What steps should you take to be able to quit your job and become a full time real estate investor? Bronson Hill, a syndicator and investor at Bronson Equity, who not only raised $15 million for his deals, but also just quit his job, shares his path with us.
Tell us a little bit about you.
I’m a real estate investor who was able to leave my great corporate job. I was in medical sales for about 10 years working with surgeons and cardiologists, and different people in surgery. I just started to realize that my job, even though it was a great job, I was making over $200k a year, I got to where I was working 30 hours a week or less, but it really wasn’t financial freedom, because I had to go to work. I was chained to these physicians, their procedures and things. And I just wanted to have more control over my time. And I started to pursue ways to do that, so I started with single family, like a lot of people, and ended up with a small single family portfolio of four houses. I have a cousin who’s a multifamily investor and we hadn’t talked in years. And so I said, here’s my plan, I want to get 30 houses, and these houses were in Cleveland mostly, these low cost houses, and I am going to get 30 houses and retire with passive income. And he said that that sounds like a lot of work. Why don’t you do multifamily? I said, Well, I’d love to, but I don’t have the money. And he said, You can raise the money. So that led me on a journey to read a bunch of books and eventually start a meetup in Southern California. I got involved as much as I could over the next couple of years, I raised $15 million. And up until just recently leaving my great corporate job.
I actually had a moment, I was sitting right here and I was thinking of the month end, quarter end, the sales hustle, you do a great job, and every month, every quarter, they say, Great job, slap on the back, go do it next quarter again. I was just thinking of this big rush at the end of the quarter. And what came out of my mouth was thank God I’m not doing that job anymore. It was just a great moment, a month after quitting and thinking, I’m actually doing the right thing. That was really great.
That’s sales in a nutshell, it goes back to zero every quarter, no matter how amazing you are.
Exactly, there’s never enough. And that’s the difference between being on a place where you actually own assets, or you get to be a part of equity in a deal versus you’re just transactional. If you’re a real estate agent, a broker, you’re doing some sort of job, even in sales, or if you’re a physician, it’s a time for money trade, you’re continually having to give up time to make money, versus when you get equity, or you get some value, you can exponentially grow your net worth. My net worth has grown 15x over the last four years, which has been really fun to watch.
Last week, I was sharing about how I did not do the right thing by quitting before at least being able to cover my expenses. I had zero properties when I quit, but you did the right thing and you had real estate income before quitting. Can you share your journey exactly how it went? So people that want to get to where you are can have an idea of where they can get started?
I admire you as well because like a lot of people say, I’m doing it, this is my new direction, burn the boats and just quit the job and I’m just going to go 100% into it. They do mentorship or other things, and then other people are a few months short of retirement and they’ve everything set up and all of a sudden they leave but I think I was somewhere in between. But there is a range of what people feel comfortable with.
I had this relationship with my cousin and it has become a very transformational relationship. What he said to me was, everybody that he talked to wishes they had started in multifamily sooner. That principle really is the ability to scale or the ability to use other people’s money, no matter how much money you have, no matter how much money you make. I had a couple of physicians that I worked with who made over $3 million a year, but they worked 80 hours a week. They weren’t really financially free, they were kind of chained to have to go do that job. If something happened to them, they were disabled, they wanted to leave, they would just lose all of that income.
Ask yourself, if adding another house, a duplex, a small multifamily, or whatever it is, is just completely overwhelming. If it feels like just way more work, then it’s not really passive. That’s a good passive or active test. There’s really no such thing as a passive investment, but the idea of some things that are more passive. As I learned about multifamily, and even more now, years later, it’s just the things you can learn about syndication, which is where you raise money from other people, and how that process really works. It sounds really overwhelming in the beginning. But once you understand that, it’s actually not that difficult. In the beginning, I read every book I could to learn as much as I could. I had a mentor in Southern California who ran a large meetup, I went to her and I said, Hey, I want to start a meetup, and her meetup would have usually 50-60 people show up at each meeting. It was a pretty good sized meetup for in person, at least before COVID. Now, after COVID we are in California, everything looks different. So I said, Hey, let’s start another meetup, I’ll do all the work, we’ll do it on multifamily, and I’ll set it all up. At that first meetup, I met a guy who was interested in investing, he just came up to me and said, Hey, I’d invest in one of your deals. And I was thinking, Wow, I don’t even have a deal. But I thought, This is great. So I got coffee with him. And I showed him what a deal would look like, I don’t have a deal, but here’s what a deal will look like, would you be interested? He said, Yes, I would invest $100,000.
I had also met another guy at that same meeting who had a deal, and I just introduced the two of them. Now I’ve raised $100,000 for my first deal. That’s the hardest thing, like anything, it’s just getting started, getting your first deal done. A friend of mine, Michael Blank says, this is the law of the first deal, being able to get your first deal going from zero to one, and then just afterwards, these things start to happen. So that was a big deal. That’s how I got started.
And then I just kept trying to learn, I went to as many live events as I could and just met some really great people. There was a saying at one of these events where somebody said, make yourself valuable to valuable people. So I was thinking, Who have I gotten value from? Oh, this guy’s podcast, I really like him, and he’s raising money. These people teach people to raise money. So I ended up approaching him and saying, How’s it going in this area? Can we be partners? He said, Yes, let’s do it. I ended up working with his platform, he had a huge network. But it was mostly for people that were doing deals, and not people that were more passive, like the physician, or the business owner, or the CPA, or some other professional. I basically came in, we set up a funnel, and then I ended up doing 1,000 one on one phone calls, 30 minute phone calls over the next 18 months. And it came from that idea of really making yourself valuable to valuable people.
That’s how I got started in it. And in each deal, I got a pretty good significant chunk of equity. And then when it was time to leave, I thought about leaving before COVID, and decided to stick around until afterwards. But the timing of when to leave, that’s the part that’s a little bit fuzzy, no one can really tell you when you should do that.
Were you able to cover your expenses by the time you left? You don’t have to share exact numbers, but how comfortable were you when you decided to make that decision?
I live pretty modestly, especially for LA, I just rent a place here, we have $150 million in real estate assets all basically in Florida, Alabama, Arkansas, Texas, and Georgia. For me, I was able to at 40 to 50k, now it’s more than that, but I was able to say, I can cover my living expenses based on this. And then each time I do a deal, I get an acquisition fee. Now in reality, I’ve reinvested most of the acquisition fees back in the deals that I’m doing. But then over time, when you do deals, you’ll have things start to cash out. So there’s some money coming from this deal. Or everybody is rolling from this deal to another. We had a deal recently that we bought in Jacksonville in March for $27 million it was a 288 unit multifamily complex. And we just sold it in December for $37.5 million. It was a huge profit, that was a 75%-100% return. But for me, we’re 1030 wanting that in the next deal. And then there are some fees when we go to the next deal. There’s some opportunity there.
When deals sell, there are opportunities there. In some ways it’s kind of feast or famine, but I feel like I’m investing in the business. I’m growing, I’m learning, and I’m covering my expenses. And I’m continuing to see my net worth grow. In multifamily in particular, you’re doing these long term deals, you know that the money’s there, you know it’s coming, but you don’t always see it right away. You’re taking less up front, but still with these acquisition fees, they add up enough to at least cover the business expense and cover my living expenses, and they continue to grow my net worth.
Just by adding value, not only multifamily, in any commercial properties if you add value, you increase the income, or decrease expenses, you automatically have equity on these properties, and that’s money, you can cash that out and buy more properties and grow that way. While you may not have that actual income coming in, that is a part of your net worth, and in real estate with the tax incentives, it’s a lot better, in many ways.
Yes, for me to make $200,000 on my corporate job, by being a real estate professional, I could actually make maybe $140,000 and it would be the same amount of money. As a real estate professional, and for anybody who’s listening, that is either a real estate agent, or a real estate professional, and that’s what you do full time, or at least the majority of your time. The IRS has put something in the tax code called the real estate professional designation, and you can use your passive losses from for example, some of these multifamily real estate deals with the depreciation and you can offset your income. Even while I was still working my job, I was able to qualify because I did more hours, I was just working a lot, so I was able to almost pay no taxes, I have saved something like $120-$150,000 in taxes in the last few years, which is amazing.
If someone is trying to leave their job right now, what are the top three tips that you would give them today so that they can take that leap?
The first thing you can do is just start taking action. What I mean by that is, life I think has an action bias that if you just start getting in motion, and I know this is something we talked about from Landmark as well, you just start moving and you start moving toward where you want to go. Let’s say I know I want to become financially free with real estate, then you start going to meetups, you start going to conferences, you start setting up calls with people that do deals, you start asking questions, you read the books, you just start doing all of this, and you make a commitment.
Tony Robbins has this saying, It’s in your moments of decision that your destiny is shaped. Once you decide to do it, you actually make a commitment, I would say to tell somebody about it, I’m going to leave my job, and then you’re accountable, or write it down somewhere. I think the first thing is just really to get in motion. There are really two things that I think help people grow in real estate or in life. And the first thing is networking. Going to great events, meetups, national conferences, there are all types of things you can do to meet people that are doing things that you’re going to learn from just by being in the room with people. And they’re going to find out that they have things that they need. If you think, Well, I don’t know anything about real estate, but maybe you know about sales, or maybe you’re an engineer, and you have a mind that you can really understand numbers. Maybe you can be somebody who finds deals, so there’s just different ways to look at it. But when you get in the room with people, you never know what sort of value you’re going to be able to bring, or what sort of value they’re going to bring to you. That’s networking.
The other one is education. Like I mentioned books, conferences, so those are those are a couple things.
The last thing is just to continue to do it, for me, it took me three years, well several years to get to where I actually was ready to leave. And if you don’t have people that are entrepreneurial, find others. My whole family are teachers, my mom’s a teacher, my dad’s a teacher, my grandmother was a teacher, my uncle’s a teacher, my brother, everybody’s a teacher. The teacher versus the entrepreneur mindset, are very different.
One thing that really helped me leave my job was to be in a group called Entrepreneurs Organization, where you have a small group of people, you meet once a month for four hours and talk about your business. And they’re all entrepreneurs. Every single one of them without exception, once they heard about my business, and I was thinking about leaving, they said, You should leave your job as soon as possible, it could fail, it could not work, but you can always go back to medical devices, you could always go back to sales. And I thought, Wow, that’s really cool. But my family wondering, Why would you ever leave your great job? Are you crazy? So it depends on who you talk to. You have to get around people with that entrepreneurial mindset, it comes back to the networking piece. You have to get around people that are really at the next level. They’re going to help you get there as well.
Is there anything else that you think is important for our audience to know that we haven’t covered?
These days, it’s so important that people pay attention to what’s happening in the world, the world is changing. There’s a huge transfer of world wealth that is happening. It’s happening through inflation, it’s happening through people not being aware that, traditional investments are not necessarily safe investments. Inflation is much higher than it’s actually being stated, I think it’s much higher than 7%. It’s really important to be in inflation protected assets. And real estate is that because you can actually use other people’s money, you can use leverage, you can use debt, can use lending to go buy real estate, at 3% or less, and inflation is seven to 15%. You’re basically getting free money to go buy things. I’m not giving anybody specific advice, but I just think educating yourself, being aware that the world is changing, getting around people that have opposing views, or views that are different from you. It’s all really valuable, because I think where we’re going to be in five to 10 years is not where we are now. And if you take steps to prepare for growing your wealth, you’re going to be much better off.
They are, indeed, eating our money away through inflation, taxation, everywhere, and double taxation through sales taxes here where we live. Do you have any deals coming up?
We’re always having deals, we had a number of deals last year, we have some stuff we’re working on now. People do need to join our investor club before we can just share about specific deals. But we do have some stuff in the pipeline. We’re always working on something.