Listen to hear how Brad Sumrok goes from being an engineer to building a nationally recognized multifamily mentorship program. He debated getting a law degree but instead started investing in apartments. Within three years he was able to quit his job and invest full time. He then started to teach others how to do it. He has a habit of helping others multiply their net worth!
Table of Contents:
- Where To Listen To The Podcast
- An Investor and a Mentor
- The Multifamily Mentorship Program Structure
- Leverage Your Credibility
- The Aha! Moment
- Mission: To Impact, Guide, and Mentor
- Facing Fears
- Best Practices of a Multifamily Mentorship Program
- Next Big Stretch of a Multifamily Mentorship Program
- How to Reach Brad Sumrok
An Investor and a Mentor
Darin: Brad did not grow up wealthy. He grew up very much with the employee mindset and began his career in engineering. He debated going for his law degree but instead started to invest in apartments. Within three years, he was able to quit his job to invest full time. And then he started to teach others how to do it. His multifamily mentorship program has directly impacted more than 180 people by increasing their net worth by one million dollars through apartment investing.
If you've listened to prior episodes, you've heard me talk over and over again about having joined a multifamily mentorship program. And Mr. Brad Sumrock here is the founder of that mentorship group. He is my mentor, so I am so glad that he is here today.
I got involved with Brad's group just at the end of 2017. I bought a duplex in October of 2017 and I wanted to go bigger. Brad, you may not even know this, but I ended up joining Brad's group without having met Brad. I went to a meetup group, and I met some folks that were part of Brad's group. They just did all the selling for you, Brad. I joined the group, I got involved. And it's been an incredible experience. I've met so many great people. Again, I'm so thankful that you've come on, and that you're willing to share with everybody.
Brad: In the past people will join our group after coming to one of our training events but more and more we just have people go into our website or like meeting some of our other students.
I always say from the stage, I'm not a salesperson. I'm an investor, and I'm a teacher. A lot of our students are out there successful and now you're one of them. Investing in apartments and following the 18-year recipe that I do and that I teach in my Multifamily Mentorship Program.
Starting the Multifamily Mentorship Program
Darin: So, you've created something special here. I know you're both an investor in multifamily apartments and you have a mentorship group. How many properties and units are you invested in? I know you don't take as much of an active role anymore, but you're still a very large investor in apartments.
Brad: Yes. The first thing you mentioned is yes, I am an investor, and I started as an apartment investor in 2002. My first real estate deal, it wasn't a single-family home, it wasn't a duplex, it wasn't a fourplex, it wasn't an eightplex. It was a 32-unit apartment building that I was able to buy in 2002 after myself going to a seminar and starting with a mentorship program. So number one is, I believe wholeheartedly in seminars and multifamily mentorship programs. And I feel from my personal experience that whether it's mine or somebody else's, that they're so much more valuable than all the free information out there.
We're not starving for more information but for the experience. We're starving for wisdom and for people that are willing to have the heart of a teacher and share their personal experiences. So it wasn't until I was financially free myself, that I started mentoring other people. I've been doing apartments now for 18 years, and I was my first client. So I was able to retire myself first and become a millionaire, investing in apartments. Then around 2006, I started mentoring other people. At the same time, I kept doing more and bigger apartment deals because it works. There's no other asset class that I've come across. I've looked at many to give you the combination of cash flow, capital appreciation, the tax advantages. The tax advantages since January of 2018 are insanely amazing.
Changing the Game One at a Time
Brad: And the bonus depreciation advantages are going to expire in 2023 and maybe even sooner, depending on what happens in November 2020. So the financial advantages are amazing, and we're uplifting working-class communities. We're not just doing this for our investors or our own families. We are earning double-digit returns, many of us are making millions of dollars. And we're doing well out there. We're changing America one acquisition at a time by uplifting these properties.
Darin: That's great. Approximately how many members are in the multifamily mentorship program? I know you’re based here in Dallas. I'm here in Dallas, but there are members across the entire United States.
Brad: I remember you asked me something else. How many properties I own? Let me answer that one first.
Right now, I just updated my schedule of real estate owned, and it's something that any apartment investor should do every quarter. So I like to update it and just keep track of all my deals, my NOI, my equity, my cash flow. So I'm currently invested in 17 deals. 13, I'm a general partner. Four, I'm a passive, and they total about 3200 units. I have owned cumulatively almost 6000 units. But I like to buy, hold, improve, and sell over a five to seven-year period. Right now, I'm in about 3200, so I'm constantly in that buy, improve, hold, manage, and then exit.
Generally between right now, my plan is five to seven years because I think we need to hold our properties a little longer right now, but I've exited some deals as early as two and a half years. So that's a little bit about what I've done as an investor.
The Multifamily Mentorship Program Structure
Brad: In our multifamily mentorship program, we train and educate thousands of people per year in our seminars – online and offline, virtual and in-person, now more virtual. And we have over 1000 students in our program.
Students are people that came to our seminars and then invested in one of our additional programs. As you know, we have different programs; some are more geared toward passive investors and have a lower investment to be in that education and mentoring program. Then we have programs that are available for people that want to be more active syndicating deals, where they roll up their sleeves and work with me and my team, personally. We’ve been doing this for a long time. It's not like we're mentoring 1000 students at one time. We're bringing in maybe 25 to 50 new students every quarter. I have nine people on my team that help me mentor all these folks.
So somebody like you that's been with us for a couple of years, it’s probably been a long time since we’ve had a mentoring session between my team members and you. Because you've come in, you've learned a lot of the basics, you've implemented, and now you own deals. And we're still available to help you and be a second or a third set of eyes. But once you learn the basics, you don't need as much personal hand-holding.
Darin: Absolutely, I remember when I went to your student event in February of 2018, I came home and told my wife, "That was the craziest thing I've ever been to." She's like, "What can be so crazy about that?" I said, "There were like 250-300 people from across the country. Every person in that room that I met was either somebody that wanted to invest passively into a multifamily deal or wanted to be a general partner and be a lead in a multifamily deal."
The Kind of People You Meet in a Multifamily Mentorship Program
Darin: There was no discussion as to why multifamily. It's like everybody in that room was focused on meeting people that they could do business with, and that were qualified. These people had paid money to be part of this group. They weren't just looking to make money with no money down type of thing. So I was extremely impressed by the caliber of the people, doctors, lawyers, business owners, and real estate professionals. A high caliber group of people. You've built a great ecosystem.
Brad: Thank you. I'm so glad you mentioned that because so many people think it's all about the information. Of course, we have great information and great content. I've been doing this 18 years. I have nine coaches that are all experienced apartment investors that they became successful following my recipe, and now they're helping me help other people become successful. So the mentoring component is valuable, and it's so much more than that.
It's learning from other apartment investors. It's meeting qualified people with money. And like you said, you don't have to go to them and say, " let me explain to you the six ways we make money in real estate and why we do multifamily." They already know and are committed to investing in their education so they can be better investors. Whether they're going to be passives or sponsors, they make better, more successful investors, and they're ready to invest.
So when they see a PPM or hear about the SEC, and what is a 506C, or a 506B. What's a cap rate or an IRR? Or what is an economic vacancy or non-revenue units, and why do you have that? The vast majority of them understand it because they have access to all that training material.
Retire in Less Than 5 Years
Darin: You started on some of your R2R’s to quantify some of the impacts from a financial perspective, and have identified how many people that have joined the group have become millionaires from apartment investing. A piece of that could be bragging. But at the same time, you know people are looking to get into the apartment space, and perhaps they’re looking at multiple mentorship groups. You want to know that the people that have implemented the multifamily mentorship program and have made money. Can you share how many people fall into that category?
Brad: The first thing with a caveat is our tracking system isn't 100% so there's probably more than what I'm going to mention. First, I used to just keep track of how many people quit their job and we got to 50. And then there were some that didn’t.
We would have these shirts, and our slogan is retire in five years or less. So I'm like, “Hey, I'm going to because that was my story.” I retired from corporate America in three years investing in apartments. We would want to track how many people retired.
But then we had people come up to us and say their net worth has increased by more than a million dollars but I haven't quit my job because their business owners or partners, own medical practice, and have employees that run everything. And so they love what they do, and they’re never going to quit their job. But they still made a lot of money. So then we started saying, “Okay, well, we got to change our metrics.” So to date, and there's probably a few more that we don't know about. But we have 181 of our students that have shared and disclosed that they have increased our net worth by over a million dollars from their apartment investments.
This Is Not a Rich-Quick Scheme
Brad: So notice that I didn't say and became millionaires because as you know, we attract a high quality. Our avatar is not somebody with no job, no money, no credit. Our avatar is somebody with a good job, a good head on their shoulders, having aggressive but realistic goals and expectations, that knows we're going to mentor them but they have to meet us halfway and do the work.
Multifamily mentorship program not a get-rich-quick scheme. That's why we say retire in five years or less, not five months, or five weeks or five days.
The only way you can really fail is if you quit or if you're not coachable. We've had a lot of people that had a net worth of over a million dollars and they've been able to increase that by a lot.
Darin: That's fantastic. In my experience, some guys that reach out to me on Instagram are in their 20s and 30s. They don't fall in this bucket but there's a lot of talk about like how do you build credibility when you're first getting into the game.
What I found when I joined your group, and then I started to call brokers, once I said I was part of the Brad Sumrock group, I could hear kind of the light switch shift. It was like, okay, Darin, you don't own any property yet, but I've done business with so many people from the group that I almost got instant credibility. And if you're not part of a multifamily mentorship program and you're not partnered with an experienced syndicator, it's difficult to break in and build that credibility with the broker community because they have a lot of buying groups coming in to put offers on these deals.
Leverage Your Credibility
Brad: That's correct. When I started in this business, when I started my mentoring organization in 2013, there were only a handful of others out there teaching and mentoring people on how to invest in apartments, and now there are literally like 20 some people or organizations doing it. A lot of these people have been doing it for just a few years. They've been successful because the market has been going up and they maybe have three or four deals. Now, they're out there doing seminars and teaching people, but some people are just teaching things that I think are wrong like, "Oh, let's develop your credibility package." And to me, I'm like, "Well, what's a credibility package?"
There are certain strategies that you could use and it's a marketing package. If you don't have the experience, the only way to get credibility, in my view, is to leverage someone else's experience.
So you come in and leverage a collective network. Tony Robbins, my mentor, talks about proximity being powerful. So, you associate yourself with successful people. So if you're an inexperienced sponsor, one, you could leverage the name of your mentoring organization, and that is going to have a reputation that you could leverage. Then two is even within the program, if you're an inexperienced sponsor, you're going to want to probably team up with a more experienced GP on your first transaction. Be a co-GP or a co-sponsor.
Don't be greedy. Be willing to give up a large part of your sponsor compensation however you've structured your deals, and get that first deal under your belt. Again, you don't need to start with a duplex.
Don't Start With a Duplex, Start With a Mindset
Brad: And there's nothing wrong with you in a duplex. But some people think the law of the first deal starts with a duplex. I couldn't disagree with that. If you want to be an apartment syndicator and do 60-100 units and up, you could start with 60-100 units and up. But the challenge is if you're trying to do it all by yourself, well then, maybe you need to go and do a duplex. But what I'm going to tell you is don't do the duplex. Just partner up with someone else with more experience and go after that 60-plus unit deal. And as you know, Darin, we have hundreds of people that have done that.
Darin: Absolutely. So March of 2018 would have been my first R2R and so I was already in the group for like three months, but when I came and heard you speak, I expected just to learn about multifamily. But one of the things that you do in your multifamily mentorship program, which I think is critical for people new to the space is you start with mindset.
You start with, you don't have to start with a duplex and a fourplex. And you know what? I just didn't have other people telling me that. So I heard it from you, and then I started to network with other people in the group. And then I started looking and saying, look, they could do it, I could do it. But there's a lot of people that don't feel they're worthy, don't know that they can do that. And they just have to surround themselves with like-minded people that can encourage them that they can go bigger.
The Aha! Moment
Brad: Let me talk a little bit about mindset. One, let me tell you what I don't do and who I'm not. I'm not a mindset coach. I immerse myself with mentors. I'm part of Tony Robbins’ masterminds. Tony teaches 80% of all your success is psychology and only 20% is actually your strategy. 80% of my program is not mindset.
But the mindset shift that I'm talking about is, number one, the mindset of being an employee versus being a business owner or an investor. And for me, that was a huge mindset or a paradigm shift that I got from reading Kiyosaki's books. If I hadn't read those books, I probably would have gone back and got my third degree, engineer MBA. I started studying it. I started studying for the LSAT, and then I read Rich Dad, Poor Dad, and I was like, Oh my god, I got to stop doing these things. That's the mindset shift that I'm talking about, these "aha!" moments.
Second, the mindset that you don't need to start with a duplex, fourplex, single family. If you have started there, I would also say you're in the perfect position to scale up. Half of my students or clients are people that have already been doing single family or small multi-unit properties. The other half, or maybe a third are people that have no experience. They come in and like you, they think, "I just want to learn. And maybe I'm going to learn and get my feet wet, and go out and buy a fourplex, and live in one unit and rent out the other three, and stuff they read on blogs, house hacking and stuff like that."
If you’re in a relationship with a woman you love, that is not sexy. The simple fact is, it's easier to get financing, it's easier to manage. Your listeners may think that it's easier for us but the thing is when I say it, it might go here into your brain, or maybe it goes in one ear and out the other. But when you start to meet enough other people that have done it.
Experiential Leverage in a Multifamily Mentorship Program
That's why going to seminars, whether they're virtual, and we've been able to recreate our in-person experience now virtually, but that's why going to seminars is so important because you're not just getting the information. You're getting what they call social evidence, social proof that other people in your seat just a few months ago, were able to go out and do what it was that you wanted to do. And so when you start surrounding yourself with enough people that have done it, you start to believe it yourself.
Darin: Yes, that's huge. The other thing you said was, you mentioned the aha moment. And I think that that's a big thing for mentors. That you all started down the path before like a lot of us and then you had these aha moments, and you had proximity to other people and other lessons learned. And then you passed that along to the people in the group. Then you are trying to do that with Tony Robbins. He's had all these different experiences, and then he passes on his aha moments to you. And so, that's where you get leverage. You get leverage of ideas, and how to really propel yourself forward.
Brad: That's such a good point. So when people think of leverage, they might think of financial leverage, but also there's experiential leverage. You could get from point A to point B on your own, but it may take you longer. And if you look at a line going from point A to point B, there's a kind of a straighter way to get from A to B. Or there's this squiggly, squirrely line that goes all over the piece of paper to get from point A to point B.
Collapsing Time Frames
Brad: And my other friend and mentor, Robert Helms, who runs a very successful podcast, The Real Estate Guys, says that "Brad, what we're in the business of is collapsing time frames."
Darin: That's a great point. Tony Robbins calls it, we turn decades into days. So what might take somebody a decade could be accelerated into 30-120 days can be accomplished through following in the proven recipe, the proven process of an experienced mentor. As opposed to having the same result, but over a much longer period of time, and maybe making a lot more mistakes and spending a lot more money.
Darin: You're right. So the way I would explain that to somebody and from my experience is, let's just talk about attorneys or property management companies. If I hadn't joined the group, how would I have found the right attorney, or the right property management company? I probably would have gone on Google and searched, and then I would've had to do a lot of research and I would've had to interview them. It would've taken a lot, a lot of time. But instead, all of a sudden, I'm part of this multifamily mentorship program that brings me in proximity to a lot of other syndicators that have already done two-five deals. And I could just go around the room and say, "Who did you use and who do you like?" Then they make the introduction.
I mean, that in itself saved me, not only of time but also confidence. I think that if you're using partners or vendors that are doing business with a lot of other people, then there's more skin in the game because it's not just Darin Batchelder. If I don't perform for him, I may lose one client. That's not the way it is with these groups. You have these vendors that do business with a lot of different syndicators. And if all of a sudden they start not performing, the word gets out, and then people start shifting their business elsewhere.
The Mastermind of Multifamily Mentorship Program
Brad: I like to think of it as a mastermind. And I run a mastermind where it's formal, where we meet and gather for four days, three times a year and truly dive in, take deep dives into our businesses, our successes, our challenges. But outside of that, just think about the Sumrok program.
There's mentoring, there's information, there are providers, there's networking, but it's a community of like-minded people that share information. So you're not just learning from me and my team, you're learning from all these other apartment investors. And there are people that are like you, and you're probably a passive investor in some deals and you're a sponsor. So, you have unique experiences in all these deals that you're invested in. So when somebody new comes in and they have a conversation with you at a networking event, they're benefiting from that.
Darin: Absolutely. That's another thing that's been fantastic about this whole industry, is that people are willing to share. I thought once I write my check and I get part of the group that the other members that have been successful are going to shut off their communication flow to me because they're going to look at me as competition.
But what I found was everybody has a Pay-It-Forward attitude. It probably flows down from the way you created the culture. But the people that are more senior, they’re like, “Darin, I’m not going after the same deal as you are.” They’re more than willing to help. And I feel that same onus now, it's charged me up and I want to help the next guy come in. So, it just is a great environment. I've been in a lot of industries, and not many industries do successful people want to share and tell the next guy how to do it.
Brad: People ask me the question too about why I do seminars. Obviously, it's profitable. But I can tell you that there are people that started investing in apartments in 2013, and their 100% focus was on building up an apartment investing empire. And some of these people are my friends, and they have six, seven, 8000 units, and in seven years. And I've done, just over six, cumulatively in 18 years. I walk the walk when it comes to investing in apartments.
The reason why I teach is I'll never forget how I felt when I had a job, and I didn't like my job and I wanted to get out of my job. Then I was able to do that in just three years. So if I'm able to transfer that experience to even one person, and that's how I got started, is I just wanted to help people. I started working with my original mentor, and then we parted ways. And I would meet with people at Starbucks and help them look at deals and underwrite deals and do Q&A. Then through my wife and other mentors, we decided to start our own organization and focus on it. And there's nothing else I'd rather be doing.
So this is my life purpose. And now we have this big huge mission. Our mission is to guide and mentor. Because some people might just listen to this podcast, and they did not just, but maybe they won't be one of my students. But if I could help them and get them to take action, and go out and seek education and mentoring, whether it's through me or somebody else, then that's part of my mission.
Mission: To Impact, Guide, and Mentor
Brad: If somebody takes my seminar and decides not to invest in one of my advanced programs, but they go out there. If I can move the needle for them and their families, that's part of my mission.
Our mission – to impact, guide, and mentor over a million people to become financially free by investing in apartments.
Then people like you are part of it too. You created this podcast and you're influencing people. You have investors that are in my multifamily mentorship program, and some may not be, and you're helping them. Thank you.
Darin: I appreciate it. You've got a conference coming up. And you've got some incredible speakers that you've lined up. I remember when you were just starting this, this is different. It's just an annual conference, and you bring in outside speakers. But when you first started this, it was like you were like a kid. Like you were so excited that you were able to pull it off and bring in such a high caliber group, and now you're doing your third year this year. So let us know about what's going on, when it is and how they can get a part of it.
Brad: I'm still as excited now about our third annual apartment investor national conference, as I was the first time around in 2018. I regularly do, say four times a year, a weekend training event, where I am the head teacher for 16 hours. And I've been doing that for a long time. Now in 2018, we thought of something different. We'll bring in some of the best educators, teachers, investors in the world, or in the USA. And so our first one in 2018, we had Grant Cardone as the keynote speaker, Mr. 10X.
2020 Virtual Event Still Stands
Brad: I was amazed, people came to the event. Then, of course, we had some amazing people. We had Tom Wheelwright, Robert Helms, and some amazing investors. None of them were at the same nationally known status as Grant Cardone, but it was an amazing event. Then in 2019, we did it again. And I'm like, "How do I talk to Grant Cardone?". Then I got to know Robert Kiyosaki through the years. They're both amazing people. So we had two major speakers, educators, influencers, investors.
And the second one in 2019 was bigger and better. And the feedback we got was it's the best event they've ever been to, the best real estate conference. The networking was outstanding. The quality and the people we attract there, unparalleled, unprecedented. The providers there are so valuable and the speakers are amazing. So for 2020, before all this pandemic hit, we were planning our third one to be on September 19th and 20th and it still stands.
However, with all things going on and us being in unprecedented times, we made the decision, and it was a difficult decision because I love in-person events. But we made what I would consider a difficult but wise decision to make this event 100% virtual. And the reason is I'm not going to go into COVID and all that type of stuff. But the simple fact is, at least 50% of the people are not ready to travel yet, and half of them are the speakers. So logistically, and business-wise, the wise decision was to have this event virtual because it's easier for you, it's safer for you, it's more convenient for you. And we could bring nearly the same experience virtually through technology safely and conveniently to your home.
There's Growth in Controversy and Difference
Brad: I'm so excited about it because I get excited about learning new things too. So like everyone else in the event, we're kind of new with all this virtual stuff. We did a virtual weekend to wealth event in May and we crushed it. It was an amazing event. I don't know if you were at that event. But we have a great team, and we have great AV people, and great production people and a great studio. So this Virtual Apartment Investor National Conference, I'm so excited about it.
Darin: So, who's speaking?
Brad: Let me just cut to the chase, we have Grant Cardone and Kiyosaki as our keynote. It's a two-day event.
I had somebody tell me the other day like, "Oh, I can't believe you have in Grant Cardone. He's so controversial. And Kiyosaki, they're so controversial." And here's the thing, they are controversial, and sometimes you need to have that different perspective. If you just surround yourself with people that think exactly like you, then you're not growing. So I follow Grant, I'm close to his organization. I mean, somewhat, and this is all relative. But I know his people. There are very few organizations that have thrived since the pandemic hit. No more than Grant Cardone.
He's raising more money, doing more deals, helping more people, doing more virtual stuff. He's doing an amazing job. So just listening to his mindset about how he is not retreating but expanding during one of the hardest times in history, this is going to be an amazing conference. Same with Kiyosaki. The reason why I like hanging around with him is he's got some amazing insights.
Darin: Absolutely. Two thought leaders. And I went to the last two events, and they were both fantastic events.
Two Sides of the Coin: To Thrive or to Get Crushed
Brad: And these guys are obviously the nationally known people. But the other speakers are going to be just as good or even better, like the content. Like Tom Wheelwright has read the entire Biden tax proposal. And according to the polls, there's at least a 50/50 chance that Biden might win. And so, wouldn't you like to know what to expect as a real estate investor, as a business owner, as an entrepreneur, as an apartment investor in a Biden presidency.
Then two of the other speakers are first-time AIMNATCON speakers. We have two of my good friends from Madeira Residential. Madeira is one of the most respected vertically integrated ownership and management companies in the industry.
Darin: A small multifamily company, right?
Brad: Yes, they own over 14,000 units. They got to know us because we were buying their deals, like students. So we're going to have their two main principles. Charlie Young, heads up their acquisitions, capital raising, and debt. He's going to be talking about buying deals at a discount, raising deals effectively continuing to millions of dollars. Then Dave is going to talk about their management company.
They're going to talk about how they've pivoted and how they're using technology to add value to their existing assets. I'm passionate right now, but I just couldn't imagine somebody saying, "Ah, I don't want to attend this event. It's too expensive."
I just talked to Kiyosaki yesterday. I was interviewing him. He thinks this is going to be a depression. But the thing is, in the depression is when some of the most successful people created their companies like John Rockefeller Sr. Some people, if there's a depression, they're getting crushed but some will thrive. What side of that coin do you want to be on?
The Perfect Storm
Brad: So it's going to be time-sensitive, critical information. And then you know my take on this is that I still believe there's going to be a perfect storm. Like the stimulus packages are running out, and apartments have been very, very resilient, which is why I still love them. And the tax benefits are amazing for at least another few years, which is why I still love them, but there's going to be some blood on the streets.
They say that until the tide goes in, you don't know who's swimming naked or something. I mean, there's a lot of people out there that have an average level of commitment, an average level of skill, an average team.
Darin: Here's what you did. So part of it looks, it's a conference, and Brad Sumrok's going to make money for having the attendees come.
Brad: But not really, because I got to pay some of these speakers.
Darin: I would imagine there's a profit there. I hope there's a profit there. I mean, why do it if there's no profit? But here's the thing, you've been in the business for a long time and you've spent time developing these relationships. Such that they are willing to come to one of your events and share with people that you bring together. I mean, that's huge. I could tell you that, you went and hired Tom Wheelwright. He ended up saving you a ton of money in taxes, then you went and shared that with all the people that are members of your group, and also all the people that go to all your conferences.
The Perks of Joining a Multifamily Mentorship Program
Darin: When I first joined, I had another student come up to me. And we were just at one of the networking sessions having a beer together and he recommended that I read Tom Wheelwright's book and so I did. I have another business and I've been paying significant taxes for years. And because of reading that book and the strategies in there, I ended up upping my real estate game and getting a lot of depreciation, and it significantly reduced my taxes overall. Because I was able to take a depreciation tax loss on the real estate side and apply it against the income on my other business.
He probably wouldn't have given me that recommendation had you not introduced Tom Wheelwright to the group. So there's a real true benefit that can happen by listening to these folks.
Brad: So, one of the other things you could look at as this conference is all about leverage. And again, when is somebody going to have the opportunity to listen to Grant Cardone specifically going to be talking about apartments and what he's doing right now. Kiyosaki is going to be talking about one of his favorite asset classes – apartments, so he's going to be sharing about what he thinks is coming and what other things he's investing in, his strategies for partnering, and what he's not doing.
So sure, you could go out and try to get meetings with these people on your own but to have all this wisdom, experience, and talent, not to mention when working with my team to figure out how to. And we've got it pretty much figured out how we're going to create an amazing networking opportunities virtually. We have bonuses and stuff, that I don't need to go into that now.
Brad: For people that invest in a ticket to the AIMNATCON, they're also going to get my home study course for free and come to a future Sumrok event, whether it's virtual or in person. So we're just stacking up the offer to make it so irresistible because the truth is that I'm passionate about teaching and making an impact. It's not about the money. I can make more money going out and buying an apartment, which I'm going to do and still doing.
Darin: Awesome. I'm going to take a little turn here – fear. Talk to me about a time that you were afraid to do something, and how did you push yourself through that fear?
Brad: Well, this is interesting. I don't want to say I have a lot of fear, but I'm good at overcoming my fear and take action. But sometimes I wake up, like when I do an event, I'm like, "Well, what if nobody shows up?" Or like before COVID, we'd do these bus tours. And I'm like, "Well, what if the buses break down? What if the buses don't show up?"
We've got to 250, and they fly in from all over the country and I'm thinking, what if the buses don't show up? So I get all these fears. The difference is that some people, get those fears and then they stop in their tracks. So being 100% transparent, I have fear every day. I grew up with a scarcity mindset. Like money was tight. Anything that resources were tight, finances were tight and that's how I grew up. I don't want to say it this way, because I don't want to believe it and put it out there.
How to Deal With Fear While Running a Multifamily Mentorship Program
Brad: But there always might be a part of me that has fears of what might happen. But the difference is, when I have fear, the thing that I do is ask myself "Has there ever been a time when I was fearful and I took action and had a successful result?" Then I'll just start stacking all those things like yeah, I've done 20-some events, and I always have a lot of people show up. And I've done all these bus tours. We'd have six a year for seven years. So one out of 42 times one bus broke down, and we had to load up a bunch of people on a bus, and it wasn't the end of the world. Now, I have a team of people. So, things don't always go right.
I have a fear that every deal I'm going to buy is going to be a bad deal, even though I trust my process. But that's the thing, I'm looking at the deal. So like the last deal I won, or one of the deals like Berkshire Square.
At the time it was 92,000 a door. Again, in June of 2018. I'm thinking, why did I get the deal? Like, that no one else wanted. Why did I get that? Am I the highest bidder? And the broker is like, "No, Brad, you're not the highest bidder. It's all because of the relationship." And I believe that but I'm also wondering, is that really true? Like, am I just the highest bidder?" Because you never really know. They don't tell you who. They don't really tell you all the bids that came in, right. So I've been sitting and I'm like, man, I must have been the highest bidder. What am I doing wrong?
Everyone Has Fears
Brad: What I'd like to share with people is even with 18 years' experience, we have those thoughts. But then I say, "Wait, have I ever felt this way before? And how did those deals turn out?" They turned out great, and I could say that deal has been one of the best deals I have ever done. I paid 11.7, now it's probably worth like 16 million.
Darin: I mean, the thing about it is like you said, everybody has fear but some people let it stop them from taking action. I think what you said was a great example is to think back in your mind. Everybody has these little mini success stories where they were scared of something, whether it's small or big, and they moved forward anyway. It was a positive result. If you can think of that and use that to help propel you forward on the other times you're scared.
You mentioned a lot of things that you do over and over again and you're still scared. But you're doing something for the first time, there's a lot of fear. You're not going to have 100% of the information. You need to get educated, get as much information as you can get. Then you're going to have to make a decision, and it's not going to be perfect.
Brad: Having that mentor, and that leverage of other people that have done it takes away the fear too. Here’s an example. I was in Jackson, Wyoming recently and we went horseback riding. Maybe I’ve done horseback riding once in my life. So we’re not doing horseback riding but they told us we’re going to do barrel racing. Like you do on a rodeo. I’m thinking, I’ve barely ridden a horse. How am I going to gallop into barrel racing? And I have my cowboy hat on. I’m thinking at least I’ll get some good pictures.
Take Action in Spite of Fear
Brad: But then the instructor did something terrible to me. She goes, I wouldn’t recommend you wear your hat. I said, why not? She said because in the past somebody’s hat blew off when they were galloping. And it landed on the rear of the horse. It spooked the horse, and the horse threw up his front legs and threw the rider off. And I'm thinking, oh, my Jesus, why are you telling me this?
And all of a sudden, I had this vision, and I hate to mention, but I had this vision of like Christopher Reeves. I'm like, oh, my God, why am I on this horse? I don't want to get thrown off. Now, I can't even get my cool pictures with my cowboy hat. And now I have this vision of falling off the horse. Truthfully, it's in that moment that stops people.
Then I thought, hey, Brad, have you ever been uncomfortable doing anything else, and then you stretch yourself, and you push through it and you were successful? I'm thinking, I have this whole team of instructors here. They take people out every day, and they teach them how to gallop on a horse and ride around a barrel. There are nine other friends of mine that have never done it either, and we're all doing this together. So that's what gave me the confidence to continue with that lesson, and out of nine people.
Then, we actually had a race. I came in third place out of nine people, and I almost backed out. Seriously, I almost backed out. The point is fear is very powerful, and we all experience it. And courage is not lacking fear. Courage is taking action in spite of fear, taking action in a way that's mitigating risk. That's doing it by surrounding yourself with the right team and the right people.
Best Practices of a Multifamily Mentorship Program
Darin: That's great. I don't want to talk a lot about COVID-19 because it's talked about a lot. But relating to the multifamily mentorship program that you have, one of the things that I was impressed with was you could've retreated but you didn't. In a moment when something that nobody could’ve expected, you stood up and said, "Instead of talking every two months, I'm going to have a weekly call. Let's get all the big questions out there and share information. Let's talk about best practices, what kind of action plans can we put together?" You brought your community together in a time that was a difficult time. So, let's talk through that.
Brad: Yes. I'm glad we're talking about COVID because we should talk about it. But I'm not going to talk about masks and no masks, and pandemics or not a pandemic. It is what it is and whatever people believe is their reality. But what I will say is yes, you're looking at an organization that generally conducts business, revenue-generating business, and fulfillment by conducting live events, networking, bus doors, educational events, seminars. When COVID hit, the first two weeks was probably a shock for everybody. It was like, "How long is this going to last? Is this going to open back up?"
But once it became evident that it wasn't opening soon, we knew that we had to do something. That's another thing about fear. The truth is, and this is why I love going to Tony Robbins' events too. Tony said don't think about how you're going to do it. Think about what you want to achieve and why. And so when COVID hit, I thought, what is it that I want to achieve and why?
Corresponding Strategy and Expectations
Brad: We didn't start off being mission-based, but now we're mission-based, and we have a big mission. I already shared this; the impact and mentor. I got over a million people to financial freedom by investing in apartments, uplifting working-class communities. And one of the ways to do that is to help people not lose money, in other ways, to keep preaching about why apartments are a good thing to do.
During COVID we knew that I have a lot of people that have uncertainty. I've never been through a pandemic but I've been through 2008, what we used to call the Great Recession. I know from that experience, there are a lot of people that had cold feet, there were a lot of people that wanted to wait. Some people just waited too long. They waited until 2012, '13, '14. If you got it in 2014, you are still in an upmarket up until COVID. But the best opportunity was in 2011.
Even two deals I bought in 2008, I don't regret buying them. We made money on those deals because we had the right strategy, the right expectations, the right financing, the right debt structure. I knew I needed to do something. I just didn't know how I was going to do it. And what evolved was a webinar with my students every other month as part of our normal program. For six weeks in a row, we did weekly webinars where we just talked about what was going on. We had students sharing about their collections. We were all in this together. There were rumors of rent strikes, there were eviction moratoriums. Some properties nationally because of the type of debt they have on it, they can't evict people.
Finding Ways to Bring the Community Together
Brad: By bringing in our community together weekly in the multifamily mentorship program, we're able to add value to so many people and give what they really want, which isn't just information. It's the connection, community, belongingness, confidence. My only regret is that we can't just continue at that pace because I'm traveling again. But what it did is make people more connected, confident, and comfortable. Multifamily is here to stay and I'm telling you there's going to be great buying opportunities.
Darin: Yes. Look at your speakers that are coming. You have access to people that I and other people don't. I remember one of the stimulus packages came out. We didn't know how to heads or tails. But you had had a conversation with Tom Wheelwright and then you actually asked him to come on. He came on and counseled all of us on what he was reading and what the impact was.
You took a resource that you were close to and then you provided that to the rest of us, which I thought was fantastic. So, props to you for bringing everybody together in a very difficult time.
So, what do you do for fun outside of real estate? I see that you travel all over the world. Is that what you and Jen like to do?
Brad: We love to travel. And obviously, we're not traveling since March. But one of the blessings that came out of this, and again, I encourage everybody no matter how bad things might be, think of something good that came out of it. We just came back from Deer Valley, Arches National Park, Moab, Utah. Beautiful places that I probably never would have thought to go, because I would have been more drawn to Sicily than Utah.
Making Things Possible With Workarounds
Brad: We went to Jackson, Wyoming, and then Yellowstone National Park. I love the outdoors and we had an amazing time. On our next trip, we're going to Sedona and the Grand Canyon. So we love to travel, and there's a lot of beautiful, beautiful places right here in the United States. So obviously, we're not going to places where we have to quarantine because that's extremely inconvenient.
I mean, it's crazy. If I could just go down this tangent for a minute? No matter what you think about it like I can't see my dad. My dad's in Pennsylvania, he's 83. I really want to go see my dad. If I go, I would have to quarantine in his home for 14 days, but I don't even have 14 days to go there. So, it's not really feasible for me to see my dad. But thankfully with FaceTime, we could virtually see each other but it's not the same. So, one of my mentors, Jesse Itzler, says you never know when your bus is going to stop.
I never know when my dad's bus ride is going to stop, I never know when mine is going to stop. I'll just say this, I just think it's a shame that we can't travel within the borders of our own country. Then I'm sure you filled out a COVID questionnaire, and it says, "Have you been to a high-risk area?" I thought how do I answer that question? Our whole country is at high risk. If you look at it compared to the rest of the world, everywhere I go is high risk. What do I do? Put yes down and then I can't go to the doctor? So not going there.
Change Is Something That Happens Within
Brad: The other thing we do for fun, and some people may not think it's fun, I used to love to eat out.
Darin: You look like you're very physically fit right now.
Brad: I have lost 18 pounds since COVID. Here's another thing I noticed, when I observe people, they either put on weight or lost it. There are very few that have been maintained. And unfortunately, what I see is more than 50% of people that I've seen have gained weight. When you talked about how we pivoted our business and started doing these weekly calls with all of our students. The first two weeks, I and my wife ordered pizza six times in two weeks.
After that, I thought this COVID might be around for a while. We can't keep ordering pizza, and that's when I decided that now is the best time. If you think about the challenges people have with getting a healthier diet, one of them is traveling all the time. We're in hotels, always eating out. I had to shift because every mentor that I've had on health said the first thing you want to do is control what you eat. The more you eat at home, the more you control what you eat.
In the first few weeks, all the restaurants were closed. So I thought I'm going to change how I eat. Then I found the coach, and I followed their protocol and has been proven, same thing I talked about with mentoring. I found somebody that had the heart of a teacher that guides and coaches people and has an amazing track record. Not just with themselves, but all their clients. Today, I'm on day 95 of when I totally changed my diet. I went from 173 pounds to 154.
Next Big Stretch of a Multifamily Mentorship Program
Darin: Brad, you've accomplished so much. I mean, you've built this ecosystem in the multifamily mentorship program. Just a huge network of like-minded people and you've impacted so many people. You've quoted a number of 181 people that have improved their net worth by a million or more. What's your next big stretch goal?
Brad: Well, there's so many. And to me, it all comes back to our mission, to impact, and guide and mentor a million-plus people to become financially free. I mean, I'm not sure where to start, but we're going to hire more people. We're going to hire more people in all aspects of our company, customer support, and customer service, continuing to create those raving fans, and creating success stories is very important. We need more sophisticated sales and marketing, we need more sophisticated systems.
One of the things that we've been doing as company owners, during this time as well, is working on things that maybe aren't obvious to the customer. But things that like, just take time to implement, like putting in the right processes and systems. So, some of these things just take time. And when you're young in your business, you're all about growing. While we're still trying to grow and we will, 2020 was a great year to really focus a little bit internally. So we're working on things now that maybe people aren't seeing the benefit of yet, but that I believe they will in the near future. Things like our IT systems, and our tracking system and things that are going to help us be more effective. So that's one of the things that we're working on.
Darin: That's a huge goal to have a million people reach financial freedom. Where are you in that spectrum right now just like high level 2019 because that was a full year. Total amount of properties purchased from your students.
Brad: The ones we track and again, I'm sure there's some that we lost track of. But 2019, Sumrok students purchased 62 apartment buildings, totaling 9800 units. And the total asset volume of those 62 purchases was over three-fourths of a billion dollars, so like 780 million. The average transaction size was 140 units. So we're not going to talk to you about buying an eightplex. We're going to talk to you about buying an 80-unit building, so get ready for that.
Darin: Get ready is right. So Brad, this was amazing. I really appreciate you coming on the show and sharing with the listeners. I can tell you I went to the last two years of AIMNATCON, and they were worth it. So, I hope that you can attend. Brad, how can people find out more about you, and how can people find out more about this conference?
Brad: The best way is bradsumrok.com. And from there, you can see our national conference, our rat race to retirement weekend training events. The next event that we're doing, as we talked about is the September 19th and 20th Virtual Apartment Investor National Conference. That actually has its own website. That is not to confuse people. Just go to bradsumrok.com, you'll see the Events tab, you'll see the National Conference there. We have great things that we're doing on pricing for that too, just to make sure.
Darin: What a great lineup. Go back over Grant Cardone, Tom Wheelwright, Robert Kiyosaki and so much more. Thank you for leveraging your relationships and bringing it to the masses via your multifamily mentorship program. I really appreciate that. I appreciate the people that you've brought into the group as coaches. I've worked with a number of the coaches. Just have been spot on, great people to work with. And people in the group just have a heart for helping each other, and I've got to give you credit for building that network. So, thank you!