How To Raise Money To Get Through Tough Times With Brandon Brittingham

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With the current market we’re dealing with, raising money is a challenge for everyone, especially the investors. Many business owners make a mistake as they walk on a journey of a sale’s mind instead of walking through a consumer’s mind. In this episode, Brandon Brittingham shares how you can raise money with a business owner mindset to get through tough times. He also shares his experience on how he was willing to gamble to build a massive brand in the first recession. Tim Herriage took the chance to squeeze out some more insights from Brandon, not only about how he maintains trust from an ethical point of view but also how it impacts doing business. Tune in to this episode to gain more gems of wisdom from Brandon.

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How To Raise Money To Get Through Tough Times With Brandon Brittingham

I’m with an absolute rock star. Brandon Brittingham. Thank you for being here.

I appreciate you. Thank you.

Tell everybody a little bit about yourself.

I do a lot of cliff notes. Anything that has to do with a home sale. I own a company around it. I have been in the investment space for a long time too. Why I originally got into real estate was to be in the investment space, and then I got into the retail side. I tried to create Amazon in real estate to how we can make it easy on the consumer. I have always had an affinity and love for investing in real estate. I have always done that too.

I was lucky enough to sit next to you at Kent Clothier’s boardroom in Chicago. I remember I was sitting there, and I had no idea who you were. I got up and spoke. Sometimes I’m a little bit of the alpha in the room. People don’t want to give me feedback, and you like popped up and quietly, “I can help you with that problem.”

I heard the authority come out. It was like, “What did you do then?” I was like, “Who is this guy?” The more and more the day got on, it was so fun to watch you pour into people. I’m excited to have you here. I start every episode with the bottom line up front. Do me a favor, take two minutes, tell the audience the single most important things in this market they need to be doing, avoiding, focused on, and changing. Whatever you think the bottom line is for this real estate investor.

In this market, a lot of people try to make the mistake is timing the real estate market. If you look at real estate over the whole, you are going to make money if you understand how to underwrite a deal. If I could do anything over again, one thing that I would tell people is to figure out how to go after the bigger deals because it’s another zero.

Your underwriting is the same, and everything is the same. In a lot of apartment deals and things like that I have done, the underwriting is easier than a smaller single-family portfolio, and it is way less pain. The appreciation and the economies of scale that I have gotten from apartments are insane. Asset classes like apartments and single-family houses, over time, are going to beat anything that’s out there.

It’s one of the safest places to place your money but people are always trying to like, “Should I buy now? Can I time the market?” You underwrite a deal. It’s a good deal or a bad deal. Over time, if you buy and hold, the key to wealth is buying and holding and not emotionally selling and buying on a whim. Underwriting is being smart about what you do with your money and holding for the long-term.

If you study and pay attention to anybody that’s wealthy, they hold cash-producing assets. They never pay taxes on it. Keep buying more and figure out how to never sell it. Pull their cash out of it to live off of but they never sell anything. If you follow that model in real estate over time, it’s going to make you wealthy. Don’t care about timing the market.

Now, we are going to see some pain across the United States. It doesn’t necessarily mean that it’s real. There’s going to be perceived pain from people that were probably smaller investors or they didn’t know what they were doing. There’s opportunity. I would tell everybody to raise as much money as they can. Stack capital because there’s going to be an opportunity.

The bulk of my wealth that I have was because I bought a ton of stuff between 2008 and 2011. Now, those assets that I bought are 10X and 15X. Stack capital now and wait for the opportunity. Opportunity is going to come but if you see a good deal now, don’t wait. If you know how to underwrite a deal and you are going to hold it for the long-term, you are going to make money either way. Don’t buy and sell. Buy and hold. Buy and hold make you wealthy.

Stack cash and assets and take advantage of the compound effect of appreciation. Too many people underestimate the compound effect of appreciation. I spoke at Scale & Escape and was looking for some good examples. Besides Tim, the lender tells them, “Buy houses and always pay interest.” It was an interesting thing. I found that in 1971, Warren Buffett bought a home in Laguna Beach and borrowed $120,000 against that home.

The CNBC host says, “Why would you have taken a mortgage? You didn’t need it.” He said, “The interest rates were a little high but I figured I could do better with the money than the interest would cost me.” That house he bought for $150,000. It was worth $11 million when he sold it a couple of years ago.

The CNBC lady was like, “That’s amazing.” He goes, “No. I took the $120,000 and bought about 3,000 shares of Berkshire Hathaway for $40 a share. That’s worth $750 million.” He was so focused on stacking assets and acquiring. The ’70s were bloody with inflation like we are going through now. It’s funny how more people need to understand that. If you have to pay 7% to make 30%, you are not paying 7%. Do you agree?

I see the thing that in talking to people and helping them invest in real estate, a lot of people don’t get and understand like, “Here’s a simple analogy that anyone can understand.” Go back to when you were a kid. In the neighborhood you grew up in, you bought ten houses. How old are you now?

Forty-four.

Let’s say that in your 20s, you bought 10 houses. You figured out how to amass ten houses. Think about if you held them until now. You did nothing but hold them to now. You got a mortgage against them. Probably now, there’s a good chance you probably have them paid off. How much would they have appreciated in value? Double, triple or maybe more. How much would your rent be?

Think about it. If you bought ten houses and did nothing but keep them your entire life, let’s say you paid $300,000 for them several years ago. One day you are going to wake up, and they are going to be worth $600,000, maybe $900,000. They are going to be paid off. You might have started rent at $1,500. Now your rent is $4,000. You are waking up every day with ten houses paying you $4,000 a month, which is worth $900,000.

Be conservative. Let’s say they are worth $600,000 apiece. You got a $6 million asset paying you every single month. For example, if you wanted to take money out and invest in other things, you could too. Most people out there in this world could figure out how to buy ten rental properties and hold them, and if you did nothing else, that will make you wealthy later on in life. People don’t get or understand that or they think you have to amass this crazy huge portfolio.

I think that way because I’m a psychopath as far as building businesses and things like that but your average person, I work with investors all the time. I have watched it happen. I will give you a prime example. I helped a doctor around 2010 buy some assets. He’s all in time for the market, and I said, “Trust me. Buy the houses and sit on them.” It’s because what he needed to do was going to go open 2 or 3 more practices, which was going to give him a hell of an ROI on his money. We liquidated the assets for him. He took the money out of it, and he was able to go and build the rest of his practices. Real estate time is undefeated. If you wait, you are going to become wealthy.

Anyone reading needs to watch that Buffett video I’m talking about, and it’s called the Oracle of Real Estate. It was a CNBC interview in March of 2017. One of the cool things about that entire experiment is that I thought the same way you reacted. Buffett turned $150,000 into $11 million but I thought, “My parents bought the house we lived in around 1980 for $17,000. I know that house is worth $270,000.”

In decades, it’s about a 6,200% increase. What people don’t understand, it’s only 8.25% per year compounded. The Laguna Beach house only did 9.25% compounded. The difference is what you said in the opening. Warren started with a bigger number because 5% of $1 million is a lot more than 5% of $100,000. It’s taken me twenty years in the business to get there.

The only way I keep growing at the rate of growth that’s significant for me once I have gotten where I am is to continue to convert that equity that’s not necessarily producing high-value returns and to put it into as many bigger and safe responsible assets. I don’t think either of us is advocating to buy the first multifamily property you see. Learn to underwrite it. Find a good sponsor that’s someone that helps you raise money or helps you invest money that they raise. Invest with someone you can trust, someone with a track record but you got to be into the bigger transactions to make it because then your money works harder.

The one thing that I want to say, this stuck with me. You said this at Scale & Escape, and I have used this. I have quoted you on this a few times. “You can buy leads, people, and anything but you can’t buy a track record.” That was a profound statement that you made. As a matter of fact, I went home and was negotiating a deal with another bank. They were trying to squeeze me a little bit, and I used that line.

I said, “I have been borrowing money from you for fifteen years. I’m probably one of the safest borrowers that you have. We have brought you a slam dunk deal, and the one thing that I got that you cannot deny is a track record. Hundreds of projects under my belt, and I have paid you back millions and millions of dollars and never had an issue, even in the worst of times.” To your point, if you are a novice or getting into this, look for people with track records because that’s something you cannot buy.

One of the things that you said earlier that I wanted to circle back to, you can’t have a track record unless you start. What people don’t understand is if you get into a nice and safe cookie cutter bread and butter deal single-family home, even if it goes down 5% in the next 12 months, that’s fine. That rock may hit the bottom and shoot all the way up. I can almost guarantee the rent won’t go down in the next six months, so what does that matter? In ‘08, I lived through it like you. You did better than me in ‘08. None of my rent went down. They went up.

When you look at real estate as a whole, if you are getting into it, the first deal you are going to get into, you are not getting into multifamily, more than likely. You get a couple of single-families under your belt. You get an understanding of how real estate works, so rents typically never go down. In fact, they always go up. The thing that I like about real estate too is you can always underwrite it to say, “I know it’s always going to get $1,500 or $1,600 a month, whatever the case is. We know it’s never going to go to zero.

The government showed that if we tell everyone to stay home, we are going to give them money to stay home and then more money to pay their rent. It works out on both assets.

If you look at the trajectory of rent of where we are as a country, it’s never going down. To your point, in ‘08, when the world was crashing, we were raising rents. There was a shortage of rental properties because people were losing their single-family houses or whatever the case was, and they still had to live somewhere. That created a whole sub-segment of people who are probably going to always rent. There’s always going to be a sub-segment of people who are always going to rent, which is going to always increase your rental numbers, and rents are not going to go down. It’s a fact.

I want to talk a little bit about raising money and some of your best advice on that. I want to talk about the transition from investing to retail, then back to investing, then even into bigger deals. I want to spend some time talking about the mindset of being a business owner and how to get through tough times. Let’s jump back to 2008.

You said something that I wrote down, and I have told my wife several times since then. You were like, “I saw the market crash. I saw everyone getting out and running away.” I said, “Blank it.” You said you took your last $200,000 and put it into advertising. What did it take to do that, and how did it work for you?

I’m a little bit insane. What happened in 2008 was that things started to get tough. Psychologically, what happens with most people when they get that type of pressure or in that situation is they shut down. What happens? People don’t do anything. We were still in the real estate investment business. The bank still trusted us. They were still willing to lend us money. Where I live, we got crushed in 2009 because we are always a little bit farther behind. Our recession hit in 2009. We were feeling it in ‘08 but in ’09, it was scary.

That’s when rates peaked was late-‘08.

I’m looking around like, “Everybody was scared, my competition. Everybody is shutting down the shop. People are going home with their tails between their legs.” The $200,000 that we had in the bank was borrowed money. It wasn’t even mine because I had all my money allocated. We had millions of dollars in projects and everything else.

I said, “I’m either going to go completely flat broke, and that’s it.” I had this feeling that we were going to come out on the other side of it, and the consumer is going to pay attention to who’s visible when times are tough. I said, “Here’s what we are going to do. We are going to take out that money. I’m going to buy ads and magazines because marketing was in its infancy.”

We spent some money there. We bought billboards, radio, and TV, and then all of a sudden, the phone started ringing. What we kept hearing repeatedly is they were like, “Everything is going bad but we see you guys everywhere. You are visible. No one else is advertising. You are advertising.” What happened is that naturally, everybody started becoming drawn to us. We built a huge brand in the first recession that I had ever experienced, and it was because I was willing to take that gamble.

When I first heard you telling that story, I assumed that you were taking out ads. We buy houses. Cash for houses. Sell your house now. Avoid foreclosure. When I got to know you and Rich, it blew my mind on the ads you were taking. Could you talk a little bit about the advertising you were doing, why you were doing it, and how that related to maybe the pain of the customer at the time?

It was a couple of things. This is what I think. As business owners, here is the mistake that we make sometimes. We walk through the journey of a sale or whatever it is in our mind but you don’t walk through the journey through a consumer’s mind. What I started thinking about and paying attention to is, “How do I connect and relate to the consumer in the time that we are in?”

We did all the things that you are talking about but then also what we started doing was the guaranteed sale. In tough times, you want something that’s guaranteed. We would put things out like there are only two things guaranteed in life. Paying taxes, selling your house, and things like that. We started playing words and doing different catchy things.

We built this brand that if you want to get your house sold, whether it’s us paying cash for it, bringing in investors, selling it retail, or whatever the case is, we built that brand in the first recession. We then got the note trust from the consumer, and then it exploded. When it started to get better, we started growing 100%, 200%, and 300% because we had established the authority when no one else was willing to. We started thinking about, “How do we solve the pain points of the consumer.” If you think about it, selling your house retail is sucks. If you think about walking through that process, you got strangers coming in and out of your house.

Most people only do it once.

It’s a painful process. It’s archaic and broken, in my opinion, and that’s why we said the guaranteed sale. Even if you were a customer that called me now, I would say, “Here’s the thing. Retail numbers X. The number for us to buy it is Y. Which one would you rather do? I’m going to give you both options.” Over time I got surprised by how many people would go with Y because they were like, “I don’t want somebody coming here taking a crap on my toilet or whatever else.” I started to think about getting into the mindset of the consumer of, “How can I pair this up every time?” It was like, “We have new construction,” as an example.

You take the wife in. She looks at the new construction house like, “I want this kitchen.” They forget about like, “I don’t necessarily have to get all the equity out of my house. I want you to buy it so you can put me in that new house.” That’s when we got deep into the mindset of, “How do we solve the problem for the consumer.”

We have an option that plays into our investment side, and we are upfront and honest with them. We tell them, “Who else has proven this?” Amazon. You will pay more for convenience, and the consumer is now built on speed. Think about it. You go to another city, you are old enough, and so am I to remember when we didn’t have Uber. We would get off the plane and have a meeting somewhere. You have to call a cab and that whole system. Now, you get off a plane and go on your phone. If an Uber is more than three minutes, you are going to get pissed off. That’s the consumer you are selling to, and they are built on speed and convenience.

It’s very interesting to me because there were several people in the DFW area that ended up doing that. The guaranteed sale. “You are home sold in 90 days or less, or we will buy it ourselves,” type thing. When you started talking about that, I was like, “That’s such an applicable strategy for the way the sellers are feeling now because there’s so much more fear in the retail market than in acquisitions. We were like, “The rents, we like to build on it.”

There are people out there reading this because the last number I wrote was 80% something of investors who are also licensed realtors. They are sitting there reading, “He’s a fiduciary. He’s not doing what he’s supposed to do,” but you don’t work with a no-name company. I guess you own the entire state now. It’s a well-known brand. It’s not an illegitimate thing. Talk about how you maintain trust and confidence from an ethical point of view.

At the end of the day, like, and trust is everything. The crazy thing is that you will appreciate this as a lender. If I break trust in you, you will never lend me money. If you break trust with the consumer, they will never do business with you. I look at everything of, “I want you to be my customer. I want to have a relationship for twenty years.”

For me to have a relationship with you for twenty years, I might have to leave money on the table, and that’s okay. Everything that we come from is from a standpoint of, “How does the consumer win, and we win also.” We are upfront with them. We are like, “The market value of your house is $300,000. We are going to pay $250,000 or $260,000. Whatever the case is, depending on how we underwrite the deal. What would you rather do?”

We give them the option, and they don’t have to do it. There are some cases where they have to do it. We never try to take advantage of anybody. We try to make it a win-win. I will give you a prime example. We flipped the house. We made $90,000 on it, which is great for a flip. The homeowner had initially called me to list the house, and he had broken his back. He bought a house in Myrtle Beach, which is his dream house. He’s retired and had to do a bunch of repairs to the house to get it to market condition but he couldn’t.

He was under pressure situation that he was going to lose his dream house. I was like, “Here’s what I can pay for you. I can take on the repairs and everything, and you can get out and move on. The market value of your house, even the way it sits, is probably X, I’m going to pay less in that but I can pay cash and get you out of here.” He said, “In my situation, I want you to pay cash and get me out of here.”

In his situation, that was the fiduciary because he was going to lose his dream house. The thing is, you put your house on the retail market, you get it under contract, and it’s not guaranteed. Deals fall through. People change their minds. Whatever the case is, people are willing to give up some equity to have peace of mind. I know what day I’m settling. I can plan everything around it. We always look through the lens of, “How do I help the consumer?” We couldn’t have built the brand as big as we did if we didn’t have the know, like, and trust of the consumer.

I want to understand and hear a little bit. We talked about it at dinner. Your philosophy on raising money, specifically private money, may or may not be secured at the time you collected. Talk about how you hold yourself accountable to your investors.

There are a couple of things. We have talked about the trust thing, but one of my core values in our company is to do what you say you are going to do when you say you are going to do it. If I tell you I’m going to call you at 5:00, I got to call you at 5:00. I live and breathe that, and I believe in that much. If you are an investor with me and I tell you I’m going to give you 8%, I can’t give you 7.99%. I got to give you 8%.

I also believe in overdelivering. If I tell you 8%, I’m probably going to give you 10%. I’m not going to tell you that because I would rather overdeliver. What we do if someone is not secured in a fund or whatever the case is, I personally guarantee everything that we do because, for me, it’s such a big deal for an investor to have peace of mind, “Given money to Brandon is like putting money in the bank.” When you live from that standpoint, and people know and trust you, and they know their money is safe with you, you have the ability to raise an enormous amount of capital at any given time.

It is time for the money minute. This is my favorite point of the show. Sixty seconds, pour into the audience the best thing you got.

If I could tell my younger self something, it would be that the myth that we all think we have is that we have more time. If you want to think about it from this standpoint, if someone gave you a gift and you threw it away, you would get pretty upset. Every single day that we wake up, we have been given a gift. If you were to ever look back on your life and tomorrow you were told you had a week left to live and I said, “I will give you a drink that can give you one day of your life back, what would you pay for that?” You pay for everything.

If I told you, I’m not going to tell you what day you get back and you go back to a day where you are in indecision and where you are afraid to make a decision, if you are afraid to pursue your dreams or whatever you wanted to go after, then that would suck. That was the day that you got back. People think that we have more time.

When I was very young, I had a near-death experience, so I looked at the time completely differently. The thing about it is that a lot of things that you are scared of and that you fear are not based on anything real. It’s based on an experience that someone else has had that you haven’t had. You think you have more time, and you don’t.

If you are faced with a situation like I was where I was told I didn’t have any time left, when I got out of that situation, I said, “I’m going to live every single day to the fullest. The craziest and wildest thing that I can achieve, I’m going to do it.” Don’t think you have more time. Do not live in fear because one day you are going to wake up and you are going to wish you had that day back that you spent in fear and indecision.

People tell me all the time, “I love real estate,” and I’m like, “No, you don’t. You like making millions of dollars.” There’s none of us, and we all started out buying belly to belly at the kitchen table where somebody is blowing smoke in your face, the house stinks or there are cockroaches, and there’s no human on Earth that ever was born, and when they were seven said they wanted to do that.

We love the result. If you go to my website, the headline says, “The business is the vehicle, not the dream.” There have been some very important times in my children’s life when I was not there. I was busy. I was running my business. I was taking care of my family. I didn’t have a near-death experience but there are still things that you can never undo. I love that advice. It’s something near and dear to my heart. We are going to get into a rapid-fire because I have got a lot of questions, and we are going to run out of time soon. How much is enough? When do you quit?

You should never live in a destination. The destination is a false narrative. If that’s how you run, you will have a hole that will never be filled. It’s the process. The thing is, people say, “Balance is BS.” It’s harmony. That’s what I believe and how I live my life. From a standpoint of, when I’m with my family, I’m locked in. When I’m with my significant other, I’m locked in. That, to me, is harmony because balance is a myth.

If you want to make a dent in this world, if you live in balance, you are going to lose. You got to have harmony. When I’m around the people I love, I pour into them and am present. If you have the ability to be present, you will crush it in business, relationships, and physically in your health but you live in harmony. You don’t live in balance, and that’s what I believe in.

How many pets do you have? Dogs, cats, horses or goats.

All dogs.

Why?

I rescued one and kept going. I’m obsessed with titles, belts, and winning everything. I didn’t know anybody else with nine dogs.

There’s no balance there but I’m sure they are all singing in a chorus when you get home. Apex investors it’s a mastermind for real estate investors but it’s more business owners and all that. Can you talk to me about why someone that makes as much money as you would spend their time doing that?

The craziest thing is a couple of things. I get energy from pouring into other people. I absolutely love it. I don’t know how to describe that feeling. Making a lot of money is awesome. Let’s not get that twisted. There’s another side too. When you teach someone else to be successful and watch them become successful, there’s no other feeling in this world that replaces that. When you speak on a stage or in a mastermind, you feel the energy of the room change, and you know that you said something that changed their life, and you literally can feel the emotional swing you’ve poured into people, and they got it, that’s an addiction.

There are some young men, Jaxon Smith-Njigba and Corban Cleveland both play for Ohio State on the football team. Jarek Broussard is a running back for Michigan State, Sam Bartis plays offensive line for Arkansas Tech, and Tanner McCalister is a DB for Ohio State. I will tell you all that because not like I’m randomly naming college football players. They all played football with my oldest son.

I was a Little League Football coach for fifteen years up until last 2021. My oldest son to my youngest son. This is my first year and fifteen years where I’m not coaching Little League Football, and it’s one of the best things I have ever done in my life. Some of them, not some of those I’m naming but in general, some of the kids on the team don’t have a father figure.

They come from a home where they don’t have the money to buy cleats. I’m echoing what you said with my own story. When I look back, number one, I’m glad it’s over because I get my Saturdays back. I got to go to the Texas-OU game that I hadn’t been able to go to for several years. It’s also probably the single greatest impact on humanity I have personally had.

Here’s the thing going back to the harmony conversation. Harmony is your bank account. That’s one of them. It is. Harmony is physically how you treat yourself, and then you have the emotional and the soul side of it. For me, the soul side of it is pouring into other people and helping other people become successful. Anything I have ever done in my life, I can’t compare to anything as far as what it does for my soul and me.

If you had to pick one business that you are in now and someone was going to take the rest of them away from you tomorrow, which one would you pick and why?

It’s twofold because raising money, I got to deploy it somewhere but I love raising money and deploying it into deals. You said you can only have one. It would be raising money and putting it into apartment buildings. That’s what I would do.

It would be raising money and deploying capital. You would be a fund manager. I love your thought processes on it. We talked a lot about it at dinner that night. It’s something near and dear to my heart. Your public speaking style is very interesting. There are a lot of people out there thinking, “I could never speak to 3,000 people. You don’t seem like you’ve got a bit of a shy demeanor, especially in a quiet demeanor but you elevate and come alive on stage. Can you tell me what that’s about?

I live in this world where I have an alter ego. One of the most famous people that had an alter ego was Kobe Bryant, The Mamba Mentality. “I don’t want to be your friend. I don’t want to shake your hand. When I get on the court, I’m trying to absolutely kill you.” For me, I have always had this fear of public speaking, and it scares me to death. To this day, my persona on stage is Ric Flair, so I just go into Ric Flair.

What is cool is the thing that I have learned in life. You get a lot farther by listening than speaking. A lot of times, when I’m in any room, I’m reading the room and paying attention. I’m absorbing. The other thing too is that I believe in time differently. I don’t want to waste people’s time. When I speak, I try to be impactful. When I have a conversation with you or anyone, I want to be impactful. I don’t want to shoot crap and do nonsense. I want to bring value to your life. When I go on stage, I’m obviously a pretty intense person with the amount of businesses and stuff that I run. I have to motivate and inspire my 100 plus people that work for me. I channel all that crap and the Ric Flair and get loose.

That is the perfect way to end. I hope they got your tennis shoes. Are those even called tennis shoes?

You call them tennis shoes.

If anyone wants to connect with Ric Flair, how do they do it?

Facebook. Just shoot me a message. DM me. If you go on social media, you will figure out all my stuff, or Instagram. People are always making fake accounts. I’m never going to ask you for money through a DM. Facebook is probably the best way. Just shoot me a message.

Thank you for being here. We are out of time. We could go for hours. Thank you, again, for taking the time to tune in. Remember, your network is your net worth, and you have been growing both. We will see you next episode.

Important Links

• Brandon Brittingham
• Scale & Escape
• Oracle of Real Estate – Article
• Apex
• Facebook – Brandon Brittingham
• Instagram – Brandon Brittingham

The following podcast program is furnished by RCN Capital LLC.  The information provided is for general educational purposes only and does not constitute any legal, tax, financial, investment or other professional advice. The views, thoughts, and opinions expressed of any speaker are the speaker’s own opinion and do not represent the views, thoughts, and opinions of RCN Capital LLC.   No information contained in this episode should be construed as financial, investment or legal advice from RCN or any individual, author, host or guest. You should always consult a financial advisor before investing.

• Buy And Hold
• buy and sell
• Raise Money
• real estate
• Retail Market
• Underwriting A Deal