Build Your Empire: Strategies for Rapidly Scaling Your Real Estate Portfolio

Stephen Schmidt (00:02.545)
Welcome back to the show where we interview the nation’s leading real estate entrepreneurs It’s your host Stephen Schmidt and if you’re joining us for the first second third or a hundredth time you’re in for a real treat today Thanks for coming back if you are an avid listener And if you’re it’s your first time we are definitely going to be showing up consistently on your podcast docket from now on I’ve got the man in the house today. It’s a special treat. We’ve got Brian Jackson He’s got a career in the real estate space

that spans over 21 years since 2004 building a bulletproof business on the money side. And we’re going to talk about his expertise and ultimately knowing your numbers and how that makes a difference. So before we get started, just remember that investor fuel, we help real estate investors, service providers, and real estate entrepreneurs, two to five X their businesses, which allows them to build the businesses they’ve always wanted to allow them to live the lives they’ve always dreamed of. That being said, Brian, welcome to the show today.

Brian Jackson (00:58.626)
Thanks for having me, I appreciate it.

Stephen Schmidt (01:00.687)
Yeah, I’m glad to be able to hop on and spend some time with you here this afternoon. Before we get started into some of your expertise, knowing your numbers, how that makes a huge difference for investors and anybody that’s in this space, can you just give us a little bit about yourself and how you got here?

Brian Jackson (01:17.774)
Yeah, so I got here I say by accident so I when I refer to that it’s as a licensed agent I got here by accident. So I am a Air Force veteran. I studied electrical and mechanical engineering in the Air Force Did power distribution airfield lighting? And then I’m a self-taught finance guy. So I actually got out I was pulling wire in the early 2000s I enlisted after

9-eleven when I got back home and I was starting to settle into what I wanted to do I was actually working as an electrician and it was not that far after that you know I live in Cincinnati Ohio so we’ve got really cold winters and then really hot and humid summers so

You can imagine working outside, pulling wire. It’s not, you know, unless you’re getting paid really well, it’s not that fun. And I have friends that were in the business. They were actually originating residential loans. And, you know, they were driving nice cars and doing what they wanted when they wanted. And I was like, man, I need to get into doing that. So 2004, I became a licensed loan officer. That’s why I love the numbers, right? I geek on the numbers. I love them.

and it’s driven me to a career in commercial finance and commercial sales. And I love those because it’s more of a numbers driven transaction versus like an emotional buy. But that’s kind of the high level.

Stephen Schmidt (02:52.688)
Hmm.

Brian Jackson (03:01.013)
numbers guy, again, it’s self-taught finance. was all, you know, figure it out, had the opportunity to learn on the job with some really unique opportunities there. But that’s what we geek out on is the numbers and then educating people on how to use the numbers to make smart decisions and build your portfolio and scale it quick. know, like, don’t have to, it doesn’t have to take a lot of time to do it, but you have to have systems and things

in place in order to do it at a high level.

Stephen Schmidt (03:34.074)
So let’s dive into that a little bit more. I would normally probably ask about when you first got started there, what made you make that decision, but let’s dive into that as far as knowing the numbers and understanding it from that level. Can you tell us a little bit more info about that specifically and how that helps people out?

Brian Jackson (03:51.854)
Yeah, so.

Yeah, it just depends on the type of asset class that you’re analyzing, but just being able to do like what I call a quick sniff test, right? Like the quick back of the envelope math that if it’s, whether or not something makes sense and whether or not you want to put resources and a lot of times money into the due diligence process of a transaction. So, you know, it just depends on the asset class. If it’s like multifamily, you know, there’s just a quick, you know, kind of a run through that we’re looking at as far as the rent roll.

gross rents. We use an income or an expense ratio versus, you know, really trying to dig in because, you know, we all know that’s where the owners hide expenses, right, to inflate the NOI or the net operating income. So we don’t have time to really always dig into those things up front. So just having, you know, being able to quickly analyze that to make sure you’re not wasting time and money.

Stephen Schmidt (04:50.48)
And so how does that benefit, like obviously not wasting time, not wasting money, but for somebody that’s, let’s say, getting started, how does that benefit them if they’re trying to really rapidly scale?

Brian Jackson (05:01.805)
Yeah, I mean, there’s two, well, there’s, there’s a couple of things people are looking for when they’re investing in real estate. Number one is usually like, what is your return on investment? Right. And if you don’t know how to quickly figure out what the cap rate is, what the debt service coverage ratio is, you could be spinning wheels on a deal that just doesn’t make sense from a standpoint. Let’s I’ll break it down here. So say you’re, you, you’re,

entertaining buying an apartment building and you have 20 % to put down. Well if it doesn’t cover the debt service coverage ratio you’re gonna have to throw more capital at it meaning you’re gonna borrow less money in order to get that debt ratio in line or the debt service coverage ratio in line right. So if you’re looking at a building that doesn’t quite cover debt service that the lender is looking for you may be required to bring more money. If you don’t have that money you’re wasting time you’re spinning your wheel.

on a property that you don’t have the capabilities of buying.

Stephen Schmidt (06:07.152)
And so, and obviously what are some things that people could do to avoid coming to their lender? What are some of those things they could do beforehand to make sure they’re coming ready to go and having a solid shot at actually getting securing the financing?

Brian Jackson (06:23.969)
Yeah, so, you know.

going, everybody says they do pre approvals, but they’re not all, they’re not all the same. So going to somebody who’s going to put the time to actually, you know, some people are more sophisticated borrowers than others. So if you’re a business owner, for example, you’re going to have a bigger stack of due diligence that the underwriter or the loan off or the originator is going to require just to even make a good decision. And so that’s, that’s the other piece is,

Then if you become a really sophisticated borrower with lots of different pieces, you need to make sure that all that stuff gets vetted and looked at by an underwriter before you get under contract or start writing offers on properties.

And so not all lenders are willing to put those type of resources into something upfront. take, you they take your word for it. They have you fill out the application. But, and then, you know, in those cases too, they don’t want to give you bad news and they delay things and they just kind of drag it out without giving you a good answer. When that starts happening, that’s when you need to have a pivot plan.

and you need to have another option. Like you need to look, you can’t put all your eggs in one basket. Because more than likely, either there’s an issue or they’re not qualified or they don’t understand how to break down and do like a…

Brian Jackson (08:00.078)
global cash flow analysis where they’re looking at like all of your income, all of your expenses as a whole. So, you know, when you get more complicated, that gets more complicated or even on our end when we’re trying to break down and say, okay, yes, we feel confident that you can go out and purchase this property.

Stephen Schmidt (08:19.088)
Now you’re kind of a Swiss army knife of an investor yourself. I mean you’ve got a background in almost every part of real estate that you can have a part of. What’s your favorite? What do you really like to focus on?

Brian Jackson (08:33.375)
So my favorite is, I love the finance part, and that’s across all asset classes. We do anything from strip malls, hotels, we do hotel construction.

Then, we were talking earlier before the show briefly, land. So building a land portfolio is part of our strategy because what we’re doing is we’re building a vertically integrated real estate company where we’ve got finance knowledge, we’ve got contract knowledge, we’ve got all the ins and outs, and then we can actually, we can get more creative. Because real estate is all about how you structure a deal.

no set way on how to structure a real estate deal.

you know, when there’s financing involved, there’s certainly rules that we have to apply and that we have to abide by. But, you know, outside of that, you can get pretty creative on how you get deals done. that’s a, geek out on that too. Just being able to like put a creative twist on a structure to get it done that nobody else thought of. That’s kind of what puts our feather in our cap, I would say.

Stephen Schmidt (09:51.076)
Now, what gets you so excited about land? I wanna kinda dive into that a little bit more here too.

Brian Jackson (09:55.042)
Yeah, so land, especially around the like where I live.

I just want to be able to control what’s going in around me. you know, by having vertically integrated real estate company, when I own the land, when it gets developed, I’ll have a hand in it. So basically I have control and I get to have a say then on what’s happening around me. And then ultimately I get to participate in the development when it happens and when the money rolls through.

Stephen Schmidt (10:25.572)
And is that, so let me ask a little bit more about that because when you talk about owning the land and then having a say in what’s actually going in there, is that you keeping the land and then leasing it to be built upon and developed or what does that look like?

Brian Jackson (10:40.715)
Lots of different ways. I mean, you can do a ground lease, you know, so that would be where somebody comes in, fully builds the asset they pay for all the tax, you know, triple net ground lease would be where they pay for the full construction of the building. However, as long as it fits the intended use for the zoning, you know, and so they build an asset and then you typically sign a long-term lease where they just lease the land back, but they’re paying all, you know, the maintenance, the taxes on the property.

and everything. you know, those are the easiest deals, honestly, to analyze because the expenses, again, is where they hide.

most that’s where the fluff comes. So when you know that that’s on the tenant, it’s not an owner responsibility that makes it way easier to analyze. That’s just one example. So that would be like a triple net. The other thing is, is like some of the pieces of land that we bought around 2020 ish have appreciated significantly in equity. So the other advantage to that is, is if you’re in a, if you’re in it for a longer term play, like we are for

for our land portfolio.

we can start building equity. And as you build equity, as developments start happening, if you were to take that piece of property to the bank, you now have the capital required or the equity. Equity always drives debt, remember that. So if you’re ever trying to go buy something or build something or do anything as far as real estate, you have to have equity or skin in the game. Equity drives the debt. So if you’re starting to build equity, you could potentially do a development

Brian Jackson (12:22.007)
no extra capital. if you just bought it, you know, so an example would be if you bought a piece of land for 50,000 and three to five years later, you know, depending on what’s happening, there’s no land available in most areas. So eventually things are going to come in there and things are going to start happening. That’s going to make your values go up. And so as the values go up, we then want to leverage our equity then to

create income producing assets on that land where we don’t have to bring any additional capital to make that happen because we already have the equity.

Stephen Schmidt (12:57.776)
Okay, and so is your…

Brian Jackson (13:00.321)
So that’s kind of the long term, yeah, that’s the long term play. So, you some of the stuff that we’ve bought where we’ve got, you know, now several hundred thousand in equity, you know, just do, if you do the quick math, you could do a million dollar project at 80 % loan to value and not have to bring any additional capital.

Stephen Schmidt (13:17.7)
right because you already have it within the existing asset that’s there. What determines

Brian Jackson (13:22.305)
Yeah, and you’ve already extended the seasoning period. So most banks are like, hey, we’re going to use the purchase price for at least the first year. Okay, that’s fine. This is a long-term play. So, you know, as that equity builds, that goes away. We’re now allowed to use an appraised value versus the purchase price, and we can then use any equity in. Or, you you just say, hey, I don’t want to bring any additional money. You find a money partner or somebody who wants to partner, do a JV or, you

There’s lots of opportunities at that point because people are going to be attracted to the land. So you can then work a deal and work it any way you want. I like to at least get a piece of the pie and have a hand in the development.

Stephen Schmidt (14:08.656)
And so with with the land what what is it that causes land to appreciate other than just the shrinkage of it being available like how do you gain equity in land because I feel like that’s probably very different than in a house other than a little bit of the market but

Brian Jackson (14:23.957)
Yeah, it just things that I look for are, you know, like when I buy a piece of land, I want to have at least some sort of intended use in mind. And so it’s not a cheap thing to do, but we go through the full in our due diligence period, we go through the full and we try to get a full site preliminary site plan approved through the municipality that we’ve bought or we’re going to buy in.

So, you know, if it’s zoned for commercial and we can put up to 5,000 square feet, like what would our intended use be to maximize the return?

So we go through that full thing. have an engineer and put together a site plan. They get stamped. We send it. They do a preliminary approval. But some of the things like, you know, we’ve bought stuff that’s wooded, depending on the type of trees that are there, you know, don’t go and grind them all down if they’re, you know, something that…

you know, like we have a local veneer company, you know, they’ll come in if it’s a certain circumference, you can get paid to clear that land. So there’s just lots of different things you can get creative with as far as was there any existing infrastructure there? You know, if there was an existing house and there’s already sewer taps, you know, it might not be the same requirement because commercial and residential is different in size. But just having the tap there can save you

lots and lots of money when you go to tap into sewer systems. But so there’s just there’s just just different little things that you can look for because sometimes land is like infill land what that we call is infill is more like hey a house sat there.

Stephen Schmidt (16:00.304)
Mmm.

Brian Jackson (16:13.389)
You know, those are usually really popular. We did this with single families for the private equity groups where, you know, we would buy the infill lots, save you 15 to $20,000 on steward taps because they were already there. There was already infrastructure there. And then you rebuild a house that as long as you, as long as the numbers work, right? These aren’t, we’re not trying to build houses there that we see ourselves living in. We, we build a house there that the numbers make really good sense. So.

There’s lots of land opportunities, but the reason we did it is because they’re not making any more of it. It’s harder and harder to come by. just depending on what the seller’s motivation is, you can sometimes get creative. You don’t always have to come up with the money upfront. So there’s just different ways to get creative on those types of deals. we started selling off the single family portfolio stuff and going all in on land about five years ago.

Stephen Schmidt (16:48.016)
Mm.

Stephen Schmidt (17:11.344)
Wow. are you buying big plots? You buying an acre here, an acre there? Like what’s what are you? What’s like a sweet deal for you?

Brian Jackson (17:17.357)
Minimum acre, yeah, about an acre and up. So even like, it became a residential neighborhood, right? Hey, I have no problem. I’ll sell you this land as long as I can make a little bit of money. By the way, we wanna represent you to sell every house in the neighborhood, because my team is a licensed sales group in the Cincinnati area. So that also.

Stephen Schmidt (17:24.217)
and it’s

Stephen Schmidt (17:40.676)
Nice, so it’s almost like double dipping.

Brian Jackson (17:43.563)
Yeah, I mean, we can control our own destiny by, you know, controlling what happens in our backyard. you know, there’s other people that have that strategy too. I certainly didn’t invent it.

Stephen Schmidt (17:57.649)
Now, obviously you’re a very well-rounded, intelligent individual, but in order to do everything that you’re doing, and you’ve mentioned your team here now at least once, maybe a couple times, what really builds a dynamic team to be able to go out and accomplish as much as you’ve been able to do?

Brian Jackson (18:16.757)
So yeah, I mean, so I’m being a military guy. I, I, there’s some tools that we use at, I’m, so I’m an agent at Keller Williams. don’t know if I should, I’m allowed to say that on the, on the podcast or not, but,

Stephen Schmidt (18:30.608)
Yeah, you’re fine.

Brian Jackson (18:32.639)
So we have a tool that help it’s helpful. It’s called a KPA. It’s a Keller personality assessment. And what it reminds me of is the ASVAP. So if you, if you, or if you know of anybody who’s joined the military, there’s a, a test that you take and it basically gives you an idea of like, you know, where that person would be a good fit in within the military. So we have a tool like that at Keller Williams called the KPA and anybody who would like joins my team. It’s not because you,

Well, sometimes we hire out of a need, but most of the time we want to, we try to tailor a role for people on our team that fits what I call your unique abilities. Like what is your zone of genius? So like where, what do you like to do and what are you really good at? Because there’s some things that I…

like I’m really good at, I could tell you, I don’t like to do them. So what we try to do is we try to have create roles within the team to where it’s like, hey, you are gonna, this is gonna be a role that’s kind of crafted for you based off of how you scored in that KPA.

So it’s I’m a little I think I’m a little bit different. I don’t know if anybody else I’m sure you there are people that use like the Tony Robbins I think it’s called the disc profile or the disc personality test it’s similar to that, but this really is a Real estate driven and it scores people Across all the jobs in the industry so I can be like you know there’s 35 or 40 of them that that we use

consistently from operations to like

Brian Jackson (20:21.463)
transaction coordinators and part of that is like our salespeople, they’re good salespeople, right? So why have them do the paperwork? Why have them get bogged down and get kind of pulled away from what you like to do and you’re good at? Because we have people on the team that…

They are good at the paperwork. They do like to do that. They love to follow and track timelines. And really, we like to have the agents, and we get to let them stay in their lane. And so they’re always on go. They don’t have these months where they’re ebbing and flowing. They get to get consistent growth. And it’s good to create systems around.

their zone of genius. Because lead generation looks different for everybody. Being in the Air Force in an electrical and mechanical, that’s what I studied. So systems flowed naturally into this industry and my career. But just constantly refining those systems to make them better, to create a better customer experience. That’s all we’ve been trying to accomplish.

Stephen Schmidt (21:33.946)
Yeah. What are some of the, what would you say are some of the challenges that you faced in the past few years and what’s maybe some challenges you’re going through right now that you’re working through to like really get to like that next level of the overall vision that you’ve got?

Brian Jackson (21:47.95)
Next level, so we have some really interesting projects that we’ve got going on. So we on the finance side, as everybody knows, artificial intelligence is kind of sweeping across the industry. that’s one of the big that’s one of the been one of our biggest struggles is just a quick intake and decision process.

Stephen Schmidt (22:01.594)
sure.

Brian Jackson (22:12.173)
that we now have a system that we’re building out using AI to help us streamline the intake process. So imagine if you have a very sophisticated borrower where you need multiple business tax returns, multiple years for that business. So there’s this big package that you put together. And a lot of the times is when you go to dive in and do the analysis of those, you find that not all the information’s there, right? So then you get stuck and it gets put back on the back burner.

Stephen Schmidt (22:38.33)
Yeah.

Brian Jackson (22:42.127)
you can’t make a quick decision then. So we’ve got a really interesting project that we’re working on with that.

streamlines the whole intake process so we can know where somebody got held up. Hey, we saw that you got held up on putting your 22 returns in the system. And then it tracks that and gives these automation so that we can track and be like, so that not a person physically, but little reminders can be, hey, we saw that you got held up here. What can we do to help get this package complete? And then once the package is complete,

you

it will use artificial intelligence and it does a pre-underwrite. So it’s not a digital underwrite, but it’s similar to like, you know, a DU find, you like, you know, in residential they call it DU digital underwriter or findings, right? So they run it through a digital underwriter and they, but this is a, this is going to be a bit more complex where if you have a very sophisticated borrower, it can analyze all of it and put it into a deal summary. And it gives us, you know, some like to be able to just get quick decisions. Cause that’s one of the things that we know a

of not just investors, business owners, anybody looking for commercial finance, you know that’s a struggle with getting a quick, quick confident answer to be able to quickly be like yes we’re confident that we can move you forward in this or that whatever you’re trying to accomplish.

Stephen Schmidt (24:06.03)
Yeah, 100%. Well, Brian, we’re so appreciative of you taking some time coming in and joining us on the show today. If anybody wants to connect with you and learn more about what you’ve got going on, connect with you for more, see what you’ve got coming up, where should they go for that?

Brian Jackson (24:21.793)
Yeah, you can text me. My phone number is 513-620-5968. If you have any capital or real estate needs, you can just text me at that number. I’d love to help. Or if you just have questions. So that’s one of the things that we pride ourselves on. We’re not high-pressure salespeople. We want to deliver valuable information. We want to educate people and make sure whether you use us or not, you’re at least making

informed decisions.

Stephen Schmidt (24:53.7)
There you go folks. Well, all seven million of you are gonna now go text Brian Jackson. I’m just kidding, we’re not that big, but maybe someday. I like to make people sweat a little bit anytime they drop their actual cell phone. I’m like, man, you shouldn’t have done that. be responsible is what I say. Brian knows how to use the block button. But anybody, I hope you enjoyed today’s episode and we’ll see you in the next one. Thanks again for being here, Brian.

Brian Jackson (25:01.367)
We’ll get you there. We’ll get you there.

Brian Jackson (25:19.938)
Thank you.