they did, they did well here for a few years. And so we wore their boots on the ground for about a half a dozen, uh, yeah, about a half a dozen flips.

Yeah. So there’s that. And then in multi-family you can do the same thing. You can do it where you’ve partnered with them on a per deal basis, which I, I recommend from a standpoint, especially in the beginning, cuz you find out people’s warts when you start working with them. And then you have to decide are those warts we like or willing to tolerate, or are those ones we can’t tolerate?

Cuz everybody. Has issues when you form a relationship like a marriage and you have to decide, is this the person I wanna be married to or, or is this person I just want a relationship [00:15:00] with? And you have to decide that. Um, or maybe not at all. Maybe it’s a one and. If you do it on one property, but what happens is we’re emotionally high in the beginning.

We’re willing to give up anything to get this next stage, and then we get into it, realize we’re doing 80% of the work and we’re only getting 20% of the pay. Or on the flip side, they see that they’re doing 80% of the work and only, and we’re getting 80%. It could be either way, right? It depends on how the system is and.

Uh, misalignment of values and I’m time monetary Value of ownership. Yeah. And that’s a challenge where if you do it on one deal, you then next deal. Okay. I’m not gonna do it that way. Yeah. And so

Mike: that’s a great, that’s a great, And I, I’ve seen lots of partnerships break up and it’s always, because of what you said, it’s really a couple things, some sort of miscommunication.

That festers or somebody feeling like they’re doing more of the, of the work than the other person and getting paid disproportionately less. Right. And so I think you’re right. The best way to kind of ease into it is just a date for a while, which is like, let’s partner on a deal, but we don’t have [00:16:00] to partner on the whole business.

Like we can just, you can be deal partners,

Bruce: right? Yeah, and I’m a big proponent of that, and we’re doing that now. Like the, the partners that we have on the Fort Worth deal, we’re looking at another one and, and we’ll discuss it with them, see if we continue with, with this one or if we go another direction.

You know, we’re still in the, um, negotiation stage, uh, at this point, but that’s, there’s nothing wrong with that. We’re, we’re friendly, so it’s good. Um, so we may or may not, you know, we’ll see how the future goes, whether or not we, they’re on every deal or just some deals and that. I like that from a standpoint of scalability.

Um, but if you become too intertwined, then there’s certain things, like if I find a deal and they say, We don’t like that deal, Oh, it kills the deal, then they’re not gonna, Or if you have. If you like this deal in in Tulsa and these people only invest in Dallas, well then you gotta find a different partner in Tulsa.

And so just like, and, and I realize when we’re partnering with them, they have other partners and they’re doing other deals outside of ours as well. As long as people realize that, that they might buy a deal right down the road from where we own the deal and we’re not partners, and you just had to be okay with that.

If you’re not okay with that, [00:17:00] then. You gotta change your business because it’s gonna happen with these, um, deal partners and, and multifamily

Mike: is, is perfect for that, Right? Just going deal to deal. Like you don’t have to, not that you might not have a small partnership, but especially partnerships get way more complicated if there’s more than two people involved, right?

Uh, but that’s, that’s, that’s what syndications are kind of built for, is people have different roles inside of. And they’re very much deal specific because a lot of multi-family stuff, people are doing it in multiple markets and there’s always gonna be somebody that’s like, I don’t want to go into that state, or I don’t wanna go into that state, or I don’t wanna travel, or whatever it might be.

Right. Is, you know, that’s, That’s what multi-family is perfect for partnering on. Right.

Bruce: Yeah, I think so. And then, and the partners go beyond the actual partners cuz you have also have, um, you gotta have good brokers, you have to have good team around you. Good attorneys, good title companies, uh, contractors, vendors, property management companies.

I mean, all those are very, are vital. Whether. You know, whether they’re your partner or if you, if you hired out [00:18:00] as a contractor, um, it’s really important to have those, those, those relationships, those resources. Strategic, yeah. In value. And you may not use the same, same partner in different cities. You might use one in one city and somebody else in another city.

We have, we have three assets, um, or three different mar. We’re in three different markets and we have three different property management companies. And it’s just, we found the ones that we feel are. The best for that property at that time when we bought it. Right? Yeah. That’s awesome.

Mike: So let’s talk a little bit about the, the power and the importance of surrounding yourself, uh, with people, whether it’s kind of coaching and mentoring, uh, at some point in your career.

Masterminds, like investor fuel where you can really kind of be around a lot of people that are growing and sharing, uh, resources and lessons learned and good and bad, Right? Uh, together. Like, just how, how I, I think, you know, you were like me in a lot of ways too, where early on you just didn’t think you needed anybody.

I’m gonna go figure it out on my own. Um, and then probably had some lessons along the way of like the power of that, right?

Bruce: Well, yeah, if, if we talk about the, um, the [00:19:00] Mastermind first and the mentorship second, the mastermind, what I, what I was really been intrigued with since I’ve joined Investor Fuel, that’s just been hugely powerful is not the successes.

You can read about those on LinkedIn or, or Facebook or Instagram. And those, those don’t excite me. I mean, they do in a sense. You wanna see people are doing, but what really, like, what I liked about our meeting we had, uh, in Nashville when we sat down with the investors, is they shared the challenges and the scars, and they asked.

This is where I’m struggling, Where can I get help? I’m like, so then, you know, for, for our business, our strength is finding good deals. Our kryptonite, or weakness, if you will, has been, uh, finding capital. And so when I brought that up, people are like, Oh, well I, I have. Access to, We just can’t find deals.

And so these relationships can be born that way in, in the, in the meeting. But the other thing is people shared in really personal stories on where they had mistakes, where they didn’t see things happening, where a property manager was stealing money and they shared openly what happened, how the property manager was [00:20:00] stealing money and ping it, and how they didn’t see it at first.

And, and they’re really open and vulnerable. And I, I think as a, if you’re gonna have a. A mastermind group. If they’re, if people are not vulnerable and real and authentic, then it’s not a mastermind group, then it’s just a, a group of people, uh, you know, thumping their chest. And I didn’t get that at all. I mean, there’s not one person I found in the group that’s a chest thum person.

Look what I did, you know, talk to me everybody, no matter how successful, Was willing to say, This is where I need help and this is where I’m stuck. And sometimes I could offer help and sometimes I can’t. But that’s okay. When we’re sitting in those round tables, unbelievable the amount people would share.

I’m like, you know, just, I get the warm fuzzies just thinking about it right now. I can’t wait till the next one. So that’s one thing about your group that has been, I’ve never seen before, is just the, the vulnerability is the term. I’ve used it a couple of times here and that’s really what it is. Really open, authentic.

Group of people. I’m super excited to be part of it. Glad you’re part

Mike: of it. And I know you were initially apprehensive to join, right? Like this maybe not would be for me. So maybe kinda share your

Bruce: thought. [00:21:00] Yeah, well we had met at, uh, at Cory’s boardroom, and, and I had said, he said, You gotta join and, and well, Cory’s Bruce, you gotta join.

Go talk to Mike. And I’m like, Okay. I seen Mike. He seemed, you know, I wasn’t sure. So I went and talked to you and you said, Yeah, we, you asked. And I said, Well, Mike, my concern is that all I’m gonna do is go there and take that. I, I have to be able to add value if I don’t add value. And all I’m doing is taking, I feel empty and hollow.

And he said, No, no, Bruce, you’re so open. You’ll be fine. I’m like, Eh, I don’t know. Well, since then, I’ve. Half a dozen people, at least in, in one meeting that I’m in regular contact with. Um, you know, I talked to two of ’em yesterday and one on Monday from, from this group. I mean, they, they’re becoming quite close and this has only been.

But three months. So I’m like, this is really neat. And then there was three people I met from the boardroom that are part of investor fuel, uh, that are now reaching out. They’re single family and they say, Hey, teach me about multi-family. Oh, I’m glad to. I’ll get on a call anytime and, and tell you what I’ve done right and what I’ve done wrong, what I’ve learned from others.

And they’re like, Man, you’re so willing to share. And I’m like, This is great. So I am [00:22:00] able to supply what I was really reluctant. I thought, what value can I bring, Mike? You know, and I’m feeling it now. So that’s pretty exciting. So thank you for, uh, Yeah.

Mike: Glad, I’m so glad you were a part of it for the, And I, I always know when people have some concern that I can’t give enough that, that that’s a, that’s a good member for us because I think a lot of people, uh, in this industry do have a, do have the, not that people sit around and think about it, but they, they tend to be more of take.

Um, than givers. And our culture is very much based on giving. And, and I think you’ll, you’ll, you, you’ve probably seen in a short period of time, and you’ll continue to see it as you go on. The more you give, the more you get back. Right. And there’s just this reciprocity feeling of people that have been given so much, um, or know that they have access to have any questions answered, is that they want to answer questions as well.

They want to help out. They wanna find ways to help other people, and that that’s the, that’s the foundation of our culture at Investor.

Bruce: Yeah. What was really incredible for me too is that that other meeting, the million dollar meeting we followed up with, that I showed up to, and there was only a few multi or multifamily people there, but it [00:23:00] wasn’t, it, it was about mindset and about overcoming personal challenges and how do you break, how do you have breakthroughs?

And the people that spoke there were just, I mean, to this day I, I, going back over my notes and just really studying what. What, what did they bring to the table? So, yeah, it’s really been great as well. Yeah, Yeah. Um, Bruce, um, the mentor, just real quick, um, just on the mentorship, I wanted to share that one of the things that I was real reluctant was to seek out those that have been before, cuz you think, why would anybody want to, to be part of, uh, why would they want to help?

Well, Just through a, a customer of my brother, he’s in construction and he was remodeling a class, a apartment, buildings in Phoenix, and they’re huge buildings and they’re, you know, tens of millions of dollars. He’s, you gotta meet this guy. So I met him and I, I said, You know, I need, I want somebody that can kind of teach me what to do, right, what to wrong.

He said, I can be, I can be resource to you. We get on regular Zoom calls, whether he’s here or San Diego or in his cabin up in northern Arizona. They own, they’re funds. They have, uh, half a dozen funds. The [00:24:00] largest is a billion and the smallest is 300 million in their REITs. And he’s willing to talk to me about stuff and I’m like, Wow.

So I’ve asked him about these cycles and he’s explained, you know, he’s been 50 something years in business, so he is been through a number of cycles. I’ve been through one. He’s, he’s sharing the signs and the experience and the br the bruises and the bumps and the challenges, um, how his first business failed and he and his, he and his brother were just dead broke and they were getting, getting outta construction and getting into other things.

And now he’s, uh, principal in a very large organization that owns property. All, you know, it’s all west of the Rockies, but they own a lot of real estate and. They’re willing to share those that are willing to listen and then share some value in return. So what I do is I refer ’em to good restaurants, I guess as return.

Cause he keeps commenting that you’ve, everyone you’ve sent me to has been perfect. You know what, what do, what do you recommend next? And if that’s all it takes, by golly, I’ll send them a , a list of ’em, right? Yeah, for sure. But finding, But the biggest thing, Mike, is that you. Talk to those that have been there before.

The, those that have [00:25:00] blazed the paths of, of multiple cycles, cuz the last five years in this business in the United States is not going to be the norm for the next five. And just realize that, Right? And who’s gonna know that? People that have been through other cycles. And so just listen to them and be, be, be aware that, that you’re.

The, the, the times. We already know that after the last, the last six months are different than the previous six months. I mean, it’s been insane what’s happened in some respects, but it’s a repeat of other cycles. So just be conscientious of how to protect yourself and the down cycles. The mentors know that.

Yeah, for

Mike: sure. Yeah. One of my biggest eye openings as a real estate investor, and it took several years to get it, is to surround yourself or find people. And I’ve got a couple mentors like the one you mentioned there that just have been around for a long time and they have wisdom and they just this realization that.

Like the stock market, depending on where you’re at in the cycle, you pull out different tools, right? And so in the stock market, if, if the market’s overheated, people might pull back and go into bonds or something that’s less risky. [00:26:00] But real estate’s the same way. There’s different extra strategies or different ways to play the business based on where you are in that market cycle.

And you only know that after you’ve been in the business for a while when you’re new, if you’re primarily a wholesaler and all you do is wholesale, you don’t understand other components of the business, that you really have to be around for a long time to realize that. You just have different strategies in different markets.

Bruce: Oh, e e, exactly. And then like even for now, what we’re looking at specifically is, is ways that we can buy where there’s either, um, consumable mortgages, you know, f. Permanent financing. It plays a fanny, fred or bank loan that’s consumable, which there are a number of them, or, um, seller financing. Those are really the two areas we’re f hyper focusing on right now to make our offers because we don’t know what the lending’s gonna be over the next two to three months.

If we go into escrow today, then they may come back and say, You know what, for this deal it’s uh, it’s no longer, uh, 65% or 70 or 65% loan. To value, we’re only gonna do 60%. And, and we [00:27:00] know people that have had that happen right here in this town in Phoenix in, uh, the last month where they had to bring an extra seven digits to close a deal just because the lender said, We’ll keep the same rate, but we’re dropping 5% on what we’re gonna fund because of the uncertainty in the market.

Well, that’s, that’s a scary place to be if you’re syndicated raising.

Mike: Yeah. Yeah. And I think it’s great for people to hear, cuz I think on the single family side, people understand subject tos and creative finance deals are, are really gonna, uh, be an important part of the, of the mix of this business single family side going forward.

But even on the multi-family side, in fact, a lot of, as you know, a lot of multi-family loans. By definition are consumable, or they have the ability to assume those, They might have prepayment penalties and stuff. So they also allow people to assume those. So no matter what kind of real estate you’re in, getting creative and finding ways to lock in some, uh, cheaper rates is, is gonna be key certainly for the next, you know, couple years.

Right?

Bruce: Yeah, probably for the next year and a half. You know, the forward curve is saying that the [00:28:00] 2024 we’ll see a, a pullback in the rates, but who knows? I’m, Yeah, who knows. We don’t have a crystal wall. But one of the things that I really have latched onto this, this last year was, uh, there was a book by, um, Harris, um, Harris, I’m drawing a blank on his name, but it’s catch uh, catching knives.

I think it’s Jack Harris by the way. Catching Knives book is phenomenal. Tells you like if you’re looking at a deal rate today and you’re think, you know, I don’t wanna buy that deal today, cuz the market’s gonna fall. Well, when the market falls down, that property’s not gonna be available on the next, When it’s starting to swing back up, you look, oh, the person that bought it has cash flowed all through those two to three years of that downturn.

Now they’re back to where they were when they. But they had that cashflow for those years, and now they’re making money into the future. So you want, you buy when the property’s available and the numbers work and they can, and you can cash and cover the, the, the debt service. As long as you can do that and run the bus, run the, the basic business, it doesn’t matter when you buy really.

Right? Yep, absolutely. So,

Mike: uh, Bruce, if folks [00:29:00] want to connect with you in any way, learn what you’re doing, connect where,

Bruce: where, where can they go to? Well, the best way to do that is go to berson.com. That’s b a k e r s o n.com. And right on there, you can get on my calendar and, uh, send me an invite. Uh, it’s an open invite to get on my calendar and, and I’ll schedule a, a 20 minute call with anybody that asks.

That sounds great. That sounds

Mike: great. Don’t, uh, hopefully you don’t get inundated here. So hope, I think a lot of people can get some good value from you. So, hey man, thanks for sharing your story today. Really appreciate it. So glad you’re a part of the group and thanks for all the

Bruce: kind words. Well, thanks Mike.

No, I’m super excited. A couple weeks we’ll be at the next event and so it’s gonna be awesome, right? Yeah. Well, glad you’re a part of

Mike: it and everybody, I appreciate you, uh, learning some lessons today. If you’re interested in transitioning into multifamily, um, and you’ve been a single, a successful single family investor or you’re already actively doing a lot of, or you already actively own a lot of doors in the multi-family space, our cash flow group, which is our multi-family group inside of investor fuel, might be a fit for you.

That’s. Bruce is a member. It’s uh, it’s a great group and [00:30:00] lots of folks, I’ve been a GP and a lot of deal flow is happening inside of there. You just go to investor fuel.com and learn more and we’ll tell you a little bit more about our cash flow group. Um, and if you’re a single family investor, we’d love for you to learn more about investor fuel as well.

As Bruce just said, our next event’s coming up here really in two weeks, so by the time we publish this, uh, might be passed, but the events are right around the corner. We always have a lot of amazing activities going on, so. Again, I’d advise you to go to investor fuel.com to learn more about all of our groups, and we appreciate you a bunch.

We’ll see you on the next show.

Bruce: Are you an

Mike: active real estate investor? If so, and you want to latch onto the power of surrounding yourself with over a hundred of the nations leaving real estate investor. 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, simply visit investor fuel.com

Bruce: to get started.[00:31:00]