Welcome to our latest episode! Today, we’re excited to welcome Brad Sumrok, known as “The Apartment King” and the driving force behind the Sumrok Multifamily Mentoring program. Since 2005, Brad has guided thousands of students, many of whom began with no previous investment experience, to purchase over $6 billion in apartment complexes. His mission is to help 1,000,000 people achieve financial freedom through apartment investing, following his proven 20-year framework.
In this episode, Brad shares his journey from Corporate America to real estate, diving into the pivotal moments and insights that set him on the path to multifamily success. He discusses the importance of mentorship, leveraging partnerships, and creating a scalable portfolio that withstands market cycles. Brad also provides valuable perspectives on today’s multifamily market, including opportunities arising from high interest rates and new transaction volume trends, and why now may be the right time to act.
Tune in now for actionable insights on building wealth, securing financial freedom, and taking advantage of the current real estate landscape.
HIGHLIGHTS OF THE EPISODE
00:00 – Welcome to the BigMike Fund Podcast
00:24 – Guest intro: Brad Sumrok
01:18 – Transition into multifamily investing
03:55 – The power of mentorship
06:45 – Scaling from small multifamily deals to larger syndications
09:14 – Partnering with co-GPs to expand investment potential
12:12 – Tips for achieving financial freedom through apartment investing
15:02 – Current multifamily market trends and opportunities
17:20 – Evaluating the market cycle and the best time to buy
20:11 – Considerations for handling loan extensions and exits
23:09 – Why mentorship and community support accelerate success
26:40 – Managing existing deals in today’s market
29:58 – Book recommendations and continuous learning strategies
31:45 – How to connect with Brad
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Full Transcript:
Intro: Welcome to the BigMikeFund Podcast, where you’ll learn about advanced wealth building strategies from real estate investing to creating massive ROI and secure retirement profits. So pour yourself a cup of coffee, grab a notepad, and lean in. Because Big Mike has got the mic, starting now.
Mike Zlotnik: Welcome to the BigMikeFund Podcast. I’m the Big Mike, Mike Zlotnik, and today it is my pleasure and a privilege to welcome Brad Sumrok. Hey, Brad.
Brad Sumrok: Hey, I’m, I’m happy to be here.
Mike Zlotnik: So awesome to have you here. We’re recording this from Cancun from the BiggerPockets annual conference. So, we are about to be hit by the hurricane. Milton is here and, uh, we’re recording this, uh, despite the uncertainty and the concern of the hurricane.
So once again, welcome. Would you be so kind to tell folks a little bit about you? You are a super guru in multifamily. You have, had great success. You have a community of, uh, students. You have a mastermind. Let me not speak for you. Would you be so kind as to tell folks a little bit about you, your history, kind of where you come from?
Brad Sumrok: Yeah, thanks, Mike. And it’s a pleasure to be here in Cancun at the Bigger Pockets Conference with a pending hurricane. So I never thought I would be doing what I’m doing with my life. I started off with parents that never owned a business. They never even finished college. And so they taught me the importance of studying hard.
getting good grades, going to college, getting a degree, getting a job, staying out of debt and staying out of jail. And I did all that. And I did all that. So I did everything right. And I, or so I thought, and I was in corporate America for 14 years and found myself losing my job, not just one time, but two times.
And I actually thought about going for a third degree. And I remember studying for the LSAT. And then I picked up the book that changed the trajectory of my life, and it was Robert Kiyosaki’s Rich Dad, Poor Dad. And then the second book, The Cash Flow Quadrant, and I realized I’m on the left side of the cash flow quadrant as an employee, and I need to get on the right side, and I want to be a business owner and investor.
But I didn’t know where to start that I, you know, Kiyosaki talked about real estate and network marketing and network marketing didn’t resonate with me. And I heard about people making money in real estate. And so where did I start? I went to a real estate investing seminar and I was very skeptical. I was like, okay, like, what am I going to learn?
I have two degrees here, but something like just resonated with me. Like everything the guy was saying and made sense to me. And so I went to that seminar and eight months later, I bought my first rental property. It wasn’t a single family rental. It wasn’t a duplex. It wasn’t a fourplex. It was a 32 unit building.
Mike Zlotnik: Very few people jump from zero to a small multifamily asset. So you must’ve gone to right seminar that gave you a start in the multifamily very, very quickly.
Brad Sumrok: Yeah. And you know, they, one of the reasons, and I know you mentioned, I have a mastermind in the, in, in a mentoring community, but. They had a mentoring program and I, I enrolled in it and, you know, I still have mentors today.
I, you know, go to a Tony Robbins mastermind. So like one of the keys to my success has been making sure I’m surrounded by people that in learning from people that are ahead of me in the game, you know, and if you want to get better in tennis, do you play with somebody worse than you or do you play with somebody better than you?
Mike Zlotnik: If you want to get better, you know what they say, you need a coach at every stage of life, no matter how good you get. Yeah, even the best in the world get coaches. So as you keep progressing and you’re getting better, you need to have a community and the right type of coaches and your top five. Yeah. The relationships to keep moving you forward. Right.
Brad Sumrok: Yeah. And, and so that’s how I got started. But then just going down the journey, I bought, I bought 32 and then 30. So I had 62 units and my goal was to get a hundred units and retire. So I have 62 units and I’m still back in corporate America. I’m burning both ends of the candle, right? So I, I, I have a job and I’m doing real estate and looking at deals and weekends and lunches and driving properties and buying my deals, managing the deals.
And a broker brings me 250 units. I was all out of money because there’s 62 units. I use my own money that I saved from 14 years in corporate America. Um, but I was able to figure out how to raise 2 million from people that I met going to, you know, investor clubs, investor communities, the mentoring program, they had their own investor community.
So I would show up to these, um, meet ups over, you know, two years when I went from 0 to 62 units and people got to know me, they got to like me, they got to trust me. So when I found this 250 unit deal, I was able to put together an investor group, and that was my first syndication. And I’ll tell you, 250 units was easier to buy.
It was easier to finance. It was the lenders like it better. I got non recourse that the 62 units I had personal liability, personal recourse. The 250 I had no personal recourse on that loan and the management company that I can hire with those 250 doors. I had professional property manager, professional leasing agent, professional maintenance people and then the whole back office that does my financials.
You know, the balance sheet, the P. N. L. The rent rolls everything. We’re on 62 units. I’m trying to do that myself.
Mike Zlotnik: Let me capture for the audience. Two great wisdoms here. No like and trust, right? To raise capital, you have to establish that. And, uh, most folks know that, but that’s the required step. And then the next one is, sometimes 10x is easier than 2x.
Bigger assets with economy of scale work often quite better than smaller assets. And it’s not easy to make that leap of size. Yeah. You did it, and it’s an easier place to be. Uh, plus you have a better return on your time, right?
Brad Sumrok: Yeah. And it’s counterintuitive. So many people think that you need to start small and graduate, you know, up gradually, but I, I would say the opposite.
Like you could start and, and, and now, and like in my programs where I mentor other people, I would even, I even advise them, like, you don’t even have to do the 32 unit. Like you could go right in, uh, whether you’re new, uh, or whether you’re doing like single family or you know, you got a couple doors here and there are short term rattles and you want to move into multifamily.
You go right into 60 to 100 units indication if you have the right system and you have the right belief. And I always tell people the best investment you can make. Second best investment I tell people is an apartment building. The first is the real estate between your ears. You know, when you invest in yourself, when you invest in your mindset, your skills, your network, um, And being in the right rooms around people better than you playing a game at a higher level than you are, you’re going to go bigger and faster and make less mistakes.
Mike Zlotnik: I couldn’t agree more. Uh, the idea of mastermind and communities, uh, what do they say? One brain is good, two brains are better when you have a whole community. You have resources, you have networking, you have strength in numbers, you have ability to, uh, get feedback. So it makes a lot of sense. So how do you, uh, get folks to, uh, go from sort of first, second deal to that 10th, I’m just curious if you folks get together, their partner, um, how do you work with your students?
Just again, from your expertise in the mastermind community and coaching, what’s the best path for folks to be successful? Um, is it continue to do things to yourself or partner with some folks who are. Somebody’s really good at execution of construction. Somebody’s really good at finding deals. Somebody’s really good at raising capital. Just, just curious your thoughts.
Brad Sumrok: Yeah. Well, the first thing is everything that I help other people do is what I do myself. So like, I’ll, I’ll answer that. That I, my first a thousand doors, I try to do it all myself. Meaning like I was the only GP, um, source and deals, going to broker networking events, going to.
you know, everywhere I could go to get access to deal flow. And then I’m underwriting the deals. Um, I’m touring the properties, uh, raising the capital, you know, doing the due diligence, uh, closing the deal and then having to do all the asset management and capex management. So what I’m finding is I’m like, I’m doing like one deal a year cause I couldn’t do any more.
Plus I was launching my, my mentoring program and my mastermind, like at that time. So it literally took me 10 years to go from zero doors to 1000 doors. And then when I realized how, when you collaborate with other people, not just in a syndication with one general partner and everybody else being passive, but I would start finding what I call co general partners, like a team of, you know, three to four people where I would be one of those three to four people and we divvy up the workload.
So now we have some people that are just sourcing deals and underwriting deals and making the offers. And then other people are like helping secure the debt and raise the money and manage the assets. So when you look at all the things that need to be done to say, go out and buy a 200 unit deal, and you could collaborate with people that have like synergistic skill sets, not just people you meet in the bar and be like, hey man, let’s go do a deal together because you like somebody.
How do you do that? That’s not the best formula, right? To have like this collaborative co GP partnership. So I love to partner up with people that have complimentary skills. And that’s what I’ve done. So the first 10 years I went from zero to a thousand doing all of it myself. And then the next 10 years I went from a thousand to 11, 000 doors as a syndicator by collaborating with others in a co GP model.
Mike Zlotnik: It’s a lot of great nuggets here. Um, I’ll say this. My observation is be careful who you partner with. So you’ve got to get really good partners. Exactly. This is not your, uh, the person you meet at the bar, of course. You have to find the right people who you want to partner with, with the right complementary skills.
Ultimately, you’re building an organization that does that strategy multifamily. And then, uh, another really wonderful nugget that I just kind of wanted to cover is quantitative versus qualitative. Sometimes you build, build, build, build. And then you break through, you build a critical mass and you discover how to do it.
And you can, you can 10x from there way faster than your first thousand doors. Yeah. So the next 10, 000 doors you did just as fast.
Brad Sumrok: Yeah. And, and that’s one of the things. So, you know, one of the things you asked was like, how do I work with my students? It’s the same way. It’s like you get them into a deal, you get them some experience, but like in my community.
We’ll have people with different experience levels, like, let’s say you’re new and you find 100 unit deal and you, you find it and you underwrite it, but now you, you don’t have the experience to close it to get the debt to raise the money and you can bring that to someone with more experience and partner with them and yeah, they’re going to take a piece of the deal, but without them, they can’t, you can’t do it.
And so we got a community of investors that, uh, oftentimes co invest with each other. Not just active and passive, but sometimes they’ll form like GP teams and they’ll co invest and then they’ll, they’ll split up all the workload. And this is how like, this is how people scale. This is how people will scale on their business, whether it’s their first 80 unit syndication or whether they’re on 3000 doors. This is how they’re scaling.
Mike Zlotnik: That’s wonderful. Let’s move forward. So you have a great community. You continue to grow and evolve. And, uh, now we are doing this in middle of October 24th. So the market, things change. And, um, what do you see ahead? I kind of want us to move us into the future. Yeah. Where are we today?
Uh, are you seeing great opportunities in multifamily? Uh, do you think it’s the best time to buy? A lot of folks did a lot of deals in the last few years. And when the rates were low until the rates spike, and some of those deals are struggling today. The reverse is true now. It feels like a lot of deals are available for sale, and its transaction volume is very, very low.
It’s almost like everybody’s scared to buy. Yeah. So, what are your thoughts? I, I, I personally like what Warren Buffett said, Be greedy when others are fearful, be fearful when others are greedy. Now, it’s time to be greedy when everyone is fearful. Yeah. So what do you think about opportunities now? And it’s hard to raise capital. It’s counterintuitive Well, but it’s the best, best time now. What do you think?
Brad Sumrok: I, I couldn’t agree more. I mean, I just used that slide in a event that I did last weekend. And here’s the thing, like people have short term memory. So I’ve been doing this 22 years and it’s been a very ative business. But people that, you know, they, they tend to remember the most, like the most recent things that happened.
That’s right. And so. You know, the last 18 months there were challenges with rising interest rates, inflation, rising costs, supply, you know, and certain markets that, that like a lot of my community members invest in and the sunbelt, we had rising insurance, rising taxes. So it was almost like the perfect store. And then all the new supply, the hurricanes, they forced insurance to go berserk.
And then all the new supply that came on after the pandemic, like there were a lot of factors at play. That made it challenging. And then, and then sellers didn’t want to sell because we were like in a, you know, in a market downturn.
So if you look at market cycles, what occurs to me is that like, we’re, I don’t know for sure, but it occurs to me that we’re at or near the bottom. Like if you look at a clock with 12 o’clock being the top of the market and six o’clock being the bottom of the market, to me, we’re between like, you know, five and 630.
Like, I don’t know for sure, but. I have my pencils up like people have had their pencils down and to me it’s time to have pencils up. We’re making offers on deals. I was in three best and finals last week on like big deals, uh, you know, 60, 70, 80 million deals. The price of debt has come down. Um, you know, and investor sentiment is improving and we’re going to see, you know, that that’s the biggest challenge because people that got in the business the last two years, they’re having like memories of what happened recently.
But I’ve been in the business for 22 years. And so, you know, I think, I think as time goes, like every month I’m seeing more and more optimism from investors and, and I still see a lot of people actually waiting, um, for the election because they want to see what happens with that because there’s instability.
But what I’m, what I’m gonna, I’m gonna put a stake in say after the election, there’s going to be four years of stability. No matter who wins, Wall Street is going to know what they’re dealing with. They’re either going to deal with a Trump administration or a Harris administration and the capital markets and Wall Street and everyone’s going to know the new rules of the game, no matter who wins.
And I just see the opportunity like now, like, probably like it was back in 2012. Like, I don’t know anyone in 2012 that said, I wish I would have bought less real estate. But at the time, You know, there was some uncertainty because they were coming out of that downturn and I believe that’s where we’re at now.
We’re coming out of that downturn and we already see the fed lowering rates and we’re starting to see more transactions hitting the market. Um, and that gap between what sellers wanted for their properties versus what buyers are willing to pay is starting to, you know, close. And so we’re seeing transactions happen.
And look, it’s, it’ll be a great time next year in two years, but like it’s better now, you know, there’s a window of opportunity. Plus, um, I’m looking to get into a deal by the end of this year because we’re still in a bonus depreciation period. So, yeah. So like if we could get into deals in the next, like before the end of 2024, you’ll have better tax advantages.
Mike Zlotnik: So, the words otherwise, lots of awesome nuggets and I, I, I happen to agree, uh, I, I particularly like the fact that the Fed outlined finally after, uh, keeping the rates higher for longer, they outlined their base case scenario with what’s going to happen with interest rates. Yep. And commercial real estate, including multifamily, very much depends on predictability of interest rates.
And that’s, by the way, that’s the biggest problem that we, that hit us in the past is when they hike unpredictably high. It was too fast to furious. So now the reverse is almost, uh, true. They started to, to, uh, to cut and then they’ve outlined the base case scenario. They’re going to continue to cut certain pace at minimum.
Plus, as you said, political, uh, the election will be over soon, right? And as we all like to personally feel left or right, doesn’t matter for investing for real estate in some ways, it does. In other ways, it doesn’t. So exactly what you said. It doesn’t matter who wins. Let somebody win.
Brad Sumrok: I couldn’t agree more because like, well, here’s what we know there, there will be either one administration or the other. And
Mike Zlotnik: we probably have preferences for real estate probably be better. Uh, the Trump wins, but at the same time, right. At the same time, we don’t know if it’s actually going to make a difference. I just wanted to add this point. I have this questions. I like to ask who is more powerful, the president of the United States or the fair chair.
Brad Sumrok: Yeah, it’s a great question.
Mike Zlotnik: It’s more powerful in relation to real estate. It has more impact.
Brad Sumrok: And then the Congress, like if we have a divided Congress, a divided House, like, and, like, look, I’ve been doing this since George W. Bush was president, right? Bush, uh, Obama, uh, Trump, you know, Biden, uh, now whoever.
It’s like, you will be successful. You know, yeah, we’re going to have some environments where there’s higher taxes, and more, you know, uh, you know, or lower taxes and more pro business policy or maybe another administration is going to have higher taxes and maybe more, you know, um, attention to like minority owned businesses or green businesses and stuff like that.
But at the end of the day, we, we’re going to have a divided Congress. And, and so that to me is the most important thing because no matter who wins, it’s going to be hard for either side to like pass sweeping legislation that’s going to have, you know, major, major impact. That’s right. So like, Don’t wait for the election.
That’s what I tell people. Like some people were professional waiters. They’re waiting for the, you know, rates to drop, the rates drop. They’re waiting for the election. They’re, they’re, they’re always waiting and you can’t move forward if you’re waiting.
Mike Zlotnik: Agreed. So action is more important than perfection of action. Yeah. So what do you think about opportunities? Are you seeing, um, uh, everything you talked about the bid and ask coming a little closer, transaction volume is still pretty low. Um, are we Going to see meaningful acceleration of the deal flow almost in order for the market to recover and recover fast. We need some volume to pick up the volume, establishes a pricing, establishes comps.
Yeah. And this is one of these market conditions where, uh, if we only saw a few more things transacting, we’d be so much better off for multiple reasons. Uh, obviously market pricing, uh, more confidence, more clarity where things are going. In addition, some stock capital could get unstuck. And also. Uh new returns could start happening.
So what do you think are we are we going to see a pickup? I know it’s a crystal ball question Are we going to see a little bit of a pickup in volume more deals happening over the next three months six months? And um, are you seeing? Uh, only brand new buying opportunities. Are you seeing anything with existing deals?
Is there a way to come in and help an existing deal that sort of is down? But it it’s not out in a sense Just curious. What are your thoughts?
Brad Sumrok: Well, you asked a lot there, so let me try to go one at a time. I mean, I see, I’m already seeing transaction volumes picking up because I’m getting a lot of deals in my inbox and in my text messages from brokers.
Like it was pretty quiet for a while. And so like I’m seeing more activity and I think it’s really because like the cost of debt has come down and the future predictions, you know, the futures, uh, forecast that the Fed made is already getting baked in a lot.
So it’s not like we have to wait till November and December for these cuts because they’ve already announced their intentions and a lot of it’s baked in. So like we’re seeing rates at a, you know, like in the 5 percent range, which we haven’t seen in a long time. Yeah, agency debt. And so that’s paving the way for More sellers now to come to the table where before the last 18 months, it was really only the sellers that needed to sell. And everybody was looking for that, you know, distressed deal where you could get something at 70 cents on the dollar.
And some of those are out there, but like, if that’s the only thing trading, that’s not enough. And now we’re starting to see like more normalcy come back, like sellers that are not desperate to sell or that are not like completely distressed to sell. They’re starting to. put these deals back on the market.
And, and, and I’m already seeing signs of it. Like I, I’ve been, I was in three best and finals in the last week. And that was more than I have been in probably in the last, you know, several months.
Mike Zlotnik: Well, hopefully you, you actually win something and you get to grow something this year. Yeah. So that’s great.
By the way, you, you, you are one of the few people I’ve, I’ve spoken. Well, one of the works for many people who are indicating exactly that transaction value is picking up. Yeah. Um, Where I interviewed the chief economist at BGO and he indicated same thing. And they’re not yet doing deals, but they’re looking a lot more deals.
And these are very powerful, uh, leading indicators into likely transaction volume increasing. Okay, let’s continue. Sorry. I interrupted you.
Brad Sumrok: Yeah. And, and I can’t remember what else you asked me, but,
Mike Zlotnik: Oh, the next question was, uh, existing deals. So, uh, I guess, I guess existing deals need, need a point to get To an exit.
Maybe that we need both, right? We need some of those exits to take place in the normal conditions rather than the stress conditions.
Brad Sumrok: Yeah. So existing deals like I I’m aware of a lot of people that have existing deals that are doing like looking at, look, if you have an existing deal and you have a loan coming due, you need to be doing a few things all at the same time.
One is evaluating a sale and you could sell for more today than you could literally just two or three months ago. So, like, my message is if you had a broker opinion of value, a BOV, and it was more than three months ago, you need to get it updated because cap rates have already started tightening and debt is more available and less expensive.
So, like, that BOV you got two or three months ago is already out of date. It’s going to be worth more money.
Mike Zlotnik: That’s a great nugget. Folks need to really feel more optimistic and more proactive. Go look at the market today.
Brad Sumrok: Yeah, it’s going to be different. And I know, because I’m in some of those myself. And so you want to be looking at re evaluating a sale, re evaluating a refinance.
And again, if you looked at this before, you’ve got to look at it again. Because things have changed so fast. They’ve changed so fast.
Mike Zlotnik: So, on the refi front, which is a great idea. Typically, do you need to see a full stabilization or can you try to refi while you’re still working on a value added work? I’m just curious, is it better to refi, lock in the rates today versus wait a little bit, let the rates come down a little more, and then try to refi? It’s a perpetual question. If you’ve gotten to 90 percent or 92 percent
Brad Sumrok: Well, I think part of it is like, when is your loan due? You know, like, and that’s not just these three year variable rate loans that a lot of people did in 2021 that are coming due now. And I have had a couple of those. So some of them, your, your hand is being forced that your loan is coming due.
So you either got to sell, refinance, or do a loan extension. That’s right. And you got to be evaluating all three at the same time, like literally. And I know people that put all their eggs in one basket and then it didn’t go that way. And then they got into. a situation with the lender where their loan was due and they couldn’t like, they just went all in on a sale and then they couldn’t get a buyer and then they were stuck.
Like, and unfortunately I know of a group that like lost their property. So you gotta be doing all of it at the same time. And, and, and so I was in a deal where we were all in on a refinance. And at the 11th hour, the current lender came back and we talked to them about doing a loan extension. We are in a three year loan with an option to extend one year, you know, the three one one.
And we were, we approached the lender multiple times and they said, Hey, we’ll get to you. Well, these lenders are so backlogged right now. Right. And so we went down the refinance path, but we kept going to our current 11th hour they said, yeah, we’ll, we’ll do the loan modification. Like, like now, like we can get to you and you still have.
You know, 45 days before your loan is due and we worked out our loan modification. So we did the one year extension, which for us on that deal was the best absolute scenario because now we have a whole nother year and cap rates have already come down. Debt is less expensive. Our property is worth more now than it was three months ago.
And in a year it’s going to be even better. And I just got a text text message from a broker saying, Hey, somebody wants to buy this property. And it’s like, and it’s, you know, And I’m like, yeah, it’s not the stress. They’re like, yeah, I know. Like it’s their target property. So like, like two or three months ago, I would have said, man, I’m not, I’m not sure where we’re going to end up here.
Like we might end up doing a cash in refinance, which would need a capital call, but here we go. We did a loan extension and now we got some of, they might want to buy it for an exit that would make us a lot of money literally in the last four months.
Mike Zlotnik: This is great advice. So whoever is doing, whoever is the operator on the existing deal, They have to always think about optionality and three options.
Current lender modifications, refi, or sale today, they’re all just as viable as ever. Yeah. In fact, it’s critical to do that. So, um, how do you do, what if you have to do a cash call and you can’t get a cash call? What other options do you have?
Brad Sumrok: So, there’s a couple options. So, like, yeah, so a capital call, one. Two, what I’ve seen operators doing is not just doing a capital call, but they’ve gone back to their investors and said, Hey, instead of a capital call, we’ll we’ll do a like a note and we’ll pay you like member loan, like a 10 or 15, or in some cases even higher. ’cause look, if you gotta get a private equity company to come in, let’s say you need $5 million, like a cash in or something, or extra capital or 2 million or whatever, and you gotta get a private equity company to come in, they’re gonna come in at a high rate and they’re gonna want.
They’re going to have terms that like they get more control or they get part of the GP or they get, you know, and so that would be another option. But like there’s a lot of operators I know that have a lot of doors that have offered their current investors like, hey, instead of just a straight capital call, um, we’ll set this up as, you know, we need 2 million and we’ll set it up where we’ll pay you like 10 or 12 or 14 percent if you put up more money and then you get paid first before the equity.
Mike Zlotnik: Yeah. I’ll add one comment on this. This is exactly the right idea. It’s the member loan or mezzan me debt. Yeah. This is what we like to call it. Some people call get fresh prep equity. It’s same concept, but the idea is you go to your first, the existing investors first. Yeah. But some people will not participate.
They, they don’t have the cash or, or other circumstances. Yeah. But if you at least set market rates, you could attract external investors too. Sure. So you don’t have to get all the money from ex external source. with the vulture terms. But if you just do a capital call and you have 30 percent participation, you’re much better off with member loan.
You can get 60 percent participation, 70 percent and get a little bit more money. But for that, my quick comment is I’ve seen people do 10%, 12%. Um, I think you need to do 18%, 20%. And the reason you need to do 18%, 20%, you got to make it attractive enough for existing and new. And that money has to be senior on a capital stack to equity.
So it’s the, that money has to feel safe by, on its own merit. Yeah. So I, I’ve seen the 10%, the 12%. I agree. It doesn’t matter if you’re doing short duration, uh, a little bit high interest rates, but that’s what makes the capital raising easier.
Brad Sumrok: I, I, I agree a hundred percent. And, you know, and the other one is like, there, there could be like if you have a GP team, like some gps have done loans, then they went to the investors.
And then if they, if they still don’t get the capital, then you get the outside companies. Uh, and it may make sense to just have one outside company come in and write that check for a couple million dollars on, you know, that could be another option.
Mike Zlotnik: Yeah, I appreciate that. It’s a great, uh, episode, but we’re running out of time.
All good things come to an end, unfortunately. So, uh, any good book to recommend any best advice and how would folks reach out to you, for example, for your mastermind, for your mastery, or they just want to learn about your deals?
Brad Sumrok: Yeah. So, uh, I mean, man, I love reading books, but like I mean, what I’m reading right now has nothing to do with real estate.
It’s called outlive. And, and, and, and it’s about how do you, like when we’re at our age, we got to start thinking about like, how do we improve the health in our lifespan? Not just extend our lifespan, but have more healthy years in our life. So I’m actually reading that right now. And it has all the latest like call it technologies and all the you know, the bio hacking and all the things you could do and the exercise and the sleep and all the things that really matters.
So like it’s called outlive and it’s fascinating. And I would just say like if you’re over 50, like you want to start thinking about those kinds of things. Um, and of course, rich dad, poor dad, most people read that book, but that book changed the trajectory of my life and the cashflow quadrant. And it still blows me away that some people haven’t read those books.
Mike Zlotnik: Yeah, it’s a, it’s the, it’s a, yeah. Real estate 101 and a PhD in real estate for those who are not in real estate.
Brad Sumrok: Yeah. And then other people reach me, just go to Brad Sumrok, B R A D S U M R O K. There’s no C in my last name. So bradSumrok. com, uh, bradSumrokinstagram, bradSumroklinkedin, no punctuation, no underscore.
I’ve actually found there’s a lot of copycat accounts out there. And some of them have more followers than my accounts. And I’m like, what am I doing wrong there?
Mike Zlotnik: Imposters. Yeah, be careful when you become a well known personality, you get imposters, unfortunately. Yeah.
Brad Sumrok: But we have all kinds of resources from coming to our events, to free content, to home study courses, to information about our mentoring program and masterminds, to how to be an investor. It’s all there.
Mike Zlotnik: Thank you, Brett. I appreciate your wisdom. I appreciate your sharing. Appreciate your optimism. And, uh, I feel great. And the last, uh, sort of, uh, thought here, I hope we are safe. I hope this hurricane doesn’t cause too much trouble for us. And then it’s, we are here in Cancun. It’s heading to Florida. So, thoughts and prayers for those folks and, uh, and their families.
Brad Sumrok: Yeah, me, uh, likewise. I mean, I think we’ve made it through here. But for those in Central Florida, sending you love and prayers. Be safe.
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