As his title “America’s Apartment King” suggests, this industry leader has established a dominant presence in real estate investing, known for his astute investments and unparalleled expertise. Ava Benesocky and August Biniaz welcome Brad Sumrok, founder of Sumrok MultiFamily Mentoring. Sharing his inspiring journey from corporate life to real estate, Brad discusses the challenges he faced, the strategies he used, and the valuable lessons he learned along the way. He highlights the importance of persistence, continuous learning through seminars, and strategic navigation of market highs and lows. Gain insights on how he turned a tough start into a successful business, earning his title as America’s Apartment King.
Get in touch with Brad Sumrok:
If you are interested in learning more about passively investing in multifamily and build-to-rent properties, click here to schedule a call with the CPI Capital Team or contact us at info@cpicapital.ca. If you like to co-syndicate and close on a larger deal as a general partner, click here. You can read more about CPI Capital at https://www.cpicapital.ca/.
#avabenesocky #augustbiniaz #cpicapital
—
Watch the episode here
Listen to the podcast here
Important Links
About Brad Sumrok
Brad is the founder of Sumrock multifamily mentoring. Brad has guided his students to purchase over $6 billion in apartment complexes, helping hundreds achieve financial freedom through real estate investing. From starting with a 32-unit complex to building a billion-dollar portfolio, Brad’s journey is nothing short of inspiring. He’s not just about wealth-building; he’s passionate about giving back and helping others follow in his footsteps.”
America’s Apartment King Discusses The State Of MF Investment And Lessons Learned – Brad Sumrok
Introduction
Welcome back to the show.
That’s lots of energy there, Ava. I love the enthusiasm. A word I want to use, which is connected to our guest, is 75 Hard. Has anybody heard about 75 Hard? 75 Hard is 75 days of this brutal and difficult diet and exercise. Two main pillars of it are a 45-minute workout indoors and a 45-minute workout outdoors. It could be indoors or outdoors. It’s a minimum of one workout outdoors. You have to be on a diet. You can’t drink alcohol. You have to read ten pages of a book. I’m on day 53 now.
I was like, “I’m going to do 75 Hard. I can’t wait to do it with you.” I’m pregnant. August is like, “It’s not the best idea.” I go to the gym every single day in the morning and do weight lifting and cardio, but I do a 45-minute cardio workout every day being pregnant. I could do it. I feel like I’m missing out, but you’re doing a great job.
We are excited about our guest. In the space we’re in, the old adage here that success leaves clues. He’s the poster child of this concept of success leaves clues because a lot of people that he has educated and mentored in this space have gone into achieving incredible things in our space. In retrospect, Ava and I always look back on the last several years we’ve been in this business. We should have got a mentor. Our guest, Brad Sumrok, is, in some ways, my unsolicited mentor because I’ve learned from him a lot. We spent some time with them if you want to mention that part.
We went to Orlando to a mastermind at this beautiful mansion. It was an intimate group. That’s where August heard about 75 Hard, and I loved it. I learned so much and connected with everybody.
I didn’t hear about 75 Hard. Brad was on it on that day. He was the first to leave. I said, “I’m going to get on this with you, Brad.”
The mastermind in Orlando was amazing. We took a second to think about what we are struggling with in life and how we can improve everything. Having this intimate group to bounce ideas off of was incredible.
Brad is part of one of the biggest personal development guys in the world, Tony Robbins. He brings a lot of stuff he learns from the Tony Robbin Mastermind to teach his people. Let’s give a quick background about Brad, and we can start a show-off.
We are joined by our good friend Bradley Sumrok. We’re thrilled to have Brad on the show. Brad is the Founder of Sumrok Multifamily Mentoring. Brad has guided his students to purchase over $6 billion in apartment complexes, helping hundreds achieve financial freedom through real estate investing. From starting with a 32-unit complex to building a $1 billion portfolio, Brad’s journey is nothing short of inspiring. He’s not about wealth building. He’s passionate about giving back and helping others follow in his footsteps. Welcome to the show, Brad. We’re happy to have you here.
Welcome, Brad.
I’m excited to be here about 75 Hard. How this went down in Orlando was the last three days of June, and the next day was July 1st, and we did a goal-setting session that I learned from Tony Robbins. I taught you all at the Mastermind. While you guys were doing your goals, I did mine. It occurred to me that on July 1st, I’m starting 75 Hard. It’s day 53, and you guys did it with me. August did, and a few of the other event attendees. It was incredible.
Transition From Corporate To Real Estate
Talk to us about the corporate world. How did real estate investing start for you? It seems to be the biggest caveat for your critics, which is offering W-2 workers to become real estate investors. This is how you’ve done it. Tell us about your journey, please.
I did everything right. I studied hard, got good grades, and went to college. Neither of my parents went to college or finished college. My dad went, but he never finished. It was oppressed upon me that that was the recipe for success, and I did it. I worked for several years, working long hours for five different companies. My goal was to climb the corporate ladder. I did okay at that. I went back and got a second degree.
What I found is that I lost my job, not one time, but two times. I found myself in my early 30s and realized I wasn’t as secure as I thought. Having a job is not that secure. I didn’t know what to do, and not only was I not secure, I wasn’t where I wanted to be financially. We all have a dream when we’re 18, 19, 20 years old that we’re going to be successful financially, whether that’s a millionaire.
Having a job is not as secure as it seems. Share on XSeveral years into my career, I’m not there. I’m not secure. I’m not financially set or on track to be set. I heard a lot about people investing in real estate and read books like Rich Dad Poor Dad. I didn’t know where to start. I researched real estate investing seminars. We didn’t have social media at that time. It was around 2001. I went to a real estate investing seminar. I was skeptical, but somehow, what the guy was teaching made a lot of sense.
After that seminar, I took massive action. That was back in 2001. We’re here in 2024. I’ve invested in over 10,000 units. I’m in over 7,000 units. I started by going to a seminar. I got back from a seminar a few days ago from Tony Robbins. I don’t tell people to go to seminars. I still go to seminars and conferences and mastermind myself. I also started an event seminar company over a decade ago. I’ve helped a lot of people get into the business. That’s like the two overviews of how I got started in both investing and education.
Let’s break down your transition more because when people go to school and go to college and get degrees and a great job, you’ve reached a pinnacle in most cases. The difficulty is there’s a lot of fear there to want to come out of that and take a risk into this new world and ecosystem that you’re not familiar with. Talk to us about your transition there. Aside from financial gain and time freedom, what else was it that gave you that inertia to want to start investing and early success? Talk to us about that transition.
We’re all taught to invest. It’s what we invest in. I was taught to invest in 401(k)s. If you change companies, you roll it into an IRA. I was also taught by people, the media people, and my dad, that you should invest in stocks or mutual funds. I did some of that in Corporate America. I was putting 6% into my IRA and 401(k)s.
America’s Apartment King: We’re all taught to invest. The question is, “What do we invest in?”
At the time, I didn’t quite understand everything I was doing. I was educated, but I did it because that’s what I thought was the path. I didn’t know any different. I had accumulated some savings in several years in 401(k)s and IRAs, but I had no visibility, transparency, or control. There are a lot of fees in these investments that I’ve learned about now. I go to wealth conferences now that aren’t even related to real estate. They talk about how much fees they’re in there.
Getting a job is considered to be a safe path, but it’s not safe. Think of all the people who lose their jobs. As you get older, you become less employable. That’s what I hear. That’s the experience I’ve had. Getting into real estate, I didn’t quit my job and started doing real estate. I would consider that risky and irresponsible. I don’t teach people to do that.
I burn both ends of the candle. I lost my job the second time. I went back and got another job in my early 30s. I was making about $10,000 a month. When I went to that real estate investing seminar and read books like Rich Dad Poor Dad, I learned that work hard for a few years. I had a job and did real estate part-time. I earned both ends of the candle. For several years, I did both.
My goal was to get enough investment income from my properties that would equal my W-2 income, which was $10,000 a month. It took me several years to get $10,000 a month of net rental income. We call it positive cashflow. Once I did that, I had $10,000 here, close to $10,000 with rental properties, and $10,000 in my job. I felt confident enough to cut ties with Corporate America. I built up and went from there because I’m a full-time investor. I can dedicate even more time, energy, commitment, and resources to real estate. That’s how I need the transition.
Is that what you recommend?
I have students come to my events and mentorship programs all the time. They’re like, “Brad, I want to follow in your footsteps. I quit my job.” I’m like, “No, please call your boss back.” There’s a saying, and I don’t know who invented the saying, but they say, “Do what other people aren’t willing to do for a period of time so that you can have the life that other people won’t have.” That means work hard.
With Ava and I, when we started CPI several years ago, it was nearly impossible for us to keep our careers and build CPI. We weren’t trying to be real estate investors who are trying to create equal income to their current income through real estate. It was more of a situation where we were trying to build an institution and trying to build that there was no possible way we could have continued our careers. Ava is one of the top agents, and I am a builder and developer.
We had to be hyper-focused on building the company.
It was extremely hard because we had to leave our careers. There’s no income coming in, and our burn rate was high when we built this institution. It’s not the way that I would recommend it. If you don’t have the huge bankroll to try to start something this big, it’s difficult.
You guys had saved a lot of money, and you said, “Here’s how much money we have. We could both afford to quit and take this risk. It’s a strategy called burning the boats. One of you could have kept your job for more security, but you didn’t. You burned the boats, and you went all in. That is an effective strategy. Tony Robbins talks about it. If you want to take the island, burn the boats. A famous Greek general did that. I don’t encourage people to do that because it’s risky. You have to do what works for you.
You have to do what works for you. Burning the boats can be effective, but it’s risky. Share on XWhen was the first time you ever heard about the term syndication? I remember when it was and where I was standing when the first time I heard it.
I remember walking by his office the first time that he heard it. I wanted to learn all about it.
Tell us about it.
For the first two deals, when I went to that seminar, I joined their mentorship program. They didn’t teach syndication because the mentor didn’t syndicate. I learned to buy your own deals. Buy as many doors or as many units as you can with your own money so that you can maximize scale. No matter how much money you have, we’re all limited by time, money, and resources. My first deal was 32 units. I put down $200,000 of what I had saved in my corporate America. I’m saving money and living below my means. My second deal was 30 units. I put another 20% down. I have 62 units, but I’m out of money.
America’s Apartment King: No matter how much money we have, we’re all limited by time, money, and resources.
The broker brought me a 250-unit deal. What most people would do is they’d say, “I don’t have the money. I can’t do it.” This mentorship program that I was a part of did networking events. They created some sense of community. I knew people because I showed up. People knew my story. They knew I had 62 units. People would tell me like, “Brad, if you get another deal, I’d like to put money in your deal.”
The broker that gave me the 250 units, I told him, “I don’t have the money. I have to raise the money.” He goes, “Are you a syndicator?” I didn’t even know what the term meant. I go, “No, I’m not a syndicator.” He goes, “Where are you going to get the money?” I said, “I’m going to raise it from people I know.” He goes, “That’s what a syndicator is.”
I found a syndication attorney. I could do it right the first time and learn the ropes of the legalities and the nuances of having to go through a 506(b) or a 506(c). I learned that, and that was my first syndication. I was on TV on Good Morning, Texas, here in Dallas. The lady interviewing me asked, “What is apartment syndication?”
Let me break that down because it’s a fancy, complicated term. You guys know this, but for the readers, imagine there’s a group of people that get to know each other, and they collaborate together. They collaborate and contribute time, money, and resources together. They go out and buy an asset. Let’s say an apartment building, but that could be any type of asset. They’re buying something bigger than anybody could buy on their own individually. That’s what a syndication is.
Within that group of people, there’s a smaller group, maybe one person or a few people, that are the general partners. There are active investors doing all the work. The rest of the people, or the limited partners, are also called passive investors, and they mainly contribute money. That is my simplest definition of a syndication.
August was syndicating deals before he even knew what the term syndication was. He raised millions of dollars for a ground-up development project here in Vancouver. He syndicated that project before he got excited about it.
It was a quasi-syndication. It was more of a joint venture because their partners were much more active than LP.
GP Vs. LP
Brad, you bought your first 32-apartment building. Was there any stage while you were networking with others that you invested as an LP to see what it was like to be on the other side as a limited partner? Did you decide, “I’m going to be the general partner on all that?”
My first LP didn’t come until I was in this business for several years. Every deal I did from 2002 to 2012 was my own deal or syndication, where I was the general partner. It was after I started mentoring others that my students would go out to other markets that I wasn’t active in, but they would find some good deals. I wanted to invest in these markets, but they were doing the research. They were boots on the ground. They were finding these deals.
It occurred to me that I could have some sense of diversification by not being in 1 or 2 markets in Texas. I started investing as an LP and GP. I’ve invested in Florida, Colorado, Ohio, and Tennessee and many markets in smaller markets in Texas. My primary MO is to be a general partner or the majority owner of a deal. I’m in 37 syndications. For most of those deals, I’m a general partner, but for some of the deals, I’m a limited partner to this day.
What’s your advice there to people as part of your mentorship program or people who are not part of your program that you advise here and there? If their focus is to be a GP, should they always be focused on that? Should they invest as an LP to see how it is, what the mechanics of LP investing are, and what the good and the bad of the GP are so they can learn from that? Is the advice not to invest as an LP, or should we try it and see how it feels?
It depends on how much money they have allocated to invest in apartments. Let’s say they have $300,000 liquid. I might say, “Do you want to put all $300,000 into a multifamily?” They may have other investments, such as stocks. Let’s say they got $300,000. If they say, “I want to put $100,000 into three deals,” and they want to be a GP, there’s not a whole lot. If they put $100,000 into two deals as an LP, that’s only saving $100,000 left for their deal as a GP. If someone had $1 million they wanted to invest, I might say, “Be a GP, acquire the skillsets, determine your market, get some deal flow, and make some offers. In the meantime, if you see a deal that occurs to you as a good investment, put $1 million as an LP.”
To get to the long and short of it, I don’t believe you have to start as an LP to be a GP. You can. Some people say, “I’m going to be an LP first, learn the ropes, and be a GP.” You don’t have to. You guys are GPs, and you concur with this. The skillset to be a GP is not how much you learn. There’s not a role. An active role is an LP. Imagine someone is going to invest with you guys and say, “I’ll put in $250,000. I’ll be an LP, but I want to be taken under wing and learn the business.”
America’s Apartment King: You don’t have to start as an LP to become a GP. While some start as LPs to learn the ropes, it’s not a necessity.
Otherwise, they put in money, you guys do the work, and they get the financial reports. That’s why I have a mentoring program. You could find somebody with no experience, be a GP with somebody with experience. They’re not cutting their teeth on their own. They’re teaming up and contributing some value to a GP team, but they may not be like the main GP.
Surviving 2008
Brad, I want to get into 2008. I graduated high school in 2007. I don’t have much experience with where the world was in 2008. I love hearing about other people’s experiences. How did you survive 2008? Maybe you can share some stories with us. Talk to us about that, please.
I had several deals in 2008. I have a lot more now. I’m saying that because what occurs to me is that what we went through the past several years was like a mini 2008, 2009, and 2010, but maybe not to the same extent. How I got through it was there are some people, some are famous, who said, “Cash is trash. You should live as if you’re broke. Always have all your money invested.” I’ve been to some of these events. They said, “Who’s got $1 million in cash?” I raise my hand and call me stupid for having that much money sitting around.
Let me tell you something. That got me through 2008 because there were some deals. Because of the recession, the greatest financial crisis in my lifetime, and one of those deals I got was in Houston. Not only did we have 2008, 2009, and 2010 happening, but we had a hurricane. I hit one of my properties where 40% of the units were damaged.
In that one deal, I had to put $800,000 of my own money into the deal. I didn’t have to. I had other options. I could have turned in the keys, lost everybody’s money, and had a foreclosure. I could have done a capital call. In that deal, I was the sole GP, meaning I didn’t have anyone else managing any other active investors in the deal. I was the sole guarantor.
It occurred to me that I’m the leader. Leaders step up. I took it upon myself. I funded the shortfalls that we had every month. It took several months to get insurance money. Every downturn will come to an end at some point. I don’t know when, but downturns don’t last forever. There’s always a downturn. Maybe it’s 5 to 7 years or 10 to 12 years, but these patterns are predictable. Downturns will happen, and they’re predictable in hindsight, but you can’t predict the next one or how long it’s going to be.
Anybody who says they can is foolish. It’s nonsense. I funded some deals personally. If I didn’t have the cash, I wouldn’t have been able to do that. It’s responsible to have cash reserves personally. I teach my GPs to have some personal liquidity. The banks require you to have personal liquidity, not just in the company bank account.
You’re talking about market cycles. It’s not a personal opinion. It’s a matter of fact that real estate goes through cycles. You got recession recovery, expansion, and hypersupply. Real estate continuously goes through those four cycles. How long we stay in a certain cycle or when that cycle comes is a prediction guesstimate as far as real estate is concerned with these cycles. There is a lot of money to be made within these cycles.
Transition To Coaching
If you ask the most seasoned real estate investors, they say, “The Achilles heel of real estate investors is debt.” If you have bad debt, you are highly leveraged, or you have variable debt, we saw that in the post-COVID era, where the interest rates went up a couple more times. Let’s switch the conversation here. We discussed your transition from W-2 into real estate investing. Let’s discuss the transition from being an investor to coaching. How did that all come come about?
When I took that seminar, I joined our mentorship program. In 2005, I quit my job, and now I’m a full-time investor. My mentor was expanding his organization. He asked me, Do you want to come and help me grow my organization and mentor other people?” At first, I was like, “What do you mean? I’m retired, and I’m 38.” It occurred to me that 38 is way too young to sit on a chair and drink pina coladas. I’m at the peak of my life, which I still am. I’m a high-energy guy back then. I got into the game. I enjoyed being mentored. If it hadn’t been for him mentoring me, I may not have had the success that I had. It was now an opportunity for me to give back to other people.
I worked with him for several years, and that moved me from Houston to Dallas. As things occurred over time and I had my own ways and ideas of wanting to do things, I started my own mentoring and event company in 2013. It’s been over a decade. I’ve grown it to arguably the number one apartment investing mentorship and event platform in the country. I’m sure you’re going to ask me about the Wall Street Journal. That’s why they featured me. They called me the America’s Apartment King, believe it or not.
An item that is important to touch on here is that a lot of times, people have misunderstandings or misconceptions about what mentoring is. You’re going in. Your mentor or coach has got these videos that you follow. You’re like, “I follow this. I have to figure it out.” A lot of mentoring, unfortunately, is in that way.
What Brad does is hands-on. He talks about being a GP in these deals. That might sound a bit convoluted for people who might not be very much involved in this business. When he says that, it means that, and I’m guessing here, and correct me if I’m wrong, one of his students found the deal that made sense through the strategies he taught them through the relationship you build with brokers. They didn’t have everything they needed to be able to be the skipper of this boat. Brad jumps in and gives a helping hand to his students. Is that true? As a GP, do you come in to assist some of your students?
I prefer the term mentor versus coach because there are many people who are life coaches. To be clear, I am not a life coach. The difference between a coach and a mentor is that a mentor is doing what somebody wants to do. I’m not trying to have you go within on a journey to find your own answers and lead you through a set of questions. I’m here to help you follow a proven path and system.
The difference between a coach and a mentor is that a mentor does what somebody wants to do. Share on XSome of that is delivered through Zoom meetings, seminars, or training modules. A lot of it is through one-on-one individualized mentoring, where my team and I will get on a Zoom call or a phone call with the people we mentor. We’ll walk them through the deal and underwriting. We put our eyes on the deal. We walk them through the steps. We help them with any questions, like which market they should invest in. How do I do a market survey? What do I do when a broker sends me an offering package? It’s not to watch these videos or take an online course because there is value to that, but that is static. This means you can’t call into a video course and ask a real-time question in a real-time situation.
Another important part of that is the connections you’ve made over the years with the securities attorneys, the accountants, the service providers, and the property managers. What has gone well? What hasn’t? The markets you understand are some of the neighborhoods that should be a no-go zone. There’s so much that goes into it.
Can I clarify that because that’s a good point? There are people out there who are real estate mentors or apartment mentors. What I’ve created goes so far beyond that because if all I did was mentor somebody, that would be effective. I don’t want to shortchange that, but it’s more because we have a network of industry experts, lenders, and insurance providers.
You don’t want to be going on Google or social media trying to find a syndication attorney, an insurance provider, or a property management company. You want to be part of that. What I’ve done is create communities of people that collaborate. These communities include general partners, passive investors, some in both roles and industry experts. My team and I create the content and do the coaching. It goes beyond mentoring and content. That’s a big part of it.
It’s important to add to this because I see myself as an expert at some level when it comes to Canadians investing in US syndications. I’ve been through it. I’ve spent the money. I’ve gone through blood, sweat, and tears to learn the process. Brad reached out to me and brought me to discuss that with some of his Canadian students. He goes out there and seeks these experts.
August, do you remember when we started the company? We had to talk to 40 different lawyers and accountants because we didn’t have a mentor to guide us in the right way.
Mentorship Program Details
We are short of time. We have to shoot through. We still have the ten questions. The last thing I want to talk about before going to the ten championship rounds to financial freedom, and it’s a continuation of the last item we were talking about before topic we talked about is who is the perfect profile of a student for the Brad Sumrok student mentorship program?
I break it down into these three tiers. All three of these strategies will allow you to leave your W-2 and live a comfortable life. One is investing in real estate as a principal investor, owning property, either managing yourself or bringing in a property manager, the same thing you did in the first two properties you bought. It’s being a hands-on investor. Two are syndicating deals, buying these deals, bringing on joint venture partners or LP investors, limited partner investors, buying these properties, and managing it somewhat. The third thing is building an institution.
Me, Ava, our team, Paul Hopkins at Ferguson, and everybody else involved in CPI capital is building here an institution. We want to build a culture around this idea. Our ten-year goal is to follow the EOS process and own over 25,000 doors in several years. Everybody has a different goal and vision. All of these paths result in a great place to be in life. Who is the perfect student for your program? What do you advise on someone who has the brain power to go down any of these lines? What is the perfect blueprint or roadmap to success within these three or other ways that I forgot to mention?
I’m going to take a different angle on this. I’ve been mentoring in my own organization for over a decade. Some of them have hundreds of employees and thousands of units, but they didn’t start with that. They didn’t start with a team of people. You guys might be unique in there. If I’m mentoring somebody, I wouldn’t say, “Let’s build a team of eight people and build your website and hire acquisitions people, analysts, and investor relations when you haven’t found a deal yet.”
Most of my students started with a simple desire to achieve financial freedom for themselves. It occurred to them that they weren’t where they wanted to be like it occurred to me several years ago. The profile shows that a lot of them are engineers, accountants, and small business owners who work long hours. It could be in a job or a small business, including real estate, like flipping homes or doing single-family rentals where they’re doing all the work themselves. They’re burned out and tired. They’re not where they want to be.
That is where my typical, most successful student is. It’s not necessarily that. It could be musicians and stay-at-home moms who have a second wind and an insight that, like, “I could be doing much more with my life.” Having been mentoring in another organization for several years and in my own for more than a decade, I know that there are a handful or more that have built up an institution. Most have achieved a level of financial success. There are many that have had several hundred units or a few thousand units. They’re in their 40s or 50s, and they’re happy with that. They’re making $42,000 a month. They’re networked from $1 million to $10 million.
Is build a foundation, do the basics, build a foundation, and if you want to build an institution, go ahead, but everything starts with that foundation of learning how to buy apartment communities and going from there with your own money, syndication, or whatever you want, but build that foundation first before?
Get educated and get a deal or two.
Let’s run through these questions.
I got a little bit of flexibility on the backend.
Wall Street Journal Article
The impetus for this show was the Wall Street Journal article that came out. It wasn’t quoting Brad. It was written about Brad and the program he offers. When I first saw it, I assumed it was going to be a critical article, but it didn’t end up being that way. They have done a lot of research. They’ve followed some of the people Brad coached over the years. These people have built institutions and managed tens of thousands of doors and billions of dollars of assets under management coming from his tutelage.
That was for us to get Brad on the show and what he’s achieved. Touch on the article and the residual effects of it. Do you feel that there’s been some level of notoriety? Are people reaching out to you to learn about who you are? Talk to us about the article and what the result is before we get to the next questions here.
There are a couple of things. I’ll try to keep it brief, but I could be a little wordy. That’s one of my gifts and areas of opportunity. Have you ever seen somebody’s website that says, “As seen on CNN, NBC, Forbes, and Real Estate Council.” What most people need to understand is that most of these things involve paid sponsorships.
The person won’t say that. They’ll be like, “I’m humbled that I was asked to be on this show. I’m an Amazon bestseller. Most of these things are paid opportunities where some group taught you to write a book and how to become an Amazon bestseller or how to pay a TV show or a magazine to put you on the cover. They act like they were asked to be on the Forbes or Real Estate Council, where most of those things are paid.
I’ve been getting in trouble for calling some people out.
There’s nothing wrong with that, but I want to level with you. There’s nothing wrong with investing to position yourself as an expert. Where I have the problem is if you’re going to do that, don’t lie and say how humble you are that you are asked to do it. People like Tony Robbins and Grant Cardone level get inquiries from the media all the time.
Not when you’re starting out, you did your first deal, or you did your first eleven-unit property, and all of a sudden, you’re on ABC News. It’s not going to happen. I could have only dreamed of being featured in the Wall Street Journal for all the good work that I was doing. Even with the hundreds of people I’ve helped create multimillionaires, it never happened to me. It only happens when something bad happens.
One of my former mentees got over his skis. He bought 3,000 units in one transaction, raised $51 million, and lost everybody’s money through his own decisions. The Journal found that I was his former real estate coach. They dragged me into that article in 2023. They decided they had done more research on me.
In their own words, let me paraphrase it, but they came back to me a year later, in March of 2024. They said, “Brad, we want to do a deep dive into the multifamily syndication business and your program because our research indicates that you, more than anyone else out there, have impacted average people like us. These are corporate people who moved from W-2 into apartments. You’ve done this more than anybody.”
I was freaking out because their negative of me was not positive. They only had this reference to a former student who had lost a bunch of money. I had these sleepless nights. I asked one of my mentors if I should engage with the media. He said, “No, don’t engage. Let them do what they want because they’re going to manipulate you.”
Most people would be evasive, Brad. Most people would not have met with them the way you have.
I asked my other mentor, and these are both famous people. I don’t want to say who they are. He said, “You need to engage. I will give you my PR team’s contact information.” Both of these people were billionaires. They’ve all been in the media for one reason or another. It comes with success. It occurs to me that the more business you do and the more people you help, you can’t make everybody happy.
I engaged with the media and the PR team. I flew up to the Wall Street Journal. It was supposed to be a one-hour phone interview, and it was a four-hour in-person interview. They saw that I was a real person who was committed to the industry, my students, and their projects. It was a completely different outcome. They asked me if they could talk to some of my successful students. I was worried that none of them would want to talk to the media, but everyone I asked said yes.
The article came out on July 16th, 2024. When it came out, it almost appeared that it was a sponsored article. It’s so good. There are some things in there that weren’t quite accurate. The journalists did a good job. They’re good people. I met them. I’ve become acquaintances with them. They’ve asked me to interview me again because they’re writing a book. They may even come to one of my training events. They were fair and balanced. I had a great experience.
Market Cycles
You have a few more minutes. We still have to do ten questions and one more question. We touched on market cycles earlier. Where are we right now? We are possibly teetering a potential recession. People talk about it. I don’t believe we’re going to go into a recession. We’ve already been in a quasi-recession. They’re talking about the market or accounting. There was a 63% chance that the rates would be decreased by 25 basis points in September 2024 in the next meeting of the Fed. Where we’re at the market? The market is cyclical. Real estate has to make a decision of when they want to come in and go out. Is it the right time to buy commercial real estate, particularly multifamily?
I believe it’s the right time to buy. If we look at a clock, we’re at the 5:00 position, meaning 6:00 is at the bottom. We could be past 6:00. It occurs to me that we’re before 6:00, but we’re near it. It’s a great time to buy. Here’s the thing. I don’t know how long it’ll last, but what I do believe is when they start cutting interest rates, it will be in September 2024 and at the end of 2024.
We get through this election. Whoever wins, there’s going to be a lot more certainty. I don’t want to say it doesn’t matter who wins because certain things matter. There’s going to be differences in taxes, regulations, immigration policy, and healthcare. They’re not all good on one side and bad on the other. I’m not going there.
What will happen is after the election, the investors, Wall Street, the corporate, and the debt markets will have clarity and certainty. They’ll know what they’re dealing with for the next three and a half years. I’m looking at this as if there are going to be some good times coming up. Now is a great time to get started, get educated, build your team, and acquire the skillsets that you need to be successful.
Championship Rounds To Financial Freedom
Let’s get to the next segment of the show.
Brad, ten championship rounds to financial freedom. Are you ready?
I’m ready.
First question, who’s been the most influential person in your life?
Tony Robbins.
What’s the number one book you’d recommend?
Rich Dad Poor Dad changed my life.
Let’s get another one since that one is a common one.
I’ve read many. What I’m reading now that I find interesting is Never Split The Difference by Chris Voss.
Next question. If you had the opportunity to travel back in time, what advice would you give your younger self?
Be more kind, be more compassionate, and have more empathy. You never know what somebody is going through. You never know how a smile, a hug, or some kind words could lift somebody up when they’re down.
Be more kind, compassionate, and empathetic. You never know what someone is going through. You never know how a smile, a hug, or some kind words could lift someone when they're down. Share on XWhat’s the best investment you’ve ever made?
The best investment I ever made is in real estate, but it’s not the real estate that you think. It’s the real estate between my two ears. It’s the investment you make in yourself between your two ears.
The answers could be philosophical. We appreciate that one.
Brad, what’s the worst investment you’ve ever made? What lessons did you learn from it?
The worst investment I ever made was venture capital, that I put money in. I was doing it because I wanted to be accepted by the people running it and have proximity to them. Everybody else I knew was doing it. I knew that I shouldn’t do it, but I did it anyway, and I was right. I shouldn’t have done it.
Brad, how much would you need in the bank to retire? What’s your number?
Things are going up. Put it this way. Ten million liquid is earning 5% now. That’s $500,000 a year. I know how to earn more than that. I’m going to expand on this. I know that this is a rapid-fire thing, but people need to target $10 million in retirement savings. I see this stuff like, “If you retire at 60 with $1 million, how long is it going to last?” It’s not going to last long. I would be uncomfortable with less than $10 million.
Brad, if you could have dinner with someone dead or alive, who would it be?
My mom. She passed in 2015. I miss her.
If you weren’t doing what you’re doing now, what would you be doing now?
I don’t know. I’d probably be teaching something because I have the heart of a teacher. I’m passionate about a lot of things. I’d find something that I could share with other people and start doing it for free. When demand goes up, I would need to charge money. That’s what great educators do.
Book smarts or street smarts?
Street smart, any day of the week. I was book-smart for several years with two degrees, and it made me $10,000 a month. When I became business smart, which might be another word for street smart, I made tens of millions of dollars in the last few decades. There’s a saying that Robert Kiyosaki has. It’s like, “A students work for C students.” I can’t say it’s true, but it occurs to me that there’s some evidence of that being true.
If you had $1 million in cash and you had to make one investment now, what would it be?
I would put it into multifamily real estate because we’re at a great time to do that. I’ve done that already several times. It’s my area of expertise. That’s where I would put my money.
Brad, we appreciate you being on the show. What’s the best way for people to reach you? Let the readers know.
It’s BradSumrok.com. The other thing I wanted to mention is that you guys know this, and you guys are coming, but I’m doing an event in Dallas. If I send you the URL, you can post it and share it on this episode. It’s on September 27, 28, and 29, 2024, in Dallas. They can find them on my website. They have to go to the homepage and look under the events tab. I could send you the direct landing page.
Thank you so much, Brad. We know you have to run. That’s why we were rushing it. Forgive us. Thank you so much.
Thank you.
Bye-bye.
