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Updated about 5 years ago, 11/16/2019
Brad Sumrok Rat Race 2 Retirement
Search for him on this site. There is a lengthy thread (or two) that should answer your questions.
@Danny Tran as a newbie to multifamily myself I found his two day event extremely informative and it provide practical info towards investing into multifamily. Of course in two days you won't be able to learn everything you need to learn to start investing in multifamily. I do plan on joining his mentoring group and will also be attending his event in November. Hope to see you there!
@Danny Tran -- I started with Brad in 2010. I volunteer at the R2R (Rat-race to Retirement) week-end events (he does not pay me). Brad gives a great overview of how it all works in the 16 hours, but there is more to learn. Clearly, he has more training, that is what he does -- and he is VERY GOOD at it. If you were not aware, there is a pitch to join his network on the second day. It is a soft pitch, no hard sale.
Once in the network, the rest is up to you; there are no guarantees -- it's a parking sticker, not an assigned space.
He hits on the various ways to get into MF: buy it yourself, find a MF and get investors to fund the deal, and be one of those investors.
My wife and I choose to be passive investors. We took about 6 months to get into our first deal (160 units in Irving, TX).
I have three criteria: 1. you have to have time to get involved. 2. you can not be to shy to meet folks. 3. you have to have some money.
The next R2R is next week-end: Nov 10-11 2018. He does three a year: March, July, Nov.
Regards,
Charles LeMaire
Hey @Gerald E. and anyone else who's interested... I apologize, but I never have a short answer to anything, so here are my thoughts about what I call the Cosco equation.
You would be foolish to get a $50 Cosco membership, if you only had $100; you would never get to break-even.
Similarly, you have to weigh what you can make in more traditional investments against what you will make in RE, after you pay Brad, over the entire period. You need to take into account that MF RE is not liquid, you are in the deal until the property sells - likely 3 to 5 years.
Please realize I am referring to the Sumrok University (my name) passive only "Foundations Membership" (F), where you have access to the on-line training and access to the networking events, not the "Personal Student Membership" (PS) which is more expensive.
In about 2013/2014, when Brad started the Brad fee was less and the returns were likely to be 20% to 25% (annualized). And the minimum was usually $25K. So I felt one needed at least $100K for this to be smart (as a passive only). Now the fee has increased and the annualized yields are a bit lower, so I think it takes at least $200K to make sense. And the deal minimums have increased, usually $50K now. This is my gut feel, your mileage may vary. If you are a "roll the dice" person, less may work.
BTW, I have actually averaged 30% annualized yields on the 10 deals that have sold; the lowest was 5%, but the highest 79% - yes, I promise I can do math and that is correct!
I suppose the next big question is "How much?". It seems to increase at each event. As of Nov, I believe he was selling the F membership for $7.5K for a two year period. I think the renewals were $2.5/year after that.
PS membership is almost $30K for 2 years and around $5K to renew. This is for the person that wants to become a Deal Sponsor. One has to be a PS to harvest money from the network and it includes hand-holding through the steps of the deal.
I guess this is my chance to put in a couple of good words about our group - please realize I am not paid by him, I have been a student with him since the beginning and I usually volunteer at events to help repay what he has done for us.
1. There have been 70 persons who have increased their net worth by $1M in the group. This was announce last Aug. This seemed to be the sponsor (PS) so I don't think the passive investors counted; I'm pretty sure there are many more, including me. The point is, we are not making Brad rich (actually we are); as a group we are getting rich from our investments.
2. I see several deals a month. If one is active, that is, network with the group, it is easy to enter into deals. This year, I have gotten into 13 so far. Last year there were 45 deals and this year it looks like we will hit 60+.
3. I have to say that the network will step up and fund a deal in a matter of days making the fund-raising task a breeze for the sponsors.
4. The 'ecosphere' is greatly aided by the fact that we can fund and close deals; brokers love that and will definitely make sure we included when a deal is being considered for sale.
Regards
Charles LeMaire
@Charles LeMaire , really appreciate you responding and the insight. I'm interested in learning more so I will research further. Thanky
Reading this in Feb 2019, since there is upcoming seminar in March 2019. From what I am understanding the seminar itself teaches you nothing beside getting good vibes " RE investments is the best vehicle to create wealth" etc., and networking with many people that never done a deal. So, basically the seminars are a pool for OPM group for future deals, where you still not learning as passive investor and the only way to learn it being PS at $30k ??
I like the cosco equation. i.e. you wont break even with small passive investments nor learn much that way.
Yikes, $30k....
Originally posted by @Nick S.:
Reading this in Feb 2019, since there is upcoming seminar in March 2019. From what I am understanding the seminar itself teaches you nothing beside getting good vibes " RE investments is the best vehicle to create wealth" etc., and networking with many people that never done a deal. So, basically the seminars are a pool for OPM group for future deals, where you still not learning as passive investor and the only way to learn it being PS at $30k ??
I like the cosco equation. i.e. you wont break even with small passive investments nor learn much that way.
There is some of that "good vibes" stuff, but it mostly is actual content: how to become a multi-family investor and what you need to know. The field trip is valuable too, in order to get an idea of the types of properties his students buy. But, you can't just go out and do it after two days of lectures. I see it as more of an introduction, and by the end of the weekend you'll know whether multi-family is for you, even if you decide not to join one of his higher-priced programs. (Aside from the personal mentoring, there is also a lower level program at around $6,000 where you become educated enough to invest with his mentoring students, and attend student events so you can build relationships with them.)
As for networking with people "who have never done a deal," of course there will be beginners there. The event is targeted to them. But dozens of Brad's students, some of whom have done 5-10 deals, will also be there. It's up to you to target the right people to meet. The most experienced ones will be called out by Brad when he is speaking, so pay attention.
It is easy to assume that the point of the event is to bring in a bigger pool of investors for those who are actually doing the deals, but the thing is the SEC requires you to have a pre-existing relationship with the sponsor in order to invest. Plus, Brad doesn't allow sponsors to accept investments from people they met that day unless they join the program. Brad puts on the event to drive more students into his program....I am sure he would be transparent about it if asked......I know of no other event where you can learn so much about multi-family and network with experienced people for something like $200.
@Charles LeMaire
Hi Charles,
thank you for your answers. I have a few more on Brad’s program. How many members would you say are active in the community currently? Both Foundation and PS level. Do they attend the same networking events? Are these events all in and around DFW?
Is there an online community as well? Ie Facebook group? Private online forum for members to share deals and raise money?
Also, do you think it makes sense to join when I’m currently in NY? I will be moving to Frisco next year, so do you think I should join now or wait until next year when I’m in Dallas? I appreciate it. Thanks
Alan
@Alan Zee -- I'll message you, so that you can ask ...
But let me try to address the above in general.
How many beans are in this container... It is very hard to tell how many Foundation (F) and Personal Students (PS) are active in the group at any moment. I suspect that only the Sumrok registrar knows the real number at any moment. Three times a year Brad has the big recruitment events (the R2Rs) so the count increases. And there are folks that fad away for various reasons; for instance, no investment class is right for everyone.
All members have access to the same networking meetings - there are 6 per year. The Fs can go to fewer. These events typically consist of a 5 or 6 hour bus trip, visiting 5 or 6 properties (BTW, a sample bus trip is included in the R2R event), followed by a social gather that includes food and drink. Most of the networking events are in DFW area, but there have been some remote ones, eg. PHX & HOU.
There are some advanced training events that are open to PS only.
Yes, there are FB pages the group in general and some for the PS. Honestly, I am not a big social media person, so I am not on these much. But I know know some remote folks that use them. The Sumrok site has on-line training videos and some other stuff.
You must answer the last question. You are trading some money for speed, access, knowledge, and experience. If you are ready to go fast, it is likely worth it, but if not, perhaps you should wait.
Clearly, I'm tight with the "FORCE", so I know most of the members, or at least, they know me on sight. I am seeing 1 or 2 deal announcement each week.
@Nick S. -- I think my friend Paul addressed this, but please don't put words in my mouth. There is real, useful content and there are seasoned sponsors and investors at the event. One will get a great overview of MF by attending an R2R and you visit a few complexes where experts point out what makes C and B class. But it is not everything, those two days are augmented by the video training that all members get. SURPRISE: it is a recruitment event. At the last few events, there have been about 700 persons, of those, about 150 to 200 are current students, mostly PS and most have done deals. Of course the PS want to find new money, they're not stupid. I will be at the next one in NOV (16 & 17) and I've done 49 deals as a passive.
Regards,
Charles LeMaire
DISCLAIMER: BP is asking... I don't work for Brad, I do volunteer at events, I am a big fan, and he has moved my wife and me from a Coach to a First Class retirement (airline joke).
Regards,
Charles
@Nick S.undefined
Originally posted by @Alan Zee:
@Charles LeMaire
Hi Charles,
thank you for your answers. I have a few more on Brad’s program. How many members would you say are active in the community currently? Both Foundation and PS level. Do they attend the same networking events? Are these events all in and around DFW?
Is there an online community as well? Ie Facebook group? Private online forum for members to share deals and raise money?
Alan
I'll answer the question about the Facebook group because it's the one thing Charles didn't explain. There is a private group for students, where we can connect with other students and begin to build relationships. However, the group is not to be used for offering deals or raising money. A Sponsor offering a deal under SEC Rule D 506(b) (which is usually the case) can only raise money from investors with whom they have a pre-existing relationship, and being Facebook friends is not enough. However, connecting on Facebook is the way that one can begin conversations in order to already have a relationship when there is a deal. It's a place where one can introduce themselves, "I just joined, I live in NYC, and want to invest in TX and FL. If you are doing deals there, I want to meet you." or "I just sold a business and need to invest the proceeds by the end of the year. I am looking for opportunities with bonus depreciation." or "I want to buy a 200+ unit property in Ohio. Who lives there and might be interested in partnering?"
By the way, if a Sponsor is raising money under 506(c) then they are free to advertise anywhere, in which case there is no particular benefit to posting on a private Facebook group when you can just post it anywhere. But most of the deals done in the group are 506(b). Besides, it wouldn't be wise to invest with someone you don't know anyway.
