Brad Sumrok Rat Race 2 Retirement

[Danny Tran]

Hi All, I'm new to real estate investment and want to learn more about multi-family real estate investment. I came across Brad Sumrok's Rat Race 2 Retirement seminar. 1. I'm interested in attending but want to hear feedback from anyone who have attended the course before. 2. I'm also am curious long after the course it took for you to purchase your apartment complex and profit from it. Thank you!

[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