All Forum Posts by: Charles LeMaire

As a complete neophyte, I met Brad Sumrok in 2010.  He is a MF mentor/trainer based in DFW area.  Syndication is in his toolbox.  BTW, he has members from across the country and we are in deals in 5 states.

With his mentoring and in his network of Sponsors and Passives, my wife & I have passively invested in 35 deals, 10 of which have sold. 

He is not a charity!  But it has worked out very well for us - my lucrative hobby.  

It can be done without a mentor and group, but you would need to be more connected than I was or put more effort into finding Sponsors than I did.

Regards,

Charles LeMaire

Apologies, a bit new to BP.  I have yet to figure out if you can contact anyone directly.  Not sure how the naming works.  If only I were good at social media.  But with that said...

Somehow the words "model" and "system" seem to be important to Ben. I gather Ben is a fellow that teaches flipping (I think that is what Hacking means, not really sure) SFH. And if one is making money selling how to with SF, speaking ill of MF makes sense.

There are dozens of ways to make money in RE:  notes, assisted living, strorage, trailer parks, hotels, etc.  I happened to walk into a group that did SF & MF;  I choose MF.   Some would buy alone, some would syndicate, that is some would find and sponsor a deal and some would invest as passives.  

I am the latter - I had a good job that I sort-of enjoyed, had amassed some funds to invest, so this was a lucrative 'hobby'.  My wife & I joined in 2010, studied and trained, for a few months, got into the first deal in 2011.  We have done more passive deals than most - most want to jump to Sponsor, but I was  happy at well paid job with good benefits.  

I am sure Ben is much richer than I, but he works at it full time.  But we have done well enough; We put $1M into MF syndication deals as passives and have pulled out about $2M and are currently in about 25 more deals - as it is hard to say what the value is until they sell, so it is hard to be concrete - sorry.  Likely around another $2M in the future.  I had a full time job until June of this year when I retired.  The RE investments have upgraded my retirement from 'Coach' to 'First Class'.

Is this the only way?  Heck NO!  And this way was is not for all.  I had to have money to invest; I did, so my money could do the work;  I have no sweat in these.  My involvement was to do the training to become knowledgeable (Sophisticated - We were Accredited, but you need to know what you are doing!) and get involved (meet & greet perhaps 10 times per year).

Some folks can go to meet-ups or perhaps they have contacts, but a active group that trains and has a network is good for many - like me, I knew near nothing when I walked in.  But they are not charities, they will somehow extract a fee.  All groups are not created equal!  

If you want to make the jump to MF and you're not connected, look around at various groups, kick some tires.  I suggest my guy; a fellow named Brad Sumrok, you can google him (read this - I have not learned how to point at his site in this interface).  He operates out of DFW area, but has members from across the country (I am in deals in 5 states).  He does a week-end "Rat Race to Retirement" (R2R) event 3 times a year (Nov, Mar, July). He actually does a great overview of the process (but it is only 16 hours, so not deep enough to know all, so you can decide if this is good for you.  He does not make a hard sale!

To be crystal clear: I have been with Brad since he started his company.  I volunteer to help at many of his events, but he does not pay me anything.  I volunteer because I think he is the real deal, this is good for so many (but not all), and I like to help my mentor.  For this to work as a passive investor, I feel you need to have:

* Money - I think you need to have about $200K to invest plus the fee to join.  This has increased a bit as the fee tends to increase and the market has compressed a bit.

* Time - You need the week-end, a month or so of evening to watch the on-line training, and 5 to 10 days in DFW to network.

* Personality - you can not be so shy, that you can't network.

At the R2Rs, I have told folks to go away and come back.  I told a friend not to bother as he works too much to come to networking events.  And I know of folks that are too introverted.  

If you are interested and you attend, I will likely be there, say hello - big, load, white hair.

As for BEN, I really have no idea what he is teaching, selling, etc.  He may be great.  House hacking may be right for you...

Regards,

Charles LeMaire

I am new to BP, but have been a Brad-ite since 2010; my wife & I first met Brad when he was at LifeStyles Unlimited (LSU).  We followed him when he left and immediately joined when he started his group, which I call Brad Sumrok University. 

At this time, we have really only done passive investing; to be clear there is a fellow (or two) that finds a property and puts together the paperwork called a Sponsor.  The Sponsor needs to raise money to make the deal, so he will send a message to his contact list to determine who wants in the deal - that would be me, a Passive investor.  

I appreciate what Brad has done for us and I willing to show our numbers for you to see and decide.  To date we have gotten into 35 deals. 10 of which have sold, and a couple are up for sale.  I manage our money fairly well, so we had money to invest, so after going through all of the LSU training, we got into 3 deals in 2011.  About this time, we made the jump to Sumrok.  3 in 2012, 3 in 2013,  2 in 2014, 4 in 2015, 3 in 2016, 8 deals in 2017, & 10 deals in 2018 (so far).  1 deal sold in 2014: total net returns of $18K on $100K invested (5.4% annualized yield).  3 deals sold in 2015: $41K on $75K (18%), $224K on $100K (45%) & $40K on 100K (13.2%).  1 deals sold in 2016: $188K on 150K (20%).  3 deals sold in 2017: $185K on $100K (79%), $91 on $150 (18%), & $350 on $125 (29%). 2 have sold in 2018 so far: $109K on $50K (58%) & $61 on $75 (35%).  I would say three home-runs, a third-base, two second-bases, a first base, and a fly ball...   

In all these deals, I have amassed a list of horror stories - very few deals go through without a hitch of some kind.  But Brad taught us well; we addressed the issues and moved on.  I am a rather active passive!  I formed a cabal and toss the same bad lead from two deals, passing the leadership to a friend (he wrote a book and did not mention me - can you believe that!).  On two occasions, I stepped up to be the Lead, once temporarily and once permanently.  I am the only person I know of to make a cash call on a deal (ultimately it was a home-run).  And I am still looking for leads that will do deals and make me money so it can be managed.

I know Paul B who has posted above.  I recall our first conversation - he needed more money, it would have been a waste for him to join then.  He returned and I have seen him in several deals.  I know Tom Lafferty who has posted above.  He is a Brad coach and a good guy.  I was a passive in one of his deals - a home-run!   I know Carlos Flores who posted above.  I am in one of his deals - I like him, he sends me checks.

I am sure that one could accomplish getting into MF, with out a mentor or group. In my case, I had a time consuming job that paid well (retired in June 2018). So MF was a part-time hobby for me. I am enjoying my free time, so it is still my lucrative hobby. We formed a LLC near the end of 2015. I can say that we had about $1M invested in late 2014, but had recouped our investment by 2017 - but were plowing the profits back in. We doubled our investment in about 6-7 years. My concept is to build a ladder of deals, each year hopefully a few will sell. Wash, Rinse, Repeat.

I like having Brad look over the deals, not a guarantee, but a feeling of assurance.

Above, one fellow expressed some hurt feelings.  Brad makes it very clear, he is here for his students!  He is not a charity!  He is a teacher and his product is his help and guidance.  I doubt that the fellow with the hurt feelings above gives away his product.  I got a paycheck from my employer.  As we are charter members, we volunteered to help Brad at various shows around the country; I have seen him talk to a lot of folks at the shows and other speaking events. But he does not do the 'pick my brain' meetings, especially with non-students.  I have volunteered at most of the R2Rs from the start (missed one, I think) - most Brad students know of me as I am big and loud.  Point is, I respect Brad, he is an expert at MF, perhaps a savant.  And he greatly enhanced our finances.

Several comments were about the 3 to 5 years (I swear, I think it was always 3 years, rather than 2).  I have seen several do that, but as Sponsors.  On the best deal, the couple who sponsor got $560K and deserved it; by the way that was their first deal - in a post above about 2 years ago, I think she is the one that was mentioned as quitting her job, he has now also quit.  As a passive, I had to have a large enough amount or more time to get there.  I guess I am one of his under-achievers, my wife retired in 4 years, but I took 9 years.  OK, I sort of like my job, the pay was great, and it had good benefits (medical).  I had no intention to retire before age 65.  Brad has moved us from a 'Coach' retirement to a 'First-Class' retirement.

Let me say that I am elated with how Brad has worked out for us.  I have nothing negative to say about using another coach or going free-style (you need contacts).  Brad brings to the table good/great training and a network.  If you intend to be a sponsor, access to the network of passives (like me) is invaluable - you can fund a big deal in days.  And there is a great deal of name recognition among selling brokers - they know we can fund and close!   As a passive, I see several deals in my email each month, sometimes 3 a week.

As I am relatively visible at the events, I have a couple of join rules that I share with those that ask:

RULE 1: It makes no sense to buy a Cosco membership, if you do not have money to buy stuff there!  I think you need about $200K + foundation fee to make it worthwhile as a passive.  Sponsor absolutely used to be able to work with less - they used their sweat equity; today as prices have increased, hard money deposits are larger, and as there is more competition many sponsors are partnering.

RULE 2: Don't buy a GYM membership if you don't use the GYM!  It makes no sense to buy a Brad membership if you don't show up.  You have to meet & greet and get involved - Sponsors and Passives need to make those relationships.  If you are attempting to be a Sponsor (Personal Student) you have to get out there and look - deals are not assigned to you!  This will not work if you are shy!

I often get asked should I be a Personal Student or a Foundations.  I always say go Foundations, learn the basics, and then upgrade.  90% go Personal Student immediately.  

If you are a neophyte, here are a few hint:

1. Typical minimums are $50K.  I have seen $25K (a while back), $75K, and even $100K on a large deal. If the raise is $1M, there may be a mix of $100k and $50K investors. perhaps 15 investors.  On a raise of $10M, the Sponsor wants to have as few persons as possible, so the min will be $100K or larger.  

2. Spread your funds; I can't spot the home-run or the first-base in advance.  

43 A sponsor, you have a relationship with, will send an email that discusses the deal.  He will likely have a web-based seminar.  Realize on a good deal, it will be a foot race to submit the papers.  When it is funded, that's it.

4. Deals borrow about 70% to 80%, they have to raise 20% to 30%.  Yield Play loans are commonly agency non-recourse loans.  Value Play loans are recourse loans.  

5. The loan is signed by the Sponsors and Key-Principals (KPs). Combined they must have a liquid net worth in excess of the loan amount. Note non-recourse loans can become recourse (Bad Boy rules) so realize being a KP involves some effort and risk.   

6. You need to be Accredited (rich) or Sophisticated (smart) to do this; or represent yourself as such.  The Sponsor should ask you and he will give you a questionnaire about it.  Do the training!  You should be smart enough to look at the analysis and check the assumptions.  BTW there is a limit of 35 sophisticated (non-accredited) investors in a deal (I think that's the limit).

7. It ain't eatin money, it is vacation money.  A lot of folks toss the 10% cash-on-cash around.  It is not guaranteed!  Occasionally there is an expense and you miss a quarter.  I see 8% to 9% usually.  I have a few deal that have not distributed regularly.   Most deals do not distribute during the first 6 months (a year for Value Plays). 

8. On a few occasions, the deals get supplemental loans (second loans).  On one, I put in $100K.  The supplemental returned $67K.  There is some remaining equity, but let that slide for now.  From a Cash in the deal, I have $33K and it distributes $15K/year.  I am just fine with the 45% cash-on-cash.

9. Deals are not liquid; have enough to live on; don't quite too early.  You might get distributions, but the big sack of money comes at the sale.

10. The Sponsor should send monthly reports - READ THEM!  And ask questions.  It is your money!  BTW, things can happen. Several stories here, but way too long.

11. When the property sells, the Sponsor has to collect refunds and pay outstanding bills.  He can't distribute everything at once.  You will likely get 80% in a week or so and then a couple more checks at it settles out in a month or so.  I just got a $10 rebate check from the title company for the sale a year ago.

12. You can live elsewhere.  I am one deal in Hurst; the Sponsor lives in CA.  I have been in deals where other investors have come from CA, IN, MA, etc.  You do have to show up and meet folks!

I am sure I have forgotten a few things, but ...

My main point is that Brad is the real deal, but he is not a charity.  He has constructed a great environment to thrive in.  He has overseen hundreds of deals and created scores of millionaires.

I am happy to talk to about all this, but as I am new to BP, I have no idea how one user contacts another.  I see a few mentions of that, but not sure how it works.  Above one fellow said use my email, feel free to use mine if you know how to find it.

Regards,

Charles LeMaire

I know nothing of Rod, he may be a great coach.  I can only tell my story as it relates to Brad Sumrok.  

I have been working with Brad since 2010.  At that time, he was a Coach at Lifestyles Unlimited (Del Walmsley's investment group out of Houston).  Brad was the first LS student to jump to multifamily without doing single family first.  Around 2002, he purchased 2 small apartment building by himself (32 & 42 units, as I recall).  Sold them a year or so later an pocketed $1M.  Del hired Brad and sent him to Dallas to open their DFW office. 

My wife and I walked in to LS in 2010 and after hearing Brad's presentation on MF,  we joined.  Brad left about a year later and we followed as we felt he was the brain trust of MF.  

My point is he has walked the walk.

To date, we have gotten into 35 deals as passive investors, 10 of which have sold, 3 are up for sale, and a couple more should go on the market soon. Currently we are in about 3850 doors/units. I calculate the annual IRR (yield) (sort of like the APY on a CD at the bank) for each deal sold; the best has been an unbelievable 78% and the worst has been 5%. Between those are 58%, 45%, ... down to 13%. In all, we've doubled our net worth - upgraded from a 'Coach' retirement to a 'First Class' retirement. I hope that got your attention.

Brad has a great program and is a great coach!   The Personal Mentoring program is geared to the folks desiring to be deal sponsors - a sponsor's job is to find a property and collect passives as potential investors.   And there are real estate contacts to help find, buy, and sell the deals.  The Foundations program is geared to the passive investor - a passive's job is to meet potential deal sponsors.  Both groups get the on-line training and attends the various networking events. The PM students get hand holding and extra training for their needs.  One has to be a PM to harvest money from the group.  Most of the deals are sydications (sponsor plus many investors), but some folks buy a property as a sole investor.

The power of Brad's "Eco-System" is the ease of funding deals.  When a sponsor finds a deal, he asks his contacts and the deal gets funded by the passives that he has contact with.  As I am active in the group, I will see several deals each month.

As I see it, almost anyone can do this, but the person this is not good for is:

[1] the fellow with few funds.  It makes no sense to buy a Cosco membership with your last $50 dollars, you have to have enough to buy stuff to make the membership fee worth it.  Similarly, you have to have enough to pay for the membership and have investing money. (It was(is) possible for a sponsor to lead a deal with little funds, but is harder now as the prices have risen.)

[2] You can not be too shy!  You have to meet people.  If you don't get out there, you have wasted the entry fee.

[3] You have to have or make time to show up.  If you join the GYM and don't go, you wasted your fee.

The normal entry to the program is at one of the three 2-day Rat-Race to Retirement (R2R) events each year (March, July, & Nov).  Brad actually teaches real information at these events, so they are worth attending, just to see if this is right for you.  Yes, there is a bit of Tony Robins motivation mixed in.  Sunday includes a bus trip for the attendees to see 3 or 4 apartment complexes, ones owned by his students, so you can see what you are getting into.  Later that day is the pitch - it is not a hard sell!   If you come, I will likely be there.  I usually volunteer - big & loud, directing foot traffic.

I think the group did about 40 properties in 2017 and we have done about that many so far this year.  They are located in many states - landlord friendly states! They range from 50 units to 500 units. The normal hold is 3 to 5 years.  

Brad can be found on FB and on his web site: https://bradsumrok.com  

And I suggest Old Capital pod casts.

Regards, Charles LeMaire