GI263: Mobile Home Park Investing with Brett Bowman

GI262 Investing in Farm Land with Chris Rawley

Brett Bowman was also on the episode GI234, but we had a sound quality issue, so we are having Brett back on. He has been investing in real estate for 15 years, acquiring $50M+ in assets, including single-family rentals, multi-family, industrial, and mobile home communities, the asset class that his firm primarily focuses on today.

Watch The Episode Here:

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Transcript:

Charles:
Welcome to another episode of the Global Investors Podcast; I’m your host, Charles Carillo. Today, we have Brett Bowman. Brett was also on the episode GI234, but we had a sound quality issue, so we are having Brett back on. He has been investing in real estate for 15 years, acquiring $50M+ in assets, including single-family rentals, multi-family, industrial, and mobile home communities, the asset class that his firm primarily focuses on today. So thank you so much for being back on the show today, Brett.

Brett:
Of Course, Charles, thanks for having me back.

Charles:
So, give us a little brief background. People can check back on that episode, but if you don’t mind just going just giving us a little outline of kind of what your background is, both personally and professionally prior to getting involved with real estate.

Brett:
Sure. Yeah. So I have a finance and business background, so steady finance of an MBA. And then I have been kind of in the corporate world for the last 17, 18 years. And still, still am. I work at a, a large tech company and do kind of corporate finance as well as some other roles. And on the side as you mentioned, about 15 years ago or so, I started getting into rentals. So I started with single family rentals and kind of worked, worked my way up to now we’re operating some mobile home parks. I’m sure we’ll get into kind of what led from A to Z there. But at this point, Suncrest capital, we have about 1400 lots, mostly focused in the Midwest. So we like to target we, we started in Kansas City and kind of drew a three hour radius around Kansas City. So all of our stuff is primarily in Des Moines, Springfield, Missouri Kansas City. And then we’ve recently expanded down to New Orleans which has been a great expansion, those a jump, but it’s been really good for us.

Charles:
So why real estate when you’re choosing different side hustles, let’s say why did you choose real estate over, I mean, over the number of different things that you could do?

Brett:
Sure. you know, it goes back and I, I’ve talked about this a little bit on, on our like Instagram and LinkedIn pages and stuff too. But even just in, in eighth grade middle school, I remember my history teacher talking about stocks in general and just kinda getting, I, I kind of got a taste for what time value of money was. And you know, he’s talking about $10 a month equals this in 10 years kind of thing, you know, you just get fascinated by it. And then reading books like rich Dad, poor Dad, I started learning about how you could really make your money work for you in multiple ways in real estate with tax, tax savings, leverage you know, other people’s money or OPM there’s just these unique benefits you get in real estate that you really can’t get in other asset classes. That really drew me to it. So starting with the single family rentals, I thought that would be kind of my way of, of growing my portfolio. And I think that’s where a lot of people wanna start. You know, it’s, it’s a good way to just kind of self-manage and, and learn learn the business. But there’s also a lot of risk to it that you don’t get in other asset classes that I wasn’t aware of at the beginning.

Charles:
So with that risk, I mean, what was what made you hone in onto mobile home communities as really the the asset class that you were focusing on? Because like you said, I think single family people get involved with it because it’s obviously, it seems lower risk, you get great financing, it’s an easy way of dipping your toe in the water of real rental investing. And what, what do you think was some of the reasons why you chose mobile home communities as as kind of like your way of really making your mark on real estate?

Brett:
Sure. Yeah, I mean, you’re right. The what single families, what, what’s nice about it is what I was doing is I’d buy a home. I’d live in it. And so I’d get primary primary owner financing, which is the best financing you can get on home. You also have the lowest down payment possible at, with that status. And then I’d live in it for a bit, and then I’d move to a new home, and then that old home would become a rental kind of rinse and repeat. So not quite the burr strategy, but kind of a close to more or less a kind of that burr strategy. The, the challenge is you can only have so many loans on your personal credit report with these, with these homes. The other challenge is if that home’s vacant, you’re getting zero money and you’re still paying a mortgage.

Brett:
So it, it really becomes hard to scale for a number of reasons. And then your homes, you can’t have them co-located, like at best you’ve got your portfolios within, you know, a few miles of each other, but they’re never next to each other. So that’s where, you know, scaling up with an apartment complex or mobile home park comes handy. So what I started doing several years ago is I, I learned about syndications and so I started passively investing in syndications. And by doing that, I started learning what scale really looked like and how, you know, even as a passive investor, I was earning more on my money than I was as a single family operator for a lot less work. And I was still getting the same tax benefits too because in a syndication you are a direct don, you still get the same benefits as if you’re, you’re the only operator.

Brett:
So I kind of saw that as a, a win-win. And then after doing that for a while, I, I got really curious about, well, what would it look like if I started doing this? So what I did is I reached out to a few of the operators that I was already investing it with and kind of offered to help them out on acquisitions. I had a corporate finance background already and was familiar with how to do projections and internal rates of return and kind of ROI analysis over 10 years, that kind of thing. Which really, when you get down to the nitty gritty of underwriting a property that’s, it’s, it’s almost exactly the same way we do with corporate financing. You know, you, you’ve got your inputs and figure out your assumptions, get ’em as concrete as possible, and then you kind of do the discounted cash flows to figure out what that ROI is gonna be.

Brett:
So I did that for a while with three different operators and it was awesome ’cause I kind of gotta see behind the curtain on how people, you know, operated these deals, what the acquisitions looked like, what SEC criteria looked like. And then almost serendipitously, I met my business partner, Ryan. He and I lived in the same town here in Meridian, Idaho, just out of Boise. And he had already purchased a mobile home park just a small 20 unit one, and he was looking to buy a second one that was within a mile of that first one. At the time he was an elementary school principal, didn’t have a lot of his own own capital, so he wanted me to come in and kind of be the capital person and he would operate it. But after a little bit before we actually acquired it, we decided we’d both kind of help operate it, but I would still be more or less the, the capital partner.

Brett:
So I got my feet wet in, in mobile home parks specifically. And then as I mentioned before, we, we had a team that we started building in Kansas City from those first two mobile home parks, but also some of my limited partner my LP investments were also in Kansas City. So I was starting to get that area, it gets to know that area. And we started looking for acquisitions outside of Kansas City, but within a three hour drivable distance. And that’s when we first expanded up to Des Moines. And kind of from there, we, we’ve grown relatively fast over the last five, it’s been about five years now that we’ve been doing it. And learned a ton have learned how to scale. I’ve learned lots of really good repeatable best practices and also some things to avoid for the future. So I can talk a little bit more about why mobile home park. So that’s kind of my journey into getting into commercial real estate in general. Yeah,

Charles:
That’s great. So you’re handling more on the capital, capital arm of it, capital raising side of it. Are you sourcing deals or is that left to your partner, Ryan, who we had on the podcast a couple months back as well?

Brett:
Sure, yeah. I’m more on the acquisition side. So Ryan is specifically homes. So homes, homes are a big deal in the mobile home park space because it’s really the make or break of your business. We generally like to buy parks that are about 80 to 90% occupied, then you’re taking another 10 to 20% of your lots are totally vacant. And you generally have to do work on those lots if you’ve either got bring concrete in or hook up water electric, but you also have to bring a home in. So old style with homes with homes is you, you’d have these mobile home parks and then kinda the operators would just advertise and hope people would move their own homes in. The challenge with that is it can cost three to 6,000 just to move a home, plus that that homeowner was responsible for the concrete and all that kind of stuff.

Brett:
So you think about somebody that’s gonna want to live, wants to live in a mobile home, it’s very rare to find someone that’s gonna go buy a $70,000 home and then pay another 20,000 to move it, get it installed, set up and everything like that. So instead what we do is we get it all set up, we buy, move in the homes, and then we sell ’em. So Ryan really kind of a full-time thing. In fact, we have three employees that all they do is homes and Ryan oversees all that. So it’s finding quality used homes, getting ’em rehabbed, getting ’em moved, sold. We also have brand new homes and that’s a whole other criteria for moving, moving, installing, and selling. And then I am more on the finance finance side as I mentioned before. So that includes anything from taxes, real estate investor relations acquisitions. But I also have a team under me that’s working on that. So somebody that does nothing but project management, another person that’s our controller. We have other, other folks that kind of do property management. So we’ve, we’ve been able to build up a really strong team that’s, that’s helped a ton over the last few years.

Charles:
So with any asset class there’s all these pros and cons. As a multi-family investor, I can tell you both of them pretty detailed. What would you say, quickly overview, kind of like what are the main pros and cons, maybe obviously the pros for you outweigh the cons with mobile home communities, but can I go over a few of those things where as an investor what you look at and why you chose this asset class and then some of the things that might be drawbacks to investing in mobile home communities?

Brett:
Sure. Yeah. So I think there’s lots of pros. One that people don’t really know very well much is if you’re looking for tax benefits, mobile home parks and RV parks is the best asset class for taxes. So I’m sure you’ve talked about cost segregation studies on your, on your podcast. What’s cool about mobile home parks and RV parks is because most of the asset is the dirt and the, the concrete and the infrastructure that’s there, it’s nothing above ground. It’s, it’s usually what’s in the ground. Those things are depreciable at a shorter timeframe already. So more of the more, a higher percentage of the acquisition can actually be cost segregated into your first year of bonus depreciation. So that’s awesome. One of those things that you just like, you don’t think about with multi, with mobile home parks.

Brett:
Another thing is with mobile home parks as I mentioned before, your general upside play is to buy a park that’s not a quite a hundred percent occupied and you make it a hundred percent occupied. So if you think about a multi-family acquisition, let’s say you buy an apartment complex with a hundred units and your upside is typically turning those units like re re rehabbing, bringing ’em to market and getting new new people in. The downside is the whole time you’re rehabbing those units, you’ve got vacancy while you’re rehabbing on a mobile home park. On the other hand, you buy a park that’s already got a certain occupancy and all you’re doing is increasing it by bringing more homes in. So it’s almost like adding another floor to your apartment complex. You didn’t have to kick anybody out to increase your, your upside.

Brett:
The other thing I, another thing I love about mobile home parks is they frequently are master metered, meaning the mobile ho the current operator is paying a hundred percent of the water and sewer costs. So to give you an example, we bought a park in Springfield about two years ago. This, honestly, we do this all the time, but this is one of my favorite examples. The mobile ho, the o the operator was paying 30 grand a month in water and sewer. This is a large park 120 units, so, but 30 grand a month, water and sewer. And within two months we had sub-metered that. So every unit had its own sub-meter. And what tenants love about that is they, they perceived that they have full control over their water and sewer consumption. So you actually saw the overall consumption came down ’cause people had, you know, accountability for it, but then suddenly we’re making an extra 30 grand in, in cash flow that we didn’t, we weren’t responsible for. So our NOI was a massive bump right there. And it’s better than a rent increase. ’cause Tenants, again, tenants see that as something that they should be responsible for already anyway. So that’s pretty cool. Something you can do with mobile home parks.

Charles:
How how long does it take and what does it kind of a cost, just like, you know, for something doing like something like that.

Brett:
So you have to buy the meters. We use a company called Metron. There’s several companies, but we, we like Metro and since we’ve used Metron in all of our communities, I think we’ll stick with them. ’cause It’s nice to have one portal. It inter integrates really well with our property management tool, which is rent rent manager. So it just makes it very seamless. So that’s the first thing. You’ve gotta buy the meters, which can be 50 to a hundred dollars depending on if you’re buying like attachments and all that kinda stuff. And then you gotta get ’em installed. And we’ve seen bids as high as 300 per meter, but we typically pay about one 50. So if you’re doing about, we call it two 50 between the meter itself plus the install two 50 per and then it usually takes like they can probably do five a day. So it usually takes about a month or two to get everything installed at our parks. And then we also start communicating to tenants ahead of time that it’s happening. We generally like to give them one month where they see what their bill would have been before we actually charge ’em, and then we’re charging the next month.

Charles:
Oh, I like that. That’s that’s, that’s nice. That’s a good way of doing it. We had to do that with a, a property we sold last year. We had, it was in Tampa and like the Tampa water a couple years went a couple years back went like crazy in pricing. They like raised it. So we started metering it because it was way off. And yeah, it was great. I mean, it was great right to the bottom line. And instead of giving people really rent increases, it was, hey, you’re gonna be covering your own part of it and obviously you, you’re, it’s better for everything, you know better for the environment ’cause you’re, you’re using less and you’re a little bit more mindful and yeah, it it’s a great value add process compared to like rubs and stuff, which I don’t really see as a really helpful system. I mean, it’s really just increasing the rent for people, you know what I mean? It’s not, we

Brett:
Actually tried rubs at one of our parks and we kinda had a revolt. We had tenants like wrote us as petition and you have people saying, Hey, so-and-so’s got a laundry, a washing machine in her unit or So-and-so’s got four kids. Like, they’re complaining that it’s just not fair and it’s very challenging to make rubs fair.

Charles:
Yeah, I, I see rubs and I’m like, I, I don’t even think of it. I’m like, you’re just raising the rent. I mean, you’re not systematically charging people for water. You suggest they do. You know what I mean? Right. But anyway, with that being said, so with your saying about going when you did with that property when you were working on it, I mean, one thing I see occasionally when I’m reading about anything with mobile home communities, you’ll usually see people coming in like they said and they’re in an article because you know, the news loves to batter down landlords and they’re saying about how lot rents are going up. And when I was looking at like, search terms for this before our it just came upon it and it was, I’m in Florida, so I was pulling up a lot of Florida terms and you can see it was people asking about how high rent lot rents can go up and stuff.

Charles:
So it’s like a common search terms here and I imagine in other places as well. And how does that work with you? I mean, like how do you go in there? It’s different. If I’m renovating an apartment, somebody can easily leave, you know what I mean? But typically we’re doing our renovations when it’s vacant obviously. So someone comes in, they weren’t really aware that people were paying 1500 before, we just spent $8,000 on the unit that we’re now charging 1800 for. So with you, how are you doing a, other than renting out those those vacant lots, putting properties on there, having Ryan take care of that maybe meter and back water you know, what other ways of kind like how you’re working with people have fixed budgets and really making the park better. ’cause We all know you’re doing that, but it’s really just, I mean, how do you float someone with a, I mean, how do you raise rents on someone with a fixed budget?

Brett:
Yeah, you know, it can be challenging and honestly, almost every time we’ve done rent increases we’ve heard from someone about it. So we just increased rents in four of our parks in Springfield. We have 10 in Springfield. And so four of ’em were kind of up for, for rent increases. And of the four, we had one person complain. So this is, we’re talking probably about 400 three to 400 people and one person complained. So it really was okay. In the grand scheme of things, the advantage we have in that market is we are not the highest. And most of those parks for us, if we have a home, it’s sold. We don’t, homes don’t sit there. It’s a very high demand market. So we’re a hundred percent occupied of homes that can be occupied, if that makes sense.

Brett:
So because of that, you don’t have to worry about people leaving so much because we, it’s already high, high demand. And there’s parks down the street charging a couple hundred dollars more than we are. So we, we’ve kind of got that. And you know, when we do the communication, we not, if we, we explained like interest rates are up, our costs are up, but also all these other parks are charged more than we are. So that helps. But it, you know, it’s, it definitely takes, you know, emotional toll when you’re hearing people say, you know, I’ve got this fixed budget and this, this person that sent us an email was, you know, not nice about it. She was telling us we were heartless and things like that. So it’s, it’s challenging, you know, and we do, we do pride ourselves in providing low cost affordable housing. But at the same time, we also have a business we’re trying to run. And it, you do need to keep, keep rents at least in pace, if not at market, on pace with market.

Charles:
Yeah, no, that’s a great, that’s a very important thing. I had a landlord or a property manager years back, my first one, and he would tell me that you always have to increase rents every year. And I didn’t know I was in my twenties, I didn’t understand exactly what he was saying, but then I just did a podcast episode on it. The difference between like one and 2% increases is just like majorly to your, your whole value of the property. So yeah, it’s like, yeah, yeah, you have to consistently raise it and it’s easier to do a small increase annually than it is to do, hey, it’s 15%, you know what I mean? That’s where you’re getting people that are, you know, gonna riot in your streets kind of thing. But doing one or two, it’s, I think people see that.

Charles:
I mean, it’s just, it goes up, you know, the person walking around, the person managing stuff, I mean, they’re, I mean, they went up, you know what I mean? What they’re getting paid. And I mean, you know how hard it’s to find people I know in the southeast and parts it’s just like, you’re, you’re paying $35 plus an hour for people. I mean, it’s just like, you know what I mean? It’s it’s crazy. I mean, it’s just like for very low skilled people that just show up, you know what I mean? And then you’re paying even more for more, more skilled people and then don’t even talk about contractors. But, so yeah, everything goes up. I understand exactly how that works. But yeah, it’s difficult. I mean, it’s a difficult thing and it’s just, it just gives a lot of negative press when it happens.

Charles:
But, you know, it happens with multifamily too. But I think you have people that are there for much longer periods, which is a pro, but also the con on it is you might get people on the pushback of it and it’s like, you know, they can’t really move stuff like this, but it’s one of those things where, I mean, anything’s gonna go up that they own, even if they own a house, their taxes are gonna go up, their insurance is gonna go up, you know what I mean? So it’s I mean this is, this is inflation.

Brett:
Sure. And, you know, our property taxes do go up and that’s where, you know, some of those, some of those costs have to flow through. And utility costs go up, contractor costs, like you said, concrete alone in the last few years is just, that’s one of our biggest expenses when we’re installing homes. And it’s way bigger than it used to be. So thats,

Charles:
So one thing I wanted to talk about is we’ve had interest rates really increased and was something, you know, that we didn’t really speak about in the last time you were on, but when you’re acquiring new parks how are you really capitalizing that? How are you financing those deals? And as I’ve spoken to people that are mobile home community owners and investors, usually they’re trying to, they’re utilizing a mix of like local banks and credit unions and then also seller financing. And they’re trying to like, you know, because you’re buying from a lot of mom pops in most situations, maybe not 120 lot Park. But so how are you, how’s everything been working with your business with interest rates and I mean, I guess mobile home community as a whole, and then also with with your firm?

Brett:
Sure. Yeah. So we, we do, every one of our deals has been a local or regional bank which has helped a lot, I think having national, and you know, one of our, one of our lenders that we like quite a bit is they, they, they lend it nationwide, but they act as a regional bank and they really liked a ma a mobile home and RV communities. So we’ve actually recently tr moved all of our deposits with them just to kind of show this like, relationship with them. And that’s kind of helped us to have everything in one place. Logistically, by the way, huge recommendation. Don’t have your money in various banks. It’s so much easier if they’re all in one bank. And especially if it’s a bank that lends, ’cause they, they like to, they like to build that relationship anyway.

Brett:
So that’s kinda the first thing is we have we have like local or smaller banks that we’re working with. And then the second is we have had to get more aggressive with seller financing than we’ve had in the past. And it’s, it can be challenging to do an, a regular bank and seller financing. We recently had a deal close in October just so, just a few months ago, about six months ago. And it was I think we did about half bank financing and half seller financing. It was kind of a weird one where the, the bank dropped the amount of leverage they were gonna give us a week before closing. And the seller came in and covered the gap for us, which was great. Interestingly that one wasn’t a great in like we didn’t have a better interest rate on the seller financing though, so nor like a lot of the deals I see marketed people are saying, okay, hey, if you pay me a three cap, I’ll give you 4% interest rate.

Brett:
And so it looks tempting ’cause you’re getting such great debt, but the cap rate is so insanely low so it doesn’t actually pay for itself. You’d have to keep that property for 12 years before that 4% interest rate makes up for the 4% cap rate you’re buying at. So anyway, in this case I think we were paying 7.85% rate to the bank and we mirrored it for the seller. So 7.85, we married the rest of the, the, the loan term. So we essentially have five years plus we can extend for another five years if needed on both. So that helps. And the other thing we’re doing is we’re just underwriting at high interest rates. So we’ve had a steadfast rule. The day one, our cashflow has to be at least 4% cash on cash without us doing a single thing. The first day we walk in the door, we, we have to make 4% and then we have to have a clear path to get to 8% cash flow within a year.

Brett:
When we were first starting, we had low interest rates, you know, three to fours that you and I were talking about before the call. And we were okay with negative cash flow. ’cause We were coming in and we were like, look, we’re gonna change the world. We’re gonna move all, move all these homes in rehab this and then we’d be negative cash flow for way longer than we expected. And that, that’s stressful. And you know, investors don’t like that. So we’ve just decided for us, we with, but the interesting environment, we’re happy passing on deals if we can’t get 4% cash flow day one. And really we prefer six, we’re pushing for six. But if we don’t have that, we just don’t offer on the deal or we’ll offer whatever it takes to get there and then we don’t get the deal and that’s fine. We still have been acquiring now so we have a deal under contract now that’s meeting that those pro parameters in New Orleans, like that other RV park that I mentioned before. And at this point we’re able to do the deal with just the local bank financing. But we have some seller financing in the works with them as well as a second position.

Charles:
How’s that terms work on that a bank loan on a mobile home community with a experienced sponsor like yourself?

Brett:
We we generally are seeing on a mobile home park, 70% loan to value. Sometimes we can get loan to cost if we’ve got some upgrades that we’re doing on these two in New Orleans, they’re both RV communities. And the second one that we’ve got under co contract now is an expansion. So we’re going from, we’re buying it at 56 pads and we’ll expand up to 90. And so we the term sheet we got on that is 65% loan to cost. So 65 is more the high end on RV parks where mobile home parks you can usually get 70. A few years ago we were getting 80% left and right. So that’s come down. And then the rate they quoted me was three and a quarter over the one year. So FR so I think that when I calculated it was like mid eights. So it’s pretty high interest rate still. So I’m not sure that we’ll go with that term, but it, it works for us. We’re still making 6% day one with the expansion play, so We’ll, we’ll just keep working on that.

Charles:
Yeah, I love the idea of making money day one and yeah, it’s, it’s, you know, when there’s pullbacks in the market, it it, it really allows people that take advantage of it and learn from it really to kind of fine tune their business plan and their investment philosophy, I guess you would say their strategy. And we’ve done it for sure ourselves, you know what I mean? Whether it’s with our active stuff or whether it’s with our passive investments, whatever it might be changing around kind of what we see and what works and what really protects that downside, which is super important when you’re, when you’re investing, especially with other people’s money.

Brett:
Right, right. One thing too that I’ll say like in this market this environment that I, I think limited partners and investors need to be aware of is operators make money by buying deals and operating deals. And so I, you know, I, you and I have both talked about operators before the call started that we’ve seen close on deals that they shouldn’t have closed on just to get their acquisition fee. And it can be hard as an LP to see that that’s happening in the moment. So what I’ll say is, you know, I think higher capitalized firms are gonna be a little bit better in that sense that they’re not gonna be pressured to buy things. ’cause They, they are, they’re fine. Honestly, that’s one reason I still have my W2 job is I don’t want to have that pressure of, hey, if, if you can’t close this deal, you’re not feeding your family.

Brett:
Like no one wants to be in that position and I don’t wanna ever have to put investors that position. So with that, as we’ve structured our income in a way that by improving the value of our current comp, our current properties, we, we make more money. Meaning we, when we sell homes that benefits our investors, but we actually get a commission on selling homes. So we’re incentivized to sell homes. ’cause Not only does that make our cashflow better for our investors, but we actually get more money ourselves too. So there’s things like that that we’ve just doubled down over the last couple years on our own operations and making our operations better rather than focusing on buying deals that aren’t gonna work.

Charles:
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Charles:
So you mentioned before about your W2. Can you like I mean how do you invest? I mean, how are you able to launch a real estate business while working full time? I mean how did that work and how are you able to balance both of ’em?

Brett:
Sure. I I always like to, when people ask me this question, I also always like to say I also have six kids, which is a bit nuts, right? So I when I first started in this, again, we’ve been doing it about five years I started slow in the sense that I, you know, doing single family rentals on the side and then being a passive investor isn’t that time consuming as if you set it up correctly. When it started getting time consuming for me, we bought our first mobile home park. So it was, it was Ryan’s second, my first that we bought. And then we bought a deal in Des Moines that immediately was almost 300 units of this portfolio that we bought. And that’s when things started getting a bit crazy ’cause it was just Ryan and me. Initially we brought on some partners that would help us but as quickly as we could, we started hiring employees.

Brett:
So we frankly got lucky with two of our hires have been incredible. Like we’ve got a really strong team in general, but we have two people in particular that just are a players. Like they, they’re, they’ve caught our vision, they work hard. They’re smart, you know, and then we have a team of another five or so that do other functions. And then we have, we use virtual assistants in the Philippines and India that do different things. So we have probably eight virtual assistants between those two countries that do anything from underwriting, bookkeeping, marketing, social media all that stuff for us that just helps a ton. So when I first started, what I was getting into, I, I peaked at, at one point I was doing an extra 40 hours a week just on my real estate stuff plus my, my day job, plus having kids.

Brett:
And that wasn’t very sustainable. So there’s definitely some systems and tools we’ve put into place in addition to having people that have, have made that better. So at this point, my average, I’m spending about 10 to 20 hours a week. That’s like a cap if we’re, we’re acquiring something, ’cause I’m heading the acquisition, I’m, I’m more on more closer to that 20. But generally I’m able to stick around that 10 hours a week because we have dashboards where I can see KPIs, we use Slack, recognize questions. We’ve got Trello where we do all of our normal project management prioritization. You’ve probably talked about Gina Wickman’s book Traction, which I can get into more detail if you want me to. But that helps us focus on the most important things. And so things that need my attention, you know, during the time the meetings that people know I’m coming to, those come to me. And then if I, you know, things that don’t need my attention, other people are empowered to make those decisions and, and move forward. So yeah. Sorry, it sounds like you wanna ask you a question, <laugh>.

Charles:
No, no, no, that’s fine. I had a question about if you just wanna go over just give us like a quick overview of traction. That was just, I

Brett:
Highly recommend the book for anybody that’s getting into really anything business or, or real estate either way. But the book is just, he calls it an entrepreneurial operating system, meaning this is what you, this is how you make decisions, this is how you prioritize things. And the big part of it that we took away from it is this weekly meeting called your Weekly Pulse. It’s a 90 minute meeting and it’s the same agenda every week. So nobody’s gotta prepare an agenda. Everybody knows exactly what to expect. And the first thing you do is you spend some time looking at KPIs. So we do that every week and we spend more time on KPIs than, you know, I think Gino’s book says five minutes. I think we probably spend 20 minutes to be honest. ’cause We’re looking at different portfolios, home sales, those kinds of things.

Brett:
And then during that we’re identifying any, any issues. And so the issues are tracked to be discussed later in the meeting. So you do your KPIs, then the next thing is you talk about your rocks, which are your quarterly, your annual goals, and you’re just quickly saying, am I on track to hit this this month or not? And then if you’re not you, it’s another issue. So then the bulk of your meeting is talking about issues. So you first go through and you prioritize, okay, what are our top five issues as a company right now? And you focus on those and you make sure you’ve got plans to solve every single one of those. And then you maybe start looking, we have a backlog of issues we start getting into, but then what we do from there is we have a few other meetings throughout the week.

Brett:
So we have, we have, we’ve grouped our properties into kind of portfolio strategic portfolios, and then each of those strategic portfolios has its own pulse meeting. So for example, we have a Missouri Pulse meeting that’s all of our Missouri properties, and our regional manager from Missouri joins that. And so we do the exact same agenda, but focused on those portfolios or those properties. And I, I don’t have to join all of those to be able to help make the decisions on those, which you know, we started, we’ve been doing that, we’re into our third year of doing traction, and it changed everything for us. It’s hugely efficient way to do things.

Charles:
Yeah, that’s awesome. That’s great that you’re able to do it. A couple of software systems that you mentioned slack, we use Trello we use it for work. I use it extensively personally. My wife uses it for her business too. I mean, it is a, it’s game changer to be able to organize all these things that everybody has going on. And we, yeah, we use it for, it’s, it’s very powerful, especially when you’re raising capital or you’re doing project management, this is where they’re like, and then it’s on your phone, it’s on your desktop, it’s fantastic. You know what I mean? I can’t,

Brett:
The other thing I love about Trello is you don’t really need training. It’s so easy. It’s just cards that move, that’s it, you know?

Charles:
Yeah. It’s like yeah, it’s just having your little cards, you’re, and you’re just moving ’em from board to board and it makes it, yeah, it’s, it’s idiot proof, to be honest. I mean there’s some ones like Asana and it’s a little bit more complex, but Trello, if you’re just pretty much just moving, you know, postcards from one place to another and you know, you do it on your phone and it’s all like real time and it’s it’s awesome. It’s a fantastic tool. Yeah. Especially for remote jobs of where we are now, and especially with what you’re doing, even if you weren’t remote, you’re still gonna have something that’s outside of your office doing something and that’s where, you know what I mean? You can add something onto their list, they go to someplace you do this. I mean, very, very powerful.

Charles:
So as we kind of wrap up here today, one question I just had is that what would be your top advice for an inspiring real estate investor with a full-time? W2? I mean, other than utilizing some of those systems and processes, you got a little bit more in there about how you’re able to really move your business forward, utilizing traction. But really someone wanted to get started, they’re on the sidelines right now, they don’t think they can do it. What would be the top things that really, you know, that would propel them closer and faster along than just sitting there? Yeah.

Brett:
Good question. I I would say go slow, be patient, be deliberate. I, I, I mentor a fair amount of people, especially within my company, that are interested in getting your real estate. And I was talking to someone last week that’s an intern here. He is 20 years old, and he was stressed. He’s like, I want X number of properties by the time I’m 30. I only have 10 years to do that. And I just said, you know, calm down, <laugh>, you’re gonna be just fine. So I think especially when you’ve got a day job, you know, a lot of people love their day job and they, they love what they’re doing, you know, make a lot of money. Frankly, I think in many cases you can make a lot more money in your day job than you can in real estate. So for me, real estate is less about today’s income and more about the long-term passive income that you’re building.

Brett:
So I would say don’t be in a hurry to get out of your day job per se. For me it’s more about building that passive wealth, passive income that over time really accumulates and makes sense. And it sounds a little, you know, cringey almost to say this, but build a team around yourself. Like, and I don’t mean employees, I mean people that you can go to. So like you have brokers, you’ve got mortgage people that you can trust for, for the, for, for, for rates. You’ve got legal people, CPAs, those kinds of people can help you a ton and like know what the value of your time is. So there’s some things that I know I can do, but it’s gonna take me three hours or I can send it to my CPA who’s gonna spend less than an hour on it. And yeah, I’m paying him for that, but it’s worth it to me to have it a done correctly, but b by myself three hours back to do something else.

Charles:
Yeah, that’s great. That’s a lot of great information. When actually keep a as we’re talking about Trello, I keep a card on my Trello of tasks to out, to get off my plate, you know what I mean, to outsource, whether that’s to a contractor like an accountant, whether it’s to a, you know, a VA or a bookkeeper or consistent, whatever it might be. And yeah, it’s just great. It feels great to take one of those off, you know what I mean? And sometimes I think people get scared because the amount of time, it does take time. I think people have fail with VAs when they don’t train them, or they don’t think, so you gotta spend dozens of hours for every hour per week you’re taking off your plate of training. For the most part, that’s what you do.

Charles:
Hopefully it’s gonna be less, but like, I’m making Zoom videos, like, so when I do stuff now, I throw on Zoom, it’s just like screen, you know, screen recording and then, you know, like, Hey, just watch this and you know, do what I’m doing. And it’s, you know, it’s, it’s pretty straightforward. People are smart, you know what I mean, <laugh>. So I mean, they can do what you’re doing and probably better, especially stuff like tedious stuff that maybe you’re not the best at. So a lot of great information there. And thanks so much for the traction book. I have. I’ve heard so many good things about that from people I’ve worked with, and it’s something that, you know, we’re working through some of those steps here at our company, but, so as we’re wrapping up here, how can our listeners learn about you and your business and what you guys are up to?

Brett:
Sure, yeah. I think, you know, we’ve got suncrest cap.com that’s short for capital, so suncrest cap.com. We’re also active on LinkedIn, Instagram, Facebook. So we, we post quite a bit of reels on there just to like investor education and people that wanna get in the space. And then my email is Brett, BRET t@suncrestcap.com. So feel free to reach out to me there or find us to the website, any of those methods.

Charles:
Well, Brett, thank you so much for coming on today. Again we appreciate you being here providing a whole bunch of value for our listeners and looking forward to meeting with you and connecting with you here in the near future.

Brett:
Of course, Charles, thanks again for having me.

Charles:
Hi guys! It’s Charles from the Global Investors Podcast. I hope you enjoyed the show. If you’re interested in get involved with real estate, but you don’t know where to begin, set up a free 30 minute strategy call with me at schedulecharles.com. That’s schedulecharles.com. Thank you.

Announcer:
Nothing in this episode should be considered specific, personal or professional advice. Any investment opportunities mentioned on this podcast are limited to accredited investors. Any investments will only be made with proper disclosure, subscription documentation, and are subject to all applicable laws. Please consult an appropriate tax legal, real estate, financial or business professional for individualized advice. Opinions of guests are their own information is not guaranteed. All investment strategies have the potential for profit or loss. The host is operating on behalf of Syndication Superstar, LLC, exclusively.

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About Brett Bowman

Brett is Suncrest Capital’s Chief Investment Officer. His conservative approach to underwriting helps minimize risks while maximizing investor returns. He has invested over 15 years, acquiring $50M+ in assets, spanning single-family rentals, multi-family, industrial, and mobile home communities. He has a background in high-tech, where he managed multi-million dollar budgets in hybrid corporate finance & large-scale program management roles. He holds a degree in Finance from the University of Utah and an MBA from Duke University.

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