Tim Bratz: The size of your success is not dependent on education, gender, race, socioeconomic background, or any of that garbage. Where you went to school, The size of your success is directly correlated to the size of your thinking. Do you have the balls to just go and do big deals? Tim is one of the most authentic and genuine people I’ve ever met.
I sincerely believe he’s coming from a position of giving and that means a lot. You’re going to make huge progress.
Tim Mai: Well, welcome everybody to the Hero Capital Raising Show. Today, we have an amazing guest on the line with us. Tim has done amazing things in the commercial real estate investing space, both as an investor as well as an educator, so I’m super looking forward to this.
Tim is the CEO and the founder of legacy wealth holdings. He, which is an investment company specialized in transforming. Distressed commercial assets, multifamily assets into high performing, uh, investment assets. Uh, Tim started his real estate investing career in 2007 as a, uh, commercial leasing, broker agent in New York City and, uh, bought his very first duplex, uh, investment property with, using his credit cards back in 2009.
He had gone a long way from there to now having, um, own over 4, 500 Rental rental units over 400 million in assets, and has raised over 100 million. And Tim has, you know, I know Tim, you know when he started teaching commercial empire, a few years ago, and so has gotten to see and witness a lot of people who’ve been through his program and.
I mean, they’re all raving about you, Tim. And, yeah, so I mean you’re out there you make a difference for a lot of people. And then I also, you launched the legacy books right for the young people super young. I love that project too. Let me hear more about that in our interview here today.
And, and yeah, so, um, you know, you know, Tim Tim is a husband, father, graduate of the Goldman Sachs 10, 000 small business program mentor of the legacy family mastermind, there was a new program that you launched recently, right? I’m an educator online. Legacy Wealth Academy, an online education platform. Uh, so with that, everyone, let’s, uh, give a big welcome to Mr.
Tim Brotz. Tim, welcome, buddy. I appreciate it.
Tim Bratz: Good to be here. I appreciate you having me, buddy. And I appreciate all the value that you’re always putting out. You’re always trying to make an impact and lead with value, and it’s just, it’s fun to see the good guys continuing to win. And all of us kind of.
Coming up the ranks, right? Like a lot of us knew each other from back before we were successful and it’s just, it’s cool to see, um, again, the good guys winning. So it’s, uh, I love what you’re doing, man. Super proud of you and just an honor to be here. So I appreciate you guys having me. Well, thank you.
Tim Mai: Yeah, definitely. Um, so share with us, Tim, I know you went from flipping houses to, uh, commercial real estate. So share with us your journey on how you, what made the switch, you know, how you got, yeah. How did you make that?
Tim Bratz: Well, high level. I went through college. Oh, three to Oh, seven. So I’m from Ohio originally.
And when I was going through college, everybody was making money in real estate. I mean, some people weren’t that smart. And I was thinking like, if this guy’s making money, I’m going to get rich if I go do this stuff, you know, and so I was ambitious about getting into real estate. After I graduated, my brother lived in New York City, as you had mentioned.
And so I thought, you know, You know, when else can I go and move out to New York City, live for free, and figure out this whole thing? So I moved out there when I graduated, no seven, and got my real estate license. I thought that’s how you got involved in real estate. And then, uh, for some reason I didn’t do residential, but for some reason, I put it with a commercial brokerage that the broker retail leases office leases and ended up, um, Took me about nine, 10 months to close my first, my first lease transaction.
And, uh, it was a little 400 square foot space in Greenwich Village of New York City, uh, at the corner of Bleeker and Thompson. I know there are a couple of New York people here. And so, um, brokered this 400 square foot space for 10, 000 a month. With 4% annual increases on a 12-year lease term. And, you know, as a money-hungry kid at the age of 22, I started doing the math on this and I’m like, Holy smokes.
Like this landlord’s going to make almost 2 million residually. Over the next 12 years for doing something once off of one small space. He had eight retail spaces. All the other ones were bigger than this one. And he had like 10 or 15 stories of apartments above it. So I quickly realized I need to be on that side of the coin, not, not brokering real estate.
So I moved down to Charleston, South Carolina. And there were a few people from the Southeast here, which is where I live today. Um, and, uh, again. 2008, the summer of 2008, I moved down there and went through the analysis phase of joining all the groups and attending all the courses, reading all the books. And, um, I show up to the party, ready to jump in and start buying real estate.
And all of a sudden, October of 2008 happens and the whole economy collapses. The global financial crisis occurs and everybody says, run from real estate. I just got to the party. What are you talking about? And, uh, uh, you know, so I ended up, um, in a position very different from today, today, a lot of money out there, not a lot of opportunity or deals, you know, back in 2008.
deals everywhere and nobody would lend money, at least not to a 23-year-old punk kid who had never done a deal before. Um, and, and with all the headlines saying how the sky is falling, the economy’s collapsing, nobody was going to take a risk on me. So, you know, I think some people say I can’t do it and the brain shuts down.
I always have. Try to ask me a question. I think asking yourself good questions stimulates better ideas and stimulates better questions or stimulates better answers. And I said, how can I, right? Who’s giving me money right now? How could I afford this? And, um, and the only person giving me money at the time was MasterCard and I called him up, and asked him to increase my limit.
They went to a point where they gave me 15, 000 and I found the cheapest house on the MLS. Slot that on my credit card, and physically did all the work to it. And I sold a pig. It was just a pig with lipstick on it to one of the neighbors, uh, who ended up leveling the house and turning it into a parking lot.
That was the highest and best use and how renovated this property was. So, um, but I made the biggest check of my life up until that point, right? It was 13, 000 in profit. And I was like, I don’t know what I’m saying, run from real estate. And this is the biggest check I’ve ever made, which taught me that.
It’s not about the economy, right? It’s about your economy. What’s my economy look like? You know, it’s not about what’s happening in the news. What are your business models? I knew people who were worth tens of millions of dollars that went bankrupt in the last downturn. And I know people who were tens of millions of dollars that are now worth hundreds of millions if not billions of dollars.
And I’m like, how is the same economy? Happened to everybody. And the difference is it’s like, it’s like sailing a boat, right? The same wind blows on us all. If we’re sailing a boat, how does somebody win a boat race? And if they’re sailing a boat, when that’s the same wind, it’s not the set. It’s not the, it’s not the wind that’s blowing.
It’s the set of the sale, right? It’s based on the business model. It’s based on your, uh, mindset. It’s based on how you structure your deals. And your business acumen and how you can navigate different situations and pivot when things happen. That’s the differentiator, right? So work harder on yourself than you do on your business kind of thing.
The whole Jim Rohn mindset. And that’s, that’s what I ended up doing, man. I just focused on how I can keep on calling in. Me and making me better and dialing in my processes and dialing in my business model and dialing in my strategy. And, um, and that’s what kind of led me to start to buy, buy and hold type properties.
It wasn’t a sexy thing. It wasn’t fancy. It wasn’t the HGTV flips, but it was like C class. Rentals that I could buy for 10, 20 or 20, 30, 50, 000 when the market tank would rent for 600 to 800 a month. How do you lose on that? You don’t. And I built up a small portfolio that way, got enough, um, hanging out in circles like this, right?
Like I commend you for putting a group like this there are some players in this room as people are introducing themselves. I’m like, man, some people doing some big things. And, um, I didn’t know that these groups even existed. Right. I plugged into the real estate investors association. And that’s almost like the blind leading the blind in most of those.
But there are a few players in the back who stand against the wall like this, who are out there doing deals. And I go and meet them and try to source deals from them, try to raise capital from them. I wholesale projects to them. And do just create the momentum, right? Being in the right rooms, showing people you have a work ethic, showing people you do the right thing.
All of a sudden, that stuff compounds your character. Compounds and your reputation compounds to the point where people say, Hey, I don’t have the bandwidth. I don’t have the time, but I have capital or I have access to capital. How about I put the money with you, Tim, and then you go out and do the work and let’s come up with some.
And that’s how I got my first private money lender on some sort of equity split. So um, that’s kind of the, the, the fast track. And then, you know, you let that stuff compound and all of a sudden, you know, pick your head up after doing that for 10, 15 years. And you’re like, Holy shit, you got a big portfolio.
Tim Mai: Yeah. That’s awesome. So I want to touch on something you mentioned first, I mean, starting you and you know, for you too. To. To think, look at it from the perspective of how can I who’s giving out money right now? Uh, you know, the economy is not my economy. Those kinds of mindset as you know, I love to hear where you got that mindset?
Because most people starting in real estate and business don’t have that kind of mindset. So how, how, how did you come about picking those things up?
Tim Bratz: Here’s the thing. I joined a network marketing company. I got asked out to a home meeting at a network marketing company when I was like 20, 22, or 23 years old.
And I was, and I was like, Oh man, I can go and get rich in this other network marketing company. Thinking that like that they had residual income and products and all this other stuff. And it aligned very well with real estate. And, um, uh, here’s the thing. It didn’t make any money. I was in the top 1% and I made like 30 grand a year.
Um, but the benefit was the way that they keep you is they pour into you from a personal development standpoint. So I met teachers like Tony Robbins and Jim Rohn and, uh, these thought leaders and dude, I just turned off the radio and I started listening to it. You know, CDs and audiobooks and, and I started like, I pretty much, I had a 4.
0, but I cheated my way through high school, you know, like, like I only read one book in all of high school and college. And then all of a sudden I read 12 books, the year after college and it was all, you know, think and grow rich, how to win friends and influence the richest man in Babylon. Um, rich dad, poor dad, and it, and I got an MBA by personal of, of in personal development, um, and those insights from.
The things that I did outside of traditional education. And so I, um, dude, I think when you realize that 80% of this game is all up here, uh, you know, it gives you the staying power and you realize, you know, you work harder on yourself than you even do in your business because that stuff compounds.
Tim Mai: That’s awesome.
Um, and then, um, what was, so in your transitioning into the commercial side, uh, into the multifamily side, how, how many units was your first deal?
Tim Bratz: Oh, man. Um, yeah, so I started in a single-family world, right? I was, I was wholesaling. I was fixing flipping. I got into single-family rentals. And then I came across a deal in 2012, that was an eight-unit apartment building and, um, and it was at a price that was so stupid that I had to offer on it and I had to buy it, you know, three out of eight units were occupied.
It needed some work, but I bought it for 30 grand, you know, in a C class, C minus area of Cleveland, Ohio. And I put another 50 into it, but still, I was into it. 10 grand a unit, you know, 80, 000 and the NOI was 27 grand. So if you’re familiar with cap rates, that’s about 30%, uh, or more than that. Um, 35, 33% NOI.
And so, or cap rate, right? That’s pretty good. Um, but I was self-managing it and, you know, all this other stuff. So here’s, here’s the real aha moment for me though, is I drove to one location instead of eight locations. I looked at one room. I looked at one foundation instead of eight foundations. I negotiated with one seller instead of eight.
I raised money on one deal instead of eight deals. I was able to go and collect the rent. I was able to go and meet a contractor at one location instead of eight. I had one tax bill, one utility, and one water bill instead of eight. Right. And so the scale of getting into multifamily resonated with this sense of efficiency that I’ve always kind of had inside of me.
And I was like, this, this is where I want to be. And I ended up selling off. Um, any single family, uh, properties that I own. And I did like, you know, I just kept on trading up and I did 1031 exchanges into an eight-unit to another eight-unit to an, you know, about a 14-unit. I rolled those into 23 units and about 31 units.
And then all of a sudden you pick your head up and you’re sitting on like 140 doors in a couple of years. Um, and those 140 and, and you know, between that 140 that I was holding, plus probably transacted another a hundred doors on top of that. So those 240, 250 doors, the first ones that I had, I had exclusive partners and I gave them 67% ownership in all the deals that we did.
They brought the money. Wow. I did a hundred percent of the work for a third of the equity and I didn’t take any fees. Right. I didn’t make any money, no asset management. I had a $ 3,000-a-month salary and that was it. Um, that’s what I valued myself at. Back then. And, um, but here’s, I think a lot of people get caught up on the first couple of deals.
Well, you know, I bought them, I bought the deal, and in my wholesale deals. If I find the deal and you find the buyer, we split it 50-50 so I found the deal I want 50% of the equity was like dude. Who’s going to asset manage this thing for the next 30 years? If you spent 90 days finding the deal like somebody has to project manage a property, manage assets, manage who’s raising the money, and who’s sponsoring the loan.
There are a lot of other players involved when you’re buying and holding property, instead of just. Transacting it. Um, and that was, that was, you know, part of the thing. So anyways, a lot of people come to me and they’re like, Hey man, what’s a fair, something like this. And I, and I explained, there’s a lot of moving parts, right?
Depends on the deal. Depends on who’s doing what depends on the exit strategy. But at the end of the day, it’s like. Who cares how much equity you got? Right? Like, like, it’s not about this deal, right? It’s about what does this deal do to set you up for future deals? This one deal will set you up to take down the next 10.
The next 10 deals are going to set you up to take down the next 100. And all of a sudden you’re going to pick your head like dude, you can build up your equity and have way more equity in future deals. After you’ve already gotten punched in the gut and slapped in the face, um, going through the learning curves on the smaller deals, like who cares anyways, right?
And as you build up, your, uh, your cash flow, right?.? and your cash reserves and your reputation, you can start sponsoring loans yourself. Then you start getting into more equity future deals that also have more upside and less downside risk because you’ve been in the game longer. So. You know, it’s very short-sighted, I think , to focus on how much equity I get in this deal right now.
I’d always be looking, I would, the way that I got to where I am is I for went for gone, whatever the word is, um, short term gains for long term wealth building. Like I was always my play. I would always forgo the upfront fees and more equity to build my balance sheet. I knew it built my portfolio. I knew it built my reputation.
I knew I could meet the people. Right. And I was getting paid essentially in building up equity, uh, as I was getting educated in the process. So, uh, you know, I see a lot of people trying to transition into multifamily and that’s usually one of the biggest hurdles that they’re facing.
Tim Mai: Wow. Okay. That’s good.
So this partner that you took on, how many of you guys did 140 units together? How many deals is that?
Tim Bratz: Uh, it was a lot smaller and I, and I did some single-family and duplex complexes and some other stuff, but, uh, I don’t, I mean, my portfolio today, 4, 000 doors is like 60 buildings. No. So it’s not working that hard.
It’s working smarter, and more efficiently. Um, so it’s, it’s some people who flip three, four, 500 houses a year. They work a hell of a lot harder than I, you know, but somehow I show up and I have a bigger net worth and I have more cash and I have a better lifestyle than they do. Um, because you’re just doing bigger deals.
Right. The size of your success is not dependent on education, gender, race, socioeconomic background, or any of that garbage about where you went to school, the size of your success is directly correlated to the size of your thinking. Do you have the balls to just go and do big deals? And if you, if you do, if you play around with thousands of dollars, you’ll make thousands of dollars.
If you play around with millions of dollars, you will make millions of dollars. And the same goes with tens of millions and hundreds of millions, right? Getting into bigger transactions and bigger deals allows you to make more money.
Tim Mai: Right. So, so far, you know, for people getting started and Looking for a potential partner like the one that you have, was that partner hard to find?
Um, or how would you go about, you know, someone starting? How would you, how, how would you recommend they go about finding someone like that?
Tim Bratz: Yeah, I don’t like getting married in business. I like partnering on a deal-by-deal basis because that partnership, which was in place for about three years, ended up folding.
I became more valuable, right? And then they didn’t bring any more money and they wanted all this equity and they wanted more equity and more return on their money. And I thought that was greedy and they thought there are two sides to every story, right? Somewhere in the middle. Is it probably true or fair?
And at the end of the day, though, it didn’t work out. Life happens. And we ended up going our separate ways. And it was very stressful and it wasn’t fun. And I had to liquidate the entire portfolio. That took me three years of my life to build. And I had to press the reset button again in 2015, 2016. So I built my entire portfolio over the past five to six years.
But that wasn’t fun. Part of my business. So I wouldn’t suggest anybody getting married to other people, other than their spouse. However, I love doing joint ventures. I like doing some joint venture deals with the right partners, right? You can bring in somebody who might have a skill or a strength that offsets yours.
And say, Hey, they’re good at raising money. I’m good at operations or, uh, vice versa. You know, it could, or I’m good at marketing and finding deals. They’re good at the day-to-day, uh, activity, and partnering up with somebody who offsets your skills without stepping on your toes or dancing on your strengths is a great way to test out doing a deal.
And the beautiful part is you go and buy 123 Main Street, you create an LLC that’s 123 Main Street LLC that owns that single deal, and you have an operating agreement that’s a Purpose entity just for that one deal. And if that deal works out great, you go and do another deal with that person. If it doesn’t, you’re only stuck with one deal.
You don’t have to partner with them on all the other different projects, you know? So it keeps you open to different kinds of dates. And if you want to keep on doing deals with somebody great, you’re in it because you love them, not because you have to be, uh, committed to them as an exclusive partnership across every project that you do.
Tim Mai: That’s awesome. So, after your partnership ended you sold off that portfolio. Now you have to rebuild your portfolio all over again. And you mentioned it was like the last six years. And, so what starting on your own where did you immediately go into syndication? Or did you, uh, did you do like a joint venture partner type?
Tim Bratz: I don’t like traditional syndicators. Um, I come from the single-family world, I was flipping, I had a turnkey business. When that partnership folded in 1516, I started flipping houses because I, you know, didn’t have access to my cash.
As we were liquidating these properties I opened up, you know, made a couple of bucks, but, um, I started flipping and so we flipped 80 to 100 turnkey houses in Cleveland. So we buy a single-family house, fix it up, and put a tenant in place. If it’s sold great, if not, we hold on to it for our own portfolio and cash flow.
And I had a lot of single-family investors or private money lenders on those deals, give them a promissory note. And, um. Uh, did it that way? And then I also had a lot of people who were buying these turnkey deals from me, right? They didn’t want to do any of the work they wanted equity upside. They want a predictable cash flow.
Think about a syndication investor, somebody who invests as an LP as a limited partner in syndication. Dude, they don’t want to do any work, right? They want it to be completely passive. They want a predictable return on their money and they want equity upside. Dude, it was, it was an easy conversation for me to have.
With these turnkey buyers saying, Hey, instead of you throwing a hundred grand into this single-family house and trying to get 8% with equity. Under one of my deals, I’ll pay you 10%. You do no work. You have no liability, no risk, and you still have equity upside. Um, and so it was an easy conversation for me to have.
And just like, and then, uh, you know, on the other side, the hard money lenders who were, I was paying 15, 18% to, I realized that just like I was going through transitions and graduating through different levels in my real estate. Career broker, wholesaler, single flipper, single family buys and holds investors, multi-family, small multi-family, larger multi-family, right?
You’re going through these graduated steps, more sophisticated as an investor. I realized there are a lot of transactional hard money lenders who are missing out on the long-term wealth building of owning and holding assets and the tax benefits that come with that, right? Like You’re a hard money lender, you’re getting taxed as an earned income tax bracket on all the dividends and gains you get.
And so I quickly realized that a lot of them were tired of underwriting the next deal to get paid again, you know, and, um, and I transitioned them into a lower preferred return. So I moved them to 10% instead of 18, like, why would they ever do that? You’ll also kick off cash flow and depreciation and equity upside.
And so the gains from refi cash-out refis and the gains from sales of these properties exceeded those 18% returns in most scenarios. So it made a lot of sense for them and to convert them into limited partners in my syndication deals. So I essentially do the burr method by renovating, renting, and refinance.
Rinse and repeat for apartments because I come from a single family. So I never, dude, I never took a class on this stuff. I never, um, read a book on it. I don’t have a CCIM designation or any of this other, I don’t, which I don’t even know stands for, um, you know, like I come from the residential world. I don’t.
And so I liken everything to a residential, um, level and how I. Bought these, these smaller multifamily deals with my investors is I’d say, Hey, you lend the money. I’ll give you a 10%, 10% return. And, um, and then I’ll kick you 20% of the equity forever. And I plan to refinance in two to three years and give you all your money back.
You take all your chips off the table, and then you still own 20 or 30% of the equity forever. And that allowed me to keep 70 or 80% of the equity. And that’s how I did the first, I don’t know, three, four or 500 doors that I, that I’ve no shit. The first. The first 1500 doors that I did was that way. And still, I structure it similarly.
We buy some more stabilized kind of stuff now. And I think. Listen, guys, there are a thousand different ways that you can deal based on the exit strategy, the cost of capital, and everything else. And if I was buying a skyscraper that was a 400 million deal and one person was willing to write the check and they wanted 90% of the equity, but I could get some fees on it and it was stable and I didn’t have to do anything and I get on 10% of a 400 million skyscraper.
I would still do that deal, you know, and at the same time, if I’m building something new construction and I and my team are working our asses off for the next on this project, and we’re the ones creating the value add or we find something that’s heavily distressed. And we’re repositioning it from a management perspective and construction perspective.
And guess what, if I’m creating all the value, then the operator deserves a little bit more equity. And I say this. Because I am the operator, right? So I can, I can say that from a standpoint of, Oh, well, it makes sense for you, Tim. But guess what? I also invest my money with different operators, with the same structure.
So I, uh, uh, I preach this and I do it myself. So it’s not like I’m one-sided in the way that I structure my deals. If it’s a heavy-value add a deal and the operators are competent rockstars, and they’re going to be working their tail off for the next two years, they deserve more equity. You know, I’m not big into taking fees though.
Like I don’t take any fees. I get paid when the investor gets the money back. Right. And I just started taking some acquisition fees, one, 2%. Uh, but I don’t take asset management fees. I don’t take fundraising fees. I don’t take capital events fees. I don’t take, um, uh, loan sponsorship fees. I don’t take disposition fees.
So I get paid. The same way the investor gets paid, right? They will, they, they make, they get paid regardless of the property’s performance. I only get paid once they get their money back and the property’s performing, you know? So I think that allows you to be in the same boat rowing in the same direction in a position where, um, Interests are aligned, you know, in a way that traditional syndication, not always, that’s not always the case.
Tim Mai: That’s awesome. So in terms of the legal structure of it, I know you said it’s not the traditional syndication, but is the legal structure a typical PPM? Uh, is it like a common tenant or not, so it’s okay.
Tim Bratz: We, we do, uh, you know, five Oh six B is what we started with. It was all friends and family and people we’ve already done business with.
And now we only do five Oh six. You know, you got eyeballs on you. And, um, I’m seeing, you know, I have a pretty big social media following. And so, uh, With all the eyeballs, you want to be able to talk about your deals and raise money and talk about it on social media. So we just do 506 C now. And, um, and that’s the same paperwork, right?
There’s a term sheet. There’s a private placement memorandum. They have to fill out the, you know, investor suitability questionnaire. And, uh, what else am I missing in there? Yeah. And a subscription agreement, right? And so it’s all the same stuff. And we have a, um, Um, an SEC registered investment for every deal that we do, and everyone is its own.
Um, but most of our deals are structured the same way. Again, we’re kind of in the middle now, right? The climate’s changing. Uh, I don’t want to take on heavy-value ad deals because… The labor force is skewed. Um, the supply chain is still all over the place and uh, thankfully the eviction moratoriums have been lifted, but that’s still, you know, kind of a political thing in some communities.
So we’re not doing heavy value-added anymore. We are doing some new construction. Because that’s a lot more predictable and we are buying some stabilized stuff. So with the stabilized stuff, it’s not as much work for me and my team. So guess what? We’re giving up a little bit more equity in those projects.
Maybe we do a 50-50 split with the investors and, um, and we structure it that way. There are a lot of people that you and I know who made more money last year and this year than professionals and they need depreciation. So that’s a cool way where you could say, Hey, what if we do a cost seg study, accelerate all the depreciation?
I give it all to the limited partners because maybe you and I don’t need it. And that offsets a lot of their tax liability at the end of the year. And maybe they don’t need a preferred return. So now you’ve got 20% of the money at 0%. Uh, rate of, you know, of a preferred return or interest rate on it, you know, and then really you can go and pay a retail price for a deal because you’re only paying five, five and a half percent on the other 80% of the, of the bank money that you got on that deal.
So it’s like, dude, it’s, I think who’s going to win over the next 24 months is people who can raise money and people who can creatively finance deals. If you can do those two things, I think you’re going to clean up over the next two.
Tim Mai: That’s awesome. So I like to circle back into five, your transition from 506 B to 506 C.
At what point did you make that transition? Was it the number of units? Was it the amount of asset management? Was it, you know, once you got big in social media, at which point did you make that decision?
Tim Bratz: It was more of the social media thing. It was, I had, I had events and I had 200 people in the audience and I wanted to be able to talk about deals without dancing on my words, you know, um, or tiptoeing on my words.
And so, uh, it just lowered our liability of being able to talk about deals, current deals, past deals, and all that stuff where I just didn’t, I was talking about.
And then it just created liability for me. And I was like, it’s, it’s cleaner if I don’t, you know, do a five or six B anymore. So, um, but you know, what’s cool is, is there still the, um, the sec came out with something where you can start as a five or six B. And then transition it into 506 C. So if you have investors early on, or you have some friends and family who are not accredited, you can open up the initial offering to them.
They can come in and commit to a certain number of units. If you don’t fill the whole thing up, you can transition it to a 506 C. Which then you can mass market it. But from that point forward, you can’t take any more 506B non-accredited investors. So there’s some cool stuff that you can do. I, you know, I see Grant Cardone’s doing like, uh, non-accredited, small increments, reggae type stuff, which I’ve never gotten into.
I never played around with it. Um, that’s another way, you know, I saw somebody in here is doing a tokenized, um, way to do it. The limitation with that is. You’re not allowed to sell your equity in an investment in the first 12 months that you own it. So you have to raise the money, but it creates an amazing opportunity for people to liquidate and create liquidity in an otherwise illiquid investment typically, like being able to tokenize it after or sell portions of those tokens after that 12-month mark. So there’s a lot of ways to skin the cat and, um, you know, being on, on, on, you know, discussions like this and learning different strategies, knowing that there’s not one size fits all, um, the more quivers you have in, or the more arrows you have in your quiver.
Like the more dynamic you’re going to be on, on, and, uh, competitive, you’re going to be able to raise money and structure deals creatively in the next 24 to 36 months.
Tim Mai: So I know you have raised over a hundred million dollars by now. What would you say are your top three ways of raising money? Attracting investors.
Tim Bratz: Yeah, man. Great. Uh, great question. And that, and listen, guys, I’ve never done institutional equity, right? The only way I’ve ever raised money is by individuals, people like you and me, um, who have a hundred grand, 200 grand, 2 million. Um, I think that my biggest investor has four or 5 million with me.
And I have a few people in the seven figures, I don’t know, maybe a dozen people in the seven figures. And then, um, a lot of people from a hundred thousand Uh, hundreds of investors in that realm. So, uh, I’ve raised about, I don’t know, 110, 115 million that way. And, um, what I would say is like the simpler you can make it the better, you know, when you’re talking about waterfall structures and you’re talking, dude, you’re going to lose 90% of the population.
As soon as you hit, you talk about that, right? If you say, Hey, I’m going to pay you an 8% return. They can conceptualize that. You know, and when I get your money back in the next 36 to 60 months, you’re going to maintain your equity forever. And I’m going to kick you a 1% equity, which might not seem like a lot, but it’s a 15 million deal.
And let me show you what that looks like. It pays off cash flow, you get depreciation which offsets a lot of the cash flow, and you have equity growth as the property appreciates, and as we pay down principal. And by the way. Another deal with me and another deal. And my goal is over the next 20 years when you’re ready to retire, you’re in four or five, 10 different deals with me paying you these, these, these pops of cash flow every month.
And these big pops of refi proceeds or sales proceeds every couple of years, too. Does that sound? Exciting. Yeah, dude, that’s so easy for somebody to conceptualize, right? As opposed to like, well, I think, uh, you know, let’s, let’s get your calculator out and, and look at waterfall structures, and after you get this prep and then there’s this, this IRR hurdle.
We do what, what are you talking about? I’ve made 400 million or more. I’ve done probably 600 million deals and I still don’t understand that shit, you know? So it’s like, how is somebody who’s not in the industry going to understand that the simpler you can make it? Having a beer with somebody at, you know, at, at the pool or, um, meeting somebody at, at the kids’ baseball game and trying to explain to them what this looks like dude, just keep it stupid, simple.
So, uh, that’s, that’s, I think a big key of taking complex shit and making it simple is one of the things that I’ve been pretty good at. Um, and I think I’ve been able to attract a lot of, a lot of investors and students because of that, um, because I simplify complex thoughts, um, or at least. I try to. Um, so I think that’s, that’s number one.
The second thing is there’s money everywhere. It is frigging everywhere. You need to be talking about it. How are people, people aren’t going to raise their hand and come to you and say, do you take money for your investments? They don’t even know if you are doing these investments, you have to be talking about it.
You have to be sharing it on social media. It’s a free marketing tool and it is the most powerful marketing tool this world has ever seen. It’s free to have 5, 000 friends on Facebook. You guys realize that free, you know, who all my investors are. Entrepreneurs, almost all of them are entrepreneurs who are not real, real estate professionals.
I have a lot of real estate. I don’t know, 20%, 15% that is real estate that is real estate professionals, but about the math, the vast majority are traditional business owners who are good at making money. And usually not as good at saving it and bad at multiplying it. So. Like, I’m in e-commerce.
Mastermind. I don’t know anything about e-commerce. I’ve never done e-commerce, but I’m in there because I’m the only guy who knows how to multiply money. And all of them are good at making money. And they don’t know what to do, they’re all, they’re fearful. They’re afraid of what to do with it. So they just stockpile it and they sit on it.
And as soon as you can educate them and be seen as the resource, all of a sudden, all of them put their money with me, you know, and they all tell all their money because nobody knows how to multiply. Like we are very. Hot commodity. Like, like think about the market right now, guys think about what’s happened to stock portfolios down 30% on average, you know, tech down 50%.
On average, you got crypto portfolios, just obliterated for the most part, you know, down 70 to 80%, guess what’s not gone down real estate, rental real estate portfolios. Nothing rises with inflation and tracks inflation. No metric in the economy tracks inflation better than rental rates. If the economy is up by, or inflation increases by, you know, 10%, 11%, guess what, you can expect rents to increase by 11%.
There’s nothing better that tracks that. And, not only are you getting a better return than the stock market in crypto, but you’re not losing your principle, right? No, not only like. You’re not only getting a better return, but, and it’s a tax advantage. It’s like, we have an opportunity and I think a responsibility to go and share what we do with as many people as humanly possible because they’re just getting crushed in their retirement portfolios, in their cash positions right now.
And we have something better. It’s like, like you can see how passionate I am because like, I believe in it. If there was something that made more money, that was a better tax advantage, that paid dividends, that had long-term equity growth. And depreciation and principal paydown backed by a tangible asset.
I’d be doing it. I promise you. I’m a lifelong student of personal finance. There’s nothing better than commercial real estate. And we must take this to people and show them what we do and how we do it. And, uh, let them know that there are places where they can put their money. So that’s the other thing that I would say is you gotta talk to people.
Go and friend up every entrepreneur you can find on social media and get to 5, 000 friends on Facebook. Fred them all up. All of a sudden, when you post, they’re going to start seeing your stuff. And it might take a year. It might take three years. It might take 10 years. And then all of a sudden they sell there, they sell their business.
Boom, sitting on 15 million. They got to deploy it. Boom. I’ve been watching you, Tim, for the past five years. Hey, this is the first you’ve ever reached out to me. Yeah. Like, Hey, I just sold my business. I want to put about two, 3 million and play with you. Uh, do you have any deals? I don’t even know who you are now, but I’ve been watching you for three, four, five years.
I see you’re a family man. I see you got good values. I like who you are. I know what you stand for. I feel good putting 2 million with you. We live in a voyeuristic society where everybody’s watching, they might not engage. They might, might not like, they might not comment. Right. But they are watching and they’re, they’re watching what you do.
And so you gotta be out there educating, inspiring people on social media, go and interview your, your, your CPA, talk about doing real estate deals, talk about syndicating, talk about what returns look like, right? Go and interview your real estate attorney. Talk about real estate stuff, anything, you know, uh, mortgages, syndication, uh, how to secure your investment with a promissory note, like whatever, go and interview your property manager, go and interview your contractor, go and interview your, uh, uh, whoever, whoever else, one of your vendors, one of your suppliers, like go and talk to other, let them create the content.
But you being the medium that gets conveyed to your audience, gives you the trust and respect to your audience. Even though you’re not even bringing the value, you know, it’s powerful stuff. So you got to be talking about it. You got to be talking about it all the time and in front of everybody. So social media is where I get a lot of money.
Um, and then, and then masterminds, right? I talked to you about the e-commerce mastermind. I also, I mean, I’m probably in five different masterminds and there’s a lot of people who sell businesses or, you know, um, you know, obviously real estate entrepreneurs are pretty. Entrepreneurial, a lot of times have their hands on different things.
I got a buddy who’s in this ERC stuff right now, like the emergency relief credit or whatever it is. Um, that, that dude, he’s, he’s pulling down 20 million a year, something stupid over the past 12 months. Now it might not last, but the dude’s got 10 million bucks to deploy, you know? Wow. So it’s like. You never know.
You just hang out with resourceful people, who are looking for an edge. I let them go and pursue getting rich quickly in crypto, selling e-commerce stores, and doing ERC tax credits. I let them kind of like, uh, you guys ever seen the men who built America? Yep. And that’s America. Only a few of you guys go.
And I think it’s free on the history network or you can buy it for 4. Um, on, uh, on Amazon, on the prime. It is unbelievable. They interview Rockefeller and Carnegie or not interview them, but they essentially share their stories and they interview present-day Titans, right? Like Donald Trump, and Steve Wynn. Um, Donnie Deutsch, uh, Carly Fiorini, like all these different titans of the industry today, Jack Welch, um, and talk to them about, you know, correlations in business from 100 years ago, 150 years ago to today.
And unbelievable business insights. It’s like a master’s degree and it’s so entertaining too. But one of the things they talk about is that John D Rockefeller was an oil man. But you know, he didn’t, he didn’t dig for oil. He thought gamblers dug for oil. He let them dig for oil. He said, businessmen refine oil, let the gamblers go dig.
And then they’ll bring the oil to him. He then refines it and sells it. He doesn’t have the risk. He has predictability. So I do that same thing in my business. I let other people go out and make money, get rich quick in crypto, get rich quick in e-commerce stores, get rich quick in, uh, ERC tax credits, get rich quick.
I feel like there’s a baseball card stint where people were making a hundred grand a month that I knew were selling baseball cards, like crazy stuff. And, uh, I let them go do that. I don’t go and chase shiny objects. I refine oil, right? I let them go make their money and then they bring it to me to then deploy it.
So that’s staying inside your lane and staying focused.
Tim Mai: Awesome. Wow. I’ve never even, um, I, and I’ve, I’ve seen Titan. I’ve seen all those shows, but never thought of it that way either. That’s super, super powerful. Yeah. Now I know you, I mean, You, you intentionally put yourself out there as an influencer as a mentor.
So, it’s easy for others to see you as the expert as an authority right so how do you recommend your listeners who are listening, and perhaps right now they don’t have that? You know, uh, that love of influence. They’re not positioning themselves as an educator, or a mentor. Uh, what, what would you recommend them to do, to begin that?
Tim Bratz: Yeah. I mean, I wasn’t either. Right. I truly believe that wealth is like sunshine, right? Like if you and I go outside, Tim, you getting sunshine takes no sunshine away from me and me educating you and teaching you, you know, how to go and build wealth. Right. And just go buy some rental real estate. Love doesn’t adversely affect me at all.
A lot of people, well, you’re training your competition and you must do all yours. I make 90, 90 plus percent of my money from doing deals, not from coaching. Right. Like it’s like, less than 10% of my wealth, excuse me, comes from coaching. And so it’s like, I go and educate people, not because I’m recruiting competitors, I’m creating collaborators.
They’re going to go out and find a deal. And they’re going to be like, you know, I don’t, I don’t feel comfortable taking this down by myself. Let me hit up Tim. And maybe I’ll, I’ll joint venture with him or maybe I’ll sell it to him and he’ll kick me some equity and I can just kind of ride his coattails on this deal.
And instead of me, you know, paying money to get educated or me, um, losing time or losing money, getting punched in the face, trying to take this deal down on my own. I can make money by linking arms with somebody who’s been there and done that and can teach me, and help me fast track. On how to build this.
And so, uh, and the same thing was, is, is with, uh, uh, sourcing deals and then also in raising money by me being on shows like this and me talking on social media about how I do what I do and educating people. I’m seen as an authority, and I didn’t. I didn’t try to go out seeking that. I just tried to like to help people.
Cause I saw all these broke-ass people and all my friends who are trading their time for money and at a job. And I’m like, dude, just go and buy a rental property. Like I got a really good friend who bought a townhouse in DC and lived in it. And then the one up next door came up for sale, right? He works for the government.
He’s got a full-time job. When he retires, he gets paid 40% of his highest salary. All right. So he makes like 180 a year right now. He’s pretty high up in the government. And, um, but he’ll make like 70 grand or whatever the hell he told me. It’s like 70, 000 a year in pension after he works for 25 years for the government.
Okay. He bought the townhouse that he lived in. And the one next to it, right? And then, and then he bought another one just now. And so now he owns his own home and then he’s got these two townhouses. Let’s not even include his own home. These two townhouses’ cash flow is almost a thousand dollars a month each, and they’re paying down principal and they’re appreciating over time.
They’re each worth about seven 50 right now. Okay. Over the next 25 years, they will be worth at least one and a half million dollars each. I’d say that since 2000 property values have at least doubled, right? Maybe more. Okay. We’ll say they just double. This dude now has two townhouses, which he fell into backwards by accident, right?
He didn’t intentionally go out and try to be a real estate entrepreneur. He fell into two deals, and those two deals are going to be paid off, and it’s gonna be 3 million worth of assets that he’s gonna own 20, 25 years from now. That both kick off probably I’d say about $4,000 a month in poss. No, I mean, that’s what they’re renting for right now.
They’re probably gonna be bringing in $8,000 a month each at that time, you know? So you’re talking about like 16 Gs times 12 months? That’s 180 thousand, almost $200,000 a year in cash flow. Let’s take out operating expenses and stuff. Let’s say he nets one 50. You know, one 40, that’s double, double. A part-time side opportunity that he spends an hour a week on is gonna give him 3 million to pass down to his kid.
Mm. Give him a double. He works his dick off for 25 years for the government and when he dies, his family doesn’t get anything. They don’t give a lump sum. Right? Think about that. Think about how powerful real estate is. So like me, understanding or me, like realizing that I was like more people just need to buy a property, right?
Just buy one. And I started talking about it on social media. And as I was talking about it on social media, all of a sudden people would raise their hand and say, Hey, can I sell you a deal? Can I buy a deal from you? Can we join a venture on a deal? Can I lend you private money, Tim? Or Yeah. Do you coach?
Do you mentor? Can I pay you to coach me? You start hearing that enough times. You’re like, all right, let me put 15 people in a room and just kind of like share some ideas and strategies. And it just started snowballing, right? It started, uh, you know, just rolling down the hill and it started compounding over and over and over again.
And then essentially a branding company, a publishing company reached out to me and said, Hey man, let’s make you the face. We’ll put all the dollars behind it. You just, you know, train and educate and that kind of, you know, created a commercial empire. So that allowed me to go out and kind of put me on a platform when COVID hit.
Um, I was able to buy my brand out from that publishing company and now I own it myself. So I was able to, you know, I don’t have as much overhead as they do. So I dropped the price and, and, you know, tried to get more value and all that stuff. So my point is, I didn’t. Try to become a guru, right? All I try to do is help other people.
And I think that was conveyed genuinely. It was authentic. This guy cares. He gives a shit about wanting people to do more, be more, have more, give more. Right. And so it’ll, it allowed me to, you know, be in a position where I just helped other people. And then it just.
Turned into deals, turned into money, turned into opportunity, turned into coaching income and consulting income. So it’s, um, but it never was, it wasn’t intended that way. It was just trying to go out and educate people. And I promise you guys, you guys will do the same thing. It’ll open up doors of opportunity for you.
Deal flow, money flow, which is all that matters. I have people who even want to come and work for me for free, you know, just to learn and be around us. So it’s like the only three things that matter in this business are deal flow, money flow. and refining your operations and social media and having an influence on that, uh, opens you up and you don’t need a big following.
You need a thousand tribe members and you can accomplish anything.
Tim Mai: That’s awesome. I love that. And just that mindset of just being out there helping others educate others. I mean, that’s very doable, right? Even if that education is like what I’m doing right now, where you interview an expert or, you know, share with them an article.
Uh, it’s, it’s very doable. So I love that. Um, in terms of maintaining these, you know, so you build these relationships through social media, uh, what, what is your way of maintaining that relationship, keeping them, I guess, in the loop of all the deals that you have? Do you do a newsletter? Do you do, you know, any direct mail?
Is it all email? What are some of your strategies there around that?
Tim Bratz: Of just capital management, you’re saying? Like, keeping investors in the loop?
Tim Mai: Yeah, yeah, yeah. Both existing investors and also potential investors.
Tim Bratz: Yeah, so I’m like, I’ll, I’ll post on social media that I have an upcoming deal. It’s 506c.
If you’re interested, here’s the registration link. Hop on a webinar. Um, I’m a big believer in one too many activities. You know, one on one phone calls are not gonna, you’re not gonna raise hundreds of millions of dollars. You have to figure out how you can Answer all the investors’ questions. Um, you do a couple of deals and it’s all the same questions, right?
Like what’s the asset? What’s the return on investment? What’s the exit strategy? Tell me more about you. Why should I invest with you? Like that’s, that’s about it. Um, and so if you can answer those questions, how am I secured? What are the tax ramifications of this? Do I get a K one at the end of the year or 10 99?
Like it’s just you, you end up getting the same questions and you ask a frequently asked question. You know, think PDF together or you address it in a webinar. So typically what I do is I have an email list. Everybody who’s ever said that they want to invest, anybody who I’ve ever done a deal with, anybody who I think has money and I haven’t, I’m an, I have them on an email list.
I’ll send an email out. Very, very simple. Couple of sentences with some bullet points on the deal. If you’re interested, check out the attachment. The attachments are like a two or three-page offering kind of memorandum. Very simple. Again, the first page is about the deal with some pictures. The second page is about the returns and, uh, and that’s about it.
And then in the email, also, if you’re interested after you take a look at this investment summary, hop on the webinar, it’ll be a 45-minute webinar. Tim will go through everything and I answer all those questions on the webinar. Who is Tim Bratz and his team? Like, why would I trust him? And why would I, why is he a competent person that I should invest with?
Right? That’s a very important question to answer. Number two is what the asset is talking about in the deal. Here’s where it is. Here are some metrics around it. Here’s the current occupancy. Here’s the upside that we see. And then most importantly how do I get paid? Like, what does it end up looking like for me as an investor?
So if I bring you a hundred grand, What are the ways and I break it down, you get paid a preferred return plus cash flow plus depreciation plus equity growth. And here’s what that all looks like from a cash-on-cash standpoint. And then when you get your cash back here’s what the equity growth looks like and the equity value.
If we’re refinancing it or selling it or whatever. So, um, that’s, that’s how I do it. So it’s a high-level email, with some bullet points. If they like that, they can get into the offering memorandum. If they like that, they can hop on the webinar. And if they still want to go beyond that, then we’ll hop on a one-on-one phone call.
And it’s not usually me. It’s usually my chief investment officer who’s way more detail-oriented than I am. And, um, he gives them a level of confidence, an attorney and stuff. So he gives them a level of confidence that uh, that we’re, uh, very professional and have all of our stuff together. So that’s how we attract the money.
And usually, we have enough people on the webinar, um, and enough excitement. It fills up pretty quickly. So we’ll fill it up within a webinar. Um, we typically oversubscribe by about 25% because, you know, 25% usually falls off and, uh, and then we can fund the deal. And then once we take down the deal, we make preferred distributions on them, on their preferred returns every quarter.
So within 30 days of the end of every quarter. So in April, July, October, and then January, we make distributions to all the investors. Uh, and along with that comes an email update or a video update. And we typically include something like a PowerPoint presentation that just goes boom, boom, boom. Here’s the current occupancy.
Here’s the percentage of construction that’s done. Here’s where we are with rents and here’s the link to the pictures and, you know, just letting them know where we’re at. And sometimes I’ll put a video in there. Um, And, uh, go that route. And so we, yeah, we keep it simple.
Tim Mai: That’s awesome. Um, what’s, um, is there, what, what software do you use to manage that?
Tim Bratz: We use invest next. Which is, I mean, we’ve looked at probably, I don’t know, six or eight of them. And, uh, we just like that one the best. They’re, they’re a small enough company. I think they’re headquartered out of Michigan. They’re a small enough company where we have a lot of influence with them. And they, every time we need something changed or added or edited, um, they do that, but they’re big enough where, um, you know, they can, they have access to capital and they can, they have the bandwidth to make those, those updates and changes. So, um, yeah, they do, they do a great job.
Tim Mai: Do you have any other tools or resources that you like a lot?
Tim Bratz: Dude, I’m, I’m a simple guy, man. My, my, my email list for my investors is an Excel spreadsheet. Like I have their name. The first name, last name, phone number, email address, and some notes of my disc.
Like there are people with fancier CRMs and I think if they get caught up in that stuff though, you know, it’s like, what matters? Like guys, there are only a couple of metrics that matter. You know, the two most important metrics that you can be focused on right now are several offers you’re making daily.
You can’t control if deals close. The one thing you can control is how many offers you make. And eventually, the more offers you make, the ratio will appear to how many deals close, right? There are going to be deals that fall off and don’t make it through due diligence. There’s going to be deals that, um, have title issues.
There’s going to be deals that blow up or financing comes back on terms that you can’t agree with. Um, and for some reason, the seller goes crazy or whatever, and that all happens. What you can control is the number of offers you make daily. We’re making offers all the time without ever seeing a property.
Right. We know what it takes to renovate a unit. We know what the metrics will look like. We know how we can increase income, and how we can decrease expenses. And we can do all of that remotely from anywhere in the world. And so we look at a deal, we underwrite it, we make an offer. If we’re in the ballpark, then we’ll submit a letter of intent.
Um, and that’s what I mean by an offer. An offer to me is like just any way of swinging the bat. Meaning if you can have a verbal conversation, Hey, you know, you’re asking 2 million, I’d be in one five range. Is it worth continuing the conversation? That to me is at least swinging the bat, at least getting the conversation.
No, go and fly a kite. Okay. I will, you know, I’ll come back in six months when it’s still listed at 2 million. Um, Or yeah, Hey, totally worth an offer. I’ll present anything like bring it to me and blah, blah, blah, blah, blah. So like that to me is an offer. Also, an email having that conversation is an offer.
It doesn’t have to be a letter of intent. It doesn’t have to be a formal purchase and sale agreement. It’s just swinging the bat, getting the conversations going off, um, you know, are we in the same neighborhood? Numbers-wise, if they say yes, then we put a formal letter of intent together, submit it, and go back and forth on terms.
Once that gets executed, then I go out to the property. I’m not wasting my time, dude. I’m, I’m in the game of sifting through deals, right? I don’t go and try to make a deal work. I try to sift through deals faster than anybody else, so that way I can, I can snag up the good deals right first. So that’s my mentality.
We don’t get caught up on a certain deal or anything like that. We just rip through. Deal after deal after deal. We make offers. We let them know we’re very serious, very qualified buyers. And if the terms don’t make sense, then they don’t. I will say, with the change in the market and interest rates, we’re making two offers right now.
So right now we make an offer at us coming in, buying them out. And, bringing the full capital stack, meaning, uh, we catch what we get alone and we raise all the money and they’re out and it’s typically a lower offer. It’s typically like 70-75% of what they’re asking for, or we offer two offers, though the second offer is us bringing 70 or 80% of the deal, and then carrying back 20 to 30% as in like either an equity position or a seller carry note that’s unsecured.
And so that allows me if. If I’m willing to give them their price, they’ll possibly do it on my terms. So it allows me now to go get 70% of the money at a 5% interest rate, and then get them to carry back the other 30% of the money at 2, 4%, maybe a 0% interest rate. Maybe I don’t give them any prep or any equity.
Um, and I just pay them all principal payments. Or maybe I say, Hey, I’ll give you this price point. There’s no preferred return, but I’ll give you 20% of the equity upside. In the deal. And now you gave up 20% equity to the seller. They now have future growth. They got their price point. They have a little bit of a note that will pay them in the future, plus 20% of any gains above and beyond that.
And your blended cost of capital is lower because you got them to carry back 30% at a 0% interest rate. You know, so we make, and that’s a higher price point, but it allows us to make an offer. That’s an offer instead of a yes or no offer. Does that make sense? Yep.
Tim Mai: Yeah. And I love how you incorporate that creative financing kind of structure on the single-family over to this multi-family every time.
That’s awesome. Um, and, uh, so I know you, you started in the last market crash right before the last market crash. Where do you see this market going?
Tim Bratz: Um, yeah, I was in the trades. Kind of. I had a painting company. I was an intern and a broker and stuff from 05 to 09. I bought my first investment property in 09.
I bought my first apartment in 2012. And, um, you know, obviously been through COVID and a lot of other stuff. You know, nobody’s got a crystal ball. Nobody saw COVID happening. Nobody saw the rise in rents. And, um, this, this boom that happened over the past two years, either like, so, you know, all these, all these economists who are predicting the future, who knows, but I think, I think there’s a few pretty clear things.
And the first is that prices have been very inflated. I don’t know if they can go any higher, um, without the feds, you know, increasing interest rate, trying to soften some things. So that’s happening. Um, it has spooked a lot of sellers, but the sellers haven’t come off their price. I read two articles this weekend on the gap between sellers and buyers now.
Right. And then, and it. Sellers aren’t coming down. Buyers aren’t going up. So it’s been a very slow go throughout the past couple of months. That’s why I think if you can get in there and make it attractive for the sellers, by carrying back the seller financing on that gap, it gets them their price point on your terms.
And you can get into a lot of deals that way. So I think that’s going to be a big deal. I mentioned that nothing tracks inflation better than rental rates. And I think rent rates are going to skyrocket, you know, and I don’t think the biggest driver of inflation is energy costs and energy costs are through the roof.
Right. It’s too much red tape for, um, A lot of the oil companies are up to dig here. And so, uh, Biden, you know, kind of put a constraint on that. And, uh, they say two to three years before any oil prices start coming down. So that means we’re going to see two to three years of inflation. Um, if that happens, then rents are going to continue increasing by eight to 10% a year.
Over that time frame. So I love that I can get fixed rate financing right now at 5%, 5 and a quarter percent. Um, and, and I know that rent growth is going to keep on happening that much, and that stuff’s going to compound. Um, you know, you take a look at what happens when. When inflation occurs. So quick, quick backstory, From 1960 to 1990, the American government came off of the gold standard, right?
And so 1 in 1960 was 4 in 1990. Okay, so it devalued by 75% in 30 years. Wow. From 1990. Throughout the, um, the.com bubble burst, the global financial crisis, and covid until, well, up until 2020. Before Covid, I’m sorry, before Covid hit 1990 and 2020, it was devalued by another 50%. So a basket of goods that cost a dollar and 1960, cost $4 and 1990, cost $8 in 2020.
And then the government printed 40% of the monetary supply in the past 24 months. What do you think that’s going to do to them, to the devaluation of the dollar and how long does it take? Asset prices don’t increase. But kind of they do because the dollar devalues and it takes more dollars to buy that asset.
Does that make sense? Right. Yep. So, what took 30 years for values to double is probably going to happen in the next 10 to 15 based on printing 40% of the monetary supply in two years. So I don’t think there’s any way not to get around that. And. My final point would be, dude, I don’t think the government gives a rat’s ass about printing money, any further and about playing with interest rates anymore.
And I don’t care who the president is, whether it’s Republican or Democrat, I think it’s proven that nobody wants the economy to collapse on their watch and they will just keep on playing with interest rates and keep on printing money in the future. And so I think we’re going to see more of what we’re seeing right now of printing of capital.
And or as soon as the regime changes in 2024, um, if things get shaken up enough over the next 24 months, I think interest rates are going to drop substantially again. So I think it’s a good, good buying time right now. And I think low-interest rates, I mean, I guys, I think six or 7% money is free money anyways.
So like, I’m not stopping buying because I have good buying criteria. And I continue doing good deals. Um, I’m not timing the market. I’m not trying to hit home runs. I’m not trying to hit grand slams. You know, what wins baseball games, base hits. Base it after base hit, after base hit, after base hit, after base hit.
And all of a sudden, more runs are scored off of more base hits than going up to the plate in the bottom of the nine, hoping to hit a grand slam to get a win, right? I’d rather see you guys do a good deal after a good deal after a good deal after a good deal after a good deal. Like, you’re gonna go to the market?
Like, who are you, Nostradamus? You’re gonna go and, perfectly, every time I try to time the market, I got my ass handed to me, right? Like, just go out and do good deals. And if you go and do good deals, they’re going to compound. You’re going to find yourself sitting on a portfolio of hundreds if not thousands of doors.
And when the right opportunities and the right buying criteria do come along, you’re going to look like you got lucky because you did the footwork and you did, uh, the things that you had to do to just build the portfolio. And you were positioned. With the private money lenders with the resources to find these deals to get the first crack at the, at, at these opportunities to get a seat at the table because you’re well respected in the community because you’ve done a bunch of deals, right?
You have a reputation for taking down deals. That is more important than getting better deals than trying to time the market. Hmm. And it’s more predictable.
Tim Mai: That’s awesome. I love it. All right. Now I like to hear about your passion projects. I know you have a couple of different ones to share with us at this point in your life.
You know, what’s important to you? What are you passionate about?
Tim Bratz: Yeah, man. I, uh, that’s a good question. I, you know, I’m at a point in my life where I wanted to hit a billion dollars in portfolio value and then go beyond that. And then all of a sudden, like, that’s important when you don’t have money, you know, and then all of a sudden I have money.
My life, I live on the ocean. I have a ridiculous mountain house. I have a, I own an Island, right? I have an amazing lifestyle. I have amazing time freedom. I have amazing kids and a wife and family and friends. And it’s like my lifestyle wouldn’t change if I quadrupled my portfolio. So now it’s more about the impact for me.
Um, and, and, you know, in a, in a self, um, preservation kind of a way, it’s like it, you. Uh, the more you impact people, the more it comes full circle too, you know, so it’s like, it’s, it’s cool when you can lead with value. And, um, and that’s what I’m focused on. So, you know, we’ve done some stuff like I have the kids’ books, little legacy library, uh, little legacy library.
com. It essentially takes those classic personal development books, like Think and grow rich and How to win friends and influence people. And the richest man in Babylon creates children’s versions of those books. So if you’ve got kids, Four to 10 years old, uh, they’re really powerful, really cool books. Um, I’m partnered up with my wife and one of our best friends who wrote the stories.
So I can tell you how good they are because I didn’t write them. Uh, I just gave, you know, feedback and insights on it. And, uh, they’re just powerful. You know, it’s like, like you asked me, Hey, how’d you, how’d you get in this personal development, this mindset game? I had to go through it all on my own because traditional education didn’t teach it to me.
And I had to do it throughout my twenties and my thirties to retrain my brain. And I’m like, what if you’re just programmed the right way? Early on, you know, and so that was like, that was a big impetus of this. So that’s kind of a passion project, is the kid’s books, little legacy library. Um, another one is, legacy wealth holding, or I’m sorry, legacy wealth Academy that we just launched.
And, um, it’s essentially like my mastermind has a couple hundred people in it. They’re rock stars in all asset classes in the commercial real estate world. Um, Not just multifamily. It’s some of the best, most amazing people you’ve ever met. And they’re amazing at what they do, um, in their different asset classes.
And I thought, you know, it’d be cool where I don’t, I don’t, I’m not an expert on other asset classes. I’m an expert on multifamily. I’ve done a lot of short-term rentals. I’ve done some, um, I’ve owned, I don’t know, three different. Self-storage facilities and office buildings, some other stuff. But like some people do a lot more of that in my mind.
I thought maybe they want to increase their influence. I can create a platform for them to coach and create kind of like a master class for other people, um, and educate, you know, and, uh, and so that’s what we ended up doing. So we have like 20 different master classes in real estate and wealth building.
Um, Topics across the board, raising private money, getting your first 10 rentals, scaling into multifamily mobile home parks, self-storage facilities, Airbnb, all that stuff. And, um, like legitimately, I could sell it for 1, 000 a month. And I was like, I want it to be available to these badass kids on Instagram who hit me up over like 16 years old.
In their mom’s house, they want to learn how to do real estate. And I was like, how do I make it accessible for them? And I thought, um, yeah, maybe I’ll price it from light to like, I don’t know, 79 or 200. And I was like, you know what, let’s make it like 50 bucks. And I was like, if I make it 50 bucks, let’s just make it 10.
You know, so it’s 10 a month for all these masterclasses. And it’s like so much frigging value and it’s open to the masses. And so like we launched it. Last month we got over 200 people already on it and just amazing reviews. And so like, that’s a cool piece where I can say, Hey, I don’t, I don’t make money off of this anyways.
It’s just like, all the dollars that we get go back into marketing, which isn’t that much, right? I make 2, 000 a month. That just goes back into marketing. And, um, to expose it to more, more people and, um, make a bigger influence. So, uh, if you guys are looking for something, check out legacy wealth Academy, you can learn a lot more about a lot of different asset classes and how other people find off-market deals.
How they raise money on those deals and how they operate and what their exit strategy is and how they structure the funding, financing, and all that stuff. Um, for all these different assets, academy. com. And it’s like I said, it’s 10 a month or you could pay for it for a year in advance for 100. So it’s like, it’s just a cool resource with a ton of value and, um, and, and so that’s what I’m looking forward to doing, man.
I just, I’m pouring, that’s awesome. Cool. On the fire, on the social media side, trying to give as much value as possible, on YouTube. Uh, so check out Legacy Wealth on YouTube and there’s a lot of value. Um, we’ll drop two videos a week on there and, um, but yeah, man, I just, you know, that’s, that’s really where I’m at right now.
You know, if I buy 50 to a hundred million dollars a year, great. Um, I got the portfolio that I currently own and, um, You know, just helping my team now. I’m like, you know, vesting them into equity, which is kind of cool. They’re building some long-term wealth and it’s, um, practicing what I preach.
Tim Mai: I love it. And I, yeah, I mean, I love how you always, always like to go the extra mile to deliver a ton of value to, to other people. Uh, yeah, I love that. Um, so If you can go back to your younger self, uh, what is the one lesson you would, uh, teach or share with your younger self?
Tim Bratz: I think, I think young people, especially with social media and stuff today, can be extremely insecure, you know?
Um, it was like that when I was a kid. And, um, although… Uh, you know, I, I don’t know, like I wasn’t, I wasn’t a nerdy kid, but I wasn’t like the most popular kid either, like always had, uh, I played sports. I was friends with the nerds. I was friends with the, with the jocks, you know, I was friends with the kids in the honors classes.
I was friends with the kids in the, um, you know, special education or like, special needs time type of classes, you know? So it’s like, I kind of ran in all different circles. Um, And I think, but I think the confidence piece is a, is a big, um, hold back from a lot of people, you know, having, having the confidence to go on social media and who cared, like not giving a shit about what other people do.
As soon as I got to this point, probably my late twenties, 30 years old, um, which is sad. It took me that long. Right. And there’s, that’s. You know, there are still people who are paralyzed by what other people think about them who are way older than me. Um, but I got to this point when I was like 30-32 years old and I was like Why do I give a shit what other people think about me, right?
Like and as soon as I reached this point of not caring what other people thought about me They ended up liking me more. It’s like, Oh, this guy’s genuine. He doesn’t care what other people like. He’s just trying to speak from the heart. He’s trying to be a good human being, you know, like knowing what your values are, and that to me, I think is a big deal of not caring what other people think about you.
And that comes with confidence, right? And confidence comes with winning little victories. That compounds over time. You know what confidence is. Confidence is the memory of winning, write that down. Confidence is the memory of winning, not one time, but many times over and over and over again. And if you can build confidence, I didn’t know how to build confidence.
And if you can teach your younger self or a younger generation how to build confidence by getting little victories, don’t go after a hundred, you go by one, then by a duplex, by a quadplex, get into an eight-unit, then keep on doubling in your portfolio. Do those little victories. Raising money on a 200, 000 deal before you have to raise it on a 2-million deal builds confidence, you know, it’s little victories and I’d rather see somebody do that.
They’re going to have a lot more staying power than the person who falls into a 300-unit portfolio right out of the gate. To develop the confidence if you develop the confidence. And then roll in, roll that into your influence, right? And, then, the two key characteristics, this is guys, I’m giving you gold.
I hope you, hopefully, you guys are taking this in and understanding this because it changed everything for me. Having influence is what’s needed to raise money. It’s what’s needed for people to want to pay you consulting fees. It’s what’s needed for people to want to sell you a deal or partner with you on a project.
You have to have influence. Influence comes from two things, respect, and trust in your audience, right? And the people that you’re influencing, they have to respect you. They got to trust you. And, and this is, since this is a money-raising panel, I’ll give you an example. My dad. Is like a million or next to his work, like 2 million bucks.
He was a police officer who had a part-time security business and made three times as much money in his security business than he ever did working a policeman job. And, um, so he’s, he’s, he’s got some cash, right? House is paid off, sitting on a little bit of liquidity, uh, some money in the stock market, getting pummeled in the stock market.
And when I’m, I’m, you know, and this is 2008, nine, 10, 11, right? Uh, I’m, I’m in real estate. And I asked my dad for money. My dad respects me. I’m sorry. I’m sorry. Back up. My dad trusts me because I’m his son. Right? A car breaks down. He knows he can call me. I’d be there for him. I’d fall on a sword. I’d jump in front of a bullet for my dad.
You know, I love him to death. He loves me to death. And the trust is there. Do you know what wasn’t there though? Respect. My dad didn’t respect me. Have you guys ever run into this? Anybody ever goes to somebody who’s in there, in their family, in their circle of influence, their buddies that they’ve known for a long time, who know you from getting hammered drunk or getting arrested, underage drinking when you were in college or toilet papering houses and getting arrested when you were in high school or, you know, failing in business for many years before you were successful.
The trust is there, but the respect isn’t there. So my dad, my dad did not invest with me until 24 months ago. I know a hundred thousand dollar minimum investment. He was only willing to bring 50
grand importance of having both trust and respect. And at the same time, guess what? I could run an ad and I could pound my chest on Instagram and Facebook and tell everybody how great I am and how many doors I own. And they might respect me. They don’t trust me. Who’s this? A dickhead, like an arrogant asshole.
Like who cares about this guy? Like they trust me or they respect me, but they don’t trust me. You need both to have influence and you need both to raise money. You need influence to raise money, right? So how can you do that? The way that you do it guys is by educating and inspiring, educating people.
It builds respect. You inspire people. It builds trust. You educate, you inspire, and you’re always posting about those two things. If you follow me on social, follow me on Instagram, follow me on Facebook, follow me on YouTube. I’m always trying to do those two things. I’m trying to educate people and I’m trying to inspire them.
Right. That, that this, this, whatever life they thought they had to lead isn’t right. 700, 000.
Multifamily properties alone, not including all the other asset classes, just multifamily five units and bigger. 700, 000. Do you know how many I own? 60. And I have a ridiculous lifestyle, right? You don’t have to light the world on fire. You just got to go and do some deals. Put your head down. Don’t look left.
Don’t look right. Work for five to seven years of your life. Of your life and you will live like people only dream for the rest of it.
Tim Mai: Love it. Love it. All right. So for the listeners that want to, uh, reach out to you and, you know, further connect with you, get into your funnel. Um, where do you want to send them? How should I, how should they go about doing that?
Tim Bratz: Social media is the best and, uh, Paul, dude, Legacy Weld Academy is ten dollars, bro. Come on. Like, you’re asking for a coupon code. I’m messing with you, man. No, I’m, I’m sorry. I always ask. Yeah, you must be from New York, man. I know. I live there. I’m the same way.
And, um, no, I’m a big believer in, uh, in always asking, but yeah, it’s dude, it’s 10. You pay for it for a year in full. You get 20% off or something like that. So, um, no, listen, guys, I’m, I’m on social media. I’m here to just provide value. I’m here because Tim asked me to be here and he’s somebody that I respect and has a ton of influence in this space.
And, um, I want to do more with them, you know, and so, uh, I like supporting the good guys. And if there’s any way that I can support you guys and help you out pointing you in the right direction, I answer my messages, hit me up on Instagram, and hit me up on Facebook. If you’ve got a question, I’ll point you in the right direction.
Uh, if I have a resource or a YouTube video or something like that to it. And if you’re interested in, you know, connecting or coaching or partnering up on stuff, just shoot me a message and we’ll figure out what that looks like. But, you know, I’m here to provide value. I’m not, you know, I believe so heavily in legacy wealth Academy.
I think everybody should check that out because it’s such a low price point. And if you don’t like it after a month, cancel, you know, it’s like. 10 dollars. So, um, but yeah, I appreciate you, man. I love you. I appreciate you having me here.
Tim Mai: I mean, gosh, I appreciate you so much. It’s been a wealth of information.
And I know we even went over time here because of all the questions I wanted to ask you and all the things you, you know, I wanted to learn from you and Your answers have been phenomenal. Very, you know, I mean, yeah, like very high level, you know, very inspiring and like eye-opening. So I appreciate you.
Thank you so much for being on the show with us today.
Tim Bratz: I appreciate you guys too. So, um, I have to drop off because I have Uh, some dinner reservations. So, um, but I, I appreciate you guys. If there are any other questions that you guys have again, don’t hesitate to hit me up or we’ll, uh, well, we’ll jump on some messenger back and forth or something.
And Tim would love to do more together, man. So if there’s any way that I can continue to support or ways that we can collaborate, don’t hesitate to reach out, man. I appreciate everything that you’re doing and have a ton of respect for, uh, the impact that you make in people’s lives. So thank you.
Tim Mai: Awesome. Thank you. Thanks, Tim. Bye, brother. See you later. Thanks.
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