Raising Private Money for Beginners | Brad Shepherd

In this episode, Dalyn Hazell sits down with Brad Shepherd to talk about how to raise private money, find deals, start a private email list and a lot more!

Brad Shepherd is the Managing Partner of SugarHouse  Investments. Real estate investing has been part of Brad’s life since his college days. He earned his undergraduate degree in Finance with an eye towards commercial real estate, interning with one of the premier large commercial property portfolio companies in the Northwest. He purchased his first rental property within months of graduating college, and quickly added several more. His experience includes management of hotel and vacation property, development of retail and hospitality space, and raising capital from both domestic and international investors. He's been exclusively focused on capital raising for commercial syndications since 2017.

Key takeaways from this episode:

-How to raise capital for your business

-The challenging aspects of raising capital

-Where to find money resources

-How to build momentum with raising money machine

-How an email list can drive your business

-The challenge of email list

-How does a flipper secure financing

-How RIA (Real Estate Investor Association) helps build money partner

Subscribe, Listen to our episodes and leave us a review:

Apple: https://podcasts.apple.com/us/podcast/real-estate-investing-for-freedom/id1570870735

Spotify: https://open.spotify.com/show/2d3nMp137jfw6MDyPPsY3j

Google: https://podcasts.google.com/feed/aHR0cHM6Ly9mZWVkcy5idXp6c3Byb3V0LmNvbS8xNzkxNDk0LnJzcw==

Connect with Guest, Brad Shepherd:

Website: https://www.sugarhouseinvestments.com/

Email: brad@sugarhouseinvestments.com

Twitter: https://twitter.com/bradshep

Connect with the Host, Dalyn Hazell:

Facebook: https://www.facebook.com/dalyn.hazell/

Instagram: https://www.instagram.com/dhazell24/

Email: dalyndhazell@gmail.com

Transcript

Introduction  0:00  

This is the real estate investing for Freedom podcast, where we bring on the experts to teach you the golden nuggets of real estate investing. So you can escape the rat race and start living life on your terms. Now, here's your host Dalyn Hazell.

Dalyn Hazell  0:22  

Hey, and welcome back to another episode of the podcast, if you've ever wanted to learn how to raise private money, that money is really cheap, and it'll allow you to expand, buy multiple properties at a time and flip wholesale rent. If you ever wanted to raise that kind of money, then this is the episode for you. It's all about building connections and telling other people what you're doing and systematizing that, and that's what we're going to break down today. And if you are a flipper or landlord, you need to be raising money all the time. Finding deals and raising money are really the two most important activities you can do. If you are just wholesaling, then raising money really isn't as important, but still, something to think about for the future. But if you're a flipper or landlord, then make sure you listen to this episode and apply what we talked about because you're going to be able to raise a lot of money with the concepts we teach today. So today's guest is Brad Shepherd, and he's an expert when it comes to raising money. He's been exclusively focusing on capital raising for commercial syndications since 2017. And so I don't care if you're trying to scrape together money for your first single family investment or you're raising money for commercial syndication worth millions of dollars, you need to know how to tactfully raise money. So before that interview with Brad Shepard, we're gonna dive into today's golden nugget of the day. And today's golden nugget is to start an email list. So Brad and I talked extensively today about starting a private email list where you're just updating people where you're at and where you're going. And that will go a long way, emails still get opened in 2021, believe it or not. And it's one of the best foolproof ways to reach your audience because it's free, and it's scalable, and it still works. So figure out how to start an email list, whether that's with MailChimp, or HubSpot, or any of those free tools and start, you know, adding all your contact list to your email list and converting that over. And you'll be surprised at how many people you know and how many people that you can just start a conversation with and of those people, there might be some that reply to your email or reach out to you saying, hey, I really like what you're doing. And that may open the door to private money. You really only need a small handful of private money lenders to build an impressive business. You don't need 10,20, 30 private money lenders, you just need a few. And so that's what I got for you guys today. But here's today's interview with Brad Shepherd. Welcome to the show, Brad Glad you're here.

Brad Shepherd  3:06  

Hey, thanks a lot for having me excited to be here. 

Dalyn Hazell  3:09  

Yes, I am excited as well. So can you give the listeners a short introduction about yourself and what you do in real estate?

Brad Shepherd  3:17  

I can give you the short or the long answer. I'll give you the medium answer. Brad Sheppard recently relocated to Boise, Idaho and moved up here from Austin. So excited about that. And I've been involved in the real estate scene for a good 20 years. That was really where I wanted to focus coming out of college. And the last four years is where I've been focused on commercial syndications. Getting into some of the bigger deals, the team sport of putting together some large syndications, which is just a fancy word for group investments, primarily focused on apartment complexes that we also do some stuff in mobile homes and self storage. And my primary focus within that world is working with the passive investors that come along with us to participate in these opportunities. So that's a little bit about me being happy to expand or on any of those aspects, wherever you want to take it.

Dalyn Hazell  4:13  

Yeah, I checked out your website before this. And you're very heavily focused on adding value to those passive investors and raising money for your large commercial deals. So that's what we're actually going to talk about today, but more focused on maybe a beginner investor who is trying to raise money for their deals, whether they're flipping or implementing the brrrr method. And so we're gonna dive into what that looks like, and some kind of tricks of the trade there. But first of all, can you kind of go into more of the raising capital of your business and how that actually works?

Brad Shepherd  4:46  

Sure, you know, I have experience on the single family side, doing brrrrs working with private lenders on that front, rehabbing properties where I've been able to bring in money from individuals that I want to get involved in real estate but don't want to spend the time on real estate. And so that's come from people I've met in meetup groups, or just from personal networking. On my last couple of deals, I had an orthodontist that just loan me out of his pocket to finance these and that did a couple burns with him. Prior to that, I did a couple of deals with just a husband and wife team that we're still friends with down in Austin, where they were loaning us the money out of their self directed IRAs to do the rehabs. And I've done several with the seller carrying the bulk of the note. And that's always the cleanest and simplest level of those opportunities. turning my attention over to the commercial side, roughly guess four, four and half years ago, you can be darn sure, you know, those are the first people I went to telling them about these opportunities here, on the commercial space where there's even more safety nets in place larger opportunities, more economies of scale, as well. And so you know, of course, it starts with friends and family and past contacts, anybody that you've known from past experience, and then from there going out to broader audiences. And that's one of the fun, challenging aspects of raising capital is when you're branching out to people that you're meeting for the first time to talk specifically about I want you. I want you to write a large check for this investment opportunity. And so there's a lot of getting to know you and trust building that goes along with that. But yeah, so it's fun for me to focus on the investor side, the passive investor side, to share a little bit about my background. In the real estate scene, I've done a lot of different aspects of real estate, what tell them about why I like the commercial syndications and how I work with the the the operators that we partner with, and allow them to focus on what they enjoy the most, what they're good at what's what's made them successful, where they can now take advantage of real estate without having to be the ones dealing with the fix and flips and being, you know, the tenants and toilets and all that stuff comes with landlording as well. 

Dalyn Hazell  7:09  

Sure, yeah, you know, when I think about somebody who's interested in getting into private money lending, or investing in these passive deals, it's got to be someone who has more money than time. And so they've got all this money that they set aside, and they're looking for a decent return that beats out the stock market, or at least is comparable to that. And we can go into why somebody chooses, you know, real estate investment versus the stock market. But certainly, that's what my mind goes to. Is there any other reason that you see why somebody would invest in a fixin flipper, a rehabber, or maybe your syndication deals?

Brad Shepherd  7:47  

Yeah, it really is that you know, everybody's gotten the idea. And I, everybody maybe is too strong, a lot of people have gotten the idea that there are really solid returns to be had in real estate. It comes with some protections that may not come with the typical stock market investment. But a lot of people who get that message also don't want to go out there and be a landlord come home from their nine to five or after taking care of the kids or whatnot, and then go deal with property managers or tenants or county tax protests, from multiple properties, what have you, there's just a lot that goes with it. If you're going to do fix and flips, obviously, that's a very active, I mean, that's a full time job right there and people undersell that sometimes, I mean, that's a very active role when you're fixing and flipping. And so you're right, for individuals who want to participate on the private lending side, yes, someone way or another, they have built up some kind of a capital nest egg for them to then deploy, where they do have more money than time that's certainly in that scenario. And so for younger folks who are working to build up that nest egg, to then deploy into whatever avenue they choose, yeah, maybe some fix and flips where they have more time than money. Makes sense. Some fix and flips and brrrr methods. Awesome. You know, I've done those because it helped me significantly in building up that nest egg. So I don't begrudge anybody from starting. That's a great starting point. It's a great way to build up the war chest. But yeah, it's simply a matter of, you know, individuals who do have more time than money are excited by the returns. They don't want to deal with the hassles. They love having other people take care of you executing the business plan, who have proven track records, go out there and help them achieve those significant returns which more often than not, are stronger than with some more protections going through typically come in a typical stock market investment.

Dalyn Hazell  9:41  

Yeah. And so for us as investors Our job is to look at that need and then fill that need so I just want to put a tangible value here, but if I am a new investor, I haven't done a deal yet. Where should I be looking for money sources? Should I go straight to friends and family or should I try out a hard money lender. And so where should I go for my first foray into real estate investing,

Brad Shepherd  10:07  

Right? I have used hard money lenders, and those are great resources because they are looking at the deal rather than the individual. And primarily the deal, we should say, you know, of course, we're going to look at the individual a little bit. But it's not about your credit report percent. I like the friends and family avenue you use, it's gonna have to start with people that trust you for one reason or another, why do they trust you? And that's not because of your track record. What else? What else do you have to go on in real estate, at least? What else do you have to go on for your friends and family to trust you with some large dollar amount for this opportunity you think is going to do well, and then you should put in all the safety nets that you would put in for any typical in lender, so you add them to the lien, they've got a note on the property, you add them as an additional insured to the, to the insurance policy that you have. So all those safety nets that will help that individual, whether that's a hard money lender, or your, your, your dad, whatever, they should be protected in the same way you would protect a stranger, and that can help you get over some of those hurdles. When I do some seller finance deals I'll put in I'll make offers, you know, in an offer to add in several insurance policies like you know, loss of rental income policies, name, keep them on there as an additional insured key person, you know, life insurance policies, what happens if this lender loans me money, and then I die, who's gonna take on that project or buy it and pay them off, you know, I'll offer to put out their life insurance policy, naming them as the beneficiary. So those, I've never had to go to that extent, but I'll make that offer, if it helps me secure the deal. So friends and family, the seller, hard money, lenders, those are all individuals that I have used, and to my benefit, and sometimes you'll get scared of a hard money lender, but when you're talking to short videos based on points and the high interest rate, but those are short term loans, you get those done in six to nine months, that hard money lender can be incredibly valuable to help you get over those initial hurdles, and get those first few deals under your belt, and then become a valuable member of your team going forward.

Dalyn Hazell  12:24  

Yeah, there's two ways to kind of go about it, you can, you know, hit up friends and family or, you know, just, you know, relationships that you have, and those people are probably not sophisticated people, like lending companies, right, right. So you kind of have to hold their hand a little more set up, you know, explain them the process, or you can go the route of the more sophisticated lending companies, but you're gonna pay more in interest and fees, generally speaking, but you don't have to hold their hand as much throughout the process. I also think a good way to build up a track record, if you are just getting started, is wholesale, a few properties because that will prove to others that you know how to get deals, properties at a discount. So that will give them a little more security as far as Hey, he knows he or she knows how to get a good deal. Therefore, I feel more comfortable lending on their deals, because I know that if I ever had to foreclose, you know, which should never happen, then I get a deal. That's still under market value. Also, you mentioned a great point about protecting our investors. You know, there's so many ways to protect our investors through the deed of trust or the mortgage, whatever state that you're in the promissory note, the hazard insurance on the property, there's probably one other missing Oh, title insurance. So we want to do all those things, at the very least, and reassure our lenders of that, so that if they have any questions, or they feel at odds, then we can, you know, hopefully put that rebuttal to rest, and you know, want to do the deal. So we don't want anything to get in the way of doing the deal. If we can prevent it. Right.

Brad Shepherd  14:07  

Right. Absolutely. And that can be, you know, that made me think of an extra point with your hard money lender. If a hard money lender tells you no on a deal, there's a reason because the deal stinks, right? You What was so what is it about that deal that doesn't work where if it is your friends or family that are loaning you money, they might not be sophisticated enough to properly evaluate a deal so hard money lender can is a really valuable partner in making sure you've thought about the deal from all different angles. And then Yes to that protection, you know, in theory, as well as not even in theory, you know, a stock can go to zero, I've I've been there I you know, in the early 2000s I owned some delta stock and they went bankrupt that stock went to zero. I got nothing for it. You know, when you when you own a piece of real estate, as long as you've got those protections in place, like you just mentioned, you can't go to zero even if the thing burns down or the flipper runs out on the on the DL, there's still that hard asset that's sitting there that can be sold, that can be recovered. You know, a lender doesn't really want to do that, because they don't want to jump in and have to manage a rehab and get it back up to a retail market to sell it off. But that option exists. And so there's a lot of protections there for, for the lenders, when those safety nets are put in place properly.

Dalyn Hazell  15:21  

Yeah, yeah. And just as a final point on, you know, what would I do as a fresh, fresh beginner, I mean, if you can't find friends or family with money, and you've exhausted all your options, you can call up national lenders, like I think lending one is one lending homes. And so they don't look at your tax returns, they primarily just look at the deal, and you're gonna pay more, but it can be a great way to get your foot in the door. And as we've seen in this market, I mean, you can, you can, you know, you can pay high fees and incur a lot of costs and still be finding the deal. You want to always run your numbers and make sure you're conservative, but don't let the fees and the high interest keep you from getting the deal. That's the last thing we would want you to do.

Brad Shepherd  16:05  

Right? Absolutely. You know, sometimes people will look at a hard money lender saying 12% and two points. Yeah, that's, that's higher than what you know, a private lender might charge. But again, for a short term deal and an opportunity to get your foot in the door and those first handful of deals under your belt. That's not prohibitive by any means; you can still make plenty of deals with those numbers.

Dalyn Hazell  16:25  

Absolutely. So once you get going and start building a track record, how do you build momentum with this machine, this raising money machine? I mean, I know you, you have an email newsletter, you hop on podcasts like this, what are some ways to put yourself out there that I'm trying to raise money, and here's where you can learn about my deals.

Brad Shepherd  16:46  

Right. And you know that that trekker track record is so valuable. So as I mentioned, I've been involved in real estate for good 20 years with lots of different aspects, new development, vacation rentals, I've had the opportunity to raise money from investors across the country. I even you know, one of my favorite stories was going to Tokyo to raise the reason to visit with an individual who's going to invest in one of our new development deals. So super fun. But it's that track record that is so important. And then you know that that existing network can only take you so far. So right now, as I mentioned, I am exclusively focused on raising dollars for large apartments indications and it is a lot of dollars, we need a lot of investors to participate with us on these. And so that existing network, you know, they can only participate in so many deals before, you know, they just need to recuperate or replenish their war chest. And so yeah, so now it's a matter of me trying to build a machine that introduces me to new individuals who are looking at real estate interested in these apartments and vacations or, or self storage or mobile homes, and is a lot comes back to a lot of traditional and traditional, it's kind of funny to say traditional, we're talking about Internet, but online marketing efforts. So the email list, the website, the Twitter following. And like this deal, and I appreciate you having me on because podcast appearances have been incredibly helpful for me growing my network meeting individuals who are already interested in some aspect of real estate, and then hear about commercial syndications and the opportunity to play here. And then reach out and want to learn more. So it is, you know, just all those different online marketing aspects. And you know, podcasts, of course, exploded last five years, and I found those to be incredibly helpful in getting awareness around my, my brand, my personal brand and SugarHouse investments out there to new audiences.

Dalyn Hazell  18:44  

Yeah, I think it's made up of multiple components, you know, you've got to have your personal brand. And then you have to have a platform for that brand. So whether that's a podcast of your own, an Instagram page, Twitter following, build up one stream of leads, and these leads are people who are potential investors, and then go all in on that. And so that's what I'm doing here with you. And so, and then you have your email list. So whatever that looks like, you know, start with one avenue, and then build that up. But one of the most powerful ways is the email list. So that's something that I'm personally contemplating getting started with. Can you kind of break down? Why did you start an email list and what kind of things you maybe include in your weekly monthly emails?

Brad Shepherd  19:33  

Sure. So this is a bit of a tangent, but what I came back from in college, I came back from a summer internship, right intern with a large commercial real estate developer up in Seattle, and looking for a student job to give me you know, help me pay my bills for the rest of my junior and senior years. I got a job with an online retailer, and I ended up being there for nine years but by the time I was graduating, we had grown quite a bit. I was able to buy into the company. We did a lot of real estate deals there, as it turns out, but in that world, what drove that business was our email list. And we were able to drive up that email list to roughly 600,000 subscribers. And I saw how powerful that was. I remember going on family vacations and sending out an email from Peru or sending out emails from southern Brazil. And watching the responses come in of the retail transactions we were able to generate. And so the power of an email list is even today, even with all those other platforms, your Instagrams and Twitter's it's unmatchable, but have that direct communication to somebody's inbox. And you have to make sure you figure out how to get into their inbox not into their spam folder. So that's a challenge. But it really is, you know, making sure once you've got these people into your email system, providing some type of irregular content that is interesting, not long, not complicated. It doesn't always have to be 100%. about real estate, we'd like to throw in some personal tidbits. Hey, we just moved to Boise. We're excited to be here. Here's why. It's an exciting little venture for our family. Look at the house we bought here and the project that it is because people like those opportunities to get to know us a little bit behind the scenes, while providing some value around. Okay, what apartment indications why mobile home? Why do we like real estate more than the traditional stock market, for example. So the cadence is really up to you or to the individual who's running the email list. You know, for us, we find that a monthly update works well, for us. This isn't a high volume market, you know, so we're going out to our investors with maybe 10 to 12 new deals each year. So it's not, it's not like we're coming out at them once a week with a new deal. And so 10 to 12 is the deal volume. And then we're going to supplement that with some educational touch points and personal touch points along the way, as well.

Dalyn Hazell  22:06  

Yeah, that's some great tidbits there. Because I think everyone, even at the lowest level, for example, if you haven't even done a deal yet, you could start an email list, you could talk about what you're learning, you could talk about some introductory deals that you're doing. And so it's a great asset is your email list, because that's your network. And so anybody you meet, like, for example, if I had an email list, and I met Brad, you know, I'd put him in my email, and I'd uh, you know, send monthly updates on what I'm doing, and opportunities for him. Now, you don't want to, like for somebody to, you know, become your private lender, you don't want to always be pushing, hey, do business with me do business with, you want to have a more How To Win Friends and Influence People approach of adding value. And then as you start to add more and more value over time, it'll come back to you, you know, in the form of money, partners and opportunities. So I also think it's important to mention that email is not going away anytime soon. Right. But regulations from Twitter, Facebook, Instagram, those could, you know, be cracked down on those could change.

Brad Shepherd  23:16  

But yeah, you can lose that audience anytime,

Dalyn Hazell  23:20  

then you're, you're in the green for as long as you can imagine. So it's good to have that foundation as it in your email list, and then maybe expand on to different things.

Brad Shepherd  23:30  

Right. And you know, it is, it can be a little bit more challenging. You'll want to. I've talked about some of the single family deals that we've done the fix and flips, the rentals, the burrs, if we're talking to somebody locally, who can I can drive over and say, Hey, here's the house. Here's the deal. With the apartment indications, or the commercial syndications, I should say, I might I'm sitting here in Boise, talking to somebody who's, who was in Missouri, talking about an asset that we're going to invest in, in Knoxville, or in Atlanta. And so it can be different. And, you know, and and we're talking about generally, most of our deals require a minimum of $50,000 Sometimes people put in quite a bit more than that. And so it is a different level of vetting, and comfort. And though it you know, in all sincerity, it's not extreme, because it is, you know, we're, we're selling a cash flow business where we were, it's a spreadsheet evaluation, more so than an MLS evaluation. And so, you still have that trust building to do, but at the end of the day, we're looking at a business, you know, business operations and who are the operators who's managing the business plan? And so it's, uh, you know, it all comes back to building relationships of trust and track record, but it's just a matter of time and plugging away. And another thing I'll mention is everybody that knows me knows I'm in real estate And I don't be obnoxious about it. You know, I'm not saying that that's the first thing I come at them with. But somewhere along the way real estate's gonna come into the conversation. And even on my personal Facebook page, you know, I, that's, that's meant to be my personal Facebook page. That's more about my family, my kids. But every once in a while, I'll sneak a little post about how Wow, this leaves the apartment deal. We just closed on this and had a fantastic return. If this ever tickles your fancy, I'd love to talk about it. And then from there, I you know, connect with people that I didn't really even think would have an interest in real estate, they reach out say, Hey, Brad, I'm thinking about this, we'd love to chat with you more about it, boom, I've got another investor in my in my database. So just make sure people know what you're up to is really important as well.

Dalyn Hazell  25:43  

Yeah, always, you know, adding value and then kind of sneaking in maybe a chance for them to invest with you. You know, I think of it as like a bank account, you have to have deposits, and then you have withdraws. So you have to be depositing in other people's lives to make a withdrawal, you can't just immediately go for the withdrawal, then you'd overdraft. And so that's one way to look at it. When you have somebody interested in a deal, whether you're a house flipper or a large syndicator, what does that conversation look like? Do you have to do a lot of convincing? Or are they just paying? I'm ready to go?

Brad Shepherd  26:17  

That's it? That's a great question. I am done trying to convince people. It's, for me, about finding people who already have some notion about the strength and value of real estate, if somebody is all in on day trading, and stock options, whatever, and they do that for them, that's the way to go. I am not going to sit there and have an argument or try to convince this individual about how real estate has performed better. I like people, I like having conversations with people who are already leaning towards real estate. They might be thinking, man, maybe I should do what I'm seeing on HGTV or whatever they you know, they see that aspect. And I'm just gonna say, Hey, have you considered going in passively, instead of being a landlord, instead of being a flipper, and just maybe changing the direction that way to expose them to what the opportunity is on that front, but they were already leaning towards real estate anyway, they've already had an interest. And so it's, you know, it's not about convincing me, it's just educating about different opportunities within real estate and the pros and cons of each. And I think that's a fair point for anybody, regardless of what your journey is, or what you're, you know, where you're at, in your journey. And what your focus is, is, you know, it's great to meet people at real estate meetups or other avenues where you find that these people have already you can tell they're already interested in real estate, rather than going in and just convincing somebody from scratch. Why real estate? Cool, that's just a lot tougher, it's easy to find people who already like real estate, so just focus on those people.

Dalyn Hazell  27:57  

Yeah, it's not enough to tell somebody, Hey, you get cashed now, and then you get a secured investment? If that's not enough, and I don't know how to help that person. Exactly. You're right. You certainly don't want to waste time on people that just aren't convinced. And you're having to drag them along and, you know, prod them. So yeah, it's a great reminder.

Brad Shepherd  28:15  

Yeah. And you just spent, especially as you know, people have experienced, if they're, if they're homeowners, they've seen the value of real estate appreciate over time. And they might be thinking, Man, how do I do more of this? But do I really want to be a landlord, whatever, you know. So it's not hard for people to see and hear the value of real estate. But again, if this is somebody who just already focused on what they think they can get better returns elsewhere, let them be focused on people who are already keen on real estate to begin with.

Dalyn Hazell  28:46  

Yeah, that's true. So can you talk about, you know, for a house flipper, they really only need one investor, for the most part, to take down a single family house, but you're needing potentially 10s Hundreds of investors for your large deals. So is it easier for a flipper to secure financing? Or is it harder? I mean, what's your take on that?

Brad Shepherd  29:08  

That's a great question. You know, obviously, we're raising a lot bigger dollars, you know, most of our deals, though, you know, there might be 50 or 60 investors in each deal. So it's not hundreds, though, you know, I'm talking to hundreds to whittle it down to the people who have the interest, the ability and the cash available, right, then what I would say for a flipper, you know, I only worked with a handful of lenders, all along the way, the whole time that I was doing, sorry, a handful of lenders along the whole time I was doing flips, because you find one, you treat them well, you get them a solid return, you pay them off in three or four or five, six months, and they're asking me, I do have another deal. When do we go again? Because if you just return all that capital to them, they're now under the obligation to redeploy those dollars and if they saw I just did a good job I treated them well, I made my payments on time we had a successful exit, they immediately want to go again. So you don't have to go out there and run around and try to find multiple lenders in that scenario, one or two, and you're golden. You can ride that relationship as long as you want to keep on flipping houses. Like I mentioned that that couple in Austin, the orthodontist, we didn't multiply with them. And the only reason I hadn't needed both is because, you know, I could tap out, I had enough deals, I could tap out one of them, where they wouldn't be available to have cash available to go on the next deal. So I needed the second one to be available. And so, but that was it, those two at the same time was sufficient. And so yeah, it really doesn't take a whole lot. And both of those are ones I met through networking at real estate, networking events, whether it was or meetups or other meetings like that. And that's it, we just struck up conversations, realized we had enjoyed each other's company, and went from there. And so then on the apartment syndication, there's, I don't have as much personal connection, I would say, because, you know, there are some investors that I have never met in person that we try to have, you know, pre COVID, we would try to have an annual event where we'd get everybody together and treat them to a nice dinner, what not, not everyone can make that. And of course, you know, we're all dispersed. But it's a little bit more of just kind of a business type relationship. And we had, we do have to find more. But it's, I think people are surprised, we're what could be surprised by how many well to do individuals are out there, it's just a matter of finding them in finding finding out where they hang out, and then getting to know them and getting them to trust, trust you and then showing them what they can do in the real estate without having to be an active participant.

Dalyn Hazell  31:48  

Yes, it's easy to think that everybody doesn't have much money, but that's true, the large majority of the population is living paycheck to paycheck. But there's a good three to 5% of Americans that have a lot of money, and they need to deploy that somewhere. And if it's just sitting there, then it's hurting them. So yeah, I've gotten that feedback from my hard money lender, it's like, hey, when 's your next deal, you know, you are serving them more than they're serving you. I feel like especially in this market, when there is a shortage of good deals. And they can command that higher interest rate, you know, you're serving them. So think of it that way too. But also think of it as you have to, to go the extra mile sometimes like maybe write them a Christmas card or a Thanksgiving card or whatever, invest in those relationships, because that's as a real estate entrepreneur, your money partners are one of your most valuable relationships. So if you only have 123. Lenders, if you're like a flipper, so forth, then yeah, invest in that relationship, take them out to lunch, write them Christmas cards, do everything you can to maintain that relationship, because over time, you'll find that they'll actually give you deals. So they will, whether that's bringing you real estate deals, or just knocking down your interest rate a little bit to compensate for the volume of transactions you're giving them. So always be investing in a relationship. You also mentioned the RIAs real estate investor associations, how are those helped you build up your money partner? Base?

Brad Shepherd  33:22  

Yeah, so those were I mentioned, those are really helpful, especially getting into a new market. You know, I've just moved to Boise. I'm thinking about going, going to those again, I honestly haven't attended Rios for a while. But you know, I want to get to know some folks here and here in Boise. So I'm gonna find myself doing that, again, it's really helpful to find folks who are looking for active participation. Some of those individuals I mentioned, they happen to be a little older, a little more financially secure, we're starting to look at the real estate market, maybe wanting to learn how to do some flips. And so they saw lending to me is a great way to see the process. And then you've developed great relationships through that you just had more permanent lending opportunities. Where I haven't found those to be helpful is for the passive investors in these larger syndications. Because you know, so many people, the reality is, as you'd expect, they want active participation, they want to go out there and source their own deals and do the flipping and the rehabbing and those things that they're seeing. And so I. That's why I didn't continue, you know, I stopped going several years ago, just because that was where I was finding the people that I wanted to get into these larger deals. Those folks, I'd find more at the Rotary Club, the Chamber of Commerce, the country club, people with money who are doing other things, might have an interest in real estate but don't want to do it actively. And so that changed where I would go fishing for these individuals for sure. But if I'm talking, you know, somebody who wants to be active and I'm including the hard money lender, somebody wants a loan on flips and sees the whole process through from beginning to scratch. Beginning to end. Yeah, I'd be hanging out the reels all day long.

Dalyn Hazell  35:04  

Yeah, but you have to go where your client is. So maybe, Maria, maybe that's at the country club. So definitely I can kind of sense that at the rails, there's a lot of beginners, people who are wanting to be active and there's nothing wrong with that. Usually, though, there's one or two, you know, older people that are kind of the resident lender. And that's great to catch up with them. But you'll probably quickly find out like you did that you have to look in other areas, too, whether that's online or in person,

Brad Shepherd  35:32  

right? I like to go to places where I'm a real estate expert. If I go to Ria, there's tons of people that are smarter than me about real estate. There are people with way more experience. I go to the Rotary Club, and I'm the real estate guy, right? Yeah, there might be a real estate agent, there's as well, but they're doing you know, that's different than they know what I'm talking about. So I like to go there where I'm the expert, you know, come to a family gathering, and I'm the real estate guy. You know, I'm the authority. And that's a different conversation. And so you got these people who, you know, they, they wonder, okay, well, who do we ask real estate questions? Do they turn to Brad? Perfect? And I can provide the information there. And then maybe that leads to a conversation about participating in some of these syndications as well. So yeah, it's just a matter of picking your audience. What pond Do you want to fish in? For sure, depending on what your goals are?

Dalyn Hazell  36:19  

Yeah. And the beauty of some of those clubs, that they only allow one industry to be represented at a time. So right, if you are the first one there, that's real estate. Wow, that could bring a lot of business to you. Sure. Yep.

Brad Shepherd  36:32  

Good point.

Dalyn Hazell  36:33  

Awesome. Well, Brad, do you have anything more to add on this topic of raising money before we kind of get on to the last half of our show, last portion of our show,

Brad Shepherd  36:44  

I think just underscoring what you mentioned, is taking care of these individuals. I've got some folks that will send me multiple referrals. And as you know, that's even on a different level. I want to take care of all of our investors, but the ones that send me referrals, I go to a different level with them, find out what their favorite charities are. And I'll make a contribution to those charities in their name and they get a nice feel good from it. Or the you know, the gifts that come along with those donations or whatnot, find out what their favorite restaurants are, or if they're married, or kids gift cards and things that they can do with the family where they like when you were the value that time, the places where they value spending their time or making their their contributions. So when you find somebody, they'll make referrals, everything you said about the investors absolutely takes care of them. The ones that make referrals double down on efforts to take care of them. Those are those key allies you want to nurture for sure.

Dalyn Hazell  37:41  

Yes. Couldn't agree more? Well, this last portion of our show is called the triple threat. And we ask the same three questions to each guest. The first one is what is the app resource or tool that has been the biggest game changer for your business?

Brad Shepherd  37:56  

So most recently, I'd say Twitter. Yeah, I signed up for Twitter, whatever it was 10 years ago, and just didn't really ever do much with it. In the last eight 910 months, I found it to be incredibly valuable networking with other smart, talented individuals from all different aspects. And it's led to several investors in our syndication deals that you know, that the magic happens in the DMS, as they say, and I found that to be the truth. And so all of a sudden, I saw myself, I found myself to be a Twitter guy.

Dalyn Hazell  38:28  

So what kind of things? Are you posting just little tidbits or about your company? Or what you're doing? Because what Twitter is different from, say Instagram or Facebook?

Brad Shepherd  38:36  

Right? Yeah. So I definitely, you know, keep it primarily focused on real estate. I've connected with a lot of real estate folks using the real estate related hashtags and have been searching for those that have been helpful and connecting with people there. But yeah, so you know, I'm a little more tentative on sharing the personal side there. I am using it primarily for real estate stuff. I'll share Hey, my family and I did this this weekend. And here's something cool. We just discovered Boise and some of the cool things we just discovered about our new house here. And so you show a little bit that personal side, but the majority of it is going to be about what we're experiencing, the deals that we're working on on the commercial side for sure.

Dalyn Hazell  39:17  

Sure. Yeah. Question two, what has been the biggest learning lesson in the last year?

Brad Shepherd  39:23  

That's another great question. For four years I've talked about these commercial syndications as being recession resilient, and they provide more stability than some other alternatives where people can invest their dollars COVID prove that out. We didn't get the full blown recession that we thought we all thought we were gonna get when COVID started, but it was bumpy. And it was scary for all of us. We paused until 2020 was a big learning year. What we saw was these assets truly are recession resilient. Were my personal rentals and I still have a hand They suffered. And I'm still dealing with eviction moratoriums and tenants who could otherwise pay but are choosing not to because I know I can't touch them, all the nonsense that comes with that. Having to pay all the bills, you know, those don't go away even though my tenants aren't paying on the commercial side. Yeah, we had a couple of those. But when you're talking about 250 units, 300 units, and a handful don't pay, that's much, much easier to weather than three out of four units in a four Plex not paying. So is, for me, it has underscored that lesson of recession resilience through these large commercial properties. It's really true. And it's been fun to see that play out.

Dalyn Hazell  40:42  

Question number three, our podcast is all about helping others achieve freedom with real estate investing, whether that's financial lifestyle, or otherwise. So what does freedom mean to you?

Brad Shepherd  40:12  

time with my family. And I know that sounds might be cliche. But that's another reason why I've been selling off my personal rentals, because even with good property managers, they still take up a lot of brain space, we still deal with these hassles. I'm still keeping tabs on, you know how to get these people, the eviction being able to evict where when I invest the way I focus on now, it allows me to generate really solid returns, that provides time freedom for me to truly focus on having fun with my kids. I mean, I've got a five year old and a two year old is back, it means two year olds, His birthday was yesterday. You know, it's just, it's such a valuable time that you can never get back. I don't want to be dealing with toilets and tenants and trying to evict people, and rarely have other people deal with the deal fast off the professionals. And so the large commercial deals allow me to participate in real estate in a significant way, without sacrificing time for my family. And that's important to me.

Dalyn Hazell  41:10  

That's awesome. Well, where can listeners get a hold of you?

Brad Shepherd  41:14  

So the best place to find me is at SugarHouse investments.com. That's my business name. That's where people can sign up for our email list and learn about the deals that we have going on. daily conversations find me on Twitter, I am at Brad Shep on Twitter. So that's where we can connect and have active conversations as well.

Dalyn Hazell  41:35  

Yeah, that's great. So hopefully, you know, in this episode, we talked about how to raise private money, what things you can do tangibly to set yourself apart, building that relationship out and, and so and hopefully, our goal is to have people knocking down your door to throw money at you. And that's the goal with this. So thank you for your expertise. Yeah. Thanks for expertise and sharing your wisdom with the listeners, Brad.

Brad Shepherd  41:59  

Hey, thanks for having me and it's great. Great to be here. I appreciate the opportunity. 

Dalyn Hazell  42:03

You bet.

Outro  42:05  

Thank you for listening to the real estate investing for Freedom podcast. If you enjoyed the show, please subscribe and leave us a review and tune in next week for the next episode.