In episode 47 of the First Customers podcast, I sit down with Brian Grimes, real estate investor and founder of 24-7 Cash Flow University. With a portfolio built on over 300 fully renovated properties, Brian shares his journey into the real estate world and the strategies that have made him successful.
Mentions
- Brian Grimes on LinkedIn
- 24-7 Cash Flow University
Key Takeaways
- Risk Management in Real Estate: Brian discusses his approach to risk, offering a fresh perspective that sometimes contrasts with popular financial gurus like Dave Ramsey. Is it about diving deep into debt, or is there a calculated strategy?
- The Power of Modern Technology: Brian emphasizes the unparalleled advantages technology brings to today’s real estate market. With apps and tools that didn’t exist even a few years ago, the current generation of investors and developers has a unique edge. Brian encourages everyone to harness these opportunities, especially for remote investments.
- 24-7 Cash Flow University: Learn about Brian’s venture, the 24-7 Cash Flow University, and how it aids budding real estate enthusiasts in their journey.
Tune in to dive deep into Brian’s insights, strategies, and invaluable advice for anyone looking to venture into the dynamic world of real estate.
Show Transcript
Paris Vega (00:01.452)
Welcome to the First Customers podcast. Today we have Brian Grimes. He is the founder of 24-7 Cash Flow University. He’s done over 300 full gut renovations on properties that are now part of his real estate portfolio. Brian, welcome to the show.
Brian Grimes (00:18.414)
Thanks for having me. Really appreciate it.
Paris Vega (00:21.728)
All right, so you’ve got the 24 seven cashflow university. Maybe you can give us a brief description of your overall business, and then we can get into who your target customers are and how you got those first customers.
Brian Grimes (00:34.442)
Yeah, I mean, you know, what I spend my time doing now is kind of more or less, you know, the same as building properties, typically buy and hold rental properties in multiple cities, kind of out of town. So I’m doing investments in Philly and the Baltimore markets, Delaware, Jersey, and parts of Texas. So kind of scattered site. And I spend time with the 24 seven Casper University, just building other developers.
So I built over 300 properties and kind of looked around and said, how can I have more impact? And how I decided to do that is by just building other developers that can go into their community and experience similar results and scale their own real estate operations.
Paris Vega (01:19.188)
Okay, so for the university, and that sounds like training for real estate developers, is that what that’s focused on? Okay.
Brian Grimes (01:26.27)
Yeah, it’s focused on education. Like, you know, so many people who want to kind of get their way out of the nine to five into cash flow and real estate. So helping people to make that transition. It’s not the easiest to make, but with a blueprint, it certainly is a much more streamlined.
Paris Vega (01:43.976)
Okay. So you’ve kind of got two different layers of customers. It seems like you’ve got the rental property customers and set like the actual tenants. That’s one layer. And then you’ve got the course kind of target audience of people who want to do what you’re doing at the higher level. All right. So how do you, let’s start with the university side of it. So how do you define and target and sell those
Brian Grimes (01:59.202)
Definitely.
Paris Vega (02:13.137)
course customers.
Brian Grimes (02:15.078)
I think to me it’s less selling and it’s more about just education. So it’s really about putting out the right education and meeting people where they are. You can get into heavy sales and try to sell things, but to me when people feel sold they get a lot of buyer’s remorse at the end of the day. Nobody likes to feel sold. People love to be educated. And people love to…
get tapped into things that actually work and allow them to accomplish their goals. So that’s kind of how I view it is, you know, my job is to stay on top of the market, give people the real unfiltered education that they’re looking for. And naturally, you know, the people will kind of self-select themselves who want to work with you one-on-one, like my mentorship program is a one-on-one program. So I’m working with, you know, the people who want to be worked with one-on-one and
Paris Vega (03:06.787)
Oh wow.
Brian Grimes (03:10.95)
educating them, watching over their back, helping them to get deals done and you know build passive income and build their own portfolio. So to me, it’s more telling than selling.
Paris Vega (03:22.652)
Okay, and so do you accomplish that by putting out like free content to draw people in and then there’s some kind of upsell?
Brian Grimes (03:28.798)
Yeah, yeah, there’s definitely a ton of free content. I mean, I’m on Instagram, I’m on YouTube, I’m on LinkedIn. I do a live call every week that people can tap into. We do have free trainings and different type of, what I would call like a lead magnet where people can tap in and get free education and get a peek underneath the hood of what we do.
And then kind of from there, you know, if they want to take things further, you can book a call, talk to me and my team one on one and, um, kind of, you know, tap into one of our mentorship programs that we have.
Paris Vega (04:09.796)
Do you see one platform performing better than others right now?
Brian Grimes (04:15.858)
Yeah, I think it’s almost like a yes and no. Because at first I thought, at first I was exclusively on Instagram and Facebook. And I thought the leads are OK. And I had some success. But then when I made the transition to YouTube, I found that the profile of YouTube’s consumer, which is the people that are just watching that platform, they’re there for education. They’re there for the how-to guides.
Paris Vega (04:44.385)
Okay.
Brian Grimes (04:45.934)
they’re not scrolling down their newsfeed looking at pictures of their grandkids. You know, like they’re trying to learn how to do something. So I think the buyer’s intent was a lot higher because people are going to YouTube to solve their problem. But then what I did learn is I doubled back to Facebook and Instagram is some of it is about the stage that you’re at as well. And I guess your organic marketing, your platform development, your offer.
Paris Vega (04:50.823)
Bye.
Brian Grimes (05:14.89)
you know, what is your core offer? Because when you start doing anything, your offer changes over the course of time. If you’re iterating and trying to meet different market needs, you start to learn your customer better, and you can therefore create a better offer for them. So as the offer changed, you still can attract the right prospect almost on any platform. So there’s like a combination of the two. But I would say the YouTube nut is a bit harder to crack.
in terms of putting out that perfect ad that can pull people in at a specific pain point and fishing in that marketplace. How do you target your ads? It’s a little different. But I found YouTube to be, once you crack that code, very profitable because of the buyer’s intent that exists on YouTube, whereas it’s just a little bit different on Instagram and Facebook.
Paris Vega (06:06.776)
Right. Yeah. You’re interrupting somebody scrolling on the other platforms with the display ads and it’s a lower chance that they’ll be interested. You’re just hoping you’re in the mood to, yeah, like you’re saying, getting into that education, solving a problem where that’s kind of built into YouTube. Now, I guess they’re trying to change it up a little bit with their little short, the YouTube shorts, where it’s that similar kind of just scrolling through tons of little micro content.
Brian Grimes (06:13.417)
Yeah.
Yeah.
Brian Grimes (06:24.108)
Yeah.
Paris Vega (06:32.664)
But you can still grab people out of that, I guess. Now you mentioned ads on YouTube, so are you posting organic content and then also turning some of it into ads?
Brian Grimes (06:42.026)
Yeah, I learned from a guy, Vince Reed, he’s got a cool program called Systematize. And I kind of took a lot of principles from him, I can’t remember this guy’s, I think Tommy Powers. He has a good program, I took his course content as well. And yeah, it’s kind of a combination of.
putting out organic content. I put out a ton of YouTube shorts almost daily. I’m putting out shorts. But also creating educational content that you can do kind of pay-per-click ads on to just educate people. So it is my organic content just with a little bit of muscle behind it, a little bit gasoline behind it, and then a focus on getting more subscribers and really building the channel.
Paris Vega (07:13.037)
Okay.
Brian Grimes (07:35.878)
A lot of people ask me, how did you get up over 10,000 subs? And how are you still growing? Especially for my channel, which is just focused on real estate. This is not relationship advice and something like the real broad-based platform. So it really is focused on getting out of the nine to five, tapping into cash flow and real estate, and just freeing yourself financially.
Paris Vega (07:51.107)
Right.
Paris Vega (08:03.676)
Okay. And you haven’t mentioned TikTok, which is like the king of short videos in a way, even though YouTube’s right in there now. But have you experimented with TikTok as well?
Brian Grimes (08:15.938)
I have and I’ve had some success with TikTok. I think the thing with TikTok is the ad burnout Rate is substantially higher. So you could run a successful ad on YouTube for years. I mean there’s one Real estate ad on YouTube where the guys like trying to teach you about commercial real estate It’s been running for about 10 years and it’s still successful like they don’t run ads on YouTube if they’re not successful on TikTok the burn rate is usually in a matter of weeks
Paris Vega (08:26.509)
Okay.
Brian Grimes (08:46.294)
So even the most successful ads will typically burn out in like six weeks. So unless you’re gonna constantly iterate and create more and more and more ads, which you can do, I found TikTok to be a little bit more active versus more of a passive strategy of just getting that one perfect ad, fine tuning it, and then just parking it and let it do what it does.
Paris Vega (08:46.34)
Hmm.
Paris Vega (08:58.43)
Yeah.
Paris Vega (09:11.224)
So they kind of optimize towards fresher content, maybe, as far as the algorithm.
Brian Grimes (09:15.854)
They, I think, I think they get it. That algorithm is so powerful on TikTok that they get it out fast and they get it out to everybody and it’s cheaper. So they run it more. And it just burnt. It’s just a, yeah, it just burnt. Yeah, the initial spike is insane. I mean, you’re getting, you’re getting like 30 cents per lead. You know, like when you’re first starting, like it’s insane. But then when it burns out, it’s like $5 a lead.
Paris Vega (09:24.128)
Okay.
Paris Vega (09:27.428)
Gotcha.
So you get a bigger initial spike maybe. Yeah.
Paris Vega (09:40.482)
Yeah.
Brian Grimes (09:45.374)
So yeah, there’s an initial spike on the new ad. And then once you hit, you know, 80, somewhere between 80 to 100,000 views, then it starts to kind of tinker out a bit.
Paris Vega (09:59.508)
Okay. Now I think it was the last guest on the podcast. They experimented with influencer based ads on Tik TOP where it wasn’t them just paying for promotion. It was, you know, finding that right influencer that matched up with them and then letting that influencer create a video about what they offered. Theirs was a software product, so it’s a little different field, but have you tried that style of advertising yet?
Brian Grimes (10:26.826)
No, and I think you hit the nail on the head. There’s different things you can promote for, like e-commerce, software. Some of these things are product-based where there’s a use value to them. For me, there are ways where you can do that, but it would be more of like a shout-out style type of, go follow him. Yeah, it would be a little bit different. So I focus mostly on building my own platforms. I mean, it’s…
Paris Vega (10:46.784)
Yeah, like a testimony.
Brian Grimes (10:55.906)
There’s two things you can do, borrow from someone else’s platform or just try to build your own. So I’ve focused on kind of putting my boots to the ground and just building my own platforms.
Paris Vega (11:05.72)
So you mentioned optimizing for subscribers, building your own platform. Does that mean like the goal that you’re optimizing for with your ads, you’ll lean more towards the subscriber goal versus like getting a conversion or a sale or that kind of thing?
Brian Grimes (11:21.258)
I would say it’s a combination of the two, and they all feed into each other. So what I’ve found is that the more subscribers you get, if people subscribe, they’re gonna get retargeted with your ads, and they’re gonna be more familiar with you from your educational content. To me, it’s all about educating. Even the ad itself, like my best performing ad is an educational ad. It teaches you three core skill sets in like 60 seconds, essentially. So…
Paris Vega (11:45.112)
Okay.
Paris Vega (11:50.496)
So it’s like the ad as content itself. Yeah.
Brian Grimes (11:50.598)
Education is add, yeah, it’s add as content and education is as add. So it’s all about having educational content that pulls people into wants to learn more and then delivering on that more, actually providing them with value. If all you do is put out value, there’s gonna be a conversion there because you’re gonna be doing more than most people who just stand in front of a Lamborghini.
and go for pure marketing, but they don’t have value. They don’t have substance. So I’m like the anti-hero when it comes to that. I’m unshaven. There is no Lamborghini. It’s just pure education. And therefore, you will attract the people who are truly looking for that and not looking for like the flash.
Paris Vega (12:21.489)
Yeah.
Paris Vega (12:29.944)
Yeah.
Paris Vega (12:38.464)
That’s cool. Okay, so you focus most of your effort on, you said YouTube and what else? Okay, gotcha. All right, so what would you say is your niche that you focus on within all this content education related to real estate development, but is there a narrower niche that you focus on?
Brian Grimes (12:46.694)
YouTube, Instagram, Facebook.
Brian Grimes (13:04.406)
I would say yes and no. I mean, I focus in a lot of different areas of the investment sphere. So we teach buy and flip, buy and hold, bird strategy, creative financing, so how to invest without cash or credit, how to get in front of motivated sellers, target pre-foreclosure. So we’re essentially hitting a lot of different pain points, but what makes me a bit different is I work with my people one-on-one.
most of these mentors or quote unquote gurus out there, they just glorify group courses. Like they don’t spend any time with anybody. And most of the people don’t get results. One-on-one mentorship gets that 90% of people who don’t get results from group courses the results. So I would say that’s different, but also the fact that we teach you multiple investment strategies. So we’re not just teaching you like, hey, here’s our Airbnb. And if that stops working,
or the city bans it, like they’ve done it, I think they did it in Austin. They banned Airbnb in like single family residence areas, I believe. So then your Airbnb strategy doesn’t work. So people actually will come to me because they’re like, wow, Brian’s actually teaching me multiple ways to invest. So if one stops working, I can pivot and still make money in this game. And that has been, you know, foundationally unique. So multiple strategies.
Paris Vega (14:05.301)
Is that right?
Paris Vega (14:09.884)
Oh wow. Okay.
Brian Grimes (14:28.246)
so you can be a free thinking investor, and then one-on-one mentorship. Somebody who’s really done hundreds of deals and is gonna work with you one-on-one to fill the gaps and get you over those hurdles.
Paris Vega (14:40.116)
Okay. All right. So if somebody is starting, starting out right now, I think understand how you get your, your clients for the cashflow university, a lot of content marketing, a little bit of advertising behind it. It makes sense. And it’s cool to hear the specific insights of the performance you’re seeing on the different platforms.
Now let’s look at the real estate kind of boots on the ground side of things of actually being a developer, having to get tenants. Let’s talk about kind of the first customer’s angle of that. Let’s say you’re a new developer just starting out. I can use myself for an example. I’ve got two rental properties in another state and I’ve just done that strategy probably it might be a common thing where you live in a house for a while.
You moved to a different house. You turned the last house into a rental property. So I’ve done that twice now. Yeah. And so I’ve got two rental properties. Okay. Yeah. And so I’d love to do more aggressive stuff or more, you know, varied type things. So I’m super interested to hear your strategies on the, uh, 24 seven cashflow side of things, but let’s just say somebody starting out, maybe they got their first rental property, how do they go about getting 10? Yeah.
Brian Grimes (15:30.241)
Yeah.
Brian Grimes (15:35.345)
The adult house hack. Yeah.
Brian Grimes (15:55.05)
like teneting it and kind of getting word out there. I mean, there’s two ways to do it. One is to do it yourself. One is to do it with property management company. I would recommend when you’re first getting started, kind of doing a combo of each. Like you almost do want to try to tenant your first property. And then you don’t. Like you do if you have some type of mentorship and you know what you’re doing. If you don’t, you’re not really going to know how to pull rental licenses and be compliant with the municipality.
you’ll probably rent out your property to the wrong person because you don’t know how to underwrite and screen, and then you’ll end up in an eviction situation. But having the experience of going out and doing your own teneting is good because it builds a lot of confidence. So I will use like a platform. One bit of software I’ve been using is TurboTenant. TurboTenant is pretty amazing because, and all the software that comes out, it just like keeps outdoing itself. It didn’t even exist five years ago.
Paris Vega (16:43.799)
Okay.
Brian Grimes (16:52.15)
but it syndicates your listing. So you can take one listing or your rental property and you can put it on a TurboTenant and it will syndicate it across 29 different websites. So it essentially just puts it everywhere that people are looking. And that will bring in a large influx of people who are interested in running the property. And then it just, you know, from there comes down to screening, showing the property. You know, you want to make sure that it’s already built.
Paris Vega (17:00.696)
Gotcha.
Brian Grimes (17:19.03)
to a level where people are going to be interested. So the renovations are good and the property is clean. You have your licensing in place. But to me, everybody needs somewhere to live. So if you have a nice, clean, affordable place to live, you’re going to get people who are interested, especially if you get everywhere. The challenge for most people has been syndicating across multiple websites. But now you have software where you can, I mean, I think Turbo10 is $99 a year, and you can…
get everywhere. So it’s pretty amazing.
Paris Vega (17:49.696)
Yeah. Super affordable. Yeah. We started using a software called door loop. I don’t know if you mess with that one. That’s I guess it’s just another one of the competitors in the market that does that kind of stuff where it lets us, you know, manage the tenants and the collect payments and all that stuff. Yeah. We just started using that this past year and that was, uh, it helped take care of a lot of hassle because we were just collected checks and
Brian Grimes (17:56.499)
Yeah, I’ve heard of it.
Brian Grimes (18:07.522)
collect payments, sign leases, all that stuff. Yeah.
Paris Vega (18:18.124)
That’s a, can be a pain even with just two properties. Um, okay. So what kind of a portfolio mix do you recommend? Like for me, so I’m sitting here, I’ve got two, you know, residential single family properties and I’ve heard that’s like the worst, least profitable way to kind of set up your real estate portfolio because it requires the most work with least profit.
Brian Grimes (18:21.025)
Yeah.
Paris Vega (18:47.724)
per unit or whatever, you know, everybody that I’ve heard talks about, you got to get into multifamily and that kind of thing. Can you talk a little bit about that kind of portfolio mix strategy of how to kind of allocate your resources?
Brian Grimes (19:02.198)
Yeah, I mean, I think owning properties, any type of rental property is better than just not. So even single family versus multi-family, that argument will only last if you have one property. Once you have multiple properties, even if they’re single family, you have multiple streams of income. So it kind of takes the edge off. Like the purpose of multi-family is that you have…
multiple streams of income. So if one person stops paying, the other one still is, and the volume offsets some of the risk. If you had three single-family properties that were cash-flowing, the cash flow from the two that were still paying would offset maybe the mortgage on the one that was non-paying and you’d still be in a pretty good position. Multi-family can be good. We all hear that and want to start off with multi-family. I would say for your first deal, if you’re doing like an FHA loan or FHA house hack,
you want to buy the biggest multi you can with that FHA loan because you only get one of them essentially, so you want to make the best use out of it. But over the years, I found that markets can ebb and flow, believe it or not. So there are times where single family properties can cash flow more than multis due to pricing mismatches and just general layouts, like a four bed, one bath at the right price point could cash flow more than a triplex.
Paris Vega (20:11.818)
Okay.
Brian Grimes (20:26.55)
That’s three, you know, one bed, one bath units. Because with the multi, even every multi-family is not the same. So there are duplexes that cash flow more than triplexes. Because when you add that extra unit in a multi, you now need another kitchen, another living room. And that’s dead space. In the rental game, you get paid by the bed, typically, especially in the affordable housing space. So the more bedrooms you can fit into a property, the higher your cash flow is going to be, typically.
Paris Vega (20:41.921)
Right.
Paris Vega (20:49.867)
Okay.
Brian Grimes (20:56.062)
So there’s some things to watch out for.
Paris Vega (20:56.556)
I got, okay. Yeah, cause if you had a multifamily unit with two units, but they were each four bedroom units, that’s one kitchen that you’ve had to build out or pay for basically versus, okay, I see what you’re saying. One with three units, two bedroom. Yeah.
Brian Grimes (21:08.046)
Mm-hmm.
Brian Grimes (21:11.662)
Exactly.
Because you have to factor in the cost of the kitchen and then the loss of the bedrooms. So the decrease in the cash flow and the additional cost of building that kitchen and dining area that is just dead space, I mean, it doesn’t equate. People aren’t renting that. They’re renting a two bed, one bath. They’re not renting a kitchen and bigger living room, one bath. You really can’t charge a premium for that in the marketplace.
Paris Vega (21:42.132)
Right, but that four bedrooms gonna get the print because that’s like the top in rental usually, right? It’s usually four. I don’t think I’ve ever seen a five bedroom rental, but I guess in the bigger. So, I’m gonna go ahead and do that.
Brian Grimes (21:44.462)
I’ll tell you.
Brian Grimes (21:52.602)
They exist in row home cities and town homes. They exist a lot more. But yeah, you’re better off with less kitchens and less dead space. You’re going to make more money as a cash flow investor.
Paris Vega (21:56.284)
Okay.
Paris Vega (22:06.2)
That’s interesting. I’ve never heard that idea before. So that’s a nice little nugget there. I appreciate that. I’m gonna be marinating on that one. Okay, okay. All right. So is there a specific type of person that you look for your course? Is it just wide open or do you have to be at a certain moment in your process of trying to get into real estate development?
Brian Grimes (22:14.519)
Yeah.
Brian Grimes (22:34.355)
I think it’s really motivation. Some people aren’t motivated. Some people just want, they wanna go out and buy a Lamborghini or something. And that’s not the right motivation, as you know, probably, that’s not the right motivation for real estate because there can be stressors in real estate, tough tenants, tough times. You really want your motivation to be family, long-term wealth.
Paris Vega (22:48.632)
Yeah.
Brian Grimes (23:00.562)
and really just the pursuit of building a passive income. So I always do kind of screen for motivation, but I try to meet people where they’re at. I mean, my course is designed to take somebody from zero to over a hundred properties. So it literally meets you at the beginning and then show you how to scale up your operation to get where you wanna go and how to do it out of town. So it really can.
Paris Vega (23:23.94)
So that’s not units, you’re saying properties, 100 properties. Man.
Brian Grimes (23:27.05)
Yeah, properties, yeah. Yeah, yeah. And it is totally doable because the same things that you do, it only took me about, as I got serious, maybe three years to hit 100. And then I hit 200 in the next year. So the exponential growth of this thing, and that’s the thing, the human mind is designed to think linearly. But this thing goes super exponential. So as you.
Paris Vega (23:33.112)
How long does that usually take, that process?
Brian Grimes (23:56.062)
continue to scale, it just gets easier and easier with the system.
Paris Vega (23:59.945)
So we talking about just some crazy risk here, like you just in debt to your eyeballs, ignoring everything Dave Ramsey talks about. And you’re just going all in. Is that kind of I mean, what are we talking about the overall strategy here?
Brian Grimes (24:15.59)
Yeah, I mean, it would be the birth strategy. So I would say the risk is relative to the individual deal, because you’re literally doing a series of individual deals over and over again. But you mitigate risk by having in-house construction crews. Lenders are only going to typically give you 65% of the after repair value of a property anyway.
the properties that you’re buying for pennies on a dollar and renovating, as long as you can build them at the right cost, there’s not a ton of risk on that side of things. If you’re not a tenant, you can eliminate a lot of risk. You can certainly, I would say the risk lies in trying to grow too fast. So trying to grow faster than you can send it. That is where you can kind of get into more of a risky situation. But it’s different than what Ramsey is talking about. I mean, there’s nothing wrong with
Paris Vega (24:53.89)
Okay.
Brian Grimes (25:10.87)
Fundamentally from my purview because I am still a certified financial planner like there’s nothing wrong with what Rams he’s talking about but I think it’s who he’s talking to is different because You know if you ask Robert Kiyosaki, he’s gonna tell you there’s good debt and bad debt and he’s got 5,000 properties and they’re all financed and he’s not you know at some point. It’s like I heard a saying if If you owe the bank a million dollars You got a problem
If you owe the bank ten million dollars, they got a problem because they know you can’t you can’t pay it Even if it goes the deal start going bad They got a restructured debt they got to figure it out Or they’re gonna be sitting with you know It’s on rental properties that they don’t even know what to do with at the end of the day but no, it’s definitely playing the game at a high level, but um Everybody doesn’t have to play at that level to break free from the nine to five the average person 10 15 properties You’ve replaced your nine to five income. You’re completely financially free
Paris Vega (25:45.057)
Right.
Mm-hmm.
Paris Vega (26:10.68)
So as part of the reducing the risk, like, um, you said like targeting maybe properties that need a lot of work. And is it going to the section eight route where it’s like, you’re getting kind of that set, uh, payment. Cause that’s like government funded. Right.
Brian Grimes (26:18.188)
Yeah.
Brian Grimes (26:26.186)
Yeah, yeah, there’s exactly, you can do that. That is one way, like getting the voucher housing, backing your rental income. So section eight can pay somewhere between 70 to 100% of the rent on average. So having that definitely makes you a bit more secure, but definitely just bringing as many things in house. Like how do you mitigate risk? Well, one thing I did over the course of time was I bought a warehouse. So I bought a commercial building
Formatted it like my own personal Home Depot now was able to order materials in bulk because I was building At least 10 properties a quarter right so now I can order 10 houses worth of materials at once Stock it in the warehouse putting it in a warehouse not only allowed me to order in bulk and save 30 40 percent on my orders and that’s real money that was going out But also it speeds up your turn time because now your guys aren’t running the Home Depot to get materials wasting two three hours a day
Paris Vega (27:10.092)
to do it.
Paris Vega (27:18.839)
Yeah.
Brian Grimes (27:25.974)
So you’re getting more work done every day. And when you create these efficiencies, this is how you mitigate your risk. You just get more efficient than the average bear. And then you save the money.
Paris Vega (27:36.708)
this now you’re making it sound fun, like a little video game. You’re just building your little pieces out. That’s cool. OK, now you said in-house construction crew, you know, you got a warehouse. I mean, these sound like massive undertakings themselves, like recruiting a construction team and finding reliable people that, you know, will show up and.
Brian Grimes (27:43.148)
Yeah.
Paris Vega (28:01.208)
Can you speak a little bit about how you go from, hey, I’ve got a rental property that I want to find a tenant for, to like, what is, I know that obviously your course teaches the, all the ins and outs and details. Yeah. Can you give us a little preview of some of that going from one little property to a real estate development agency at scale?
Brian Grimes (28:11.414)
Hell up, yeah.
Brian Grimes (28:20.107)
Yeah.
I think when you go in into the full gut renovation game, you need crews. So eventually you will find a good crew. You’ll find a crew that just can chew through a house. Like this just like dinner. Iterations, yeah. You’re gonna get a couple of guys and then you’ll build around them. What’ll happen is like, let’s say you’re doing a cosmetic renovation. So you’re on deal number three now, and you’re like, I’m ready for a cosmetic renovation.
Paris Vega (28:37.725)
just from hiring several different people on different projects.
Brian Grimes (28:52.682)
We’re going to come in, put down new flooring cabinets. We’ll redo some of the plumbing, some of the electric, TLC the roof, new windows, and then paint, get out. So as you’re doing that process, you’re going to have to interface with an electrician, a plumber, HVAC tech, a roofer, some interior guys who can do flooring, paint, and you start to assemble a little crew. And then a light bulb goes off, which is, if I keep these guys together and I can buy…
for 20 cents on the dollar and build at 45 cents on the dollar and the lenders will give me 65 cents on the dollar, I can put a play together. I can go out and find properties that can keep these guys busy and build at a certain cost that allows me to keep these properties, refinance my money out of them, and just tend to them and rent them. So then you start to do two deals at once. You line up more food than they can eat. And that’s how you keep the crew. And as you keep doing that,
they do two deals, then you get four. Then they do four, then you get eight. And once you get eight, you double the size of the crew. Because they’re talking, contractors know contractors. So then they start pulling in more guys. And eventually, it will just continue to iterate, and the lenders will get more and more confident until you can scale and scale and scale. So it kind of happens on all fronts. Lenders are greedy. So once they see, lenders are greedy, and they hate new people. So once you become…
Paris Vega (30:00.804)
Hmm.
Brian Grimes (30:19.538)
somebody who’s successfully executed on a renovation and you’re coming back for more, they start increasing their exposure to your operation because they don’t want to invest in somebody new who’s unproven. So their greed is naturally going to be there to fund this operation. So then it’s just your ability to find more deals and the crew wants more work to build. So it becomes part of an ecosystem. It’s not something you have to even aggressively do. There is a sweet spot to it.
But the average bearer could scale up to 10, 15 deals a year with a smooth system, not be completely stressed out and just execute. You don’t have to do what I’ve done, like 100 deals in a year. You don’t have to do that.
Paris Vega (31:01.633)
Right.
So you mentioned like the lenders being greedy. Is there a way to find that first lender? Cause if you’re, you know, this shows about the firsts, you know, first customers, first everything. So if you’re getting that first property, I mean, how do you get that initial trust?
Brian Grimes (31:14.198)
Yeah.
Brian Grimes (31:24.326)
Well, there are lenders that will work with new people. There are some that was kind of specialized in that. They’ll just give maybe worse terms on your first deal, and then you renegotiate on deals to and beyond. But it’s really just, you know, you’re unproven until you execute on a deal. Once you execute on a deal, the floodgates open up. And that’s why I tell people, yeah, go ahead.
Paris Vega (31:44.608)
And is that like a year? Like a, is there a timeframe that they, they want to see payments start coming in?
Brian Grimes (31:51.894)
No, that would be on like the long-term side. This is more on like the construction long side that you’re looking for. The long-term lenders, they’re even, believe it or not, their greed profile could be even higher. So there’s something called portfolio lenders. So when you’re just getting started on your first deal, you don’t really have to worry about all of this because you can go turnkey with a FHA house hack. But once you get to like deal number three, your debt to income ratio gets out of whack.
Paris Vega (32:12.804)
Yeah.
Brian Grimes (32:20.99)
So they can’t back the loans with Fannie Freddie. So now you’re in the non-QM, the non-qualified mortgage space, and you’re dealing with portfolio lenders. And what they do is they underwrite big portfolios of loans, $600 million of debt every six months, and they package it and sell it to big national land trusts who service debt. And their appetite is insatiable. So they will literally ask you, well, you’re doing 10, can you do 20? Like they’re trying to push you.
to higher levels so that they can sell that debt and produce more. So, a lot of this is about getting in the right pool. So some people, they will stick with, they’re trying to go to Bank of America to get the money and they’re telling them no, and they’re like, oh, I guess I can’t do this. And it’s like, you’re talking to the wrong lender. You gotta talk to these guys because this is what they specialize in.
Paris Vega (32:53.764)
easy.
Paris Vega (33:15.54)
Okay. All right. So the spot I’m in seems like that I’m right in that in between space personally, where I’ve got two properties and then we moved or right now, and we decided to rent because of the issue you’re talking about, where we couldn’t buy anything else unless we had to have some serious, you know, down payment or at, you know, they wanted at least a year of proof of the rent coming in from the properties. And it’s like, well, we just moved out of that house. So there isn’t a, you know, there’s no proof.
Brian Grimes (33:29.56)
Yeah.
Paris Vega (33:45.564)
even though we’re sure they’re going to pay and everything. But, and so, yeah, it’s like I’m right at that space of the next thing I would have to do would have to be some kind of commercial situation because my personal, like you’re saying debt to income or whatever the limitations are of those loans are tied up now.
Brian Grimes (33:56.91)
Let’s do it.
Brian Grimes (34:04.022)
That’s correct. Yeah, so you gotta get, you’re a tweener. You gotta get into a different pool that is specifically for investors.
Paris Vega (34:10.539)
Okay.
Paris Vega (34:15.104)
Well, I feel sold on your course already. I feel like this happens too often. I’ll have a guest on the show and I’m like, well, I’m sold. I’ve heard. Yeah. I obviously need some help kind of bridging the gap from where I’m at to where I want to go, um, cause yeah, I’d love to grow that real estate project and, and get more, uh, properties going and in different areas, cause you were saying that you can help people get.
Brian Grimes (34:22.91)
Sign me up.
Paris Vega (34:42.732)
figure out the whole out of state side of thing. Cause like.
Brian Grimes (34:44.966)
Yeah, yeah, that’s a major key. Like I just helped a couple. They were struggling to get a deal for like two years. They came to me, they came to me, I talked to them, they didn’t sign up for the mentorship program. Then they came back a year later, still haven’t got a deal done. And they got in and they were in Louisiana, the insurance premiums were skyrocketing because of the hurricanes. So I showed them how to invest out of town, they ended up getting a duplex.
and in Cleveland for like 80 grand cash flow on them, 8, 900 a month off that first deal and put the property management in place. We helped them get all the resources in place and they did that quickly within like 90 days of mentorship. So yeah, investing out of town is a major key. It’s a major key.
Paris Vega (35:33.98)
Okay, because then you’re not limited by things like you mentioned earlier, the Airbnb situation, because those laws can change so fast and you’re out of business.
Brian Grimes (35:40.434)
Yeah. And we have the technology at our fingertips today. Just like the applications me and you were talking about, this stuff didn’t even exist probably two, three years ago. So you have so many apps that allow you to invest remotely that didn’t exist 20 years ago. The only purpose of being alive right now and fully functional is to take advantage of some of these out of town opportunities. I mean, these are opportunities that developers did not have back in the day.
Paris Vega (35:50.869)
Right.
Paris Vega (36:08.784)
Yeah, because we were a little concerned to be an out of state, but so far, it’s just like, just like we would be doing back where we were. We just call in somebody or email in somebody to tell them to go fix something. Like we’re not personally going to the residence anyway.
Brian Grimes (36:14.562)
just like you’re doing now.
Brian Grimes (36:23.302)
That’s the aha moment. When you do it, now that you’ve done one deal from out of town, now you’re just like, well, they could be here, they could be a thousand miles away. What’s the difference? Yeah, you just set up the systems and then the systems will take care of it.
Paris Vega (36:33.293)
Yeah.
Paris Vega (36:37.252)
I could see there being a little bit of a limitation, like time zone wise, that could get annoying unless you had like a team to be a buffer between you and the tenant. There you go.
Brian Grimes (36:44.458)
Virtual assistant. You can get a $5 an hour virtual assistant to answer the phone, coordinate with the different technicians, have somebody boots on the ground in that city who’s local, who can run to the property in the middle of the night. You just create the systems.
Paris Vega (36:59.5)
Beautiful. Awesome. So, if people are interested in learning more from 24-7 Cashflow University, their website, you know, direct us to how we can take action on taking part.
Brian Grimes (37:15.658)
Yeah, you can reach out to me on YouTube. Brian loves Cash Flow on YouTube. That’s easier to remember because I love Cash Flow. Instagram, briangrimes, underscore, 247 CFU for the 24-7 Cash Flow University. On LinkedIn, Brian Grimes Real Estate. That all will backlink to a free real estate training on www.workwithgrimes.com forward slash cash flow. Workwithgrimes.com forward slash cash flow. It’s a free real estate training.
It’ll show you how to acquire properties for pennies on the dollar all across the country. You don’t want to miss out on that free offer.
Paris Vega (37:50.572)
Cool. And we’ll add all those links to the show notes for this episode. So you guys can check that out. Brian, thank you so much for being on the show. This was super enlightening and I’m interested, man. So I’m going to follow up with you later. But thanks, man.
Brian Grimes (38:03.79)
Thanks for having me, I really appreciate it.
Paris Vega (38:05.888)
All right, we’ll see everybody next time. Later.
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