How These Founders Built Wealth Through Sales & Real Estate | Moe Falah & Brad Sumrok 🌏EP128

27:35And literally the next day, I wired him 50K. Whoa. Right after losing half your company. Right after losing half my company, I wired 50K because I just kind of wanted to give the middle finger to the universe that said like, despite this idea that I should be in scarcity, I know that I'm going to be able to get through this and I'm going to go and play in the world of abundance. And so I gave the middle finger to the universe and said, despite all this pressure, I'm going to go against what you think I should do. And I'm going to go and like just take control here. That move just like inspired me to go out, do more, provide more.

28:06I mean, we get to help a lot of people. So aside from just like the idea that like it creates more abundance and your own ability to go and pursue. Just help, you know, if all you're taking is for yourself, it's just very selfish. Like, we're gonna die at some point. Like, we're all gonna die. And you're not gonna take anything with you. So give it to people who need it who don't have the same opportunity that we have here. All right, so where can people follow you, better life if they wanna work with you, et cetera? Tell them everything. Yeah, so on YouTube, it's at MoFala. On Instagram, it's at follow the leader.

28:39and if you want to follow a better life, it's at Team BLFG. But if you want to hop onto our opportunity calls, we run them twice a week. We show everything about the opportunity at join.teamblfg.com. We'll show you everything of what we do, how we do it, and how you can get involved. All right, guys, you're watching the Money Mondays. And as you know, we cover these three core topics because it's important to have these discussions with your friends, family, and followers. We grew up thinking it's rude to talk about money. I think that's insane. You have to talk about money, loans, debts, financing, investing, cashflow.

29:09Should I get a lease? Should I rent? Should I buy? These are real life situations you have to be able to talk about with people around you. So check us out online, like, comment, subscribe, and we'll see you guys next Monday on TheMoneyMondays.com.

29:25Ladies and gentlemen, welcome to a special edition of The Money Mondays. Normally this podcast takes place inside of an RV motorhome, but I'm in Miami trying to knock out six podcasts back to back to back and there's a rainstorm outside. so we took over the move studio here in miami they have multiple locations so i'm very grateful to be here in their space right now with a long time friend who's in the real estate category he's had masterminds coaching businesses accumulated thousands of units in the retail space so what we're going to do is cover three core topics how to make money how to invest money how to give it away to charity so without further ado mr brad sumrock give us a quick two-minute bio we get straight to the money hey dan thanks i'm excited to be here yeah i never thought i'd be doing real estate and own the business.

30:06Neither of my parents finished college. So it was impressed upon me to study hard, get good grades, go to school, get a job. I did all that. After 14 years in corporate America, never made it to the top, never even made it to the middle and was fired once, laid off once, read Robert Kiyosaki's books in the year 2000. And I became a seeker of business and entrepreneurship, went to a real estate investing seminar, and eight months later, bought my first investment property, 32 units, did another deal with my own money, found myself out of money. My third deal was 250 units where I learned how to raise money from other people.

30:45And since then, I've done over 11 ,000 units as a general partner all over the country. Then I got inspired by Tony Robbins, and I saw how he was impacting millions of people. So I started doing conferences and seminars and created a large investor community and run a mentoring program and a mastermind. So that is the two minute summary. Wow. Okay. There's a lot to unpack there. On the path to 11 ,000 units, when you first started, when did you decide to go from your own money to bringing in capital? Well, I decided out of necessity because I ran out of my own money. I had a mentor, which I think is critical for anybody that wants to achieve a lot of success faster.

31:27and my mentor wasn't syndicating deals with other people's money. He was using his own money. So that's what I did. I did 62 units, but all my money that I had saved in 14 years of corporate America was gone. And then a broker brought me a 250 unit and it penciled out. And I wanted to do the deal, but I didn't have the money. But what I had, Dan, is I was going to networking events. I was going to meetups. I was going to other investor clubs. And people would tell me, like, hey, if you find a deal, I'll invest with you. So when I found the 250-unit deal and I didn't have any money, I put it to the test and I was able to raise$2 million and buy a$7 million deal with other people's money.

32:08And what I learned about it, it was easier. The lenders wanted to loan me more. It was non-recourse financing. I was able to hire professional management and become a true business owner instead of an operator where I literally bought myself a job with my 32 units and my 30 unit. Now I'm a business owner. So that's how I did it. It was kind of out of necessity. It wasn't like I wanted to do it. But I didn't want to stay small, and I didn't want to give up the opportunity to buy that deal. So for the investor side, why is it better for them, interesting for them, easy for them, good for them, safe for them?

32:43Like walk through why they make a decision to co-invest into this deal. So let's say they're$2 million you're raising, and they're going to put in$100 ,000 of it. What's the typical thing for them? What are they looking for, the investor? Well, they're looking for a good return. They're looking for something safe, something relatively secure. There's always risk in any type of investment. But they're also looking to invest outside of Wall Street. They're looking to have a little bit more control over their investment, where they get to see the asset that they're investing in. They get to know the people that are running the deal and making the decisions.

33:17and you know in multifamily they're looking for cash flow they're looking for appreciation they're looking for depreciation so when you have something that puts money in your pocket every month something that goes up in value and something that reduces your taxes and then they don't have to do any of the work so they're leveraging like in my case they're leveraging my experience my contacts my time my rolodex my expertise in terms of like finding deals analyzing deals funding deals, managing deals, handling nuances, anything that goes wrong, like we handle it. So for them, it's pretty hands off.

33:52So if I'm an investor, I'm listening out there and I want to put in, just use a hundred kids example, what should I be looking for? Someone's bringing me a real estate deal. Well, I look at two things. I look at, you want to vet the, the GP team. So you want to vet the people like what's their values? What, how do they run their business? How are they going to handle adversity? What's their track record? And I also look at the numbers of the deal. What are the returns going to be? What's the cash flow? What's the upside? What's the tax savings? And, you know, Dan, I'm sure you know this, like you've looked at thousands of investment opportunities, like every investment opportunity or every pitch deck is going to look amazing, right?

34:33Like the sponsors have amazing experience. Everything is going to look amazing. And so one of the things I'm passionate about teaching is like, how do you really vet that both on the people side and on the number side? And what's the ballpark return I should be looking forward? I think investors could expect to double their money, say, like in a five year period, not including the tax benefits. So, you know, you'd have a combination of cash flow and upside. And if the deal does as projected, it should pretty much double your money. when times go better than expected because of market forces and the deals generally do better and they could also do worse and the tax benefits could be really really big but everyone's going to have that a little different because of their own situation so let's say on the other side of it i am 29 years old i live in montana and someone shows me a deal for 12 units for example something nothing crazy just 12 units and i want to go raise 600 000 what do i do well there's a couple steps so this is why i got into teaching you know and that's how i started is i went to a seminar and i joined a mentorship program and and so my first deal was 32 doors and i'm not sure how i would have done that on my own i probably wouldn't have done it or maybe i would have done it wrong so like i believe that anybody could go out and buy 12 units and especially if they want to use their own money or even raise money from other people.

36:02So you want to acquire certain skills. I think you want to understand some of the basic fundamentals, like what is NOI? What is cap rate? What's a T12? Like what's a pro forma? How do you model a deal? And then you want to be able to find deals. And then when you find them, you want to be able to analyze them quickly and effectively. And then you want to have a network of industry professionals. You're going to need a real estate attorney. You're going to need a lender. You're going to need an insurance provider, maybe a management company unless you're going to self-manage it. And you need a network.

36:32You know, having a network of investors and being a part of a community really helps. I think at some point, you know, you could create your own brand and your own community and have your own following. But as you know, like that takes time and it takes money. So that's how I started is I joined a program and I leveraged somebody else's experience and Rolodex and track record and community. And that's, that's the best way I think people can get started. So you're saying I should go try to find like a mastermind or a group or networking in my city to start to build relationships and to build information.

37:06Sure. I mean, and there's a lot of free stuff. Like you can find free resources on YouTube and bigger pockets. You can find free meetups and get a lot of information. But at the end of the day, you know, you pay one way or the other, you know, you either pay with your time or you pay with your money. Very cool. So on the making money side, as you're accumulating more and more in the real estate game, how are you deciding whether you go to commercial buildings, Airbnbs, fix and flips, multifamily? There's so many options for you as the real estate person, real estate mogul that you are. How do you decide what you're working on?

37:41Man, that's a great question. Like, I really believe that you could be wildly successful on any of those things. And for me, it was like the first seminar I went to, I learned how to knock on doors, buy the pre foreclosure list and knock on doors and try to save people from their home being foreclosed. And after having the door slammed in my face, like 49 out of 50 times, I was like, this isn't for me. So number one, it just didn't align with me like that business. So then the next seminar I went to, they taught single family rentals. And the whole first day, it was like, buy a single family home, rehab it, rent it out and cashflow.

38:19And I remember going home that night thinking I'm going to buy 40 single family homes in the next three years and quit my job. The next day they taught multifamily rentals. And multifamily was like, hey, instead of buying 40 single family homes, imagine buying 40 units on one property. And I'm like, this seems simpler. And the guy teaching said, hey, look, if you have like 100 ,000 to invest, like skip the single family and buy as many doors as you can on one site. So that's what I did. And what I didn't do is I didn't go to 27 conferences and look at 27 different things. But honestly, I probably could have done the same with Airbnb or self storage or anything.

39:00But one of the things I learned early on, Dan, is that the riches are in the niches. And I heard somebody else say, if you want to make specialized money, you need to be a specialist. So I just decided to be a specialist. And to this day, like I get pitched a lot of other asset classes, mobile home parks and different types of things. And the thing is, is I'm, I'm still a beginner in those asset classes. So I just stay in my lane and I keep growing and I keep scaling. And there's so many opportunities like in this narrow niche, but there there's unlimited opportunity. So you now have a wide array of states to invest into to buy multifamily.

39:41Dallas, Texas, Chicago, New York, Atlanta, California, if you want to go like, There's so many different options. How do you decide what state you're going to buy multifamily in? So I have a recipe for that. And one of them is I prefer landlord and business-friendly environments, literally at the state level. Not California. Not my house. Here's the thing. There are people that own apartment communities in California, and they're making a lot of money. Sure. And so one of my beliefs is all real estate is local. If you know the nuances, like in California, I have actually a student that lives there and he's buying deals in San Diego and adding additional dwelling units and he's crushing it.

40:22But like I don't live there. I don't know all the nuances. So if I'm starting with a clean sheet of paper, I'm going to go to a red state at the governor level. So I'm going to be looking in like Texas, Georgia, Tennessee, Utah, Florida. Florida, yeah. Yeah, because even at the city level, they're more progressive and they're more likely to implement like rent controls and stuff like that. But at the state level, it's not going to go through. In fact, some of these states actually have laws passed that preempt cities from implementing rent controls and stuff like that. So I like places where, like, if they consume your product and they don't pay for the product, they can't live on your property.

41:01It's just like a restaurant. It's not California. Yeah, so that's not California. It's not New York. It's not Boston. Again, people that live there, they understand these nuances and they can make a lot of money. but so i look for red states i look for population growth above the average job growth above the average affordability gap which is like say a medium-priced home costs 420 000 and a medium-priced apartment might be 1800 a month well that medium-priced home at 420 000 when you look at the principle the interest the tax and insurance it might be 3200 a month and i target dan like the the working class and middle class families that make 60 to 80 ,000 a year, only 27 % of them could get qualified to buy a mortgage.

41:47I mean, to get a mortgage for that$420 ,000 home. So they're more likely going to be renters and they're less likely to be able to afford the payment of 3 ,200, 3 ,300 a month. And they're going to be more likely to rent an$1 ,800 a month apartment. So those are the things I look for. And coming down to like every year, I do like a top 10 market analysis. In their past five years, it's all been pretty much the same with a few markets coming in and out. But it's Salt Lake City, it's Las Vegas, it's Phoenix, it's Dallas, it's Houston, it's Charlotte, it's Tampa, it's South Florida. And this is where the people were going.

42:25This is where the young adults are moving to. And this is where people are more likely going to rent. So those are all still big name cities. So you're not going to like a rural city or like a secondary or third tier town? I love this question. And that's, it's one of the nuances is all those cities I mentioned, if you're willing to understand and get to know some of the tertiary markets around there, you could do really well and you'll have less competition. So like I have a deal in Amarillo, Texas. I lived in Dallas and Houston for like combined over 30 years. I had never been to Amarillo. Like why would you, why would you go there?

42:57It's not like I'm going to say, Hey, honey, let's go on a weekend trip to Amarillo, right? Doesn't happen. But one of my mentees that was trying to get into the Dallas market and didn't have success decided to look in Amarillo. Now he's got like six deals there and he's, he's literally the third largest property owner in Amarillo. So we really know the market. And then he found deal number seven and I co-GP that deal with him. And it's one of the best performing deals in my portfolio. that's awesome yeah so as people are growing they're getting their first property their second property the third property how should they be considering to scale should they focus on that niche like you like to do or should they be studying and researching if they wanted to go into storage units if they want to go at airbnb or should they really pick a niche and just go that way well it's hard for me to tell people what they should do you know and you can do both but i would just say if you start to get into other asset classes just know that there's a lot of nuances that are different.

43:52And I've seen people that have jumped from multifamily to triple net, to storage, to development. And they didn't do as well because they didn't see the blind spots. They didn't fully see the differences in these businesses. So if you're gonna do that, you wanna make sure that maybe the first couple of deals in that transition, you're working with a really experienced team. I haven't done that. The way I've scaled is I've just done bigger deals and more deals. And then if you stay in your lane in multifamily, like some people would develop like their own vertically integrated company. They'll do the management in-house, the construction in-house or the renovations in-house.

44:36What I do with all my investments is I co-invest with other really good operators. So like I have no employees in my multifamily business. I have no construction people like I've trained thousands of people over the country and a lot of them are out there doing deals and they're building their own organizations and now they've scaled up and I end up partnering with a lot of them and I also partner with some of the biggest and best operators in the country so that's how I do it so when you first get a deal approach to you is there like a certain checklist of things like no way I'm doing this deal is there anything that stands out and vice versa?

45:17Are there any times like, oh, I really want this deal because of this? Yeah, I think it's important that you have what I call like your buy box, you know, and you just get really clear on what it is that you want. Like for me, I'm going to buy, like if I'm going to lead a deal, you know, I'm going to buy in Dallas, I'm going to buy in Houston, I'm going to buy in Tampa because I know these markets, I lived in these markets and they all meet the criteria. I'm going to buy 150 units and up. I'm not going to buy something under 1960. I'm probably not going to buy anything newer than 2010 because there's too much competition and too much new supply.

45:50So if a deal comes across my desk that's 150 units and up, you know, that's between, say, 1980 and 2010 in these markets, then I'm going to start digging into it. If it's smaller, if it's in a different market, I'll probably send it to somebody else that I know. And I'll say, hey, here's a deal that might fit your buy box that doesn't fit my buy box. some people stay away from properties that have you know flat roofs some people get really like technical with like the piping and the roofing and stuff for me i've made money on all those types of deals so it's not so important to me so how do you know when it's time to sell when it comes to multifamily like some people get emotionally attached or they just want to keep it forever so you buy a place for eight million dollars and now it's worth 12 or 13 or whatever the number is and time goes on when you know it's like you know what now's an opportune time to sell Yeah, that's a great question because some people do talk about like holding these deals forever.

46:47And by the way, if you do that, just know that like every five to seven years, you're going to have to reinvest to continue to upgrade the property because all those upgrades you did in year one are starting to experience wear and tear after five to seven years. So I don't really get how people talk about owning properties forever and having infinite returns. And it doesn't always work. It's a good concept in theory. but it doesn't always work that way. So because most of my deals are syndications with investors, what I find is people like to get in and out of deals within three to seven years.

47:20Some people want to reinvest. Some people want to use the profits to pay for their kid's college or to pay off their home or to take a dream vacation. So within three to seven years, if I've completed and met or exceeded the projected returns, that's the time for me to exit. Yeah. Also, you know, like every asset class, I mean, Jamie Dixon with Chase will say this, and Ray Dalio, every asset class every 15 to 20 years is going to have a correction. So you may be going up and up and up and up and up. And for example, from 2012 to 2022, multifamily only went up. Then in 2023 and 2024, it went down.

48:00So there were people that just continued to hold. Now they wish they would have sold. And now they got to wait for the next upturn. interesting yeah so on the mastermind side why is it important for people to join if they want to get into the real estate space for example why joining real estate masterminds well because you're around other people that are playing a game and at your level or higher you know you hear the saying like you become like the five people you spend the most time with so when you are a part of a mastermind you expand your network you know you expand your contacts you expand your knowledge you get exposed to different things and you get to leverage other people's experiences other people's problems other people's network and a lot of people like in my mastermind they end up co-investing with each other so you just have more deal flow and more opportunities very cool yeah so people start to meet each other they're starting to build up their own portfolio and now it's time they're ready for their first big deal when they're reaching out to investors and they're reaching out to people that they've met, how do they put it on a silver platter for someone to actually want to invest into their business, into their real estate?

49:12Yeah, that's a whole topic of like how to, so what I hear you asking is how do people effectively like position their deals and pitch their deals and raise capital, right? I think part of it is like, who's your ideal investor? Like for me, for so many years, I would say it was a retail investor. It was people that came to my seminars, watched my master classes, follow me on Instagram and then go to my website. Maybe they've learned from me or took a course. These people are likely to invest like 50 to 100 to 150 ,000. So if I'm raising$10 million, I need 100 investors. You know, other people and where I'm transitioning very recently is I'm getting in front of family offices, allocators, high net worth people.

49:55So, you know, there's a theory that like, it's easier to get 10 people to give you a million dollar check than 100 people to give you 100 ,000. For me, it's been the opposite because of the nature of my business and the seminars and the masterminds. I once was able to raise$22 million in an hour webinar from like hundreds of people that I put out on a Zoom meeting. But now what I'm focused on is like how they get in front of and build relationships. And the more the family offices and the high net worth people, they care more about the relationship. They care more about like knowing you. because they don't have a shortage of deals.

50:34You know, a lot of people teach like, oh, you're giving people one opportunity. Well, that might be at the retail investor level. As you know, like the family offices, the centimillionaires and the families that manage hundreds of millions of dollars, they have a lot of deals. For sure. They have a lot of deal flow. They're getting pitched all the time. So what they're looking for is like connection. They're getting to know you. They're looking to know your values. Like, who are you as a person? And I think they're going to invest more into you than in any deal that you might position with them.

51:06Is there a goal in mind? You've done over 11 ,000 units now. Is there a number like, you know what? I'm going to stop at this point. You know, that's a good question. Every now and then I think about like, why do I keep doing this? But I keep doing it because it works and I can do it somewhat passively. All my investments are something I do and I co-invest with other people now so I don't have to do all the work myself. I'm not an operator at any of my deals. And so I think that's something I'll continue to do for the rest of my life, honestly, because it works. The event and mentoring and mastermind, I am an operator.

51:46Like I'm very hands-on. I coordinate. I'm the main content creator. I'm the main coach. I'm the main mentor. I do a lot of the speaking. And that's just something that fills my soul. How long am I gonna do that? I don't know, but probably for another decade or so. but I'm not sure I'll be doing that when I'm 80. Sure. You know? All right, let's talk about the charity side. Why do you think it's important for people inside of their households or with their businesses and offices? Why do you think it's important to have some type of philanthropy part of their world? You know, the best way I would say that, Dan, is anybody in this country who already hit the lottery.

52:20Like, we're so blessed. And I didn't realize that. Like, I'll be authentic. Like, when I was an engineer and an MBA and I was making$120 ,000 a year, like I was blessed, but I didn't feel it at the time. I felt like I was struggling to keep up with the Joneses and was just in a different phase of my life. So I wasn't one of these guys that were giving away 10 or 20 % of my income. But when I started to come into, you know, seven figures and I started to reduce my taxes and I went five years without paying any federal tax, like I felt a calling that like I could be doing something more. and so I got into charity and it became addictive you know and and if you have actually not only contributed to a charity but actually went to another country right and and like I used to donate tens of thousands of dollars to a charity that would provide wheelchairs for people in need and then they invited me to go to Nicaragua in 2017 and it just changed my life and so like to me like giving money changes the people that are the beneficiaries of that charity but actually going on a trip actually changes my heart like they like it just transformed me so i got into it even more and now one of the charities that i'm most passionate about is one of my best friends runs a charity called child liberation foundation where they are committed to eliminating uh trafficking and of children so like i have paul hutchinson speak at a lot of my events we do fundraisers I match dollar for dollar and just in the last six months we've contributed like with my community and the matching of my company like almost a half a million dollars amazing yeah and I and and now I'm like hey I want to go undercover and he's like no no no no you'll get killed like that's not something you want to do yeah I've had a lot of friends that have done it and it really does change them yeah because of the things that they see and you know when they go to Mexico and they have to be there for weeks at a time to be undercover.

54:24It's very intense and very dangerous. Very much so. Okay. On the charity side as an individual, why do you think it's important for people to take the time to actually go do it compared to just here's 10 grand or here's a thousand bucks? Well, as I mentioned, I think, I think the money is, is impacting lives because we, they do need money. and I believe everyone in this country in the United States is blessed like I said we hit the lottery so whether you're making 10 ,000 a month or 100 ,000 a month I would encourage everybody to to start doing something like that but actually going on a trip like that first trip I went to Nicaragua where you see how a 200 wheelchair not only changed the recipient but like their family their caregivers I mean and some of these people were adults and some of these children that are 11, 12 years old are being carried like a sack of potatoes that never had the gift of mobility.

55:22And when you see the emotional response where they're getting placed into a chair and they could actually move around and like it brought tears to my eyes and it just touched my soul. And then it makes you want to do more. And it also makes you realize how blessed you are. And for me, it just made me feel gratitude every day that like I have my arms and I have my legs and I have my mind and I have my eyes and I, like, it just changes you. You know, and you go from like, like your hardest day could be somebody's best day. Sure. All right, so the last question is the one question I ask on every single episode and I've never gotten the same answer before.

56:01So let's say you go from 11 ,000 units to 20 ,000 to 50 ,000, 100 ,000 units over the course of time, but finally, eventually, it's time for Brad to pass away. What percentage of that billion dollars do you leave to children?

56:16Wow. With the children or the charity? Children. Children. You know, that's a really good question, and I don't know the exact answer. Because I believe that, you know, children are our future, and I know a percent of it, but I also have a heart for, like, old people. And my dad's in a senior living facility, and if I ever got into another asset class, I have to believe that we can run our senior facilities better. For sure. Sure. And and so and I don't have kids and I'm not currently married. And that's a good question. And I don't really have a clear answer. I could make something up, you know, that would sound really good, but I don't have it.

56:55Yeah. So where can people check you out on social media? Where can they learn about you, your masterminds, your events, things that are going on in your world? Yeah. So I'm really proud of what is happening on my Instagram page. So I told you this personally, but six months ago I had 14 ,000 followers and now I have like almost 350 ,000. And so I spend way too much time on Instagram and I respond to my own DMs, but I'm really into it and how it's grown. So I would tell everybody to go to Instagram and my name is just Brad Sumrock, B-R-A-D-S-U-M-R-O-K. And it's got a blue check mark. And I also found that there's like some copycat accounts, which is the highest form of flattery.

57:35and they have punctuations and underscores. So I don't have any of that. So just B-R-A-D-S-U-M-R-O-K with the blue checkmark and I'll respond to you personally. Very cool. All right, guys, as you know, we covered these three core topics about how to make money, invest money, give it away to charity because it's important for our society to do those things, understand them, and have discussions with your friends, family, and followers. We grew up thinking it's rude to talk about money. I think that's ridiculous. We have to have discussions about money because it's real life. Loans, taxes, accounting.

58:03Should I rent? Should I lease? should I buy? These are all things that are part of our daily life. So you have to be able to have these discussions eloquently with the people around you. So getting as much knowledge as you can by listening to podcasts like this and richly sharing the things that you hear on this podcast is a very useful tool for you ever and ever and ever with the people around you. So check us out online, share, like, comment, subscribe, all those things. It all helps us keep up with the rankings on the top 50 of the whole world right now. We're number 44 in the world right now.

58:29So that's because of you guys liking, commenting, subscribing. So I appreciate it. Visit us at themoneymondays.com and we'll see you guys next Monday.