Real Estate Investing With Jay Conner
In this episode of Real Estate Investing with Jay Conner, Jay and his special guest Tim Bratz, the CEO and founder of Legacy Wealth Holdings talk about how to acquire and transform distressed commercial and apartment buildings into high-performance investment assets.
Tim began his real estate career in 2007 brokering commercial leases in the competitive NYC real estate market, where he saw the true potential of investment real estate to transform personal finances and provide financial freedom.
Tim’s resourcefulness helped him acquire his first investment property in Charleston, SC in 2009 by using his credit card to buy a duplex. Tim transformed the rundown duplex all on his own and turned a profit on his first deal. He reinvested those proceeds and began seeking private capital to expand his holdings.
Today Tim follows a simple formula to buying real estate: only invest for cash flow, only buy at wholesale prices, and create (never speculate) appreciation through value-add improvements & sweat equity.
Working in real estate, Tim has learned how to build a passive business and create a residual income that allows him to live the lifestyle of his choice. Tim now focuses on educating and empowering active operators and passive investors to become financially free through commercial real estate.
Tim’s current portfolio exceeds 4,000 units with a valuation of more than $350M. Working in real estate, Tim has built a passive business and created a residual income that allows him to live the lifestyle of his choice.
Timestamps:
0:01 – Get Ready To Be Plugged Into The Money
1:25 – Jay’s New Book: “Where To Get The Money Now”- https://www.JayConner.com/Book
2:27 – Today’s guest: Tim Bratz, the CEO, and founder of Legacy Wealth Holdings
4:34 – Tim Bratz’s journey in real estate.
9:52 – Tim Bratz’s advice to a new real estate investor on how to find private money.
16:22 – How Tim Bratz achieves his current portfolio that exceeds 4,000 units with a valuation of more than $350M.
21:49 – Connect with Tim Bratz: https://www.LegacyWealthHoldings.com
25:25 – Actions to make to become successful in real estate investing.
28:45 – Tim Bratz’s parting comments: The best thing you can do is take action
Private Money Academy Conference:
https://jaysliveevent.com/live/?oprid=&ref=42135
Have you read Jay’s new book: Where to Get The Money Now? It is available FREE (all you pay is the shipping and handling) at https://www.JayConner.com/Book
Free Webinar: http://bit.ly/jaymoneypodcast
Jay Conner is a proven real estate investment leader. Without using his own money or credit, Jay maximizes creative methods to buy and sell properties with profits averaging $64,000 per deal.
What is Real Estate Investing? Live Private Money Academy Conference
YouTube Channel
https://www.youtube.com/c/RealEstateInvestingWithJayConner
iTunes:
Listen to our Podcast:
Build Your Legacy Wealth Through Commercial Real Estate with Tim Bratz & Jay Conner
Jay Conner
00:02:32
First of all, he and I are friends and we are co-fellow brothers in a great, big mastermind that is for top-end real estate investors all across the nation. In fact, that’s how we got to know each other. Well, my guest is the CEO and the founder of a company called Legacy Wealth Holdings, and this is a real estate investment company that acquires, transforms distressed apartment buildings into these high-yielding assets for their own portfolios. So my guest’s current portfolio, listen to this, folks. My guest has a portfolio right now that exceeds 4,000 – yes, I said that right – over 4,000 units and the valuation of his portfolio is more than $350 million. So my guest has built a passive business and created a residual income that, quite frankly, allows him to live the lifestyle of his choice. I mean, my definition of freedom, my guest actually lives out.
Jay Conner
00:03:47
He’s got the freedom to choose what he wants to do when he wants to do it with whom he wants to do it and for how long he wants to do it. So my guest is here to educate and to empower other folks like you to become and help become financially free through this world called “commercial real estate.” I know you’re interested in learning all about passive income, how to use other people’s money, so you don’t have your own money involved. And so welcome back to the show, my good friend, Tim Bratz. Hey, Tim, welcome back.
Tim Bratz
00:04:21
Hey, Jay, how are you doing, buddy? Great to be back. Thanks for having me, man.
Jay Conner
00:04:25
Absolutely. I’m so excited to have you back. Tim, you have an amazing story, but why don’t you take a moment, I’ve got some questions I want to throw your way that I know the audience wants to hear all about. But first of all, tell people your backstory – how you got to where you are today, how you got into commercial real estate and how you’re qualified to talk about what you talk about?
Tim Bratz
00:04:50
Well, again, I appreciate you having me here. You’re a huge inspiration, been a friend for a while and great to just kinda be interacting and stuff with you. So yeah, I got my start going through college around 2003 to 2007, when everybody was making money in real estate, kind of the first go around. And that got me excited. I wanted to go and make money. And so I was very motivated to get into real estate. And I kind of started out in the trades and I had a painting company. I interned for a big residential home builder, one of the largest in the country, and realized I wanted to be an investor when I graduated in 2007. So I moved out to New York City. I thought everybody gets started by becoming a real estate agent.
I’m from Ohio, originally. Cleveland, Ohio. But I moved out to New York City and got my real estate license and started brokering retail and office leases. Somehow, I parked my license with a commercial brokerage instead of a residential brokerage and was brokering these retail and office leases. And it took me a while to close my first deal, with the first one closed in about 8 or 9 months and just did the math on it. And it was a dumpy little listing on a side street, Greenwich Village, a little 400-square foot space and that 400-square foot space rented for $10,000 a month. And they signed a 12-year lease term with a 4% annual increase. And as a money-motivated kid, I was doing the math and I realized, Wow! This landlord’s going to make almost $2 million over the next 12 years for doing something once.
And that was 1 unit, right? They had another 7 retail spaces, 10 stories of apartments above it. And it just kinda hit me, I need to be owning real estate, not brokering real estate. So I moved down to Charleston, South Carolina, not far from where you guys are and just decided to study, study, study, and got all the courses and sort of plugged into the local real estate investors association. And right when I was like, “All right, let’s go and buy something,” the market collapsed in 2008, the end of 2008. So, I showed up to the party. Everybody’s running out the back door and I’m like, where’s everybody going? I just got here. But it was kind of cool because there was not a lot of competition. It was a very different market than you see today. Today, there’s a lot of capital out there and you know, like your book teaches people how to access a lot of that capital and then sourcing some of those deals, right?
Like the deals, some of the low-hanging fruits, not as easily accessible as it was maybe 10 years ago. Ten years ago, you couldn’t walk down the street without tripping over 3 foreclosed houses. But there was no money anywhere back then. So it was very different, kind of opposite of today where there’s an abundance of capital and a lot fewer deals. So, back then, I found great deals. I knew that they were great deals, but nobody was lending money. And so, I invested in some private money courses and kind of learned how to creatively structure the financing and obtain the funding. And so I bought my first house actually with credit by increasing my credit limit and essentially buying it on a credit card, fixing it all up. And then I got into raising private money because nobody was going to lend to a 23-year-old kid who’d never done a deal before in the worst housing recession ever. You know, 2009, no bank was going to lend me money. So I had to figure out how to go and raise private money. And so I showed my credibility. I showed people that I had a good work ethic, that I knew what I was doing, that I was willing to see a project through and make big personal sacrifices to make sure that their money was protected and got access to some private money. And people put up some cash. And I raised it in many different ways. Sometimes there were debts. Sometimes it was equity they would put the money up and say, “Hey, let’s split the deal, 50/50. I’m going to get the money, you do the work.” And we split it, we did some of that. And then there were other people who said, “Hey, I just want a fixed return. Pay me 10, 12, 15% annualized on the money.” And we figured out a way to kind of reverse-engineer the deals in order to make that work.
Jay Conner
00:09:01
Well, you and I’ve got a lot in common, Tim, particularly in the world of private money. You know, 2008 and 2009 actually ended up being a great big blessing in disguise. At the time, I was using lines of credit, got cut off and no notice, learned about private money. And like you said, there was inventory everywhere, but no money. And when I first learned about this thing called “private money,” actually in the first 12 months, our business and our profits tripled because we had access to the private money. Now in just a moment, I’m gonna want you to tell us your journey and your story of how it is you move from flipping houses to owning a $350 million in real estate portfolio. I know people want to hear that story, but before they do, let’s talk about private money for a moment. You got experience in raising a lot of private money, what kind of advice? And you can speak from experience. You were a new real estate investor that had never raised private money and here you are out, you know, attracting private money. What kind of advice can you give to our listeners here as to what’s the best way for them to start attracting private money?
Tim Bratz
00:10:25
Love that, great question. And I think there’s multiple things. I think first of all, everybody is always their own bottleneck. I think we are always holding ourselves back, telling ourselves these stories that probably aren’t true. And you know, just like in 2008, 2009, we thought there was no money out there until you knew how to unlock it. And then when you know how to unlock it, the vaults are open, right? And that’s kind of the thing today where you think there’s no deals out there. Well, if you know how to source off-market deals, then there’s absolutely deals, like we have no problem finding deals even in this market and how hot it is. So number one, get out of your own way, get out of your own head. There’s always deals. There’s always money. Number two is those are the two activities you need to be focused on, regardless of what’s going on in your business, you might be deal-heavy, but not money-heavy.
Other times you might be money-heavy, but not deal-heavy, right? And you need to always be sourcing those, both of those things at the same time. Because I remember when I first started flipping houses, I would spend money on advertising and marketing and direct mail pieces. And I get all this deal flow coming in. And then all of a sudden I’d have too many deals. I’d say, turn off the pipeline. Like let’s just get these deals to the finish line, get ’em done. And then all of a sudden I’d get those, you know, renovated and turned over and under contract and say, “Hey, what do we got in the pipeline?” And then we wouldn’t have anything because I went through these feast and famine cycles of finding deals or marketing, and then turning off marketing and it turning on marketing, turning, you have to always be marketing all the time for deals.
And you also need to always be marketing all the time for money. And so I’m always just talking to people about, “Hey, what do you do? What do you invest in? You know, where do you put your money when you have some extra cash? Do you own any real estate?” “No, I don’t, but I always wanted to-” I was at a birthday party for a 6 year old this weekend and somebody, you know, I’m sitting down, I’m eating some cake or whatever. Somebody sits down. “What do you do? You’re in real estate.” “Oh yeah. I’m in real estate. I invest in apartment buildings.” “Oh man, I’ve always wanted to invest in a buy-rental property. I just, I don’t know where to find the money. I don’t know do this or do that. Or I just see it as risky or blah, blah, blah.”
He’s like, “I’m trying to save up the cash.” I was like, “Well, man, why don’t you just raise private money?” And it just, you go out on these conversations of, “Well, do you know anybody with a 401k or an IRA or entrepreneur or an A-player?” So like, there’s so many people with access, either their own capital or access to capital out there, all you need to do is help them uncover that. And I can assure you that even though the market’s been going crazy, everybody knows inflation’s coming. And everybody financially aware knows that inflation will be coming. And if you just educate, it’s not a sales process, it’s not a pitching process. It’s not a “lend me money”. Cause whenever somebody asks me to lend them money, I feel like I’m never going to get it back. Right. But if they want a joint venture, they want to partner up, you want to, “Hey, you want to come in on this deal with me.”
That’s a little bit different of a language that seems a little bit more exciting for people to want to get involved in that. And I’m always talking to them, “Hey, I got some deals in the pipeline. I got some deals coming down the next 30 to 90 days. And have you ever thought about passively partnering up on the financial side of a real estate deal?” And I kind of ask them to borrow private money without actually telling them I want them to lend me money. You know, I told them they’re passive. I told them the financial side, right? So they know they’re bringing money. They know they’re not expected to do anything. Do they want to partner up meaning, you know, get involved somehow? And so I say things like that in order to just kind of plant the seeds. And a lot of the investment side of raising money happens to deal with timing, right?
They might actually be interested and they might want to invest in your deals, but their money’s tied up in another deal. Their money’s tied up in, you know, a project or they just sent their kid off to school or just pay the college tuition or something along those lines where all of a sudden they’re selling their business. They’re launching a new product. They’re selling some of their asset. They’re going to have an influx of money. It could be today, or it might be six months from now. The key is just staying involved, staying relevant in those conversations, and letting them know that you’re always working on opportunities. And I think we have a responsibility to know where the stock market is and how inflated it is. And knowing that we can take people’s capital and back it by a piece of property, something tangible and reliable that increases in value as inflation increases, rents increase as same as inflation.
And just by educating people, we’re able to help them place their capital into a safer, more stable investment. And I have a sense of responsibility to have that conversation with everybody, right? And you know, if somebody loses their butt in the stock market, the same way that a lot of people did back in the day and I could have helped them, I could’ve helped them not lose, right? 20, 30, 40% of their portfolio value by helping them extract at the top of the market right now, and then bringing it into something that’s stable. That’s predictable. That can go, that can ride out through this inflationary period that we’re probably going to be going into. I think we have a responsibility, you know, I think we need to be doing that for folks.
Jay Conner
00:15:30
So it doesn’t sound like you’re chasing, begging, selling, trying to talk anybody into anything. And in fact, you do it the same way I do. And that is, I don’t even, now with you being in apartments, it would be different, but like on single-family houses, I don’t even pitch a deal, right? I have the people come into the program, they’ve got the money pledged, ready to go. And they’re just waiting for the phone call with the good news. I don’t even ask them if they want to fund the deal. Of course, they want to fund the deal. They’ve been waiting for the phone call and I love what you also said, Tim, you said you’re teaching people about what this stuff is. And I couldn’t agree with you more. I mean, we’ve actually got an obligation. We need a servant’s heart to let people know about, you know, the programs we have. All right. So the audience is dying to hear the story, Tim, and I’ve heard it and I want to hear it again. How in the world do you journey, how in the world do you go from flipping single-family houses one at a time to owning, oh, my lands, $350 million in real estate portfolio with over 4,000 units in a short period of time?
Tim Bratz
00:16:45
Yeah. Well, relatively short, you know, I’ve been in real estate since 2005, started investing in 2009, bought my first apartment building in 2012 and it was the bottom of the market, you know, but I realized a few things when I started looking at apartments and buying apartments. You know, I came from the flipping business and I wasn’t a very good flipper. I was okay. I found some good deals because the market was so cheap, but you know, I wasn’t, I didn’t have the attention to detail. I didn’t have the, I didn’t like that it wasn’t, it could be like automated or standardized as well as maybe investment property could be. You know, in my investment properties, I’ve standard finishes. And when I got into flipping houses, I didn’t like the holding cost and the carrying costs and not being able to cover those and having to come out of pocket every single month. If the property sold, great!
If it didn’t sell, I was always stressed out when I was flipping like the retail-style houses. Then I started flipping some, like rental properties, kind of turnkey rentals, and I’d fix the property up, put a good tenant in place, put it in a management place, and then sell that as a stable rental property. And if it didn’t sell, I didn’t care because I still have the cash flow coming in. So it gave me some sense of relief and really removed a lot of the stress from the real estate investing business. And then when I did sell it, I made the same percentage return as I did when I was selling like retail flips. And then when you add in the cash flow and all that other stuff, actually my returns were a little bigger. So then when I got my first apartment building in 2012, I realized not only was it like a turnkey single-family rental property, but it had the scale that my ambitions and that my goals surrounded.
So I really liked the apartment buildings because all of a sudden, I could go and flip one apartment building that was equal to 8 houses. My first apartment was an 8-unit building, but I only had, you know, I can go to 1 house or I’m sorry, 1 apartment building or 8 houses. I can look at 1 foundation or 8 foundations, 1 roof or 8 roofs, meet the contractor at 1 location or 8 locations, pay 1 tax bill, 1 utility bill, 1 water bill, or 8 water bills, 8 tax bills. So you see like there are so many different levels of scale in getting into apartments. It was actually easier for me to do, like, I was flipping probably 80 to 100 houses a year when I was flipping the turnkey stuff. I mean, I have 4,000 doors, over 4,000 doors today, and it’s really only like 65 apartment buildings.
Like you and I know a lot of guys in the masterminds that we’re in, who are flipping 3 or 400 houses a year and that’s way more transactions than I do. I do 15, you know, transactions, 20 transactions a year. And so I think it’s working a little bit smarter than working harder. I know some other people who work way harder than I do, but I just have more units and, you know, I just have more zeros added on. And I think that’s a big differentiator for a lot of the levels of success that I’ve seen is, it’s not how smart you are, right? It’s not your level of education. It’s not if you were born with a silver spoon in your mouth or come from a family with a bunch of capital and cash, and who’s already doing real estate. It’s how big do you think, right?
As the level of the size of your thinking is directly proportionate to the size of your success. I’m a blue-collar kid from Cleveland, Ohio. My dad was a cop. My mom was a stay-at-home mom. And, you know, I just had big ambitions and I found an asset class that really could scale. And I thought big and I thought, “Hey, what’s the worst thing that could happen?” I moved back in with my parents or, you know, move in with a buddy or figure something else out or, you know, go to zero. Not that I ever want to go bankrupt. And not that I would ever be, you know, reckless with my money or other people’s money or with any investments that I ever did. But just, conceptually, I think about you can go really big and the sky’s the limit or worst-case scenario, you hit ground zero, like go back to zero, but at least there’s a floor to it, you know.
At least there’s a stop, you know, somewhere there. And although I never want to go there, the opportunity, the upside-opportunity versus the downside-risk just far outweighed it. So I just started thinking bigger and I just didn’t let fear get in the way. And I found opportunities to invest in these apartment buildings. And so I structured it in a way that was very attractive to my investors, made it attractive for me to be able to build up some equity. And then I just, you know, you do what you say you’re going to do when all of a sudden things start compounding and this momentum kicks in and people want to do more business with you. Brokers bring more deals to you, and people want to reinvest their capital with you. And so it just kind of hit the snowball.
Jay Conner
00:21:29
I’m visiting with the founder and CEO of Legacy Wealth Holdings, my friend and a brilliant guy, Tim Bratz, and, Tim, I know we’ve got some listeners that may be needing to jump off and not hear the entire interview. If some folks are wanting to learn about what you do in this world of apartments and commercial buildings and all this passive income, you and your team have got a way to help them, right?
Tim Bratz
00:22:00
Yeah. I mean, I put out a lot of content on social media, Facebook, Instagram, I’m very active. We have a YouTube channel called Legacy Wealth, and we do a little bit of coaching, right? Like just from me talking about doing deals. And it never really turned, like, I was never intentionally going to be a coaching platform, but you know, talking about it and talking about trying to share information, trying to help people with their lives and their business, it turned into people sending me messages saying, “Hey man, can I buy a building from you? Can you sell a building to me? Can I joint venture? Can I lend you private money or can you coach, do you mentor? How can I learn this stuff, Tim?” And so I put together something called “Commercial Empire.” CommercialEmpire.com is the website where we talk about how to scale from residential investing into multi-family investing and try to take, you know, a lot of the complex ideas that I think are over, you know, kind of get in our own way.
And we think, “Oh man, this commercial real estate is way too convoluted and way too complex for me to get involved in.” We try to simplify it. And I think that’s probably where I shine is taking complex ideas and making them, you know, kind of elementary, third-grade level, because if it was too complex, I wouldn’t get it. If it was too mystic, you know, mystified, I wouldn’t understand it and I wouldn’t pursue it. So, I try to look at things that are very complex and I try to make them very simple so that I can explain it to my team and to people I do business with. And that kind of turned into an education platform. So, it’s a very easy entrance into buying commercial real estate, specifically apartment buildings, and how we source deals off-market, how we raise private money.
How we structure it with the financing, how we underwrite these deals, and then how we operate them and exit them eventually, whether that’s selling them or wholesaling apartment buildings or, you know, just refinancing and holding them long-term to build that long-term legacy wealth that I think is the reason why we all got involved in real estate in the first place, you know? Like that residual income, that passive income, that mailbox money, like that’s I think why a lot of us got involved in real estate, we’re attracted to real estate. And then like I got sidetracked on the hamster wheel just doing the transactional stuff. And it wasn’t until I got into buying and holding rental properties that I realized I could take a couple of bucks, maybe an acquisition fee on the front end, and then have that ongoing residual for as long as we own the property. And then, you know, property appreciates, principal pays down. There’s a lot of good stuff that comes with owning real estate and holding onto it long-term.
Jay Conner
00:24:33
For someone to learn about what, what you do that URL again was CommercialEmpire.com, right?
Tim Bratz
00:24:43
Yes, that. exactly CommercialEmpire.com, Sir.
Jay Conner
00:24:43
Now, in addition to that, you have another website, LegacyWealthHoldings.com. Why would someone want to go to that website, Legacy Wealth Holdings?
Tim Bratz
00:24:56
That’s if you’re looking for apartments to buy and you want to join our buyers list, like you can jump on there. If you’re interested in kind of working together on the passive investing side of things, that’s another place. And we put a lot of our podcasts like this episode, you know, I know you’ll share this and we’ll probably put this up on our website as well, and just try to, you know, share as much information. So that’s kind of like the one-stop shop where you’re going to find access to everything else at the LegacyWealthHoldings.com website.
Jay Conner
00:25:23
All right, that’s awesome. Well, I’ve got one more question for you, Tim. And that is what are the top actions that someone needs to do to actually be successful in the commercial side of real estate investing?
Tim Bratz
00:25:41
Great question. Coming full circle of, kind of what I mentioned before, is to get really good at sourcing deals and raising money, right? And get involved in environments like the mastermind that we’re in and there’s many great masterminds out there. Find a mastermind. I think finding a mastermind, finding the coach, I don’t really do, you know, I don’t really promote, like, just one-on-one mentorship. I think masterminds are way more valuable because I think it’s one to many. You have a lot of mentors in the room and a lot of people you can learn from in different seasons of their life. And, you know, maybe somebody has their health really dialed in that you can lean toward, somebody has relationships. Great. And then many people have business dialed in. And so I really liked the value of masterminds. And I can assure you from, I was really bad at real estate up until about 2015, 2016, which is when I joined my first real estate mastermind.
And I was growing and, you know, guys like us and anybody who’s even listening to this, you have something inside that you know you’re going to be successful. You’re going to figure it out on your own. Right. But you’re going to get the education one of two ways. One way is, you know, getting punched in the face over and over and over again, like I did it for a long time and I had incremental growth and what I got a little bit better each year or year over year. But as soon as I joined a mastermind, it was astronomic growth. It was like quantum leaps forward every quarter that I went out to an event and it was, I had, I was able to lean on other people’s experiences, what to do, what not to do, the people that they built relationships with.
I could fast track to a great CPA, fast track to the best marketers in the entire country, fast track to other private money lenders that other people have and used are already warmed up to doing what we do that they’ve built the relationship with. They say good things about me. And all of a sudden they invest a million dollars with me. Like that’s, that’s unheard of and try to develop that relationship from the ground up is, it would take years. And so I always thought, man, now I understand it. I’d much rather stroke a check for the education today and then fast-track it versus, you know, trying to learn it all on my own and go the slow path. That’s going to cost you more and take a lot longer that way. So I think the best thing you can do is join a mastermind.
Any of the masterminds out there, look at whoever the leader is. And look at some of the members that have been there for at least 3 years or longer. There are some transactional people who come in and go and all that kind of stuff. But if they’re there for at least 3 years, that means they really align with the core values and the mindset of that thought leader of whoever is the organizer of that organization. And you can, if you align with them and their values, then I think that’s a great way to get started into a mastermind. And then from there, just focus on those revenue-generating activities, which are finding deals, raising money.
Jay Conner
00:28:33
Awesome, Tim, you nailed it. I tell you, man, I appreciate you so much. And I look up to you so much. You are such a leader. I just appreciate you so much. Any final thoughts or comments before we wrap up?
Tim Bratz
00:28:48
Yeah. I mean, the best thing you can do is just go take action, guys. So go find a deal, take it down, buy a rental property. You’re going to learn so much from just doing that first deal. That is the biggest bottleneck to having success, is just taking down that first deal. Everything is incrementally, exponentially easier after that first one. So if you haven’t done a deal, just go out and do it. If you’re looking to level up, just go and take the next steps to level up, like go and buy an apartment building, go and buy a 5-unit, an 8-unit, a 10-unit. You’re gonna learn more from that small apartment building than you ever would by reading about any of that stuff in books or attending courses or anything. But yeah, if I could help anybody, don’t hesitate to reach out to me on social media. I’m very active there. And again, appreciate you having me, Jay, you’re a rockstar, man. I look up to you and appreciate our friendship and our business relationship, too. So thank you.
Jay Conner
00:29:39
Thank you so much, Tim. And by the way, folks, Tim Bratz spells his last name, B as in boy, R-A-T-Z. It sounds like a German sausage you would eat, right? Tim Bratz, B-R-A-T-Z at LegacyWealthHoldings.com. And if you want to follow in the shoes of this guy, CommercialEmpire.com. Tim, I hope to see you soon. Thank you so much, my friend.
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