Living The Red Life - Empire Lessons From Buying 10,000 Apartments, Jets & More w/ Brad Sumrok

Episode Date: June 10, 2024

Today I've got Brad Sumrok in the house. Termed "The Apartment King". We discuss the conventional wisdom surrounding education and real estate investment. Brad explains how societal norms lead many to unquestioningly spend large sums on a traditional college education, only to find limited job prospects afterward. Reflecting on his own experience, Brad details his journey through the corporate world, achieving degrees and following the expected path until it left him unfulfilled and financially insecure. His turning point came after reading Rich Dad Poor Dad, which inspired him to explore real estate as a viable alternative to traditional employment.Brad shares how attending seminars and seeking mentorship transformed his career, allowing him to amass a portfolio of over 7,800 apartment units. Initially intimidated by large real estate deals, he emphasizes the importance of starting small and gradually taking on bigger projects. His story highlights how multifamily properties, starting with a 32-unit building, offered a more streamlined and profitable path than single-family investments. He also underscores the value of investing in oneself through education and networking, as these personal investments often yield higher returns than any single asset class. The episode stresses the power of community and continuous learning in achieving long-term success.CHAPTER TITLES1:16 - Brad's Background and Real Estate Journey2:29 - Initial Real Estate Exposure3:04 - First Real Estate Conference Experience4:02 - First Investment: From Single-Family to Multifamily4:44 - Scaling Investments: Raising Capital and Larger Deals6:10 - Financing and Management of Large Multifamily Properties6:52 - Transition to Education and Mentorship8:21 - Building a Community and Event-Based Learning9:04 - Challenges and Relationships in Business11:38 - Mindset and Lessons from Large Deals14:13 - Community Impact vs. Individual Success17:51 - Is Real Estate a Great Investment?18:37 - Investing in Yourself: The Key to Success18:53 - Closing Thoughts & EncouragementConnect with Rudy Mawer:LinkedInInstagramFacebookTwitter

We're conditioned in our society here in the U.S. of A. Nobody thinks twice about paying $50,000 a year to get a four-year degree. So you could get a job and maybe not even get a job and move back home with your parents. But like, if you pay $500 to go to a seminar for a weekend, your friends think you're an idiot. I did everything right. Went to school, got good grades, studied hard. My parents don't have college education, so they taught me like that was the path for success. So I did all that and it worked until it didn't. And I found myself like after 14 years of corporate America,

not being where I wanted to be. I had no freedom, no security, no certainty and picked up the Rich Dad, Poor Dad book. And Robert Kiyosaki talked a lot about real estate. I have one big question. Is real estate a great investment? I would say the better investment than real estate or ads or funnels or Amazon, no matter what it is, the better investment than any asset class or businesses. My name's Rudy Moore, host of Living the Red Life podcast,

and I'm here to change the way you see your life in your earpiece every single week. If you're ready to start living the red life, ditch the blue pill, take the red pill, join me in Wonderland and change your life. What's up guys? Welcome back to another episode of Living the Red Life. Today we're going to talk all about real estate, invest in your money wisely and we're here with Brad the Apartment King. Brad, what's up? Hey man, I'm happy to be here. I'm glad we finally made this happen. It's been, you know, trying to get in. And obviously, you're very busy. You know, you've got about, what, 7,000 apartments. I'm currently in about 7,800 doors. I've had 10,000.

Crazy. It's a good time to, last few years was a good time to sell. Not right now, but years ago, I was selling. Wow, that's crazy. 7,000. Wow. And on top of that, you know, what we've kind of clapped on and chat about a lot is I have a big mastermind for marketers and entrepreneurs, and you've kind of done the same, re-educating people on all of your success in real estate, how they can do the same. So to school, got good grades, studied hard. My parents don't have college education. So they taught me that was the path for success. So I did all that

and did everything right. And it worked until it didn't. I got a job, tried to move up in the company, got an MBA. Then I found myself laid off through corporate acquisitions and got another job then I got fired like actually got fired for lack of performance I was in sales and it was tough and I found myself like after 14 years of corporate America not being where I wanted to be and doing everything right actually wasn't getting where I wanted to go so So I had no freedom, no security, no certainty, and picked up the Rich Dad, Poor Dad book 20 years ago. And it was like, okay, all these lights went off. And that led me down the path of going to seminars, looking for mentors, going to conferences. And Robert Kiyosaki talked a lot about real estate. So that's kind of how I got interested in real estate.

Wow. That's crazy. So I love, I did the college real estate. So yeah, that's kind of how I got interested in real estate. Wow, that's crazy. So I love like, you know, I did the college route too, right? And that's what you think. And you think, oh, if you become this, you know, I did a master's degree, Nelly did a PhD because I'm like, that's the way to become rich. And my catalyst book was the four hour work week. So you're a rich dad, poor dad. Yeah.

So how did the real estate start, right? Because it's like 10,000 units, but it started at a conference. Well, look, I remember going to a conference and a real estate training event. And day one, they talked about single family rentals. And Kiyosaki talks about getting out of the rat race. He's going to have a game called the cashflow game or something. And so my first goal was to make enough income from my rental properties that I could quit my job. It was mine too. That's what they say is getting out of the rat race or financial independence. And so back in the day, that was 10,000 a month because that was my paycheck called W-2 income. And so I penciled out, I need 40 single family rentals. And I was like,

oh, that's a lot to deal with. But I was committed. It was the day one of the seminar. I went out and wrote up my goals. And then day two, they taught about multifamily rentals, about this idea of instead of doing all these single families to have all of your doors, the units we call doors in business, to have all your doors on one site. And I was like, wow, that seems a lot. It makes sense. Yeah, yeah. It seems simpler rather than having all these properties to have eight, 12, 15, 20, 30 doors on one property. So I skipped all the single family, duplex, fourplex stuff. And my first investment I ever did was 32 units. Wow. Well, then the first one I ever did, and it seemed like a really big deal.

Well, some people start eight full. Yeah. 32. But what I found was it was actually easier. Yeah. And I did 32 and 30, and then I ran out of money because part of this doing everything right thing, I live below my means and save. Yeah, yeah.

I mean, so the first few deals, I actually had money to buy. But then I was out of money because they were all tied up in my deals. And I remember my third deal was 250 units and a broker brought me the deal and I didn't have any money. But what I had was I had confidence, I had skill sets, I had an investor database because at this point, now I'm known as the guy that has 62 units. And I still had a job, by the way. And I was about to quit my job and I got this 250 unit deal. And I was able to raise money from people that I met at investment clubs and investor communities. And that's when I learned about, wow, I could buy 30 units with my own money, but I could buy 250 units with other people's money and we do it by where it's called being the general partner of the deal and you take a piece

of the deal and so I buy this 20 250 unit property mostly with other people's money but I take 20 percent of the deal and then since then I've done over like 10,000 units where I'm like a general partner taking 20% of the deal. But basically you're getting 50 doors for free by yourself, right? If you've got 250 doors and you get 20%. Yeah. That's crazy. So you're getting more for free than your first two units that you did yourself. Yeah. And the lenders like them better. They're more easily financed. You could get no non-recourse debt, which is no personal liability. Oh, wow. You have personal liability on your car, your house, your duplex that you buy, your house hack deals, or whatever it is

that you do, but you go buy 200 units. You have no personal liability. The professional management companies like those properties. They like them better than the 30 units. And you go buy an eight unit, like good luck. You're going to manage it yourself. Yeah. That's crazy. And then how did that, fast forward a little, now you're obviously still have all that and it's passive, mostly I would imagine. And you'll focus more on the education side of the brand now and educating other people to do it? How's that going? Yeah. Well, the two businesses, like I still am very active doing deals. Yeah. You know, did one recently, 286 unit is a general partner. But the reason I got an education is, you know,

that's how I started. And if it wasn't for the generosity of the guy and his company that was like, you know, people sometimes give seminars about it. And it's not true. It's like, look, I mean, I guess it could be true if the guy's just in it for the money or the people were just in it for the money. But there was a guy 20 years ago that was generous enough to teach what it is that he did. If it wasn't for him, I probably wouldn't have gotten started. And so I got started, had success. And then I also love going to events, I still do, like Tony Robbins and stuff. Where we met, right? We met at an event. My vision was like, hey, if I could be like the Tony Robbins of apartment

investing, where I could do valuable conferences at a low price point and have a big impact, it's now about impacting people. So we do a lot of events. We do trainings. I have a lot of free content. And of course, we have higher value programs where people could work with me and my team personally. And I love it. So I still invest. Very active in the market. but what I love the most

is doing the education and what I tell people, doing deals puts money in the bank account. When you're doing conferences and changing people's lives and people come up to you and thank you, that's special because it's in your soul. It's so fulfilling and rewarding. Yeah. I think what's crazy with the event space is like you said a lot of it i think people give a bad rap because it's like someone gets sold and then they don't do the work and then they say it's a scam and obviously there are awesome you know big gurus that i don't mean care as much as people like me and you where we actually enjoy working with the clients and seeing those life-changing results. And I think maybe the difference is me and you were those people 10 or 20 years ago,

right? Like you said, you're starting out and I listened to the four-hour work week and I actually got into real estate. I bought some student houses, which I still own. And my goal there was like five grand a month. If I make five grand a month in the UK, that's crazy money. No one's earning that. And I actually, by 23, when I in the UK, that's crazy money. No one's earning that. And I actually, by 23, when I left the UK, I was at that point. And if I was still there, I'd probably have a hundred student houses. I love real estate. And obviously now I got into more socials and marketing. But what about the soft skills of business, right? Like during 10,000 doors and then this side, what are some of the biggest business lessons you've had? Well, look, man, you guess one of

the things that I'm proud of is I haven't made very many enemies. Like I've been in the business a long time, you know, and I know brokers, I know property owners, I know some of the institutions, I know retail investors. And while you can't make everybody happy, and that could also be stressful because it occurs to me that, at least for me, but maybe people like us, we want to be liked and we want everybody happy and we just can't do it. But I've also made very few enemies. And just being able to have workable relationships with people over the years, it pays back. And it just pays back to be humble when you work with people. You know, if you don't do what you say you're going to do, you apologize and you fix the

messes that you created along the way and none of us are perfect. But I think just being intentional and humble and cleaning up any messes or miscommunications or mis-expectations along the way, I think goes a long way. Yeah, I think that's important. I've been in business about 10 years and I can probably count on a hand, maybe five people that have really screwed me over just pure and ethically. But I think apart from those few right which isn't many in 10 years that this community like we're all friends with each other and people sometimes say

who are your competitors or aren't they your competitors i'm like we're in a weird industry where we're all like best friends you know like and obviously you're kind of more in this marketing world too now and see that but i'm'm sure, you know, connections and building good relationships, whether it's real estate, whether it's marketing, whether it's owning restaurants in downtown Miami or South Beach, Miami, you can't ignore that. It's one of the oldest, you know, old school habits of good business, right? Right. Like we met, when did we meet? Three or four years ago. Yeah. Right. And, you know, i text you i'm here in miami neighborhood i text you and three hours later here we are in a podcast yeah yeah yeah and and that's just

but that came also out of meeting at events so it's like the connections of events too you know we've you've came and spoke at my event now and and i'm sure one day i'll be knocking on one of your doors to uh help with some real estate when I finally do more in the US. So yeah, that power of the connections and the human interaction, I mean, not everyone understands it, but the people that do always win. Yeah. It's any business that I, and I specialize in multifamily buildings, multifamily real estate, and it's certainly true there that relationships are the biggest factor, long-term and success. I mean, you can get a short-term win and burn a bridge, but long-term success is going to

be the relationships you have with people in the industry. And I think every industry is similar where, like you said, everybody knows each other. You know, there's a saying, it's a good old boy network. You don't have to be a male to be a better saying in Texas. It's a good old boy network you don't have to be a male to be but it's saying in texas it's a good old boy network um and that just means that like what you know and who you know is just as important or more important than what you know and i think that's true in any type of business and now that i'm you know i i put myself out there i go to mastermind events i go to networking events, I, even a few years ago, I was like, Hey, if I'm not speaking on the stage, I ain't going. And that was my ego speaking.

Yeah. Yeah. And now it's like, I'm back and saying, Hey, look, if, if like, there's a lot of ways that I could add value and get value from going to events, even if I'm not on the stage and it's just running into people like you and building those relationships. Yeah, totally. And what about for you on top of that, doing $10,000, you've done massive tens of millions of dollars in transactions, and then you've obviously started to grow this coaching education business to millions of dollars. What are some of the lessons from those big deals? From the big deals? Well, the big deals aren't that much harder than the small ones.

Okay. That's a lesson in itself, right? It's a big mindset lesson. It's mindset. Yeah. Because for a while I was comfortable doing like, you know, and I started doing deals, apartment deals in 2002. And I got to a level in around 2018 that I got comfortable with a $30 million deal.

Okay. But I would see people doing 50, 100, 200 million, and I would be like, oh my God, how are they doing that? Well, it's the same thing. My first deal was 1 million, that 32 unit deal, and I went from one to 30. And again, it's a lot about the people you associate with and you realize the people that are doing $100 million deals are not smarter than you. They're just thinking differently. Yeah. Some of them are probably less smart than you too. They're just taking more risks.

Sometimes the more intellectual you are, it actually gets in the way. Well, we have a lot of experts that make no money because they overanalyze everything. And I have one friend, I always say, you know, and he'll say he's like the dumbest guy in the room, but he just like gets on with it, you know? So it's kind of funny how that works. Yeah. Like, you know, but the friends of mine, Kiyosaki and Kenny McElroy, they have a saying to say, you know, C students, YA students work for C students. They're taught to be like, buy the book, to do everything right, to not take risk. Whereas C students almost grew up like, hey, like, what the hell? Like, I don't have anything to lose. Let's go for it.

Yeah, yeah, yeah. And they tend to be more entrepreneurial. Yeah, that's funny. Yeah. What about building the community side? Because you're hosting big events. You have this big mastermind coaching programs now. You've built that to many millions i know it's like very successful um you know maybe not 10 000 door level quite yet but it's very successful so what about the that side because

that was probably new to you right learning that side of things well what i learned is i really love the community part yeah like it it's fulfilling and and someone asked me the other day because because I'm going through a pivot right now, figuring out what's next for me in these next five years of my life and this journey that we're all on in business. And someone was like, okay, Brad, let's say you do 12 million a year in your coaching business. What if you had 12 clients that paid you a million dollars each and then you don't need a team, you don't need to do events, it's just you with 12 people and you worked with

them one-on-one, how would that feel? Because I'm going through this pivot of like, oh, I want to take my company. And I realized it would be lonely. Yeah, I wouldn't want that. I'd want both. Yeah. That'd be my answer. Yeah. But I wouldn't just want that. I'd want both. That'd be my answer. But I wouldn't just want that. And it's like, well, why? And it's like, because something happens when you have a community of a thousand people that depend on you. Something happens to your soul when you are on a stage in front of 50, 100, 500 people that came to you thirsty for

knowledge and information. There's an impact factor. Then there's a community factor. So look, I might be able to be more profitable if I didn't have a team. And I love my team. I love community leaders. And my team and their families depend on me for a paycheck and for motivation and leadership. And so it's not just about profit margin. It's not just about having high paying clients. It's like I would lose out on so many things that I built, the team, the community, the people that depend on you for the inspiration. Even people that are listening to this podcast that never met me. I hope in some way, shape or form that I impact them and motivate them and cause them to go out and do something. If it's not way, shape, or form that I impact them and motivate them and cause them to

go out and do something. If it's not investing in apartments, it's like pursue your dream and have a powerful why and don't just play it safe all the time because that's not going to get you to where you want to go. But you also have to be calculated and take on some risk. But the best way to mitigate that is through education and surrounding yourself with other people that are doing it. So you get confidence and you have evidence success around you and have people that can help you along the way. I love that. And okay, so I have, what, we're getting towards the end of today, but I have one big question. Is real estate a great investment? It is, man. It's a great investment. And I don't know if

these numbers are true, but they, I don't know who they are. I say, well, 90% of millionaires became millionaires through real estate. I don't know if that's true or if the real estate gurus- Or I think they at least have 90%. 90% at least of real estate. It's a proven way to go. But I would say the better investment than real estate or ads or funnels or Amazon, no matter what it is, the better investment than any asset class or business is the investments you make in yourself. And I know many people heard that before, but they hear it, but they ain't doing it. Yeah, I think we see it, right? I remember paying $50K, $100K to masterminds when I was in my mid-20s. But they don't, they hear it, but they ain't doing it. Yeah, I think we see it, right? We pay 50K. Like I remember paying 50K, 100K to masterminds when I was 20, in my mid twenties. And I'm like making good money in my business.

But I'm like, that's still a lot of money for like free events a year. But yeah, that's what it boils down to, right? But it's the people you come out of without the back of that. I mean, but we're conditioned in our society here in the US of A. I mean, but we're conditioned in our society here in the U.S. of A., like nobody thinks twice about paying $50,000 a year

to get a four-year degree. So that's $200,000. $200,000 so you could get a job and maybe not even get a job and move back home with your parents. And that's okay. And then Biden's like forgiving all that stuff, which is all another topic.

But like, if you pay $500 to go to a seminar for a weekend, $50,000, your friends think you're an idiot. Yeah, yeah. But like, and I know, like my friend, and I thought that the first time I went to a seminar, it was 500 bucks. And I was in the back of the room like this on day one. But day two, I was in the front,

taking all this notes because somehow like it made sense. Yeah. Yeah. Okay. You know? Yeah. I mean, I mean, look, the, the, the, the, the, the world's very different compared to entrepreneurs. Right. And I mean, I always say one of my greatest gifts was not caring what other people thought. So I just got on with it and did whatever I wanted to do. Right. And I mean, that holds so many people back is that fear of like, should I do this? What will people think? Is this like, this isn't normal. And I, my whole life, I loved not being normal. So it fitted me, but I think most people are the opposites, but back to the real estate, you know, the reason I had to ask you that question is I always see people debate like real estate is still a good investment. Is it a slug, blah, blah, blah. And I blah. And I think it's beyond the scope of today,

but there's a lot of tax benefits to real estate if it's done right as well. I mean, there's three things I like about real estate. One is there should be cashflow. Yeah. So we need cashflow. If you have a job, you have a job because it gives you a paycheck, which we call cashflow. Well, real estate, if you do it right, will have more cash. You'll have cash left over at the end of every month after you pay all the billings and pay your debt. So that's the cashflow. And then if you do it right, it goes up in value. And it always goes up in value over the long term. There could be ups and downs in market cycles, but it goes up in value over the long term. And with multifamily real estate, there are strategies

where you could raise the value. It's called value add strategy. And the tax incentives are incredible. And I could just say this, I haven't paid federal income tax on a eight-figure net profit in four years. I've paid no federal income tax. So the government incentivizes us because they want to pay. They incentivize us to invest in clean energy. They incentivize us to invest in electric cars, right? They incentivize us to invest in housing. So when you do that, it's not a loophole. It's actually designed to get us to direct our money into different industries and housing is one of those industries. Yeah. I love it. All right. So last question, you know, you've probably got people hooks on the, we haven't even mentioned the private jet. We'll save that for another day, but, you know,

talking about the, the four years, no tax thousand, you know, 10,000 doors, building your coaching business to 12 million, right? Where do people learn and find out more about you hey it's real easy they just go to brad some rock.com b-r-a-d-s-u-m-r-o-k no c my last name and that's also where you can find me on instagram uh i i think people are still on facebook linkedin cool um i'm not like you on social and i i still respond to my own social media I do a little I know you do but yeah that's the way

Brad Subrock thank you for coming on guys you heard it here 10,000 doors a lot of mindset tips and a bunch more business tips on top Brad thank you for coming on guys until next time keep living the red life I'll see you guys soon.