Adapting To The Market After 20 Years

Brett McCollum (00:00.887)
Welcome back to the show, guys. I’m your host, Brett McCollum, and I’m here today with Brad Neal. And today we’re gonna be talking about how Brad has adapted to the market after nearly 20 years of being in the industry. So, pretty excited for the show. Brad, welcome, and I’m glad to have you,

Brad (00:03.235)
So.

Brad (00:08.141)
Yes, sir. Thank you, Brett, for having me.

Brett McCollum (00:20.003)
Perfect. All right guys, hey, at Investor Fuel, we’re here to help you guys as real estate investors, service providers, and real estate entrepreneurs to 5X your businesses to allow you guys to build the best business you’ve wanted and the lives that you’ve always wanted and dreamt of and to create for yourselves, okay? So Brad, again, thanks for having us, man. I’m glad you’re here with me and welcome to the show.

Brad (00:41.122)
Yes, sir. Thank you very much.

Brett McCollum (00:42.659)
Cool, all right, well I’m excited to talk about how you adapted to the market, what you’ve done, but before we kind of get into all of that, give us a little background, Brad. Who’s Brad, how did you get into the industry? Catch us up to speed, man.

Brad (00:56.394)
Okay. You know, I’ve been in the, kind of just stumbled into the real estate industry, you know, back when I was 18 years old, like any other 18 year old, kind of looking for some direction, trying to figure out what you want to do in life. And I read a couple of self-help books, you know, trying to pump myself up and figure out which direction I wanted to go and came across

I read a few and came across one that was, it was titled, Find It, Fix It, Flip It. yeah, kind of walking you through how to flip houses. And you know, this was back in 2006. So, you know, the market was just about to crash basically. And so not the best time probably to jump in, but yeah, I started flipping houses at

Brett McCollum (01:27.737)
Okay.

Brad (01:51.659)
18 years old back in 2006, I pulled out a small loan. It was a, I bought a house for 30,000. I got just a conventional Bank of America loan and put about 30 into it and sold it for around a hundred. And I thought I was on top of the world at 18 years old, getting a check at the closing table for, after closing costs and stuff, probably $25,000 or whatever.

Brett McCollum (02:19.897)
That’s huge.

Brad (02:21.002)
Yeah, so I I got the bug from then on.

Brett McCollum (02:25.881)
I bet so. Man, that’s why, so 18 years old, man, at 18 I was nowhere even close to thinking about it. You know what mean? Good on you for that, man. That’s really cool. So this is back in 2006. Yeah, that’s when the market was weird, but you know what they say, when’s the best time to plant a tree? Right, 30 years ago. When’s the best time to plant a tree?

Brad (02:34.634)
I appreciate it.

Brad (02:47.594)
Okay.

Yeah, right. Now, yeah.

Brett McCollum (02:55.481)
Right now. Yeah. So good for you, man. That’s really cool. So you started in 06, you started flipping houses. But I mean, you and I have talked, like I said, off camera a little bit as well. And you’ve been kind of adapting to different things in the market as you’ve gone for the last, you we’re almost 20 years into this. So you’ve been, you rehab, how long have you been rehabbing houses? Are you still rehabbing houses? Like, what does that look like?

Brad (03:09.073)
it.

Right.

Yeah, yeah, I’m still rehabbing houses. You know, I.

I actually got into some commercial real estate, which I never, you know, I’ve never thought that I would venture into kind of that sector. But yeah, to this day, I’m still rehabbing houses, doing commercial real estate. And then, you know, most recently I’ve been dipping my toe in wholesaling for the past year or two. So, yeah.

Brett McCollum (03:51.735)
Nice. Yeah, that’s all right. So let’s start at the, let’s start at rehabbing. All right. You got the bug. You started at 18 years old. how you went through the 08 cycle where things crashed. How did that work out with you? Like what was going on at that time?

Brad (03:57.449)
Okay.

Yep.

Brad (04:10.448)
Yeah. So, it was the days on market were a lot longer, you know, houses would sit on the market. there just wasn’t much demand, you know, right after the house and bubble and stuff like that. I would say it was a lot different in the fact that most of the time when I would look for a potential flip house, I would find them through foreclosures, either online, fair closure, bank owned auctions.

Brett McCollum (04:33.059)
Okay.

Brad (04:35.783)
or actually going to the courthouse steps and buying a foreclosure in person. And the inventory back then was, I mean, you could buy as many flip houses as you want. remember looking down in like Port St. Lucie, that had a huge housing bubble. And, you know, they, back in that time, you you could buy a 1500 square foot house, stucco block, you know, a couple of years old for like $70,000. And

Brett McCollum (05:02.946)
Right.

Brad (05:03.771)
You know, those same houses today are, you know, probably three, three, 400,000. And so like you could, you could buy, it was much easier to source potential flip projects than it is today for sure.

Brett McCollum (05:06.829)
Yeah, exactly.

Brett McCollum (05:17.539)
Okay.

Yeah. But I mean, that’s, I mean, you’re the pro man. Like you’ve been to this 20 years, but there’s still deals in today’s market, right? Just, looks a little bit different probably. Yeah. What’s your been, what’s your experience been with, uh, cause I mean, obviously the, from 2006 till now pricing, the housing market like doubled in some areas, tripled even, right? Um, what’s the, what’s your mindset when it comes to like,

Brad (05:27.661)
Mm-hmm. Yep. Yep. Yep. For sure.

Brad (05:43.986)
Yep. Yeah, I mean, it’s definitely it’s and this kind of leads into, know, the wholesaling thing that I told you about that I’m kind of gotten into. like, you know, it’s definitely tougher to source. In my opinion, it’s tougher to acquire flips. You’ve got to look.

Brett McCollum (05:47.641)
what a deal looks like for you today or has it shifted over the years.

Brad (06:10.809)
You know, somebody has told me, you know, if you’re fishing, want one pole in the water or you want four poles in the water. Like you’ve got to use, in my opinion, multiple sources to find the deals in today’s time. Because, you know, back on like an online bank on auction site or something, there may have been in that particular county, there may have been 20 deals back in the day. And basically you’d bid on them and they’d sell to the highest bidder.

And today, you know, there’s one or two maybe and you’ve got multiple investors that you’re competing against. So it’s a lot, it’s a lot tougher.

Brett McCollum (06:44.525)
Yeah. Yeah. Yeah. But I mean, I think you hit on something, having, you know, multiple, you know, lines in the water, you know, that’s really, that’s powerful. Definitely a nugget people should write down. If you’re listening to this, you know, stop that pause, write that down, have multiple lines in the water. Because that like you do one thing one way forever and something happens and it gets turned off. You know, you’re going to wish you had more.

Brad (06:51.609)
Mm-hmm.

Brad (07:00.408)
Yeah.

Brad (07:09.828)
Good. Good.

Brett McCollum (07:12.675)
you know, more lines and that’s powerful. All right, so you’ve been, you still rehab, but you started, when did you get into the commercial side? Like you said, now it’s kind of like, I didn’t even meet, but like, what does that look like? Like, catch me up on that.

Brad (07:18.836)
Thank

Yeah.

Brad (07:29.405)
Yeah, so I bought my first commercial property in 2013. So from 06 to 13, all I focused on was flipping houses. And I had a local realtor that he would kind of send me deals as he got them. I’d look for foreclosure flip for flip projects and stuff like that. And one day he just called me up. He’s like, Hey, I’ve got a guy that is getting up in age.

He’s got this 9,000 square foot commercial property with eight units, right around 1100 square feet a unit or whatever. And he’s like, are you interested in it? And at first I was super intimidated. like, I don’t have nothing about commercial property. Give me a flip house that I can run the numbers and everything like that. yeah, I thought about it for a little bit. called a…

a friend of mine who lives up in Ohio and he does it on a much larger scale. He rents to like Target and stuff like that. And I told him, said, hey, Jimmy, got this property. This is what they’re asking for it. This is what it’s bringing in now. And this is what I think the rental value is worth. What do you think? And he said,

what the hell are you waiting for? He’s like, you better pick up the phone because if you don’t, I am. yeah, so I ended up jumping into that. And honestly, I think that was probably one of the best decisions that I’ve done. yeah, yep, yep. Right, you’re not.

Brett McCollum (09:09.955)
Do you still own that property? Good for you. Yeah, it sounds like a good friend. Yeah, right? Yeah, I mean, sometimes we need that kick in the butt. They’re like, do this, you know, like, yeah, that’s really good. Good on you, man. So you own that. How are you renting? it what kind of a, is it a triple net? Like what are you doing on it?

Brad (09:29.313)
Yeah, so when I purchased it, you know, was just a gross lease. was X amount, a dollar per square foot, and that was it. It wasn’t a triple net lease. you know, I feel like as far as like trying to acquire new commercial properties, there’s a, I now own, you know, three commercial properties totaling, you know, the largest one I have is in Gainesville with 17 units.

but I’ve got 31 doors total and, you know, I, what, out of, all three of those properties, I’ve realized the best, the best way to add value to the properties is, by finding properties that are on gross leases, modified gross leases, whatever, and converting them to a triple net lease where you, basically just, it’s like found money.

you know, triple net is you’re building in, you know, your costs that you have on the property for taxes, know, property taxes, property insurance, you know, common area maintenance stuff, dumpsters, know, you know, anything that services the building. So yeah, that’s, that’s kind of been that honestly, I’ve been using, flipping and wholesaling to basically drive that goal of

Brett McCollum (10:55.801)
Here it is.

Brad (10:56.687)
adding more commercial properties because they’re super passive. I make sure that maintenance stays up on the buildings. They’re super passive income. It’s not like residential rentals where you’re calls on the weekend about a fridge went out or something like that. These are business owners that are renting a space from your business. So they’re pretty self-sufficient.

Brett McCollum (11:17.934)
Right.

Brett McCollum (11:21.859)
Dude, that’s really cool. So I’m just trying to think, like, I love the idea, like your flips, your wholesale to fund the long-term, right? Like the thing that’s gonna be here tomorrow, right? Because with flips, mean, I’ll you speak to it as well, but with flips, you can make a lot of money, but it’s also highly taxed, right? And you’re gonna, yeah, so it’s…

Brad (11:39.656)
Right.

Brad (11:48.566)
Mm-hmm. Yes.

Brett McCollum (11:51.393)
It’s big upfront money, but it’s also big tax stuff. there’s not a lot, you don’t get a lot of the benefits because it’s all short term, right? I imagine, and I personally do not own anything commercial like that. So I imagine tax benefits are probably a lot better. I mean, am I close?

Brad (11:52.399)
Thank

Brad (11:58.854)
Mm-hmm. Mm-hmm. Yep. yeah, for sure. Yep. Yeah, I mean, with the flip houses, you get hit hardcore with capital gains, short-term capital gains tax and stuff like that. And, you know, with the long-term commercial rentals, you can…

right off, you can depreciate the property much longer. And there’s some other, I’m not an accountant, but there’s some, you can do a cost segregation analysis on the property to instead of, I think it’s, they depreciate it over 29 and a half years, but if you do something like a cost seg, you can actually depreciate certain items like.

flooring and certain specific items that service the building over, think it’s five years. So instead of spreading it out, yeah, instead of spreading it out over 29 and half years, you’re depreciating it much faster over that five year span. yeah, there’s a lot of different tax things with that, with the long term, definitely versus.

Brett McCollum (13:00.269)
Right. Get a lot of those benefits upfront. Yep.

Brett McCollum (13:09.089)
Interesting.

Brett McCollum (13:14.817)
Are you looking to, that something you’re going to continue to do, do you think? Be it commercial acquisition, looking, you know, is that part of your strategy long-term?

Brad (13:24.857)
Yeah, I look at I look every single day. Yeah.

Brett McCollum (13:28.685)
Wow, that was gonna be my next question. are you, what are you doing to, are you actively trying to source those deals? Like, how does that look for you?

Brad (13:37.915)
Yeah. So, you know, I’ve got feelers out to different local, you know, real estate agents that I’ve worked with in the past. If they get a bug in their ear that somebody’s interested in selling. But, you know, a lot of it is there’s two main commercial real estate websites out there. You know, there’s Loopnet slash CoStar, they’re owned by the same company. And then there’s Crexie.

And basically, you know, they’re the Zillow or the realtor.com of the commercial world. you know, so I’ve, I check on there. I’ve got some very specific filters and I get notifications every morning on stuff that hits the market. And yeah, so that’s, I’m out. I’m actively looking for more commercial properties for sure.

Brett McCollum (14:19.053)
Nice.

Brett McCollum (14:28.087)
Yeah, so using your wholesale inflips to fund this for that, right? Fund this to pay for that. That’s beautiful, I love that. Let me jump in. So you said earlier that you kind of in the last year, give or take just started wholesaling real estate, is that correct? Cool. Yeah, I mean, again, another pivot, right? You’ve been doing this a long time. The market got, we all know the market has been weird over the last year and a half, two years, right?

Brad (14:43.065)
That’s correct.

Brad (14:54.499)
Mm-hmm.

Brett McCollum (14:57.561)
What led you to that? Catch me up on the wholesale side.

Brad (15:01.082)
Yeah, I mean, so kind of in my tool belt, I had the flips go in and the commercial, the commercial real estate and probably in the last, I’d say last two years, sourcing flips has been, had been pretty difficult. So, you know, I was driving, you know, I spent some time, I try to buy flips only in areas that I’m familiar with, right? And so I, lived up in middle Georgia.

Brett McCollum (15:25.358)
Right.

Brad (15:28.601)
near Warner Robins for three or four years. And so I’m very familiar with that area. I did some flip houses while I was up there. And, I found myself like driving to their, they don’t do an online foreclosure auction. It’s only in person. So I would drive three and a half hours up there and bring a check in hopes to buy a flip house up there. And then I’d have a three and a half hour drive back home to North Florida where I live and be empty handed.

Brett McCollum (15:48.611)
Wow.

Brad (15:57.512)
And, you know, I’d go to some of those, I’d go to some of those auctions and there’d be, you know, back in the day, you could almost show up with a check and you’d buy, there just wasn’t much. But now, you know, there’s a lot more flippers out there with the real estate market kind of peaking out. I would say it’s peaked out recently, maybe even six, 12 months ago, it’s peaked. you know, I got into whole, to answer your question, I got into wholesaling because I realized like, I’m spending a lot of time just trying to source my next deal.

Brett McCollum (15:58.041)
You

Brad (16:26.979)
And I was getting a lot of text messages, phone calls, emails from different wholesalers, through different web platforms or whatever. And I’m like, where are they finding these deals at? How did they find this deal? This deal would work for me, but when you pad in their profit and stuff, it doesn’t work for me.

was I got into it. attended a seminar on wholesaling and, you know, learned quite a ton of information from there. And so, yeah, I’ve been I’ve been wholesaling basically since I believe it was like beginning of August. So, you know.

Brett McCollum (17:14.979)
Wow. Yeah. And on the wholesale side, is it something that now that’s in your tool belt too, right? So the way I was always taught, right? When I like coming up through the wholesale ranks is using your wholesale deals, you cherry pick the best, sell the rest, right? All right. Is that something you’re looking at yourself as well? Like, or how do you

Brad (17:26.964)
hehe

Brad (17:33.225)
is.

Brad (17:38.701)
Yes, yeah, yeah.

Brett McCollum (17:44.343)
envision your whole feeling going.

Brad (17:44.659)
Yeah, yeah, for sure. So I mean, the nice thing with like the wholesaling side is, you know, lot of the leads come in through pay-per-click ads or any sort of leads, lead sourcing. And basically, just like you said, cherry picking them. you know, if I’ve just, if I just closed on a flip house, right.

And I get a lead for a property that’s in my backyard or an area I’m familiar with and I feel comfortable flipping there instead of selling that lead off to another investor as a wholesale deal I can just keep it in-house and hold on to it and turn it into the next flip and so the beauty it to me the wholesaling fits in really well because if it’s something down in South Florida or North Georgia or You know, Tennessee wherever I may get a lead from for wholesaling

Brett McCollum (18:22.745)
Right.

Brad (18:37.652)
I’m making passive income by finding deals for other investors and making an assignment fee on it and basically hooking them up with their next flip.

Brett McCollum (18:50.361)
Right. Yeah. Super valuable. For sure. Dude, I love it. So man, almost 20 years in doing so, you made a couple of comments about market changes, you know, maybe we peaked, right? You kind of said, what kind of advice would you give somebody listening to this that they could take with them on their journey? Cause I’ll be honest with you, man, you’re a veteran in the game, right? Like you’ve been doing this a long time. Like you’re like,

Brad (19:03.544)
Mm-hmm. Right.

Brett McCollum (19:19.769)
You know, you’re the definition of a pro. What advice are you able to give somebody that’s listening to this, like from an adapting point of view? Because the one certainty that we have in life is that it’s going to change. We change. Life changes, right? So what advice can you give somebody?

Brad (19:25.138)
Thank

Yeah, mean, like you said, everything’s it’s constantly everything’s a cycle and you know, I don’t I would just say, you know, look at look at the big picture, you know, in certain as far as depends on if you’re talking about, you know, a flipper versus a wholesaler versus a commercial real estate investor, you know, on the flip side. I think we’re in a cycle now where

things are cooling off a little bit. And I think that there’s some people out there that it’s harder to find flip deals, it’s a smaller profit margin. And right now inventory is coming up. So, you know, there’s a lot more stuff on the market, days on markets up. And I think we’re gonna be in the cycle where it’s gonna be cooling off more inventory, more opportunity to get flip deals. But in that is,

The nice thing about flipping is you can flip houses in an upward trending market or a downward trending market. You just got to build it into your into your numbers. You know, if you’re selling in a downward trending market, you’ve got to you’ve got to plan that it may take you 180 days of carrying costs to hold this property versus if you would have sold that same property two years ago when it was super hot, you you plan for 60, 90 days, hold it maybe.

So, you I would just say look at the big picture as far as which way the market is trending and don’t get caught in a bad spot.

Brett McCollum (21:09.123)
Yeah, yeah. I mean, that’s a great point, Neat. But how do you not get caught in a bad spot? Probably we should surround ourselves with people that are like Brad, who’s been doing this for 20 years and can say, hey, I know what it’s like for homes to sit on the market for 180 days because I did it. And you came through it, came out of it, and you’re still continuing. That’s so many people from back then, man, that I’ve talked to.

Brad (21:28.944)
Mm-hmm. Right.

Yeah.

Brett McCollum (21:39.147)
I flipped houses back and then like, well, what are you doing today? I lost it all in 2008 and I’m never going back. Right? I how many people can you do you know that has that same story and you being on the other side of it now, like I said, almost 20 years later and still active and good on you.

Brad (21:56.239)
Yeah, when the market was, you know, I would say was because in my opinion, I think it’s it peaked, you know, back at the end of 2023, beginning of 2024, maybe at least in the areas that I’m in. you know, I would say now anytime I’m approached with a deal, I’m pickier. You know, if it’s a more risky deal and if it’s a more risky deal, I’m going to make sure that I build in a safety cushion.

because of the way that the market is trending down versus back when it was trending up, you could jump on a riskier deal just because you had the safety of the market appreciated.

Brett McCollum (22:38.359)
Yeah, dude, that’s great. So 2006, fresh out of high school probably, right? You bought some quote unquote self-help books and then you pressed go. I think that the most successful people I talk to are those that really they get out of education mode and they get into action mode, right?

Brad (22:47.277)
Yeah.

Brad (22:52.27)
Yeah

Thanks

Brad (23:03.755)
Yeah.

Brett McCollum (23:08.427)
And maybe just maybe you were a little bit too naive to know better at 18, which may have worked to your benefit, right? But I think that’s the I believe like that’s why real estate is the coolest thing in the world. Because it affords the opportunity for an 18 year old. You know, I know teenagers that are, know, obviously the parents kind of are, but like I know teenagers that are in the in the business, you know.

Brad (23:13.646)
You’re right.

Yeah.

Brad (23:24.012)
Hehe.

Brad (23:28.278)
Mm-hmm.

Brad (23:33.741)
Mm-hmm.

Brett McCollum (23:37.123)
And now here you are nearly 20 years later and it led you to, you’ve got these commercial properties and it’s forecasting your future for, you know, not just you, but I would imagine you and your family, your children, your hopefully maybe someday your children’s children, you know, that’s legacy, man. And that’s the beautiful thing. you know, that’s a really cool thing. And now you’ve got the added tool of wholesaling to continue like even in today’s market where it’s a little bit more,

Brad (23:43.725)
Right. Yeah, for sure.

Brett McCollum (24:06.925)
I don’t know, like it’s a little more uncertain, right? You being able to draw back on your experience from 2006, seven, eight, nine, you know, in that uncertainty and knowing that you’ve made it through it, probably confidence today as well. And now you have added tool with wholesaling into that. Man, that’s…

Brad (24:18.111)
Mm-hmm. Mm-hmm. Mm-hmm.

Brett McCollum (24:27.469)
I just think that’s the mark of a professional man. Like we’ve been able to kind of navigate the waters, you know, and stay in the game and continue to grow. So, man, super cool talking with you today. People do want to get a hold of you in some way. What’s the best way for them to be able to reach out to you,

Brad (24:28.811)
Yeah. Yeah, you can, you know, send me an email address. You want me to get my email address and you do it in the comments or just here on the podcast or. Okay, yeah.

Brett McCollum (24:53.305)
We can put it in the show notes, that’s fine, yeah.

Brad (24:56.659)
Yeah, send me an email address and I’ll send you my email address and you reach out to me that way. Cool.

Brett McCollum (25:03.337)
Yeah. Yeah, perfect. Well guys, I really hope you enjoyed today’s show. We learned a lot. There’s a lot to unpack. I encourage you to go back through the episode, rewind it, start it again, rewind it, start it again. Brad truly did unpack 20 years of, into this short time that we’ve had. So, you know, go back and do that. I encourage you. So, again, I hope you enjoyed the show. We’ll see you guys on the next one. Be sure to tune in. Take care, everybody.