How to Grow Your Investment Portfolio Without Spending a Dime

Brett McCollum (00:00.413)
All right guys, welcome back to the show. I am your host Brett McCollum and I’m here today with Craig Eppler. Today we’re gonna be talking about how Craig grew his portfolio without using his own money. Before we do guys, at Investor Fuel, we help real estate investors, service providers, and real estate entrepreneurs to 2 to 5x their businesses and allow them to build the businesses they’ve always wanted and allow them to live the lives they’ve always dreamed of. Without further ado, Craig, how are you, man?

Craig Eppler (00:26.456)
Doing well bro, how are you doing?

Brett McCollum (00:27.707)
Man, doing good. Really appreciate you being here with me. It was super cool catching up with you, getting to know you a little bit. And I’m excited for you to share a lot of the things that you’re doing and are looking forward to. before we get into all that, let’s back up a little bit, give some people some history, some context, and catch us up to speed a little bit. Who is Craig Eppler?

Craig Eppler (00:34.573)
Likewise.

Craig Eppler (00:48.91)
Craig Eppler, good question. I grew up in Lehigh Valley, which is about an hour and a half north of the Philadelphia area. So Northeast. Went to school out in York College. So went to college out there, majored in finance, always loved numbers, but frankly didn’t like the theoretical version of numbers, more like the practical side. So I thought finance was a good fit. So I went through there, had no idea what I really wanted to do.

I think a lot of people don’t, but I interned at seven different places, right? Everything from insurance to investment management to advisory, all these different things. Got my MBA out there as well and then moved to Philadelphia to start my career at Vanguard. There I was on the derivatives trading desk, which sounds a lot sexier than it actually was, but it was cool, fresh out of college. You got to deal with a lot of big numbers because there’s a lot of

Brett McCollum (01:20.711)
We have.

Craig Eppler (01:48.654)
clients, 401k plans that are housed there and they just deal with a lot of capital. I worked there for a couple years, but wanted to switch over to something that I could feel the client a little bit more. Vanguard is such a big firm that you don’t really have access to the clients as much and you don’t really feel the big decisions you’re making with all these different zeros at the accounts. So I moved over to a firm, an investment advisory firm also in the Philadelphia area.

started there as an investment analyst and moved my way up through the seven years I was there to a senior portfolio manager. But that chunk of time is kind of where my real estate journey actually began. I was living in Center City, Philly at the time and commuting out to a suburb. And while it’s not that far from a mileage perspective, the traffic was horrendous. So I really got into podcasts.

Brett McCollum (02:41.298)
Yeah.

Craig Eppler (02:44.696)
didn’t always do the do the like real estate podcast, but found those kind of by jumping around. And I feel like a lot of your like listeners probably got into the like a bigger pockets podcast. So learned a lot through that and kind of thought, hey, if these guys can do it, why can’t I? So 2017 is kind of where my real estate journey began. But my first primary house and did a classic like I’m house hack where I rented the like the other two bedrooms out. Didn’t pay for the full mortgage, but it paid for them.

Brett McCollum (02:54.672)
Mm-hmm.

Craig Eppler (03:13.326)
I paid for like the vast majority of it, which really freed my cashflow up for my job to kind of start buying rentals. From there, two years later, I found a credit union that was able to give me 100 % home equity line of credit, which I don’t even know if they do that anymore. But I was able to pull on that and buy my next 16 doors with Creative Financing. After the 16 doors, I found a large portfolio.

also out in the center of PA. I’m not sure if I mentioned that, but all these portfolios are in Harrisburg, York, Reading area for those of you who know where that is. And then I bought my big portfolio, which was a 32 unit portfolio in Harrisburg. And I bought that with raising a little bit of money and just using debt on that. So I was able to kind of get into this whole 44 unit portfolio for only about $50,000 to $60,000 of my own personal capital.

So I’ll stop there. I guess, guess it’s kind of other things I do as well. I’ve since left the advisory firm and have started my own fund. The fund is a promissory note fund where we give investors nine or 10 % fixed returns. And I just launched a music royalty fund that closes at the end of April. So pending when this is out, you may or may not be able to get into that, but that’s a music royalty fund that gives investors yield at the tune of seven to 10 % plus an IRR of 20%.

But yeah, I’ll stop there. Brett knows a lot of information, so can dive in wherever you feel fit.

Brett McCollum (04:44.593)
There now I love it, man. That’s it’s incredible. A lot to to, you know, pull down, you know, it’s very interesting because a lot of people when we’re talking, we’re talking about flips or this or that and you’ve got a different, you know, maybe skill set coming into the real estate game, right? Because a lot of us, you know, that’s not how our start was, you know. So let’s walk back a little. It’s college. You’re trying to figure out who you want to be when you grow up, right? Yeah.

Craig Eppler (05:11.022)
Yeah, still am. No, I’m kidding.

Brett McCollum (05:12.957)
Guilty, I mean, I must have had like 102 majors, you I don’t really know. It just, you don’t know. I don’t know if you remember, when that was, I mean, you’re 21, 22 years old, you know, at this point, I’m guessing. How did you, what was the mindset like of like, I know I want to land here in the finance space, because there’s just not at an earlier age, at a younger age, there’s not a lot of mental like,

Yeah, this sounds smart, you know, to do like, because that’s not a it’s it’s more rare, I would say like, how did that come to be for you?

Craig Eppler (05:48.322)
Yeah, so I mean, I was always good at math. My dad was a CPA. I know I didn’t want to be an accountant, but because in my head, they kind of look backwards, right? When you do your taxes, it’s what you did in the past year. I thought finance was more of what’s in the future, which I thought was more interesting. So that’s kind of what came about. I got into kind of trading stocks, did a lot of that stuff early on. So to me, it was kind of fascinating playing with future value calculators. That sounds

Brett McCollum (05:52.881)
Okay.

Brett McCollum (06:05.232)
Craig Eppler (06:16.43)
super nerdy, but playing with that kind of stuff to see, okay, if I have this much money and I compound it by eight or 10 % every year, like this is how much money I’ll have in 20, 30 years. And just playing with those kind of calculators, I thought was very interesting. Didn’t know again, what I was going to do in finance. And a lot of people have a picture of like what people do in finance. And a lot of that is very different than it actually is. You you watch like the like Wolf of Wall Street and all these different things. That’s not what actually happens. I mean, obviously.

Brett McCollum (06:41.895)
Yeah, right.

Craig Eppler (06:44.11)
But I’m not sure if that is a question or not, but that’s really how I got it.

Brett McCollum (06:45.629)
No, that’s perfect. You that’s interesting because you grew up with, you know, there is a financial background growing up with dad being in an account. know, it’s in, at least it makes some clarity come to be. And then you get out of college, you start working. And how long, give or take, before you dip the toe in the real estate waters, how long were you in like the corporate America type?

Craig Eppler (07:08.334)
So I bought my first primary house just over two years after I graduated college. And then my first rental two years after that.

Brett McCollum (07:13.884)
Okay.

Okay. All right. So and then you were how long in working for like corporate America until how many years was that?

Craig Eppler (07:22.958)
So I house hacked, which I think I try to recommend for everyone. So I did that just after two years of being in the kind corporate America rat race. And then two years later, I bought the rental that was outside of my house. So yeah, two years and then two years later. So really only four years.

Brett McCollum (07:39.301)
Okay, so you were working corporately for four years, give or take, before you launched the fund? Is that kind of how that…

Craig Eppler (07:46.124)
I’m sorry, I’m sorry. So the timeline’s a little off there. Yeah, so it was two years before I bought my first rental, or I’m sorry, before I bought my first primary, and then four years before I bought my first rental, I was working in the corporate world for almost 10 years before I launched my fund.

Brett McCollum (08:00.655)
got you. Yeah, because some of that I was that’s why I was asking because a lot of with a fund and it’s most people I’ll say like this, get into the fund after they’ve been in the real estate game for 10 years, let’s say. And they’re like, I can launch a fund, you know, you yours is a little bit more. Yes, you had your own personal stuff, different things like that. But it wasn’t the I’m to run this professional real estate business for 10 years and then launch. But your background from your

Craig Eppler (08:14.22)
Right, right.

Craig Eppler (08:28.088)
Correct.

Brett McCollum (08:30.247)
corporate job probably gave you a picture of like, there’s a way to do something here. Can you talk about that a little bit? I think that’s really interesting.

Craig Eppler (08:34.903)
Mm-hmm.

Craig Eppler (08:38.414)
Yeah, so I dealt in funds, you know, because when I was at my old firm at the advisory shop, you know, our job was really, you we were a firm of 25 people. We managed about $1.5 billion. So it was my job along with, you know, two of my colleagues to place, you know, the kind of place like on client capital where we best saw fit. mean, honestly, mostly that was stocks and bonds. But as we got bigger, a lot of our bigger clients wanted exposure to other assets as well, whether it be real estate.

or private credit or private equity.

Brett McCollum (09:08.423)
What, yeah, when was that? What years was that? I have a theory in my head and I’m just trying to work through.

Craig Eppler (09:12.876)
Yeah, so I started there in 2017 and worked there through the end of 2023.

Brett McCollum (09:18.245)
Okay, and sorry, continue. So you were replacing different things. Keep going.

Craig Eppler (09:21.71)
Yeah, exactly. Yeah. So we started placing people in different kind of alts when those became more in vogue, honestly, and there were better ways for clients to access them. And as I kind of grew up in that space, I saw that a lot of our clients, frankly, lot of our clients were kind of mass affluent clients, know, 60-ish years old and a net worth of one to $10 million was kind of our bread and butter client. So they were well-to-do people.

But a lot of them didn’t care about the intricacies, in my opinion, of the stock and bond market and really just wanted a piece of consistent income, which we all know here. If you own enough real estate or a lot of alts give you a more consistent income stream than stocks or bonds. So I created the fund based on that knowledge. That’s kind of where I came up with the, I’m promised, there are no fund, which gives a fixed 9 % return. And the reason I came up with that number, one, it’s like fairly competitive for the market. And two, 9 % is about

Brett McCollum (10:11.953)
Mm-hmm.

Craig Eppler (10:17.966)
what the S &P 500 has done for the last 50 years. So you’re getting kind of the stock market like return with without like the like a volatility, which we’ve seen a lot here recently.

Brett McCollum (10:27.677)
Sure. Yeah, we can talk about that too. I mean, especially from the, I don’t know, from the date of this show, you know, I’ll let people date it back, but let’s just rewind, I don’t know, three or four days ago when the stock market, everybody’s freaking out right now, right? I mean, if you have a 401k, maybe don’t look at it right now. Maybe just don’t look.

Craig Eppler (10:30.497)
Yeah.

Craig Eppler (10:46.862)
100%.

Yeah, just don’t log in. You’ll be okay.

Brett McCollum (10:54.461)
Now, I’ll go back up. The reason I asked you those dates earlier, because here’s the theory. So being in the real estate game for a long time now and looking at in the wholesale space is what I’ve done. A lot of the people in the iBuyer game really started hitting around 18, 19. Were you guys, when you were working in that job,

Craig Eppler (11:16.483)
Mm.

Brett McCollum (11:21.765)
Is that something you guys were seeing right on that timing too? Or was that kind of in existence before then? Like, what did you guys see?

Craig Eppler (11:28.654)
It was a round. Our clients weren’t as into the real estate space. We were more allocating, frankly, to the largest guys that had to buy real estate. We were buying the thousand-door multifamily unit or kind of like a building and in a fund that held like a few billion dollars. Right. So was at the very large scale. Our clients at the time didn’t really want to be in some of the smaller stuff. So they knew of it, but it wasn’t really top of mind in terms of what we were talking about.

Brett McCollum (11:58.641)
Yeah, because I’ve always tried to pinpoint that shift. everybody knows BlackRock, Blackstone. There’s how many trillions in assets they own right at this point. They made a clear shift in an approach to just buy out single family real estate, which was in my head very interesting. And I get it and I understand why.

Craig Eppler (11:58.894)
If that makes sense.

Craig Eppler (12:06.434)
Sure.

Brett McCollum (12:26.461)
I wonder why they never did it before and why now all of a sudden they’re doing it. It’s like, so coming from your background, I was wondering, did you have any insight on that? It’s always a question I’ve always kind of wondered. These are the smartest investment people on the planet, allegedly. And why now, right? Versus before, because real estate has been around since the beginning of time.

Craig Eppler (12:41.026)
Mm-hmm.

Craig Eppler (12:50.53)
Right. I think in my head and I, you know, I don’t work for those firms obviously anymore. But if, but if, if, if I were to guess and kind of what we’re hearing at the time is, you know, Wall Street can get pretty creative with how they invest. And at the time, you know, class A and B plus multifamily was pretty richly priced. So when they were allocating and kind of adding to their portfolio, they needed to, they needed to get the returns from somewhere. And single family real estate obviously has done well.

Brett McCollum (12:52.669)
Sure.

Brett McCollum (13:01.169)
Mm-hmm.

Craig Eppler (13:20.366)
and a lot of those firms frankly got burned with those programs, kind of buying everything in sight, but it was another way for them to market another sector that they were in, right? If you had a big, big fund, right? A multi-billion dollar fund, could be in storage. You could be in multifamily. You could be in whatever else. Now you could add single family as another asset class. So it was a way for them to diversify quote unquote, away from some of the stuff that they had, just something else for them to talk about as well. So I think it was more of a, you know,

What are other assets that we can invest in that are still under this great umbrella that we love?

Brett McCollum (13:53.351)
Yeah, yeah, it was just funny. And I agree with that, by the way, like the diversification of it all. It just was one of those, like, I never understood why now. I do think it was probably interesting that rates went to near zero shortly after that. Like, maybe there’s something to that. Potential. Again, I’m just speculating, right?

Craig Eppler (14:02.21)
Yeah.

Craig Eppler (14:17.826)
Potentially, yeah.

Brett McCollum (14:22.845)
But I just was wondering from somebody that’s worked in that industry space for a bit, some insights that you may have seen and heard and done, just curious on that. So yeah, just scratching that itch for my questions, honestly. Yeah, so the background though, that it’s just really a, you started buying your own stuff, you worked up to a 44 unit portfolio and you did it largely on 44 units.

Craig Eppler (14:36.344)
Nope.

Brett McCollum (14:50.749)
Craig, if you don’t wanna share it, I’m not gonna force you. What is the value of that real estate today?

Craig Eppler (14:55.822)
All of the, so if you combine the value of all the real estate, we’re looking at seven to $8 million, depending on what marks are. Um, that’s kind of the rain. Yeah, sure.

Brett McCollum (14:57.085)
community.

Brett McCollum (15:03.003)
Yeah, let’s call on the low end. Let’s call the $7 million number. And you used how much of your own money?

Craig Eppler (15:09.518)
50 to 70 grand, depending on where you want to it.

Brett McCollum (15:13.597)
Yeah, that part is what it’s impressive, right? Like the cool thing. how did you get the skill set to? Because I mean, it takes a lot of people a long time to figure out like how to leverage properly, right? I’ll be able to be because you, you know, you’ve got the books, you’ve got the you know, you know, the rich dad, poor dad, the, you know, nothing down Bob Allen, you’ve got there’s there’s material that people can buy and do and so how are you able to kind of

Craig Eppler (15:32.984)
First.

Brett McCollum (15:41.287)
come up with that strategy or had you always considered it? Like how did that work for you?

Craig Eppler (15:46.37)
Yeah, I mean, I listened to a bunch of podcasts. I like to read as well in terms of like the real estate books, but I listened to a bunch of podcasts. And you know, there’s guys like me and you on here that like actually talk about this stuff, right? And they were doing this years and years ago. And you kind of heard these stories and like the tactics weren’t all that complex, especially coming from my background in finance. I’d always thought of stuff very black and white in terms of how to structure deals, but real estate really allows you to get super creative in terms of.

how you put something together. And I thought that was interesting. So my goal after kind of my first rental was, wait, I don’t need to come up with 20 % every time to buy a house, right? You know, there’s a bunch of different ways to do that. I don’t need to use my own money. Like people at the time, I mean, when rates were at zero, was like, kind of like I’m raising debt from people at 7%. And they thought it was like the best thing in the world, right?

So there’s different ways to get into these deals or give people a piece of the equity pie. To me, from the learning perspective, just to kind get back to your question, it was more of just having the interest and having kind of like sparking the curiosity, like, all right, here’s this deal. I think it’s interesting. It’s something that other people aren’t looking at. I think that’s another thing that people kind of don’t realize is like, oh, it’s just because it’s a deal for me doesn’t mean it’s not a deal for you. To me, a lot of deals are in the actual terms.

Brett McCollum (17:04.849)
Right.

Craig Eppler (17:09.614)
Right? how you can structure it is really, in my opinion, like three quarters of it. Obviously, you have a pencil, you got to be careful with leverage because it can bite you in the butt. But as long as you protect yourself and kind of make sure that your eyes are dotted and your teeth are crossed, I think there’s a lot of ways to get into real estate with not a lot of

Brett McCollum (17:28.431)
Interesting. Yeah, I mean, I agree 100%. It’s the learning how to structure deals. I think that is a huge right? and, you know, I’ll be honest, mean, fairly quickly structuring like deals, you know, from Yeah, I love the fact you have that financial background in the acumen to do. Was is there any crossover from what you did with like, you know, the pre you know, your previous career?

Craig Eppler (17:34.008)
Yeah, that’s the biggest piece.

Brett McCollum (17:56.729)
into how you structure real estate deals for yourself? Was there any crossover there?

Craig Eppler (18:01.422)
A little bit. It was mostly in kind of how it was modeled out, right? So I was very comfortable in Excel. So just kind of modeling out like, okay, rents are this, this is what insurance costs is what repairs are. Like modeling that out, I mean, I could crank those out really, really fast. Just like kind of like back in math. Now I don’t even need it, right? Like you look at a deal and you can kind of look and be like, this probably works with about this much cashflow and I can be probably within like 50 or a hundred bucks per month kind of thing. So I think that was the biggest crossover. The thing I learned

over the course of buying all these units was every seller has a different need. And some of those needs are quite odd, think. I think. And just finding stuff, right? I know it sounds crazy, everything I bought was on the MLS. So finding stuff that’s mislisted is really how I found almost all of my deals. Stuff, for example, I bought a three unit portfolio of three single family houses. It was listed as one.

Brett McCollum (18:45.543)
Okay.

Craig Eppler (18:57.578)
And it was at a higher price than everything else in that neighborhood. So no one looked at it with and had no pictures. Right. So stuff like that. I had another guy who, and I won’t name names obviously, but where I would buy it and he wanted to say that he sold it for X. So I’m like, okay, we can sell it for X as long as it appraises. And I want a seller credit of this, meaning I bring less cash to the table. Right. So we both win. You know, things like that. I think people don’t realize that sometimes the motivations of sellers aren’t always

Brett McCollum (19:02.877)
Mmm.

Craig Eppler (19:26.52)
like the highest price possible, you know?

Brett McCollum (19:28.349)
Yeah, yeah, we are typically there’s three things in any given transaction that people want speed, convenience and price. You know, you can pick two, you cannot have all three. You know, and so we, we, so we focus on our side of like, how do you structure something that makes sense? You know, you want, you want, you know, price, cool. You got to sacrifice some time potentially. You know, you want this, you got to sacrifice this. What’s most important and then

Craig Eppler (19:40.334)
That’s good, I like that.

Brett McCollum (19:57.297)
their reasons for it. I think we often like, we can uncover the motivation, which is not ever, you get somebody that sells a house at a discount, by the way, right? Of any kind. There’s a motivation of some kind. And it’s our job to really uncover what that is and then not take advantage of it, but to solve it.

And I think it’s with your ability to structure creatively like that, your ability to do more volume and deal size, it grows. that thing, it’s just really cool. I love talking to people about creative finance because personally, I don’t like it as much as I like some of the other stuff. But you want to know why? It’s probably because I’m not as good at it. Right?

Craig Eppler (20:49.518)
Definitely, yeah.

Brett McCollum (20:50.223)
If I was like a wizard, man, I’d be like, dude, creative finance, but intellectually I go, yeah, that’s a super skill. So cool that you do that, man. And it’s really interesting just the way you approach it from that, hey, as a finance guy coming into it, how does this just, like you said, back of napkin math leads me to a question.

Craig Eppler (21:12.472)
Yeah, shoot.

Brett McCollum (21:14.897)
the people that I know that do deals at the highest levels are not typically putting things out on like, you know, look at this fancy, you know, I don’t know, pro forma. Yes, you pro forma, but like, they’re not jumping into deals because of a pro forma. They’re running it on back of neck and a lot of times I’ve found. Do you think that potentially we over complicate these?

you and if it doesn’t scratch, because my, guess my question is, if it doesn’t scratch out on the back of napkin, it probably isn’t a deal on a perform either. You’re the finance guy, right? So I’m like, all right, tell me, I, am I oversimplifying that?

Craig Eppler (21:48.526)
Right? I 100 % agree with that. Yeah.

Craig Eppler (21:56.052)
I mean, I always put the Excel sheet out there just for my own knowledge. I would, if anyone’s getting started in that, like would definitely say like do a bunch of those. Because if you do 50 or 100 of them, like there’s not a lot of levers to pull when you’re buying a, like I’m buying hold at least, right? It’s like, okay, what can you rent it for? What are these different costs? If you do a BRRR method, what, you know, there’s not a lot of modeling to it. I guess I’m relative to what I’m used to modeling out.

Brett McCollum (22:23.195)
Right.

Craig Eppler (22:24.588)
So to me, your point, if it doesn’t pencil on like on the, like a public map, unless you’re buying like a weird complex deal, that’s like a mixed use thing and it’s a weird, it’s, have to slice the property somehow. But for normal every day buying a like a three one townhouse. Yeah. If it doesn’t pencil, then I don’t think you, don’t think it’s necessary to go through the whole kind of five year projection. Cause it’s probably not going to be right anyway.

Brett McCollum (22:34.898)
Sure.

Brett McCollum (22:48.317)
I think that’s a lot of investor problems like, I have to run it through all the things and spend all the time and do this due diligence and do, do, do, do, do, do. I’m like, you just wasted hours of your life for that. could have, does it scratch here? Yes. Okay. Now go and do that. Does that make sense? Yeah.

Craig Eppler (23:03.573)
Right. Yeah. just, and just being, again, just not taking no for an answer. If you really want something, unless that they really are stuck on one thing. If, if, if, you know, cause if you come to them and be like, Hey, can you do a seller financing? They say no. It’s like, okay, can you do this? You know, just giving them multiple options. Like it’s like, it’s just like an old school sales technique. Like don’t give someone a yes or no question. Give them three options and none of them are no, you know.

Brett McCollum (23:27.965)
Yeah, I like that. No, that’s not wrong. I want you to do me a favor. So on the funds, they’re kind of unique, right? And by the way, if you guys are listening and you’re thinking real estate funds and how these are structured, it’s unique, guys. So pay attention here. Craig, you were telling me a little bit about before pre-show and it’s very interesting. So tell me how they work, kind of what maybe the asset classes are, that sort of thing.

It’s just, and I’ll say this, the reason why I want you to bring it up is I know a lot of these folks listening, might be flipping a bunch of houses, doing a lot of things like that, and you’re generating high income, but you’re also having to pay taxes out at the highest level too, because it’s short-term capital gains, right? You have to pay it out. So can you explain what you do a little bit more and go into some detail, and if you don’t mind.

Craig Eppler (24:23.586)
Yeah. So I’ll start with our core funds. My firm is called EPLOR Capital. It’s just my last name and then like I’m capital. Our core fund is called the I’m promissory note fund. And really all we’re doing there, it’s kind of stupid, simple in terms of what yours is. you know, say Brett, you’re a client of mine, right? You put $100,000 into our fund. Starting month one, you get a check and every month thereafter you get a check for the next three to seven years. And that’s fully customizable to you. So think about it as you’re almost buying a bond.

with my fund and then the fund is commingled across every client that’s in the fund and we’re investing in again, old school cash cow businesses. So this can be anything from airline parts to an inventory to a franchise to oil and gas to insurance. These are businesses that have been around at least 10 years, have really good margins, have an operator who’s been there a while and are really looking to grow or kind of kind of like I’m restructured what they’re doing. And to me, the biggest question I get is like, why wouldn’t they just go to the bank?

and just kind of pay you less. Since 08, 09 and the kind of real estate crisis there, most banks frankly pulled back from kind of lending to most businesses. Or if they do, they make it very difficult. I still do my due diligence and we have first liens on hard assets, but it’s a lot easier to deal with us than it is to deal with JP Morgan Chase. Not to call them out, but any major bank, right?

So that’s kind of where this whole fund actually came from. And honestly, the space, the private credit space as a whole has honestly gotten huge over the last five to 10 years here. I’ll stop there. There’s a lot of information.

Brett McCollum (26:07.643)
Yeah, no, that’s really cool. Yeah, so I like the way you approached it, the cash cow businesses, right? So a couple questions that I, of my just hearing that, because this is, I think we see it from afar, but don’t necessarily recognize what you’re doing. The person that, let’s say the businesses that you guys quote unquote lend to, right?

What might be some of the, because I’m looking at, I’m looking in my mental brain of like how the crossover is, because they’re raising their hand for help too.

Craig Eppler (26:48.686)
100%. Yeah, I my job frankly is the intermediary between clients looking for cashflow, right? You’re looking for a 9 % fixed rate return and don’t want to deal with frankly, lending money out to all these individual businesses, but still like the sectors that they’re in. So my job is to kind of make sure that those people are taken care of as well as making sure I’m prudently lending out the money to companies that need it. I mean, ideally they don’t need it, And that they’re in a good kind of like…

kind of like a position, but these guys are using it mostly for growth capital. Right, so they’re looking to expand, they’re looking to buy the next location, they’re looking to kind of buy more inventory, that kind of thing.

Brett McCollum (27:27.965)
they’re not looking for from a bail me out of this situation. Yeah, that’s you. And that’s kind of what I was looking at is like, man, like, and I didn’t think you’d say that, by the way. I was like, I was glad you responded the way I thought you were. But so these are growth minded organizations. They’ve been around, you said at least 10 years typically. So very safe from, in theory, they’re very safe businesses that you lend to, you know, would you say?

Craig Eppler (27:31.298)
Neither not to stress at all. Yeah.

Craig Eppler (27:46.21)
Mm-hmm. Yep. All of them have.

Craig Eppler (27:56.846)
100%. Yeah. And again, everything we have has some sort of hard asset backing it. I learned that from real estate, right? You always want some sort of hard asset backing it if you can from a, I mean, there are assets that you can do really well in without that. But I think in a more conservative fund like this, it made sense for me and my clients to make sure that it was hard asset backed. So for example, there’s a group that does e-commerce stuff, right? And we have inventory that we have a first lean against. And another important part of the fund,

Brett McCollum (28:17.073)
Okay.

Craig Eppler (28:23.534)
is that there’s a coverage on this, right? So we all know that if a product doesn’t sell, right, there’s a reason it doesn’t sell and that the value of that inventory is probably not what you think it is. For that group, we have a three times coverage ratio, meaning if we lent them $100,000, the mark right now is at least at $300,000. So if we did need to sell it, we could sell it at a deep discount. Yeah, 100%.

Brett McCollum (28:45.903)
It’s like landing on real estate, it’s LTV. Yeah, I think it’s super, yeah, that makes a lot of sense. Okay, that makes perfect sense. I love that, by the way. Good on you guys. More curious for me, selfishly, because I am a musician I love, and the royalty fund.

Craig Eppler (28:58.604)
I’m

Craig Eppler (29:04.654)
Yeah, so this is so what I heard a lot last year. So I launched this fund in March of 2023, kind of ran it parallel to my corporate gig and then then launched and then just kind of went on my own at the beginning of like I’m twenty twenty four. So the promissory note fund has been around for over two years now. But in the first kind of year and a half of business here, a lot of my investors, lot of my clients thought that the promissory note fund was cool, but they wanted a little bit more juice, for lack of better words. Right. They want a little more upside.

So I’m like, okay, we can give like, we can give equity upside to things. And I come across a lot of different deals. mean, my job is to go through deals all day, right? So I’m looking at three to 10 deals a week, depending on what comes in. So I get a lot of deal flow and, you know, I met these guys last year, really like what they were doing with the, like a music royalty space. And I thought it was a unique way to attack this. I’ll give kind of like the quick, kind of like the, like, the, like, I’m quick story here. I know it’s not real estate focused.

But I think there’s a lot of similarities, honestly. So I’m not sure if you guys have heard, a few years ago, Justin Bieber, obviously popular, I’m kind of like a pop thinger, sold his music royalties to Sony Ventures to the tune of like $200 million. Right? Now, what this group is doing is they’re not going after the Justin Bieber’s of the world, but they’re going after the people who work for him. So his songwriters, his producers, his managers, people like that.

Brett McCollum (30:03.824)
Of course, yeah.

Brett McCollum (30:17.725)
Yeah, a lot of money.

Craig Eppler (30:30.606)
who still get compensated partially through music royalties. So these guys are getting checks every single month or every single year from the amount of times that his songs are played on Spotify and iTunes and TV commercials and TikTok, all this other stuff, right? So what these guys are doing is they’re going around and kind of finding those smaller guys, for lack of better words, and gathering them up into a larger portfolio. So they’re raising $150 million to buy up these smaller guys and they’re paying only

five to kind 10 times multiple on their money. Once they bring all that together and kind of put it in one nice pretty package, they’ll sell it to a big private equity company like a Blackstone or a KKR or even a like Sony Ventures. And because that group doesn’t have to do the work to kind of go around and find these smaller guys for lack of better words, they’re willing to pay a multiple of 15 to 20 times. from an investor perspective, I honestly like it a lot because it’s an asset that cash flows, right? Every time me or you are on Spotify,

Brett McCollum (31:21.533)
Mm.

Craig Eppler (31:30.094)
and listen to Justin Bieber or whatever, like your music of choices, they get paid a fractional penny of that. And if you kind of multiply that over this big portfolio, it becomes a seven to 10 % yield, which isn’t the worst thing in the world. So you’re getting paid to own it. And then at the end of it, you’re getting the multiple, right? So you’re buying these things for five to 10 times and selling them for 15 to 20 times, you’re getting that expansion as well. So on $100,000 investment, you’re getting like $10,000 a year in yield.

And then at the end of the term, you’re going to get a check for two to $300,000 as you’re like a multiple. So it gives you a blended IRR, if you kind of blend it all together of 20-ish percent, which is obviously much more attractive than like the 9 % fixed return. Obviously it’s a lot safer than that one, but it’s just a different investment.

Brett McCollum (32:10.62)
Wow.

Brett McCollum (32:18.021)
Yeah, dude, super cool. I love the way that your mind works at looking at different opportunities. Because I think most of us get, know, like it’s not to say that this is a real estate show. So it’s nice to not say and we know that real estate is great. It’s a hard asset. You know, you can predict that you have it yourself. It’s part of your, you know, but I like the fact that you look you’re looking outside of simply just real estate and not being stuck there and then but applying the principles maybe from real estate in some of the ways.

Craig Eppler (32:22.382)
Yeah.

Brett McCollum (32:47.961)
into those other things. think it’s really, it’s unique, man. I’m so glad to have met you and talked to you. It just expands our horizon of what’s possible. Yeah, to that point, how can people connect with you, get to know you a little bit further?

Craig Eppler (32:58.414)
I appreciate that.

Craig Eppler (33:03.586)
Yeah, so if you’re interested in the fund investments at all, can find us at EpplerCapital.com. It’s my last name, E-P-P-L-E-R.com. I’m sorry, EpplerCapital.com. We’re on LinkedIn, we’re on Facebook. If you want to shoot me an email, you can shoot it to the info one. So it’s info at EpplerCapital.com. That’s where all the information is. But yeah, we’re pretty active there. We’re posting probably three to five times a week, as you can see our content there.

Brett McCollum (33:26.085)
Amazing dude. This has been super cool. I definitely made me my mind’s just racing, you know, like I’m thinking a lot and Yeah, good for you. I love that Yeah, man, seriously. Thanks for coming on the show with me today. I appreciate you being here Yeah, and guys seriously connect with Craig look into that. I mean, it’s It’s really unique. I love it man. So cool. Well guys, I appreciate you being here and hanging out with us today We’ll see you guys on the next episode. Take care everybody

Craig Eppler (33:31.918)
I love it. That’s great.

Craig Eppler (33:39.466)
Thank you, Brad. I appreciate it.