Real Estate: How You Can Raise Capital and Buy Real Estate w/ John Burley

0:00Doing your business over and over again. Yeah, there's the excitement of, well, we just got a big deal. We got this and this. But if it's so exciting and so amazing that you have to be there 24-7, well, how do you get free? When John Burley talks money, we listen. He's literally taught more than 1 ,000 people how to buy 100 properties each. Money secrets to the rich is the book. He's the real estate king. I got to work a lot with Zig Ziglar. And, you know, my favorite Zigism, as it were, is if you help enough other people get what they want, you'll get everything you want. how you raise capital, how you buy real estate, the mindset it takes to become rich, all of these from John Burley.

0:37So, John, most of my listeners are working on success for themselves. How do you define success? Man, that's a great question, Brad. And it's actually one I think you and I first discussed over 30 years ago in Hawaii when we first met. My son, who's now been doing acquisitions for 12 years with the company, was literally just crawling. I think to me, success was the idea that on the money side first is that I would build up assets that would provide cashflow. In the old days, we called it mailbox money. And the idea was that more money would be coming in per month for decades and decades and decades beyond any level of spending that I could imagine.

1:18And that would then give you the capability. It's an old classic, but it's one you and I both enjoyed was the idea that you can do whatever you want, whenever you want with whoever you want without having to give thought to the money. I mean, we're still intelligent about the money, but the idea is like, hey, let's go to Europe for two weeks on a whim and you book it and you go. You don't have to be a slave. And so I really shifted from what most people taught and what most people do. And all I wanted from the very get-go, I formed a private equity company in 89 and after I came out of securities and the sole purpose was to create cash flow, nothing else, just income streams.

1:56And, you know, then did hundreds and hundreds and then thousands and thousands of properties. So it just built up massive income streams that just come in every month. I mean, and there's still some morning, Brad, you know, and Sherry and I are up at our mountain home that we still have several times a year where it's just like, you know, almost like, Hey, honey, pinch me. Is this real? I mean, how did this happen? How did we get all this? Well, yeah. Thousands of pieces of real estate later purchased acquisitions. That's how it happened. I mean, it didn't happen by magic. You actually had to buy them.

2:29You actually had to have tenants. You actually had to, had to, had to, we'll get to all of that in a moment, how to do that. Where do you feel like, cause a lot of people are still trying to work out is success for me? Cause there's a price to pay for success. Where do you think you, you chose success to be your performance standard? Well, I think you, you said the optimum word right there, Brad, and it's choice. And it's something I know that you teach a lot of. You and I are both big proponents of, look, this is a choice. No one's a victim. No one's entitled. No one just gets magic success. And we'd be hard pressed to find anybody who out of nowhere did one big deal, made a bunch of money and kept it.

3:07We both know a lot of guys who made money on a big deal, but it got pissed away really, really fast. And so what I look at is when I look at success is the first thing is making that choice. And then understanding it's a process. I mean, you're going to, it's like anything else, you're going to have failure out of the gates. And that's how you learn. And that's how you get better. It's how you get stronger. I don't know what happens to us when we become, after we become toddlers, because, you know, I mean, we didn't fall down a couple of times trying to walk and say, that's it. I quit. I can't walk.

3:40We just kept going. If it was 50 ,000 times we fell down, we did it. If it was five, we did it. And then somehow we get older, we let our wiring get crossed and we just give in to failure. So I think, you know, embracing it. Then I, you know, I've kind of looked at it as like, look, about 2 % of the population in any given craft, you know, and I came from a sales background. So 2 % were extraordinary exceptional. I mean, everybody's envious and jealous, number one. But, you know, the lady's been on the top of the board for 20 straight years. At some point, we need to acknowledge she didn't get lucky.

4:13you know so two percent are extraordinary exceptional what they do 18 are good to great and then the other 80 you know you kind of go from okay mediocre down to suck I always just kind of from sales just lumped them all into they suck at what they chose to do so I think you know making that choice and I did it consciously on several areas of my life not too many but several but I wanted to be in the top two percent so you know the first one was selling I want to be in the top 2%. And this is the bar, these are the numbers. And then going and seeking out people like yourself, great wisdom, great mentors.

4:46What do they do different? The first thing obviously is they'd all taken the company presentation and put it in the garbage can because the company presentations are designed for mediocre people to get mediocre results. And that's not what I was looking for. They all have what I call talking points. They had a conversation that meet not not just the conscious need, which is normal selling, but the subconscious needs. And the larger the numbers, the bigger decisions, and we do big numbers, the subconscious is far more important. And so really talking to their subconscious side of their brain and really being aware of what the known or unknown key needs are of a human being in regards to what we do.

5:25And so just learning how to do that and going through the process. And like you, I didn't get to take my course when I started. I had to screw it up a lot, which is one of the reasons we're both so, you know, you're so great at what you do is you figured out everything to do wrong. And so students today, they just get the, hey, I'm still figuring out how to do things wrong. Don't worry about that. Yeah, we break new things. And that's what God invented golf for. I can come up with new things to go wrong every day in golf, you know, and golf was that it was the 2%. You know, I looked at the great players and what they did differently than everybody else.

5:59It's like, So they didn't just beat drivers all day long. They worked much, much harder on 25 to 40 yards in putting than they did on the other stuff. Also, at the end of the day, the guys that went on that I played with that played tour in greatness, when it got 5 or 6 o 'clock, they weren't heading into the bar to play cards and hang out with the guys. They were out there under a light on the end of the driving range, beating balls until 9 or 10 o 'clock, doing what greatness takes. You know, when you look at success, and I want to maybe use our kids as a thing, you at some point had to choose success, right?

6:34Because you didn't come from success. What do you think is the advantage or disadvantage for your kids and maybe my kids that they come from a family of success? Yes. Boy, great question. And, you know, I've really gotten some amazing insights in the last decade. We've been blessed, which is a nice way of saying we worked really, really hard for decades. And I work for some very work with some very, very large family offices where we literally they put up all the capital. I do all the work. We split all profits and losses 50 50. And I formed the company in 89. We haven't generated losses yet. And, you know, so some of them are third and fourth generation money and not the famous Internet money, real money, real, real money.

7:21And, you know, with, you know, 500 million to 2 billion excess capital to deploy on top of everything else with 12 percent reserves, all normal operation stuff, because, you know, life is not Instagram. You know, it's one thing I love. You always teach real world business skills is, you know, just talking to them. And I think, you know, some of the things is like, you know, with the kids passing out the kids, it's like, look, you don't have to go in dad's business. You don't even have to be a big entrepreneur. You do need to add value to the world and your community. So it's like this one family opposite.

7:52It's actually the grandfather, the founder, fourth generation just passed away a year ago. But I remember when I was meeting with them, we were doing the first placement, the granddaughter, literally where she was the chosen one that was going to take over all the money side. And so I'm having conversations with her about how she's going to be working with my son. And I'm talking to him and there was like five grandkids, all of them accomplished. One's just a doctor, just a doctor, a doctor in Africa working for free. The other one is very, very philanthropic and in the arts, not a big selling artist herself, but doing huge things in their community for the arts.

8:30The other one is in the family business. The other one is doing the investment side of the business. The other one actually is a college professor. But the idea was it wasn't for their families. Like, this isn't just about money. We're not going to you're not going to be trust fund kids, but you can have a good lifestyle. And like your kids, even if they're on their own, they still get to come home to your house like mine. And they still get to go on the four to six minimum great family vacations, regardless of whether they're doing that. That's just kind of given. When we go when we go to the Caribbean, daddy pays for it.

9:00you know, and, and, and so just teaching them. And then I think the biggest lesson is teaching them the values and the morals, teaching them not to be a trust fund baby. Cause you and I both know some, um, and their lives didn't work out well, uh, teaching them that, you know, they're responsible and accountable. And I remember when little Danny was, was maybe seven or eight, she's like, wow, daddy, we're so rich. So rich. It's like, well, actually, no mom and dad are so rich. Yeah. There's a difference, honey. And, you know, and John's worked for 12 years in the company. He has, he's built up an equity position.

9:34We actually, this year we did the docs on a continuation. Sharon and I have agreed that, you know, if I was to pass away in the near future early, that John would actually take the reins and John would be in charge of the decisions, not mom, because you can't have two chiefs. You need, you need one person at the top making those big decisions. And so I think it's just, you know, and I, and I know you and I've had these conversations, maybe you've done as well, is really teaching them that you need to be responsible. You need to go make your own screw-ups. You need to go have your own wins. And look, life is hard, man.

10:05You're going to get knocked down way more than you're going to get knocked up. Now, the nice thing is you've got a family that loves you and supports you and is going to help you. And part of that is we need to let you go out and make your own mistakes. So what is the John Burley formula for success then? How does success happen? first thing is choosing to be successful on the subject you know and you know in this podcast you know in business is choosing so it's like you know what do i want i was never a shiny object guy um i think it was from golf you know because a lot of my friends played tennis you know when i was like 12 or 13 but it's like wow every time i was playing tennis for two hours all i was thinking in the back of my mind that's 150 balls i didn't hit i mean that could be the difference you know in a tournament.

10:49So, you know, it is a focused direction. It is the choice. And then just going like, okay, so to get to where I want, what do I need? You know, I looked at it most, you know, in our primary asset we invest in is real estate. And most guys, you know, they just teach quick cash and flipping and wholesaling and all this stuff. And it's like, we'll get to that in a minute. We'll get to that stuff. Yeah. None of it gets you rich. And so it's like, so I wanted cashflow. How do I create cashflow? What's the asset that in the safest, most secure way for decades and decades and decades could create me cash flow.

11:23Because I come out of Wall Street, the world of Wall Street. So it's like I had learned the other asset class to dip successfully, but I just like the idea of, and everybody calls it passive. It's not passive. It's residual. We have to manage the assets. We have to manage them very, very well with very strict systems. It's just creating that residual income and then not doing the shiny object syndrome. Oh, I've got a hundred houses. Now I need to figure out how to do this or do this. No, no, I'm just going to do this over and over and over again. And, you know, after about two years and like 300 houses, it's like, okay, we've just about figured out everything not to do.

11:58And then, yeah. And although I still, we still have new stuff come up. Although we always just say, welcome to Tuesday morning, because that's what it feels like to us. And the reason Tuesday, not Monday is because Monday is make it rain day. Monday is not put out fire day, like everybody else in the world does. And then just, you know, building it up. And then what do I need to do to get better? What do I need to refine? What are we continually looking at? What could be better? What could be better? What could be better? How do I systematize it? From my financial days, several of my clients were huge, massive McDonald's owners and operators.

12:31Their idea was, and I went on several trips with them, that literally the entire senior and middle management team could leave for a week. No client would know. No vendor would know. Nothing would know. So the idea was literally that a guy flipping burgers could run the operation, not forever. And this isn't one of these seminar land things where it's like, oh, yeah, my business is better when I'm not there. Well, then you're not a very good business owner. However, we know a couple of guys who literally their businesses are better if they're not there. However, the idea is getting it to where you then have that choice to, I don't need to be in here 80, 100 hours a week.

13:11I think also that you were at the tail end of that generation. For me, I came from a little town, Brad. It's 25 ,000 people. My family knew of three decamillionaires. And the first thing that they all did is they all had for 20 to 40 years worked 80 to 100 hours a week without exception. The next thing is they were the owner. They took the risk. But it was less risk than most employees because they were smart about risk. None of them went bankrupt. I know these guys are like, well, going back up is the best thing that happened to you. I don't think so. They had learned their lessons and did their corrections without massive sabotage.

13:47And then what they did is, you know, I was saying we were just talking about at my last event, you know, greatness is boring. Greatness is boring. You know, you have those moments, but, you know, the data, whether you're Michael Jordan practicing harder than anybody else in the game, greatness is boring. You know, doing your business over and over again. Yeah, there's the excitement of, well, we just got a big deal. We got this and this. But the day-to-day, week-to-week, month-to-month operations, well, they have to be boring for it to be sustainable and for you to be able to have people do it and run it.

14:18If it's so exciting and so amazing that you have to be there 24-7, well, how do you get free? And I think the big thing, too, for me, the success is choosing what is your end game, what is your freedom game, and what does that look like? Your own big success. We are going to be back in a moment with John Bullard. We're going to get into real estate. He's the author of Money Secrets of the Rich. Read it and make sure you're subscribed. Without the proper methodologies and strategies, building a wealthy life can be difficult. If you're struggling with building wealth yourself, this is the time to join Brad Sugar's 30X Wealth Program.

14:52The 30 videos in this program will help you learn how to make your money work for you rather than you working for it. Create the life of your dreams. John Burley. Thousands of pieces of real estate you've transacted over the years. hundreds and hundreds and hundreds of millions of dollars, taught literally hundreds of people to be in the century game, like owning hundreds of properties themselves. Yeah, actually over 1 ,000 of those now. 1 ,000 century makers. Yeah, and that would be$70 ,000 to$140 ,000 plus per month net after expenses income for decades. It's unbelievable, Brad. Well, it's got to be believable if there's a thousand of them out there.

15:37Let's dive into this. First of all, I think flipping houses is dumb. What do you think? Oh, I think it's idiotic, man. Flipping houses is essentially all you did is you traded your old job for a new job, and there's so much risk you're not even aware of it. And I don't mean risk in the silly, foolish way. I literally went to William Dickerson, who is the grandfather of real estate trainings in 1978. I was a 17-year-old kid. And it was all about no money down and creative financing. It was basically all the ways you could do investments without money. And then when I talked to people who were wealthy, especially when I had my broker, they're like, well, yeah, sure, John, you could do that.

16:19But, kid, why would you be so stupid? Why don't you just have the money? Because real estate is incredibly easy when you have the money. And it's not your money. So I just looked at that model was so archaic, so medieval and so broken. And what's so sad, Brad, in 2024, they are literally verbatim teaching exactly word for word Nickerson stuff. And it doesn't even apply anymore because the reason that the wholesaling and the flipping stuff worked so good back then, there were no freaking computers. There was no computerized things. There was no valuations, nothing. So there was just these holes out there.

16:55There were a lot of work. I mean, you literally would go down to the sheriff's office and you would literally write down on a notepad the name and the address of the people. And there was no skip tracing. Sometimes you had to hire a private detective. There was no valuation. So there was just the lack of information opened up holes that no longer exist and haven't existed in 20 years. But they're still teaching it like it does. Well, hang on. You touched on you went to wholesaling there. That's another bugbear of mine. Why are people still thinking, well, what I'm going to do is I'm going to find a great deal, and then I'm going to find and invest and flip the deal to them.

17:31Why are people still teaching this? Because it's sexy. It's get rich quick. It's easy. It's the get rich in your underwear, sitting at your kitchen table doing nothing. And it's not how work does. And then the whole get rich thing is like on the flipping. It's like, okay, they just discount risks that have to be accounted for in a business. Because as you know, as a business owner, knowing risk is in many times more important than understanding opportunities. So the first one is market risk. The real estate market could go down 10 % to 20 % on any major event instantly. I mean, it's a couple of weeks.

18:06And they pretend that it's not there. But if you're flipping wholesaling, it goes down 10%, 20%, you're done. Every deal you got is over. The next thing is they act like economic risk doesn't exist. When the economy goes down or slows down, it has an impact on every asset class. especially real estate. They then act like interest rate risk doesn't matter, and they're all teaching you to do hard money loans, which basically, folks, let's go into a pawn shop. I mean, it's not what you do. What we did is the models were so archaic and so broken. And for you guys listening right now, look, if you're trying to do real estate, just as an aside, there are people who've made money flipping, and there are people who've made money wholesaling.

18:45I don't discount that. But there's people who make money running pawn shops, and there's people who make money running cleaning companies. You know, there's many ways to make money. Just some are a little safer, more simple and easier than others. Yeah, the difference with a cleaning shop or a pawn shop, you actually have a business that provides income streams and on-go. With a flipping type model, you're only as good as your last deal. And the thing is, for me, I knew the end game was to be financially free. I do about a half dozen speeches a year to real estate groups around the country. And it's like when I look out there, it's like my brothers and sisters, they lost track of what they got into.

19:27They did not become real estate investors to get a new freaking job. They became real estate investors to become free. And then they just get sucked into the vortex of magic wand flipping, which there is no magic wand, but get rich quick flipping. Quite frankly, flipping is the riskiest transaction there is. and that's the one they teach you first and literally this should be like and later when you're very very wealthy you might want to do this with some of your assets not do this with no money and with other people's money and then I always tell people for god's sake if you're asking for money come up with the term better than flipping because most people are afraid to flip an egg because it'll break and you want them to flip their life savings yeah and so to me it was like it's just way too much work for way too little money and I don't want you know so for us So over a decade, a$400 ,000 house like clockwork, you know, is the prices have changed.

20:19But like clockwork for 35 years now, I make about 120 % of what I paid for the house over the next decade walk net. So if I buy a$400 ,000 house and cash flow it for the long term, it's got to be the right house in the right area, marketed right. There's a lot of pieces to it. I make half a million dollars over the next decade. If I can make a half a million dollars in the next decade by doing a transaction once, why would I flip anything? It's like there's just – I understand why people flip. I get it. But for me, it's like why would I flip for$20 ,000 or$30 ,000 or$50 ,000 on a deal when that deal is going to make me half a million dollars lock and load for the next decade?

20:55And I don't need money today anymore. And I work a lot with the capital investors, and they pay a placement fee of$10 ,000 per door. So it's like if you need the short-term cash, we have that in the model. Flipping is just – it's a broken get-rich-quick dream. Let's get into fundamentals then. Top three fundamentals for long-term real estate wealth. You need capital, period. You know, we put the pink elephant on it. But I can make it or raise it. And that's the distinction I think a lot of people don't get. They don't get that you can raise capital. There are a lot of people out there with capital that don't want to do the work.

21:35Yeah, so as you know, Brad, I am literally, I came out of Wall Street. I am the first guy who did a for-profit private equity fund that did single family home portfolio. I'm the first guy that did it. Everybody said it wouldn't work, but almost all of them were fee-based. So they made their money on fees and the residential was too much work if you were fee-based. And then the other thing I just did is like, wow, everybody else has played this so small ball because no one did single family and single family made a higher cap rate. I'm not in love with single family homes. I couldn't care at all about my capital investments.

22:06You know, they simply make more money properly management than the multi units. We own multi units. We own commercial. We own all of that. But a portfolio of single family home run properly simply makes more money. And there are some better tax benefits that are available for sub four units than there are for the commercial and the bigger. So the first thing is like, look, the number one thing you need is money. So stop screwing around with real estate. I tell people all the time, like, look, if you don't have any money, stop spending any time looking at real estate, studying research. Because real estate's a joke.

22:35So everybody right now listening, if you came to one of my courses, you learned how to raise money, you did what you're told, a normal expectation would be 30 to 90 days minimum out, you'd have a million in cash. If you had a million dollars in cash, you could buy real estate easy peasy all day long. The million dollars just is not your million. And so we went out and raised hundreds of millions of dollars in the early years, way over half a billion now, and just put it into long, long-term placements. And almost all of my capital investors, you know, and we've had over the years, you know, from my security side and the real estate side, I've had over a thousand clients who were decking millionaires to billionaires.

23:12Boy, talk about success leaving clues. They did nothing that's on Instagram. I mean, and they, you know, they understood the capital and they had the capital. So it's like, you know, I had so many guys that own McDonald's. McDonald's on purpose wouldn't let you know money down leverage in. because they knew it doesn't work long-term. There's too much risk. And so a lot of our real estate was bought with a capital investor with a down payment and signed for a loan. A lot of them, we've just bought cash. A lot of capital investors, the wealthier ones are like, yeah, yeah, yeah, we understand leverage.

23:49We know it works, Johnny, et cetera, et cetera. And I just like to have 50 houses with my buddy, John. So let me just drop a check here for$10 million and let's go. Let's just put together a portfolio, a small portfolio, and let's just do that. And they're both good answers depending where you're at. And I do see a very, very common as people get older and they're successful, they deleverage. It's not Instagram, man. They hate releveraging their assets every five minutes. And you and I know, I mean, we both know lots and lots of people. They did good stuff, but then for 10, 20, 30 years, all they did was continue to build and grow their business while paying off the assets within the business and paying off the rest.