Transitioning from a stable career to entrepreneurship often comes with its challenges. Brandon Cobb, who was once a medical device sales representative, experienced a significant career setback that propelled him into the world of real estate investing. Today, he manages a $22 million portfolio focused on affordable housing and has raised over $15 million in private money. In this episode of Raising Privat Money Podcast, Brandon Cobb shares his inspirational journey, strategies for success, and lessons learned along the way.
From Medical Sales to Real Estate
Brandon Cobb’s transition into real estate was far from smooth sailing. After being unexpectedly fired from his job in medical device sales, Cobb faced a series of failed online business ventures. However, he found his footing in real estate investing, initially focusing on fixes and flips. Drawing from a diverse set of experiences, Cobb pivoted into new construction, identifying a lucrative niche by addressing the affordable housing crisis.
Mastering the Art of Raising Private Money
One of the key elements behind Cobb’s success has been his ability to raise private money. Instead of directly soliciting funds for deals—a strategy that can often appear desperate—Cobb recommends engaging potential investors by seeking their feedback and gauging their interest. Both Cobb and host Jay Conner emphasize the importance of appearing confident rather than desperate when raising private money.
Cobb’s innovative approach involved negotiating with investors for fixed and flip projects at a 10% annual interest rate with no monthly payments. This method alleviated the financial burden of hard money loans, characterized by high upfront fees and interest rates, thereby allowing for more sustainable growth.
Syndication: A Path to Scalable Growth
Transitioning from debt positions to equity through syndication was a pivotal strategy for Cobb. Syndication, likened to crowdfunding, involves multiple investors pooling their resources to fund larger projects. This not only increases the available capital but also allows investors to become partners in deals, thus sharing higher returns. Through this method, Cobb expanded his funds from $6 million to $15 million, opening up opportunities for larger-scale projects.
Strategizing for Success in Real Estate
Cobb’s company, HBG Capital, specializes in entry-level housing in Nashville, Tennessee, a market with high demand for affordable homes. They have developed a multi-faceted approach that includes owning land outright with investors, contracting with national home builders, and building homes both to sell and to rent. This variety of exit strategies ensures stability and profitability, even in fluctuating markets.
Personal Insights and Lifestyle
Beyond the numbers and strategies, Cobb also shares personal insights into his journey. Real estate investing has afforded him the ability to travel frequently, taking six weeks off per year to explore new places. Particularly meaningful are his annual trips with his mother and a sibling trip to historic locations with his retired history teacher sister. These experiences underscore the personal fulfillment that can accompany financial success.
Learning from Mistakes and Moving Forward
Cobb’s journey from flipping houses to new construction highlights the importance of learning from mistakes and adapting strategies accordingly. Tracking key performance indicators helped him recognize the saturation in the fix and flip market, prompting a shift to new construction which offered higher profits with less competition.
Both Cobb and Conner agree on the significance of continuous learning and adaptation in the evolving landscape of real estate investing. Leveraging private money and shifting from a hard money-dependent model has been crucial for Cobb’s business scalability.
Get Involved
For those inspired by Cobb’s journey, HBG Capital offers opportunities for business owners who want to invest in real estate without the day-to-day hassles. Interested investors can join their fund at hbgcapital.net. Additionally, Cobb offers resources like a free ebook and a podcast, “Recession Resistant Real Estate Radio,” aimed at guiding business owners in real estate investing.
Jay Conner, the podcast host, further promotes a free guide on private money’s role in real estate investing, available at jconnor.com/moneyguide. He encourages listeners to follow, review, and subscribe to the podcast across different platforms.
Conclusion
Brandon Cobb’s transition from a medical device sales rep to a real estate mogul exemplifies resilience, strategic thinking, and the importance of personal growth. By focusing on affordable housing and mastering the art of raising private money, Cobb not only achieved financial success but also created a sustainable, impactful business model. His journey is a testament to how setbacks can become stepping stones to greater achievements.
10 Discussion Questions from this Episode:
Career Transitions:
How did Brandon Cobb’s experience as a medical device sales rep prepare him for the challenges in real estate investing?
Private Money Strategies:
What are some effective strategies that Brandon Cobb and Jay Conner discussed for raising private money without directly asking for it?
Market Niche:
Why did Brandon Cobb choose to focus on entry-level housing, and how does this niche address the affordable housing crisis?
Real Estate Development:
What are some benefits and challenges of transitioning from fix-and-flip projects to new constructions, according to Brandon Cobb?
Cash Flow Management:
How does managing cash flow play a critical role in scaling a real estate business, especially when dealing with hard money loans?
Equity vs. Debt:
Brandon Cobb mentions transitioning from debt positions to equity through syndication. What are the pros and cons of this approach?
Investor Relations:
How can investors effectively gauge interest and seek feedback without appearing desperate when raising funds?
Exit Strategies:
What multiple exit strategies do Cobb and his team employ for their projects, and how do these strategies mitigate risks?
Educational Resources:
How can business owners benefit from the educational resources shared by Brandon Cobb, including his free ebook and podcast?
Personal Benefits:
How has real estate investing allowed Brandon to enjoy personal activities such as annual trips with his mother and sister, and what does this reveal about balancing professional success with personal fulfillment?
Fun facts that were revealed in the episode:
- Brandon Cobb makes it a point to go on an annual trip with his mom, as well as sibling trips to historic places with his sister, who is a retired history teacher. These trips are a cherished tradition for him.
- Brandon’s real estate journey began in an unconventional way—he sold his retirement accounts to fund his very first fix and flip project, and he learned construction skills hands-on as he went along.
- Despite his busy schedule managing a $22 million real estate portfolio, Brandon ensures he takes about 6 weeks off per year to travel and unwind, highlighting the balance he’s found between work and personal life.
Timestamps:
00:01 Raising Private Money Without Asking For It
03:27 Traditional career pursuit leads to unexpected outcomes.
06:32 Shifted from fix and flips to new construction.
12:35 Switched to new construction for higher profits.
13:18 Pivot to larger deals creates lucrative opportunities.
19:13 Switched from deposition to equity and achieved great success.
25:58 Raising private money without asking, leading servantly.
27:55 Connect with Brandon Cobb: https://www.hbgcapital.net
29:38 Nashville thriving with growth and job opportunities.
31:17 Develop land, sell, build, or rent homes.
34:04 Book addresses the lack of knowledge for investors
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