Building a Real Estate Empire: Creative Financing, Flipping & Raising Capital with Chris Bounds

Christian (00:01.553)
Hey everybody, welcome back to the show. Today we have an incredible guest. His name is Chris Bounds. He’s a highly successful real estate investor, a fund manager and a top growth leader at EXP Realty with just over 90 million in transactions. Guys, this is gonna be an exciting show today. I’m very excited to have you on Chris. Why don’t you just introduce to the audience, know, who you are, your background, how you got here and currently just what you’re working on.

Chris Bounds (00:28.002)
Yeah, thanks, Christian. I mean, you summed it up pretty well. Real estate investor, fund manager, flipped a lot of houses, had my experience with single-family rentals, moved into multifamily. along the way, we host a lot of events and network with a lot of folks and both operators and passive investors. And have fun doing it.

Christian (00:52.465)
That’s awesome, man. So I’m curious, why don’t we just talk about what motivated you to start investing in real estate at just 22 years old? mean, how did you land four deals in your first year without using your own money?

Chris Bounds (01:06.126)
So, I mean.

Fast forward like long, long, long time ago, uh, back in my like early years, um, I’m talking about early teens, uh, Hey, maybe even single digits. I’ve always been entrepreneurial, uh, whether it was taking candy from, uh, my house and selling it to friends at school or selling like club memberships to people. Um, and other things that, maybe I’m not so not as proud of, but, uh, I’ve always been entrepreneur trying to, trying to get out there and, uh, figure out a way to, make some money. I always knew I would get into business. I didn’t really know what that

meant or what that would look like. My grandfather had built a very large air conditioning and plumbing and construction company throughout central Texas. So, and he basically played monopoly all over Texas, buying commercial properties, rental properties, land, rural. So I got to watch that. And even with even with my parents, like they had a rental property. And I remember that as a as a kid,

helping when in between tenants, like I would be out there helping clean up, like rake leaves and stuff like that. so I remember seeing that and just watching it, but really it wasn’t until I was in college, like a lot of folks read rich, bad, dad. It like opened up a lot of lights and really made things, make a little bit more sense to me on how money works. And, you know, he talks Robert Kiyosaki in that book talks about real estate. So I’m like, Hey, I’ve seen my grandparents do it. I know my parents had a rental property.

I’ll do that. But I was like, I’m a broke college kid. How am going to do that? Cause I’m over here. it’s kind of funny too is I just start taking action and I don’t have any money. I don’t have a job. I’m in college. I’m the definition of a broke college kid. So I’m like scheduling appointments with these real estate agents to go look at properties. And I’m like, well, I get them at a discount. So I’m like having them write these offers that are just way below these are on market properties that are way below.

Chris Bounds (03:04.717)
market value and the agents like appalled and embarrassed that they want, they don’t even want to submit it because they’re embarrassed. It’s so low. And they’re like, no one’s ever going to accept this. And then, um, so there’s that going on. Then I’m going to lenders cause you know, Hey, I’m gonna get these rental properties. I’m gonna have a tenant. They’re going to pay the mortgage and lenders are like, you don’t have a job, dude. Uh, like how are you going to make the mortgage? Like, no, doesn’t. So my heart was in the right place. I was very motivated and excited.

Christian (03:24.71)
Haha.

Chris Bounds (03:34.541)
I was taking action. A lot of people don’t even get that far. But I hadn’t quite learned the fundamentals of the investing side. I ended up taking a course. that’s how got my first few deals while was in college.

Christian (03:47.633)
That’s incredible. That’s incredible, man. So how about we just talk about breaking down some of the creative financing strategies that you used early on to acquire those properties?

Chris Bounds (03:58.626)
Yeah. And they’ve kind of come full circle. So, I, I don’t, whether it’s serendipitous, or God placed this bandit sign right in front of my vehicle that with that particular time, but I saw the sign and it was, basically a real estate coaching guide, put the sign and a phone number and I called it and I was like, Hey, yeah, I’m interested. He tells me, Hey, well, I’ve got this course, you know, or no, no, no. So I have a conversation with them and I’m like, well,

I don’t have any money. And he’s like, well, you actually don’t need money. Like, you know, I’ll show you exactly how you can buy properties with no money. like, oh, okay. Well, that’s cool. So then he’s like, um, you know, it’s like 1500 or $2,000 for this weekend bootcamp. And I’m like, ah, I don’t even have that. Uh, but I did have a credit card, um, because in college they hand you credit cards out and like, like candy. So, um, I had a credit card and I was just thinking like, what if, like, what do you, what if, what if he’s right?

Christian (04:50.811)
worth.

Chris Bounds (04:56.639)
and this actually does work and I take the course and I get out and I get a deal and it pays for the credit card bill because I got, you know, that bill’s gonna come pretty soon. So I just took a leap of faith and I jokingly say I was dumb enough and naive enough to believe everything he said. So I just believed it to be true and I did it. And every single weekend I would drive from College Station, Texas to San Antonio.

Cause at that time San Antonio was completely online. everything’s online now, but at that time San Antonio is completely online. So in my dorm room and it takes an M I was looking at pre-foreclosures and on the weekend I would drive knock on doors all day. I didn’t have enough money for a hotel. So I would come back and I did that for 90 days straight. Uh, every weekend that I had free and then I got my first deal and I was like, wow, this actually works. And I ended up doing four deals that first year. So the first one,

that particular mentor, we JV’d on it. So he funded it, split the profits. The second one was a, a double close. I didn’t know what a double close was, but I did a double close. the third one was a sub two deal. And then the third one was financed, it was a, the sub two deal we ended up branding out. It was a lease option. And then the third one, fourth one was a, private money, lender had funded that particular acquisition.

there was already a Section 8 tenant in it, so we let them stay and it cashflowed well. So first four deals, it was a lot of various exit strategies that I played with. I don’t really recommend that, but that was my story.

Christian (06:33.179)
Man, well your story is quite a journey. That’s awesome, man. So present day, let’s talk about that. I mean, for those that don’t know, you have over 900 units, man. I mean, that’s awesome. I mean, why don’t you talk about some of the key steps in being able to scale a portfolio to that magnitude in managing a portfolio.

Chris Bounds (06:53.037)
Yeah. And, um, caveat, couple of things. One, it was 900. We sold one. So it’s lower than that now. So it’s a little below 400. Um, the second thing, any, anytime that anyone tells you that they have 900 units, 400 units, 3000 units in all odds, they’re a part of a fund or a syndication and they may have interest in that many units, but they don’t actually own them personally. So I just say that because they’re the, the,

Christian (07:01.787)
Gotcha.

Christian (07:16.251)
Mm-hmm.

Chris Bounds (07:22.669)
especially if you go into the LinkedIn circles and you see people bragging about AUM, so which is assets under management. They’re like, it’s a little disingenuous to some folks that may not really know the game. So I like to be transparent. Yeah, I’ve had 900 units, a little lower than 400 now because we’ve sold some good deals, made some money on them. But, you know, just keep that in mind. I’m a partner in those deals and there’s a lot of investors. But to get back to your question, my wife and I, when we got married,

flipped around 200 houses, including some wholesales and some single family rentals in that mix too. And towards the end of that run, we we had this like machine, we were spending 30 grand a month on marketing and we’re doing five something deals a month. And we had this huge machine and I’m like, we have a really, really busy job and like it’s fine. It makes money. Every once in a while you get a deal that’s a headache and you don’t make money on but

Christian (08:13.766)
Yeah.

Christian (08:20.753)
Mm.

Chris Bounds (08:21.727)
overall, that was fine. But like, this isn’t why we got into real estate, we got into real estate for financial freedom, flexibility, and you know, just overall building wealth and financial freedom. House flipping did not do that for us. It was fine, learned a lot. But we’re like, how do we turn this machine off? And the problem is, you can’t just flip a switch because we had a lot of capital invested in marketing and people and an office and so

We, that was a slow transition. then once COVID happened, you know, that was kind of the opportunity to take, to flip that final switch, move more in the passive nature. I’m not against flipping, I’m not against wholesaling. I just, I treat them as they are, which is it’s a job where you can make profit. but it’s what you do with that profit afterwards and just knowing that, Hey, if instead we didn’t flip to it,

200 ounces, if we actually just bought 30 and kept all of them, I would actually be wealthier. Uh, then, then the, like, if you do the math, ask any flipper that like that, it’s just the plain math. Um, but we, you know, we’ve since realized that, you know, I still do occasional flips a little bit more strategic on it now, but, uh, and we ended up, um, you know, starting to fund and getting part partnering with some successful operators and multifamily.

Christian (09:23.054)
wow.

Right.

Right.

Chris Bounds (09:43.541)
And then we’re on our second fund, which is more of an open-ended fund where we place strategic equity with experienced operators in residential properties, but primarily multifamily properties.

Christian (09:57.489)
That’s amazing. That’s amazing. So let’s talk about, you know, raising capital, right? I mean, you’ve been able to, for the, again, once again, those that don’t know, you’ve been able to leverage over 19 million from private money lenders. Let’s talk about, you know, what that was like for you. I mean, did you kind of struggle with learning, you know, how that process works? You know, how did you learn? Maybe you could just give advice to, you know, just people that are looking to raise money, you know, for their current deals right now.

Chris Bounds (10:24.779)
Yeah, so for most and almost all of those is it’s individual private money loans for our flips. So that just adds up and you can even take a large chunk of that. We were using certain like if you have two depending on how many flips you’re doing a year, two to four private money lenders.

Christian (10:31.877)
Okay.

Chris Bounds (10:41.471)
You can churn their money three to four times a year. So you don’t need 30 private money lenders to be really successful. One, two, three, they can make you really rich and then you always have hard money lenders. Transparency. So the number one thing that private money lenders are, the number one thing they’re focused on is getting their money back. They do want to make a return, but they care a lot about just getting their money back.

And that means they’re focused on you. So a hard money lender, if you take them as the standard for asset based lending, they do care a little bit about you, but by and large, they don’t care as much about your credit and stuff like that. They care about the asset, the actual property, and they’re going to make sure you’re buying it cheap enough and they’re loaning a really good loan to value. So if you screw it up, they’ll take it back and you know, they can fix your mistakes and, and, you know, sell it and make a profit. Private money lender. They usually don’t want to do that.

The whole reason why they’re a private money lender is because they don’t have the time. They’re busy with their job or they’re retired. They don’t want to deal with any of that, but they’re okay making eight, 10, 12 % or whatever it is. just loaning you the money because you are trustworthy. You’re knowledgeable. You have a good reputation and you have experience. You know what you’re doing. So if you’ve done a couple of deals and you funded it through creative financing or hard money lending,

It’s not difficult to get private money loans. I got my first one on my third deal while I was in college with no job. So not everyone’s going to be able to do that. Maybe I was lucky there. I don’t know. But I was able to since do many more. And once you get a couple of private money lenders and you’re successful and you get that reputation, sometimes they’ll refer you to other folks. You can always tell that story. But the number one rule I always say like, actually two things.

place you find private money lenders is usually everywhere because they’re just walking around networking meetings for real estate. It’s a natural, uh, you know, meeting point, just getting to talk to people and, uh, um, you know, they’re usually not just going to raise their hands. Hey, I’ve got $500,000 in my bank account. Um, you’re going to have to get to know them, um, and build that relationship. And the number two thing is once you find that they may be interested in, in being a private money lender or an investor,

Chris Bounds (13:05.003)
So if you’re investing like a syndication or fund, don’t pitch them. You need to know what their experiences, what their interest level is, what they like and don’t like as far as the asset and terms and all this other kind of stuff. Get to know them, build that relationship, but don’t pitch them. I love closing the initial conversation with something like this. Hey Christian, all my deals actually, they’re all funded right now, but

Christian (13:15.899)
Mm-hmm.

Chris Bounds (13:33.454)
If you’d like on the next one, I’ll just send it over to your email and kind of get your opinion. See what you think. You want me to do that? 10 out of 10 times, they’re going to say yes. And then I’ll say one more thing. And if you’d like, you want to see one of the prior deals we already did, just kind of see what we do. 10 out of 10 times, they’re going to say that too. But now they got to give you their email address and their phone number and you send it to them. You follow up. And then when you get the next deal, send it over to them.

Christian (13:39.953)
Not pushy right? Yeah

Christian (13:51.216)
Mm-hmm.

Chris Bounds (14:03.445)
Almost always they’re going to say no on that first deal. They’re still getting to know you. Keep following up and then you might get to a point where one out of five will say yes. That’s how you build it and it takes time, but they can make you a lot of money. long as you treat them well.

Christian (14:20.665)
Absolutely. I couldn’t agree with you anymore. I mean, it’s all about nurturing the relationship, right? And it really is does come down to playing the long game and it’s about providing value, right? And as you know, like it’s, it’s one of those things where you just can’t come up to somebody like you just said, an immediately pitch. It’s you’re going to rub someone off. And next thing you know, you know, that relationship could ultimately change your life. But once that door is closed, man, it’s, it’s a closed door, you know,

Chris Bounds (14:48.673)
Yeah, No one likes lending money to someone who’s needy. So if you come across as needy, which means I have a deal or because they don’t know you and then you’re like trying to pitch them, now you’re needy. Banks don’t like it. Mortgage lenders don’t like it. Private money lenders really don’t like it. So just don’t be needy as long as you don’t need money or at least you seem like because I needed money usually when I was having these conversations. I just didn’t tell them that.

Christian (14:52.507)
Yeah.

Christian (14:58.971)
Mm-hmm.

Chris Bounds (15:18.458)
I had other resources and hard money lenders, always there for you. yeah, play that long game, build a relationship and it’ll treat you well over time.

Christian (15:27.685)
I love it, man, I love it. So let’s talk about maybe some challenges and lessons, know, since your journey. I mean, what are some of the toughest challenges you’ve maybe faced, you know, a longer way and what has been your processes on kind of being able to overcome those?

Chris Bounds (15:43.052)
Yeah. I mean, macro, macro, really making sure that you’re building something that aligns with your long-term goals. So I mentioned it before, or, you know, my wife and I are long-term goals were building wealth and passive income, but, we started off doing that because we bought a few rentals, but then we, you know, I quit my job $200 a month. I didn’t really pay a lot of bills, so I had to flip, but then we built this like flipping machine when in hindsight,

I could have still done that, but instead of building a flipping machine, I could have just said, Hey, let’s flip two or three houses that pays bills. got a nice life, nice lifestyle with that. And then the fourth or fifth one, you know, every three, four or five, we keep that one. And then we would have built a much more larger portfolio than we did after that run. So that, that was one of the big things, obviously investing in people and quality. there’s folks that we’ve hired that, they were great.

And we probably should have done more. And this is on me. It I was learning how to be a good manager, how to be a good boss. And there’s folks that we hired, they were great. I could have done things better to keep them longer. There’s also people we hired that they weren’t a good fit. And me, I probably could have done things to help them find the opportunity that was more fit for them than sticking around too long.

at our company and that’s on me, that’s my development. But yeah, those are two, if I had the reset button, those are two things that I’d probably focus a lot on.

Christian (17:20.753)
That’s great. So let’s talk about that. mean, I know you said on hiring now, so what are some of your, how do you structure hiring, right? I mean, what are you looking for when you are hiring somebody now? And then when you do bring someone on board, I mean, what type of process do you have that person go through depending on what they’re doing as far as their role? Why don’t you just talk about that? What people need to look out for.

Chris Bounds (17:42.188)
Yeah, I have to cut me out because this has never been my strong suit. my wife and my wife’s much better at that. She’s, I’m a bit more of an introvert. I don’t know if that’s a reason. It could just be where I’m wired, but she, she has that intuition, whether it’s a like female intuition or

Christian (17:46.993)
Mm-hmm.

Christian (17:53.211)
Okay.

Christian (17:58.674)
Mm-hmm.

Chris Bounds (17:59.214)
her natural gift. She’s also a lot more personal. She’s an extrovert and all those kind of things. So I loved having her there because she’d had that extra sense to where we’d leave the interview and then I may feel okay about them and she’d be like, no, hard no.

like and then she would just sense these certain things and there were some that we hired and she wasn’t quite convinced and odds are like most of those times she was right. So I definitely should have leaned a little bit more in her but beyond that like it’s just hard to know like a piece of paper, a resume as a resume, can put whatever references like they’re never gonna give anyone.

Christian (18:15.909)
Wow.

Christian (18:26.502)
Yeah.

Chris Bounds (18:38.109)
references, probably not going to speak more to them, but are good things about them. So it’s how they conduct themselves. you know, showing up on time, how they conduct themselves, their communication. But I loved when we were looking for acquisition agents that we had, we had a, like a field day. was, it was the last part of the interview process where they would come out and actually just spend a day with me, going on appointments. And I weeded a lot of people out that way. one guy left during lunch, one guy.

Christian (19:04.814)
yeah.

Chris Bounds (19:07.885)
uh, called me later on and said, Hey, uh, can, can I do this more of a part-time thing? And then these were people that I felt good about originally, but, they, you know, having that field day was, you know, gave them that extra taste of really what they were getting into. And, uh, you know, it’s better that they figure out that it’s not a good fit before we hired them then afterwards. And then last, this one’s a little harder to do. I think with the economic model of flipping.

Christian (19:17.467)
Mm-hmm.

Christian (19:25.84)
Yeah.

Chris Bounds (19:37.698)
But pay people. Like, if you go cheap, you get cheap. And it’s not like some folks, high quality folks may not be willing to learn for the experiment or work just for the experience, but you’re just not going to keep them very long. It’s so much better off to pay good people what they’re worth and keep them longer. They’re going to be able to do much better for you, for the company.

and for performance and they’re probably gonna stay a little bit longer. Yeah.

Christian (20:15.025)
I love that man. I appreciate you breaking that down. So why don’t you talk a little bit about, you know, invested X Chris. I know you have that going on. So why don’t you share the audience about what you’re doing over there and invested X.

Chris Bounds (20:25.613)
Yeah, so part of my evolution and learning about business and really understanding what branding is in a house flipping environment or that type of business, branding may not matter as much unless you’re going to be like the Weebae Houses guys or the Homevestors guys, those big brands. But by and large, mom and pop house flippers, the lifetime value of a customer is one. So outside of me, just my name, I haven’t really focused a lot on brand, but

I have since realized that there is a, a benefit to brand for, for real estate investors and small real estate investors. And especially this becomes significantly more pronounced moving into multifamily or funds or syndications or things like that. So, just running into things where people were like, I didn’t know you did that. I’m like, I talk about it all the time. How’d you not know that? And really it’s because

the brand that I was putting out there didn’t reflect that. So like I have a brand invested agents. and because I’m a licensed real estate agent, I’ve got a team of real estate agents and, you know, I teach them how to invest. but then people are, you know, they’ll, they’ll look at that. And if that’s the only thing I’m talking about, they’re like, I didn’t know you were into multifamily or,

I didn’t know you actually did loans. Uh, or, oh, so I was like, I really had to think of things like, you know, how can I position a brand that speaks more to what I do from a holistic standpoint? That’s where invested X comes in. Um, so by and large, we’re a real estate investment company. Um, and I do a lot of things. I have different things under that umbrella, um, that you can find on our website, whether it’s our private community, whether it’s our events that we host.

Whether you want to join our team or maybe you’re an investor that would like to partner on a deal together. And that’s what InvestedX does. It communicates what basically I’m doing in the real estate world.

Christian (22:34.501)
Absolutely. Now that makes a lot of sense. I appreciate you sharing that, Chris. Man, I wish we honestly had more time, but unfortunately we don’t, my friend. I wish we could go for another hour. But any other things that you want to tell the audience, you know, exactly, I know you did mention one place they could find you, but maybe you could share, you know, all your places where they can find you and work with you.

Chris Bounds (22:53.163)
Yeah, I’m all over social on pretty much every platform that’s at least the main platforms other than Snapchat. I’ve never really gotten involved there. But if you Google my name, you’d find it. If you go to investX.com, we have a free community you can get access to. Free education too. Like I have an entire like five, six part.

Christian (23:02.033)
Me neither.

Chris Bounds (23:12.897)
breakdown of everything about real estate investing and how to get started from managing contractors, finding deals, marketing, all this stuff. It’s free. It’s actually, you can get it on the website and you don’t even need to opt in, but do opt into the community because you get a little bit of networking out of that and there’s some extra tools and resources, vendors and stuff like that, that are shared. Just anything I can do to help because that’s how I got started. Like folks were generous with their time and I was able to use that and grow. So.

I do that. Now, obviously I get things back because I get to meet cool people. I get people that’ll come along and say, Hey, actually I heard you speak at this thing. And then that helped me find this person who funded my first deal and like, it’s kind of cool. So yeah. And if you do join the community, say hi, say you met me on this podcast. I would love to meet you.

Christian (24:02.161)
I love it, I love it. You heard it here first, and gentlemen, definitely be sure to reach out to Chris. Man, I couldn’t appreciate your time enough, man. I really thoroughly enjoyed our conversation and I’m just wishing you and your wife and your companies just all the best in your endeavors, my friend.

Chris Bounds (24:16.257)
Thank you, thank you, it’s been pleasure.

Christian (24:17.739)
Of course, of course. All right guys, well as always, we will see you on the next episode. I hope you enjoyed today’s show. Take care.