Brandon Thomas - 15 Units With Only $600 Out of Pocket

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Brandon Thomas began his real estate journey working as a property manager throughout college helping to manage a 65 unit apartment. He saw firsthand how much an owner could earn and wanted in. Brandon has been able to creatively finance 15 units in Morgantown, WV that he also manages, as well as doing other deals. He's a licensed agent in Maryland and runs a team there. His work in real estate has given him the opportunity to also launch a clothing company that donates 50% of all profits to the Save The Children Foundation. This clothing company operates 100% self-sufficiently from technology and requires no additional time or money to maintain and operate from after launch. Brandon is also a respected mentor and sought-after speaker in the real estate investment community.

In this episode hosted by Mike Swenson, we discussed:

• How Brandon got a Property Manager role during college
• The huge benefit that people don't realize about appreciation and saving money in their taxes
• How Brandon started a business partnership with his colleague through a Facebook post
• Putting together an offer with 80% commercial loan from bank and holding the 20% downpayment as a second lien with interest
• What to consider in choosing between single-family and multifamily properties
  
• How Brandon puts half of his clothing business' profit to save the children and the other half to company's expansion

Timestamps:

0:00 - Intro to Brandon's Career
1:33 - How Brandon Got Started in Real Estate
4:01 - Appreciation and Cashflow
5:48 - Power of Networking
7:47 - The 10-Unit Property on Market
12:21 - Single-Family versus Multi-Family Property
14:38 - The Transition in Getting Your Property
17:07 - Finding Properties
20:11 - His Clothing Company
26:48 - How to Find Brandon

FOLLOW BRANDON:

https://www.youtube.com/@BrandonThomasOfficial

https://equityculture.bigcartel.com/

https://www.instagram.com/brandonthomasofficial/

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Minnesota Real Estate

Read the full transcript here:

Mike Swenson
Alright welcome everybody to another episode of REL Freedom where we talk about building time and Financial Freedom through opportunities and real estate I'm your host Mike Swenson and we love sharing about different ways that people are pursuing their passions everybody comes from different backgrounds everybody has different gifts and building streams of income outside of real estate which we'll also talk about with today's guest Brandon Thomas Brandon grew up and has a background in West Virginia you served as a property manager through college got into working with investors and you're a licensed realtor you have a team and then you also work on flips and buy it holds West Virginia Maryland couple other states as well your claim to fame I guess if you want to call it that building a 15 unit portfolio with 600 bucks so obviously we're going to talk about that creative financing and then giving back through your clothing company that you have and so there's a lot of fun stuff a lot of cool things that you've got going on Brandon so we are so excited to have you on the show.

Brandon Thomas
Oh thanks Mike I'm so happy to be here I'm excited to talk about all the fun stuff that we have in store today.

Mike Swenson
Share a little bit about your background and what led you up to getting into real estate and kind of where you're at today.

Brandon Thomas
yeah so uh to touch point in what you already said in college as a property manager for a 65 unit apartment building and the owner of the building would always you know check in weekly but what kind of really got me into wanting to be an investor is seeing how much money was coming in each month that this person was just pocketing each month because the the whole thing was paid off and once I saw those numbers I was like I gotta get into this I got to figure this out and that was definitely the Tipping Point and I haven't looked back.

Mike Swenson
So what uh in terms of kind of property management then how did you get that job what was your your background or how did you get connected to get into Property Management.

Brandon Thomas
Yeah so I have a bachelor's in Masters in accounting I went to WVU and I had an internship to be a like staff accountant or something for this property management company but it ended up being a full-fledged like Property Management role so I dealt with leases you know rent collection you know book doing the books essentially for the for the apartment complex as well uh managing repairs with the the repairman and that's how I that's how I really got into that role specifically.

Mike Swenson
Well it's interesting that you said that that was your exposure in college um I had somebody that I knew that owned some rental properties and what I heard from them was now these are single family homes and he only had a handful but he's kind of like well why why do I want to invest in real estate when I'm just making you know 100 bucks 200 bucks a unit like that doesn't seem very lucrative and he had another business on the side but there's so much more than just that little bit of cash flow there's all these other benefits that he didn't see but somebody like you that saw it at a high level and could see somebody with quite a few units is like wait a second there's a lot of opportunity there and I think that's what people miss about real estate because you hear people talk about find a property that cash flows and they're thinking well wait a second I gotta pour 25 25 down now you can talk about creative financing but kind of the traditional thinking is 25 down and putting all that money into not really make cash flow or maybe make a cash flow like yeah what is what's in it for me but you got to see that firsthand and having your you know accounting Finance background to be able to see that obviously your eyes were open in a different way and you were fortunate to see that to want to jump into that.

Brandon Thomas
Yeah and that was just you know the cash flow piece it doesn't even take into account the appreciation you know the you know year to year you see about four percent appreciation on average you know no matter what the uh what region you're in that's about the average and once you stack that you know over five years you know that's that's 20 of your appreciation that could be your cash that you already put down you know back in appreciation over that time period and uh the tax benefits as well you know being a an accountant you know per se uh the the depreciation and saving money in your taxes every year is also just a huge benefit that people just don't realize well.

Mike Swenson
And going back to appreciation you're not I mean for some people that do pay cash on the property um you're getting that four percent or five percent return on your entire investment but if you're putting down let's say twenty percent twenty five percent you're actually getting a 4X or a 5x return on your appreciation because I always use the example of you know the lender is not going to come to you and be like well I own 75 of the property so I want 75 percent of that appreciation it's not like that you get 100 of the appreciation by only owning a certain percentage of the property and so that really is the big piece that people miss out when they see oh appreciation at four percent or five percent they think well I can go put my money somewhere else and earn more than that well no because you're you're only getting a certain percent I can't go borrow money I can't go to a you know if I'm investing in apple I can't say well I want to put down 20 on Apple stock um if you finance the other 80 I want all the returns and so that's the sneaky benefit that people just don't realize.

Brandon Thomas
Yeah you you nailed it

Mike Swenson
So you saw that for first hand talk about those next steps then getting into it yourself

Brandon Thomas
Yeah so you know I don't come from a wealthy family you know we never grew up with a lot of money so in order for me to get involved I really had to get creative with it and so I started out I got my real estate license and I started learning all the real estate jargon knowing the forms um knowing you know the different types of addendums the different types of loans that were out there you know what kind of loans can I go out there invest in real estate with no money out of pocket you know there's there are a few out there um but they weren't really appealing to me and so luckily with the power of networking I was able to uh this is actually a really funny story I did a Facebook post and I was like hey you know I'm thinking about getting into real estate investing this is you know something that I've been working on for a few years now I'm really passionate about it I'm looking for like-minded people who would be interested you know partnering up and a gentleman that I graduated high school with sent me a DM was like hey man you know I'm thinking about getting into this too and he's he's already got successful businesses uh in Morgantown and I was like well this is going to be a perfect partnership with like him having already the business mindset and stability and me bringing the real estate knowledge over to this this partnership it just it all clicked and uh we got our we got our first five unit in Morgantown that we we bought creatively um well you know what I guess it wasn't exactly creative but it was kind of creative more on our partnership because he put down the 20 percent uh for the down payment and he gets a larger portion of our cash flow each month that I'm paying back from my half of his down payment that he essentially financed from me um over I can't remember what it was like over 10 years or something like that um but we're I'm gonna have to throw a little bit more money into another project we have and it'll offset the loan a little bit that we have but that was one of our creative ways and then we also bought a 10 unit let's see about six months later that was very creative so after all this happened we a 10 unit came on the market and both these properties were on on Market as well these weren't off market so all both of them had multiple offers and what was so cool about our 10 unit um offer was it wasn't over asking price the other offers we know definitely were over asking price when there's multiple offers someone's going to go over asking but what we did is we reached out to the agent and we were like would the owners be interested in holding the down payment the 20 down payment as a second lien over a certain amount of time with interest and they came back and they were like yeah you know what they would be interested in doing that so we put together an offer we got 80 commercial loan from the bank and then we submitted with the offer that the current sellers would be holding 20 percent at I think was four percent over 15 years and we also included the amortization schedule how much potential interest they would be making over that time period and what the monthly payment would be how we would be paying it like just direct deposit each month and uh once they saw all these numbers they were like yes this is this is what we want to do and I mean essentially we're putting you know one of their kids through college just with the interest alone that they're making on this loan so the um the 600 that came out of pocket was just for closing costs between me and two other partners to split on that deal well.

Mike Swenson
And that's the beauty I mean so many people don't realize what's out there and for somebody like me that is an agent when I talk to investors that aren't agents they they think so much bigger because as an agent we tend to think how the typical residential transaction flows and investors are much more creative in their thinking and so I've had to learn to think outside the box and come up with different options but like you said you're providing a solution where you know the sticker price isn't the same but what they actually get is much larger because they're becoming the bank and if you can help show them it's going to take a little bit of extra work and some extra conversations but if you can show them hey you can make more money here outside of just what's purchase prices it doesn't mean everybody's going to go for that but for the right people it's it's a big win for them and like you said it helps put people through college because they're being the bank like instead of the Bank building all these other buildings and having these nice offices why don't you let the current owner have some extra money and they're going to be super excited about it.

Brandon Thomas
Yeah and I mean we love also like throwing offers for like owner finance properties and stuff like that but whenever for them to do an owner an owner finance situation usually they want some sort of down payment so this is the kind of the reverse side of it because they're still getting 80 percent at closing from a loan from the bank and then they're financing the remaining so it's still a zero out of pocket for us uh but it's it's like a reverse owner finance because there's getting a down payment from the bank is how I see it.

Mike Swenson
That's awesome and and so it sounds like everything's going well with that property and and they're pumped about it still

Brandon Thomas
So I mean we've had our uh our hiccups um we had to replace some panels and that has really set us back but luckily we've been working with the insurance company and they allowed us to do two or three panels a month because I mean it's a 10 unit but there's like 20 different panels between all the different rooms garages stuff like that that needed upgraded but the insurance company worked with this and allowed us to do two or three panels a month and we're able to pay for those panels through the cash flow so nothing has been directly out of our pocket but we're still you know not making any money off of it but at least everything's getting updated fixed through the cash flow and uh for us that was a huge win.

Mike Swenson
Well I it was interesting I had a conversation earlier today with somebody and we were talking about buying smaller multi-family versus something a little bit larger talk about you know as as you're analyzing maybe like a one or a two unit deal versus this 10 unit deal what do you see as the benefits of going to kind of the small or the little bit larger multi-family versus something maybe one or two units with kind of I'm leading up to the answer if you can have a little bit more meat on the bone to these to do these types of things but I'm curious to hear your perspective on it.

Brandon Thomas
Yeah I mean I think it it comes down to your risk tolerance you know if if you want more of the appreciation side of things then I would say go more the single family route because they do appreciate a little bit quicker from in my understanding uh but if you want something that's like going to be guaranteed cash flow especially the larger ones where you get a commercial loan you know these are variable rates that change every five years you know luckily our rates are you know around three four percent on these ones but if we were to buy them at the rates now I don't I mean we might be breaking even on these um but that would be probably the larger thing is it just comes down to your personal risk tolerance do you want to at least have your mortgage paid then I'd say go larger you know in a worst case scenario if you're looking for more appreciation and if you get one crappy tenant in there that's gonna keep missing your monthly uh their monthly rent and you got to come out of pocket for that for that mortgage like that that could be a killer um so yeah it really just comes down to to that in my opinion.

Mike Swenson
Yeah and I think what some people might see as uh less units being less of a risk it is that opposite because yeah out of 10 tenants if one tenant or one one unit is vacant or somebody didn't pay this month you still have nine rent checks coming in if I've got a duplex and one person doesn't pay I've lost 50 percent of my income and so it is a little counter-intuitive where the larger properties you can spread that risk out more versus a smaller property that just doesn't happen.

Brandon Thomas
Yeah and I mean I'll give you an example here for the 10 unit we had at one point five or six I can't remember five or six um vacant units at one time and we were still able to pay the mortgage pay the insurance pay utilities and all that off those four units so if that tells you anything right there you know that wouldn't be able to happen in a in a single family or probably not even a duplex you know with today's interest rates anyways.

Mike Swenson
In terms of the vacancy was that because you were updating units is that because seasonality type thing or was that. In the transition of when you got the the property talk a little bit more about that.

Brandon Thomas
Yeah it was it was in the transition of when we bought it there were I think three vacant vacancies when we bought it and then shortly after I'd say wasn't even a month after we had some tenants who apparently were not from this country I'll put it lightly and they all of a sudden send me a text message was like hey we gotta leave sorry essentially I mean that's what it was and it was a large family and they were taking up two units and we just owned I mean we only owned the place for maybe two or three weeks at this point and they just bolted and so that put us in a tight spot and we had a lot of vacancies but I'd say it only took Maybe maybe a month to get it back to full capacity we still have one that's vacant and that's just because we're choosing to not rent it out because we you need to do a few things to it but right now we're at full capacity at all all our units.

Mike Swenson
And I think having other other conversations with investors I've I kind of set that expectation with them is look if you're looking for a non-risk opportunity that has a ton of cash flow and everybody's in the units paying on time and it's perfect like those deals just aren't there right now and so there's some challenge some hiccups that you're going to have to overcome and so it might be the rents are low it might be the units need to be updated it might be the management was poorly ran previously and now you're bringing in a higher level of management and even with that because you're bringing a high level level of management tenants might leave because they don't want to be held accountable in ways because maybe the the old landlord looked a different way you know when they weren't paying or when they had issues or they didn't respond to them so there's going to be some sort of problem solving that you're gonna have to do uh to be able to turn those units um but therein lies the opportunity you've got to take something that has you know some some wheels that need to be greased a little bit and make it better and that's your opportunity to make money is to improve the condition or improve the tenants or improve the processes of those properties.

Brandon Thomas
Yeah you nailed it I mean you don't make money unless you're solving a problem you know the problem's already been solved and you're not making any money.

Mike Swenson
Exactly yeah because everybody's looking for those units and those units aren't out there yep exactly so talk about finding properties because you mentioned you're looking in in some other states as well what are you looking for when you're looking for deals

Brandon Thomas
Yeah so my brother-in-law he's on he's in Upstate New York near the uh the Finger Lakes and um like Ithaca region uh uh and we're trying to find like an Airbnb probably up there and then uh my flipping partner here in Maryland he wants something in the Carolinas so so we're also looking for an Airbnb in the Carolinas and uh I got a family who wants to to get a a condo or something in Ocean City and I'm everywhere man you know if if it if it makes sense financially and the numbers make sense and like I said it comes back down to my wrist tolerance if it makes sense I mean I'll invest just about anywhere um so yeah that's those are probably all the primary locations that we're looking at.

Mike Swenson
And what's the what's the logic here there what are you curious in terms of kind of short-term rentals when you have apartment complexes is it diversification or is it cash flow or is it kind of everywhere in between.

Brandon Thomas
It's everywhere in between but it's certainly uh plays a big part with just diversification you know I I've never really dabbled in the the short-term rental you know um area you know I've ran the numbers I've we've been under contract before in a cabin uh near like Deep Creek Lake Maryland and it didn't really work out we came to a disagreement a couple times and and then we we were also under contract on an old post office that we were going to Airbnb in the same area and again it came into just disagreements with uh inspections and it just it never worked out so I'd like to get into that space just to just to learn from it.

Mike Swenson
mm-hmm yeah and a lot of people that I've talked to you hear these stories and and maybe they're not going to be as exciting of numbers as the wild west back in the day but at the same time short-term rentals do provide great cash flow that doesn't mean that you don't have to work hard for it that doesn't mean you don't have to investigate the market run numbers pick the right properties in the right locations with the right amenities but it's also totally a different mindset you're thinking about Hospitality you're providing an experience versus you're providing housing yes you're providing housing but you're being judged on the experience as well and so it's a different mentality approaching those properties but when done well you you can make a lot of money that way.

Brandon Thomas
Yeah exactly I mean it definitely comes down to you know they're leaving you reviews and other people are going to see these reviews it's not like that in the long-term rental space you know I don't have an old tenant saying this guy didn't come at 3am and you know unclog my toilet you're not you're not going to see that in the long-term rental uh space so yeah you know it's just building that brand and uh reputation and if we can do it in one state then I don't see why we can't do it in another.

Mike Swenson
Well that's exciting so talk a little bit about you know we want to focus on time and Financial Freedom through real estate so you've got a clothing company that you've launched now how did that come to be.

Brandon Thomas
So it's it's really just a passion project you know I've I've always been on a fashion minded you know I I care what I look like when I go out in public but I don't care that much but there's no really ideal uh closing brand out there for Real Estate Investors for entrepreneurs you know for people who want to have this this kind of freedom and so I kind of took that twist and and I wake up at like three o'clock in the morning and I always have my best ideas from like three to six a.m and this is one of those ideas from three to six a.m I just I've got this idea I created a logo I went through this whole entire thing I built the whole system whole the whole process and it was just a just a passion project man as um but and you know to get back on on topic there's there's nothing out there for entrepreneurs and Real Estate Investors so I wanted to take something that could appeal to them you know it could be a conversation piece if they wear that out on top out in public they're going to be like oh you know your T-shirt says cash flow tell me more about that you know so it's just something like that and I got a I got a hoodie that says like Leverage right here and um what else do I have I mean we only launched two weeks ago so we're we're still in the the soft launch phase but yeah man we got our fall lineup out and and uh it's been a good two weeks so far for the business I'm hoping to get to expand the website a little bit and I'd love to be on Amazon by 2024.

Mike Swenson
Yeah and you mentioned that it pretty much runs itself right and so people can have these ideas and create something where it's not hey order comes in I'm printing the t-shirt and now I'm shipping it and sending it out um you can do that automated and so talk a little bit about that.

Brandon Thomas
Yeah so I think the best part about that is that the entire system is essentially free there's zero overhead in the in the system I built the website that I have connected is free the drop shipper that I have is free you know the people who are paying for the products essentially the the price gets pushed to the drop shipper they get you know paid and then all I get is the the difference of the profit from the prices that I set on my website to what the actual cost is on a drop shipper website so whenever they place the order on my website it goes which is a free website goes straight to the drop shipper they get the order they do everything ship it you know they handle their returns um cancellations everything they handle it it's shipped directly to them to the person that bought the you know the item and uh then I just get paid the difference.

Mike Swenson
Yeah and so if nobody makes any purchases you don't have hard costs I have no I'm not losing any money awesome well yeah that's that's really cool and and you have the ability to do that because you kind of you're Your Own Boss you get to decide what to do and so you go take a little bit of time get that set up and now that runs itself and now you can go focus on another stream of income.

Brandon Thomas
Yep and I mean I got the I got the blueprint you know if I wanted to start a different type of clothing business or maybe sell accessories or cups or anything like that I got the blueprint to do it and it's all going to be seamless.

Mike Swenson
Awesome and and also too I noticed that you're donating a portion of the profits of that too talk about that.

Brandon Thomas
Yeah so I'm actually not taking any money from from the uh the clothing company uh half half the net profits are going to uh save the children Foundation and then the other half the profits are just going to expanding the company with like overhead costs you know getting a better website that's not free you know and just to have your products on Amazon there's a monthly cost and so that's what all the money is going to be going towards I'm not taking a dime on this man like I said it's it's a passion project for me and uh I know that that Foundation could use the funds a lot more than what I could.

Mike Swenson
I know you mentioned too you've got a real estate team that you do as well we didn't cover anything on that but anything more you want to talk about there.

Brandon Thomas
You know what I mean it's a typical real estate team me and my my uh my old broker we started this team in Maryland and we have about four or five agents below us and it's really just referral based for me you know if it's a good listing I'll take it um if it's a a close friend I'll help them buy but a lot of it I'm just Outsourcing to to the other agents and letting them handle it and again going back to the Financial Freedom you know just just having a real estate license you can get a referral fee just for referring to someone and uh there's really no work for for me to do you know once once you hand them off uh but that's that's pretty much the team in a nutshell.

Mike Swenson
That's awesome and it I mean it it does speak to you've got different irons in the fire doing different things you've got your rental properties you've got some real estate sales you've got your clothing company you've got new Ventures that you're pursuing in the short-term rentals and so you're building all these different things that are working hand to hand and to build the life that you want to live.

Brandon Thomas
Yeah man uh we didn't even touch on this I actually have another company too I have a financial services firm so we do uh like we set up trusts we can set up whole life insurance policies we can do iuls you know and all that ties into real estate investing and you know becoming the bank and the infinite banking policy uh but that's a topic for another day man we might need to might have to do a part two on on this.

Mike Swenson
Awesome well thank you so much Brandon for coming on and sharing how can folks uh reach out to you or get a hold of you if they want to learn more about what you're doing.

Brandon Thomas
Yeah I mean my Instagram is uh Brandon Thomas Official. My TikTok is Brandon Thomas Official. My YouTube is Brandon Thomas Official. My threads is Brandon Thomas Official. I try and just claim it all man so I'd say the best way is just to DM me on Instagram though.

Mike Swenson
Well thank you so much for coming on Brandon and sharing your story excited to see what you've accomplished and excited to see where you continue to grow in the future so best of luck.

Mike Swenson
Alright welcome everybody to another episode of REL Freedom where we talk about building time and Financial Freedom through opportunities and real estate I'm your host Mike Swenson and we love sharing about different ways that people are pursuing their passions everybody comes from different backgrounds everybody has different gifts and building streams of income outside of real estate which we'll also talk about with today's guest Brandon Thomas Brandon grew up and has a background in West Virginia you served as a property manager through college got into working with investors and you're a licensed realtor you have a team and then you also work on flips and buy it holds West Virginia Maryland couple other states as well your claim to fame I guess if you want to call it that building a 15 unit portfolio with 600 bucks so obviously we're going to talk about that creative financing and then giving back through your clothing company that you have and so there's a lot of fun stuff a lot of cool things that you've got going on Brandon so we are so excited to have you on the show.

Brandon Thomas
Oh thanks Mike I'm so happy to be here I'm excited to talk about all the fun stuff that we have in store today.

Mike Swenson
Share a little bit about your background and what led you up to getting into real estate and kind of where you're at today.

Brandon Thomas
Yeah so uh to touch point in what you already said in college as a property manager for a 65 unit apartment building and the owner of the building would always you know check in weekly but what kind of really got me into wanting to be an investor is seeing how much money was coming in each month that this person was just pocketing each month because the the whole thing was paid off and once I saw those numbers I was like I gotta get into this I got to figure this out and that was definitely the Tipping Point and I haven't looked back.

Mike Swenson
So what uh in terms of kind of property management then how did you get that job what was your your background or how did you get connected to get into Property Management.

Brandon Thomas
Yeah so I have a bachelor's in Masters in accounting I went to WVU and I had an internship to be a like staff accountant or something for this property management company but it ended up being a full-fledged like Property Management role so I dealt with leases you know rent collection you know book doing the books essentially for the for the apartment complex as well uh managing repairs with the the repairman and that's how I that's how I really got into that role specifically.

Mike Swenson
Well it's interesting that you said that that was your exposure in college um I had somebody that I knew that owned some rental properties and what I heard from them was now these are single family homes and he only had a handful but he's kind of like well why why do I want to invest in real estate when I'm just making you know 100 bucks 200 bucks a unit like that doesn't seem very lucrative and he had another business on the side but there's so much more than just that little bit of cash flow there's all these other benefits that he didn't see but somebody like you that saw it at a high level and could see somebody with quite a few units is like wait a second there's a lot of opportunity there and I think that's what people miss about real estate because you hear people talk about find a property that cash flows and they're thinking well wait a second I gotta pour 25 25 down now you can talk about creative financing but kind of the traditional thinking is 25 down and putting all that money into not really make cash flow or maybe make a cash flow like yeah what is what's in it for me but you got to see that firsthand and having your you know accounting Finance background to be able to see that obviously your eyes were open in a different way and you were fortunate to see that to want to jump into that.

Brandon Thomas
Yeah and that was just you know the cash flow piece it doesn't even take into account the appreciation you know the you know year to year you see about four percent appreciation on average you know no matter what the uh what region you're in that's about the average and once you stack that you know over five years you know that's that's 20 of your appreciation that could be your cash that you already put down you know back in appreciation over that time period and uh the tax benefits as well you know being a an accountant you know per se uh the the depreciation and saving money in your taxes every year is also just a huge benefit that people just don't realize well.

Mike Swenson
And going back to appreciation you're not I mean for some people that do pay cash on the property um you're getting that four percent or five percent return on your entire investment but if you're putting down let's say twenty percent twenty five percent you're actually getting a 4X or a 5x return on your appreciation because I always use the example of you know the lender is not going to come to you and be like well I own 75 of the property so I want 75 percent of that appreciation it's not like that you get 100 of the appreciation by only owning a certain percentage of the property and so that really is the big piece that people miss out when they see oh appreciation at four percent or five percent they think well I can go put my money somewhere else and earn more than that well no because you're you're only getting a certain percent I can't go borrow money I can't go to a you know if I'm investing in apple I can't say well I want to put down 20 on Apple stock um if you finance the other 80 I want all the returns and so that's the sneaky benefit that people just don't realize.

Brandon Thomas
Yeah you you nailed it

Mike Swenson
So you saw that for first hand talk about those next steps then getting into it yourself

Brandon Thomas
Yeah so you know I don't come from a wealthy family you know we never grew up with a lot of money so in order for me to get involved I really had to get creative with it and so I started out I got my real estate license and I started learning all the real estate jargon knowing the forms um knowing you know the different types of addendums the different types of loans that were out there you know what kind of loans can I go out there invest in real estate with no money out of pocket you know there's there are a few out there um but they weren't really appealing to me and so luckily with the power of networking I was able to uh this is actually a really funny story I did a Facebook post and I was like hey you know I'm thinking about getting into real estate investing this is you know something that I've been working on for a few years now I'm really passionate about it I'm looking for like-minded people who would be interested you know partnering up and a gentleman that I graduated high school with sent me a DM was like hey man you know I'm thinking about getting into this too and he's he's already got successful businesses uh in Morgantown and I was like well this is going to be a perfect partnership with like him having already the business mindset and stability and me bringing the real estate knowledge over to this this partnership it just it all clicked and uh we got our we got our first five unit in Morgantown that we we bought creatively um well you know what I guess it wasn't exactly creative but it was kind of creative more on our partnership because he put down the 20 percent uh for the down payment and he gets a larger portion of our cash flow each month that I'm paying back from my half of his down payment that he essentially financed from me um over I can't remember what it was like over 10 years or something like that um but we're I'm gonna have to throw a little bit more money into another project we have and it'll offset the loan a little bit that we have but that was one of our creative ways and then we also bought a 10 unit let's see about six months later that was very creative so after all this happened we a 10 unit came on the market and both these properties were on on Market as well these weren't off market so all both of them had multiple offers and what was so cool about our 10 unit um offer was it wasn't over asking price the other offers we know definitely were over asking price when there's multiple offers someone's going to go over asking but what we did is we reached out to the agent and we were like would the owners be interested in holding the down payment the 20 down payment as a second lien over a certain amount of time with interest and they came back and they were like yeah you know what they would be interested in doing that so we put together an offer we got 80 commercial loan from the bank and then we submitted with the offer that the current sellers would be holding 20 percent at I think was four percent over 15 years and we also included the amortization schedule how much potential interest they would be making over that time period and what the monthly payment would be how we would be paying it like just direct deposit each month and uh once they saw all these numbers they were like yes this is this is what we want to do and I mean essentially we're putting you know one of their kids through college just with the interest alone that they're making on this loan so the um the 600 that came out of pocket was just for closing costs between me and two other partners to split on that deal well.

Mike Swenson
And that's the beauty I mean so many people don't realize what's out there and for somebody like me that is an agent when I talk to investors that aren't agents they they think so much bigger because as an agent we tend to think how the typical residential transaction flows and investors are much more creative in their thinking and so I've had to learn to think outside the box and come up with different options but like you said you're providing a solution where you know the sticker price isn't the same but what they actually get is much larger because they're becoming the bank and if you can help show them it's going to take a little bit of extra work and some extra conversations but if you can show them hey you can make more money here outside of just what's purchase prices it doesn't mean everybody's going to go for that but for the right people it's it's a big win for them and like you said it helps put people through college because they're being the bank like instead of the Bank building all these other buildings and having these nice offices why don't you let the current owner have some extra money and they're going to be super excited about it.

Brandon Thomas
Yeah and I mean we love also like throwing offers for like owner finance properties and stuff like that but whenever for them to do an owner an owner finance situation usually they want some sort of down payment so this is the kind of the reverse side of it because they're still getting 80 percent at closing from a loan from the bank and then they're financing the remaining so it's still a zero out of pocket for us uh but it's it's like a reverse owner finance because there's getting a down payment from the bank is how I see it.

Mike Swenson
That's awesome and and so it sounds like everything's going well with that property and and they're pumped about it still

Brandon Thomas
So I mean we've had our uh our hiccups um we had to replace some panels and that has really set us back but luckily we've been working with the insurance company and they allowed us to do two or three panels a month because I mean it's a 10 unit but there's like 20 different panels between all the different rooms garages stuff like that that needed upgraded but the insurance company worked with this and allowed us to do two or three panels a month and we're able to pay for those panels through the cash flow so nothing has been directly out of our pocket but we're still you know not making any money off of it but at least everything's getting updated fixed through the cash flow and uh for us that was a huge win.

Mike Swenson
Well I it was interesting I had a conversation earlier today with somebody and we were talking about buying smaller multi-family versus something a little bit larger talk about you know as as you're analyzing maybe like a one or a two unit deal versus this 10 unit deal what do you see as the benefits of going to kind of the small or the little bit larger multi-family versus something maybe one or two units with kind of I'm leading up to the answer if you can have a little bit more meat on the bone to these to do these types of things but I'm curious to hear your perspective on it.

Brandon Thomas
Yeah I mean I think it it comes down to your risk tolerance you know if if you want more of the appreciation side of things then I would say go more the single family route because they do appreciate a little bit quicker from in my understanding uh but if you want something that's like going to be guaranteed cash flow especially the larger ones where you get a commercial loan you know these are variable rates that change every five years you know luckily our rates are you know around three four percent on these ones but if we were to buy them at the rates now I don't I mean we might be breaking even on these um but that would be probably the larger thing is it just comes down to your personal risk tolerance do you want to at least have your mortgage paid then I'd say go larger you know in a worst case scenario if you're looking for more appreciation and if you get one crappy tenant in there that's gonna keep missing your monthly uh their monthly rent and you got to come out of pocket for that for that mortgage like that that could be a killer um so yeah it really just comes down to to that in my opinion.

Mike Swenson
Yeah and I think what some people might see as uh less units being less of a risk it is that opposite because yeah out of 10 tenants if one tenant or one one unit is vacant or somebody didn't pay this month you still have nine rent checks coming in if I've got a duplex and one person doesn't pay I've lost 50 percent of my income and so it is a little counter-intuitive where the larger properties you can spread that risk out more versus a smaller property that just doesn't happen.

Brandon Thomas
Yeah and I mean I'll give you an example here for the 10 unit we had at one point five or six I can't remember five or six um vacant units at one time and we were still able to pay the mortgage pay the insurance pay utilities and all that off those four units so if that tells you anything right there you know that wouldn't be able to happen in a in a single family or probably not even a duplex you know with today's interest rates anyways.

Mike Swenson
In terms of the vacancy was that because you were updating units is that because seasonality type thing or was that. In the transition of when you got the the property talk a little bit more about that.

Brandon Thomas
Yeah it was it was in the transition of when we bought it there were I think three vacant vacancies when we bought it and then shortly after I'd say wasn't even a month after we had some tenants who apparently were not from this country I'll put it lightly and they all of a sudden send me a text message was like hey we gotta leave sorry essentially I mean that's what it was and it was a large family and they were taking up two units and we just owned I mean we only owned the place for maybe two or three weeks at this point and they just bolted and so that put us in a tight spot and we had a lot of vacancies but I'd say it only took Maybe maybe a month to get it back to full capacity we still have one that's vacant and that's just because we're choosing to not rent it out because we you need to do a few things to it but right now we're at full capacity at all all our units.

Mike Swenson
And I think having other other conversations with investors I've I kind of set that expectation with them is look if you're looking for a non-risk opportunity that has a ton of cash flow and everybody's in the units paying on time and it's perfect like those deals just aren't there right now and so there's some challenge some hiccups that you're going to have to overcome and so it might be the rents are low it might be the units need to be updated it might be the management was poorly ran previously and now you're bringing in a higher level of management and even with that because you're bringing a high level level of management tenants might leave because they don't want to be held accountable in ways because maybe the the old landlord looked a different way you know when they weren't paying or when they had issues or they didn't respond to them so there's going to be some sort of problem solving that you're gonna have to do uh to be able to turn those units um but therein lies the opportunity you've got to take something that has you know some some wheels that need to be greased a little bit and make it better and that's your opportunity to make money is to improve the condition or improve the tenants or improve the processes of those properties.

Brandon Thomas
Yeah you nailed it I mean you don't make money unless you're solving a problem you know the problem's already been solved and you're not making any money.

Mike Swenson
Exactly yeah because everybody's looking for those units and those units aren't out there yep exactly so talk about finding properties because you mentioned you're looking in in some other states as well what are you looking for when you're looking for deals

Brandon Thomas
Yeah so my brother-in-law he's on he's in Upstate New York near the uh the Finger Lakes and um like Ithaca region uh uh and we're trying to find like an Airbnb probably up there and then uh my flipping partner here in Maryland he wants something in the Carolinas so so we're also looking for an Airbnb in the Carolinas and uh I got a family who wants to to get a a condo or something in Ocean City and I'm everywhere man you know if if it if it makes sense financially and the numbers make sense and like I said it comes back down to my wrist tolerance if it makes sense I mean I'll invest just about anywhere um so yeah that's those are probably all the primary locations that we're looking at.

Mike Swenson
And what's the what's the logic here there what are you curious in terms of kind of short-term rentals when you have apartment complexes is it diversification or is it cash flow or is it kind of everywhere in between.

Brandon Thomas
It's everywhere in between but it's certainly uh plays a big part with just diversification you know I I've never really dabbled in the the short-term rental you know um area you know I've ran the numbers I've we've been under contract before in a cabin uh near like Deep Creek Lake Maryland and it didn't really work out we came to a disagreement a couple times and and then we we were also under contract on an old post office that we were going to Airbnb in the same area and again it came into just disagreements with uh inspections and it just it never worked out so I'd like to get into that space just to just to learn from it
18:51 MIKE
mm-hmm yeah and a lot of people that I've talked to you hear these stories and and maybe they're not going to be as exciting of numbers as the wild west back in the day but at the same time short-term rentals do provide great cash flow that doesn't mean that you don't have to work hard for it that doesn't mean you don't have to investigate the market run numbers pick the right properties in the right locations with the right amenities but it's also totally a different mindset you're thinking about Hospitality you're providing an experience versus you're providing housing yes you're providing housing but you're being judged on the experience as well and so it's a different mentality approaching those properties but when done well you you can make a lot of money that way.

Brandon
Yeah exactly I mean it definitely comes down to you know they're leaving you reviews and other people are going to see these reviews it's not like that in the long-term rental space you know I don't have an old tenant saying this guy didn't come at 3am and you know unclog my toilet you're not you're not going to see that in the long-term rental uh space so yeah you know it's just building that brand and uh reputation and if we can do it in one state then I don't see why we can't do it in another.

Mike Swenson
Well that's exciting so talk a little bit about you know we want to focus on time and Financial Freedom through real estate so you've got a clothing company that you've launched now how did that come to be.

Brandon Thomas
So it's it's really just a passion project you know I've I've always been on a fashion minded you know I I care what I look like when I go out in public but I don't care that much but there's no really ideal uh closing brand out there for Real Estate Investors for entrepreneurs you know for people who want to have this this kind of freedom and so I kind of took that twist and and I wake up at like three o'clock in the morning and I always have my best ideas from like three to six a.m and this is one of those ideas from three to six a.m I just I've got this idea I created a logo I went through this whole entire thing I built the whole system whole the whole process and it was just a just a passion project man as um but and you know to get back on on topic there's there's nothing out there for entrepreneurs and Real Estate Investors so I wanted to take something that could appeal to them you know it could be a conversation piece if they wear that out on top out in public they're going to be like oh you know your T-shirt says cash flow tell me more about that you know so it's just something like that and I got a I got a hoodie that says like Leverage right here and um what else do I have I mean we only launched two weeks ago so we're we're still in the the soft launch phase but yeah man we got our fall lineup out and and uh it's been a good two weeks so far for the business I'm hoping to get to expand the website a little bit and I'd love to be on Amazon by 2024.

Mike Swenson
Yeah and you mentioned that it pretty much runs itself right and so people can have these ideas and create something where it's not hey order comes in I'm printing the t-shirt and now I'm shipping it and sending it out um you can do that automated and so talk a little bit about that.

Brandon Thomas
Yeah so I think the best part about that is that the entire system is essentially free there's zero overhead in the in the system I built the website that I have connected is free the drop shipper that I have is free you know the people who are paying for the products essentially the the price gets pushed to the drop shipper they get you know paid and then all I get is the the difference of the profit from the prices that I set on my website to what the actual cost is on a drop shipper website so whenever they place the order on my website it goes which is a free website goes straight to the drop shipper they get the order they do everything ship it you know they handle their returns um cancellations everything they handle it it's shipped directly to them to the person that bought the you know the item and uh then I just get paid the difference.

Mike Swenson
Yeah and so if nobody makes any purchases you don't have hard costs I have no I'm not losing any money awesome well yeah that's that's really cool and and you have the ability to do that because you kind of you're Your Own Boss you get to decide what to do and so you go take a little bit of time get that set up and now that runs itself and now you can go focus on another stream of income.

Brandon Thomas
Yep and I mean I got the I got the blueprint you know if I wanted to start a different type of clothing business or maybe sell accessories or cups or anything like that I got the blueprint to do it and it's all going to be seamless.

Mike Swenson
Awesome and and also too I noticed that you're donating a portion of the profits of that too talk about that.

Brandon Thomas
Yeah so I'm actually not taking any money from from the uh the clothing company uh half half the net profits are going to uh save the children Foundation and then the other half the profits are just going to expanding the company with like overhead costs you know getting a better website that's not free you know and just to have your products on Amazon there's a monthly cost and so that's what all the money is going to be going towards I'm not taking a dime on this man like I said it's it's a passion project for me and uh I know that that Foundation could use the funds a lot more than what I could.

Mike Swenson
I know you mentioned too you've got a real estate team that you do as well we didn't cover anything on that but anything more you want to talk about there.

Brandon Thomas
You know what I mean it's a typical real estate team me and my my uh my old broker we started this team in Maryland and we have about four or five agents below us and it's really just referral based for me you know if it's a good listing I'll take it um if it's a a close friend I'll help them buy but a lot of it I'm just Outsourcing to to the other agents and letting them handle it and again going back to the Financial Freedom you know just just having a real estate license you can get a referral fee just for referring to someone and uh there's really no work for for me to do you know once once you hand them off uh but that's that's pretty much the team in a nutshell.

Mike Swenson
That's awesome and it I mean it it does speak to you've got different irons in the fire doing different things you've got your rental properties you've got some real estate sales you've got your clothing company you've got new Ventures that you're pursuing in the short-term rentals and so you're building all these different things that are working hand to hand and to build the life that you want to live.

Brandon Thomas
Yeah man uh we didn't even touch on this I actually have another company too I have a financial services firm so we do uh like we set up trusts we can set up whole life insurance policies we can do iuls you know and all that ties into real estate investing and you know becoming the bank and the infinite banking policy uh but that's a topic for another day man we might need to might have to do a part two on on this.

Mike Swenson
Awesome well thank you so much Brandon for coming on and sharing how can folks uh reach out to you or get a hold of you if they want to learn more about what you're doing.

Brandon Thomas
Yeah I mean my Instagram is uh Brandon Thomas Official. My TikTok is Brandon Thomas Official. My YouTube is Brandon Thomas Official. My threads is Brandon Thomas Official. I try and just claim it all man so I'd say the best way is just to DM me on Instagram though.

Mike Swenson
Well thank you so much for coming on Brandon and sharing your story excited to see what you've accomplished and excited to see where you continue to grow in the future so best of luck.