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Join us as we take a deep dive into the real estate market with insiders in the industry.
Michael Conrad
Everyone, welcome back to the Business of Homes podcast. I got to tell you, when I started this podcast, I thought it was one thing, but it has evolved in my mind to be more inclusive and expansive and the types of stories that we tell. I thought that this podcast was about the business of real estate entrepreneurism and the philosophy that sort of is behind all of it and drives us.
00:01:02:10 - 00:01:33:16
Michael Conrad
And I really thought that I'd spend most of my time speaking to people that spend their days being a realtor. But as I began to think, I realized, you know what? The business of homes includes so many people, myself included, not a real estate agent. And I think that it's those stories that are sometimes even more curious to hear, because we recognize that the home is this great connection space for business and that some have very intentionally chosen not to follow the path of sales.
00:01:33:18 - 00:01:52:00
Michael Conrad
And those people have these really interesting views of things because they see it from a completely different vantage point. And one of those people is Brandon Thornbury. I think Brennan has touched just about every aspect and even some of the nontraditional places in real estate. How long have you been at it?
00:01:52:02 - 00:01:55:00
Brandon Thornberry
I started buying real estate in 2005.
00:01:55:00 - 00:01:56:11
Michael Conrad
And that was your entry point?
00:01:56:14 - 00:01:57:01
Brandon Thornberry
Yes.
00:01:57:04 - 00:02:00:00
Michael Conrad
You started investing just for yourself?
00:02:00:01 - 00:02:08:12
Brandon Thornberry
That's correct. Yeah. I bought a single family house here in East Nashville. And I did what? What's now called a house hack.
00:02:08:17 - 00:02:09:12
Michael Conrad
Oh, what is that?
00:02:09:16 - 00:02:23:16
Brandon Thornberry
That's when you rent out to people and they essentially pay your mortgage. Right? So it was a four bedroom house. There are three roommates there and their rent covered my mortgage. And I essentially live there for free.
00:02:23:16 - 00:02:26:06
Michael Conrad
So isn't that just called buying a house and having roommates?
00:02:26:07 - 00:02:36:21
Brandon Thornberry
It is. But but Bigger Pockets now calls it a house hack. So people are doing that long before they coined that phrase. But that's when I really caught the bug for real estate.
00:02:37:01 - 00:02:41:07
Michael Conrad
Did someone inspire you to do that or is that just something you fell into?
00:02:41:07 - 00:02:48:00
Brandon Thornberry
I've always had a weird ability to monetize situations.
00:02:48:02 - 00:02:49:18
Michael Conrad
So to scale.
00:02:49:20 - 00:03:14:05
Brandon Thornberry
So back to being a kid and and having little things like shoveling snow or raking leaves and setting up a little business where I have my friends go out and do the jobs. And I, I received the orders for these jobs as a kid. That doesn't work because your friends are like, you can't be back at the house just taking orders.
00:03:14:07 - 00:03:16:08
Brandon Thornberry
But as an adult, you know.
00:03:16:10 - 00:03:16:21
Michael Conrad
You can do it.
00:03:16:23 - 00:03:19:22
Brandon Thornberry
You can do that. So, yeah.
00:03:20:00 - 00:03:35:21
Michael Conrad
That's amazing. So getting in early into ownership teaches us so much about the real estate game, but it didn't stop there because you went on to try to buy another property and another one after that. So what was the journey?
00:03:35:23 - 00:03:57:11
Brandon Thornberry
Yeah, So after I caught that real estate bug, I just I was all in, so I just started buying duplexes. Just slowly, you know, like maybe like one or two a year. And early on, I did all the work myself. So I was doing the painting. I was refinishing the floors, I was changing out the light fixtures, you know, everything.
00:03:57:13 - 00:04:20:11
Brandon Thornberry
So I just slowly built that up. At the time, I was a tour manager for bands and loved my job. It was really fun. But I knew that I didn't want to be on the road forever. And when kids started coming, I knew that I would want to be off the road. So I started buying rentals as sort of an exit plan to get off the road.
00:04:20:13 - 00:04:35:03
Michael Conrad
A lot of people that get into that investing space immediately look towards a real estate license as a way to sort of open up other doors. Or maybe sometimes they move into a development place. Which road did you take?
00:04:35:05 - 00:05:01:02
Brandon Thornberry
I stayed in the rental space for the first six years, and when I was sort of transitioning off the road, the rental rental income was kind of there, but it wasn't totally sufficient to bridge that gap. So I started doing some wholesaling and then functioning as a realtor, just kind of as a side hustle just to supplement that rental income.
00:05:01:04 - 00:05:09:21
Brandon Thornberry
But at the point where the rental income really was enough, I was pretty much done being a realtor. Yeah, so your.
00:05:09:21 - 00:05:12:08
Michael Conrad
Sales side is a whole side unto itself.
00:05:12:09 - 00:05:13:23
Brandon Thornberry
It is. It is a lot of work.
00:05:13:23 - 00:05:47:03
Michael Conrad
Yeah, but that's just plugging things in in some ways. It's taking a seller and a buyer and connecting them, making sure that there's financing, making sure the thing is repaired. There's a lot of this plug modules into themselves. Yeah, part of the sales side of real estate. But then there's this whole other side where you're evaluating properties for their highest and best use, or you're working on the development side or you're connecting people that have the resources to either do development, finance it, or maybe create the vision around it.
00:05:47:05 - 00:06:12:00
Michael Conrad
And I think that is never not interesting because this land around us, it was all just prairie one time, right? And so it's all become something out of necessity or out of vision. And it's easy to look at like the Old West and be, oh, they had vision. They made streets and buildings, and now we live in these relative urban landscapes.
00:06:12:02 - 00:06:28:21
Michael Conrad
And it's harder to see those that have the vision to take something that's nothing. And make it into something. And you're someone that's doing that even right this moment, taking parcels in hard areas of town and turning them into spaces that people want to be at.
00:06:28:23 - 00:06:49:13
Brandon Thornberry
Yeah, yeah. I really enjoyed taking funky commercial buildings and doing something creative with them. So that's the fun side of real estate where you get to tap into your creative side and it's all it's not all just, you know, dollars and cents, you know, you could do something creative with it. So I really enjoyed that part.
00:06:49:15 - 00:07:04:09
Michael Conrad
You were telling me about this makerspace that is beginning to take on a life of its own. What are you looking for in a parcel when you're trying to build that, or did the makerspace start as the idea?
00:07:04:11 - 00:07:43:15
Brandon Thornberry
Hmm. That's a good question. It was always that's always something I wanted to do. And when the property presented itself, that was like, this is the perfect one for that. Those pieces kind of came together. So I knew I was looking for kind of this relatively rundown, somewhat affordable property. And this particular property used to be like a salvage yard, and it was in this family for they owned it for like 70 years and they had just kind of like added on to it, you know, those properties where you can just tell like there is an addition and then there is and then another addition.
00:07:43:21 - 00:08:07:08
Brandon Thornberry
And so and so this property was just perfect for that, where it just had all these unique little spaces that was kind of already chopped up. And my thought was, Hey, I could have, you know, several different tenants in here that, you know, are looking for relatively affordable space in terms of like in comparison to what people are paying for commercial spaces in Nashville.
00:08:07:08 - 00:08:19:01
Brandon Thornberry
Yeah. And so being able to provide some affordable spaces to artists and makers and creative types and yeah, just do something fun with it.
00:08:19:07 - 00:08:23:12
Michael Conrad
So now is this is this the space that has the shipping containers?
00:08:23:14 - 00:08:24:03
Brandon Thornberry
Yes.
00:08:24:05 - 00:08:25:22
Michael Conrad
Yeah. How do they fit in?
00:08:26:00 - 00:08:54:16
Brandon Thornberry
So, um, this, this particular property, the vision for it definitely evolved along the way. And so in addition to having the dilapidated or once dilapidated structures there, there's also some vacant land. And so we just brought in a couple of shipping containers and are fitting them out to be content creation spaces similar to this studio that we're in right now.
00:08:54:18 - 00:09:16:08
Brandon Thornberry
Um, so different backdrops, podcasting space. Uh, so one of the other spaces that's already on the property is used to be an old shop, so like a garage where they would fix up cars and it's just got such a great Americana vibe to it. We have old vehicles in it and so we started renting that out for music videos and photoshoots.
00:09:16:10 - 00:09:25:18
Brandon Thornberry
And so seeing the success of that was when I thought, well, maybe there's more we could do here at the property in addition to the shop. So it's been really fun.
00:09:25:21 - 00:09:57:12
Michael Conrad
Well, thank you for the larger community for not putting in a four storey mixed use. I think shipping containers are beginning to really capture the mind and the imagination of a lot of folks that sort of sort of orbit real estate. I know that I have a shipping container dream myself for a little place in the woods, but shipping containers continue to rise to the surface as this relatively affordable and very creative solution for certain situations.
00:09:57:14 - 00:09:59:02
Michael Conrad
Have you had an experience with them in the past?
00:09:59:06 - 00:10:23:22
Brandon Thornberry
This is my first time and what gets me excited about it is also sort of combining. I just got done renovating a school bus into a motorhome and we have we have solar panels on the roof of our school bus. And so my thought with the shipping containers is, you know, the challenge with the shipping container development or community.
00:10:24:00 - 00:10:53:17
Brandon Thornberry
A few challenges are the first is infrastructure, right? So if you're going to build a shipping container community, whether that's residential or as like little shops, you're going to have to bring in, you know, sewer, water, electrical. So I'm trying to figure out how could you, um, how could you take a piece of land and more feasibly drop shipping containers onto the property that are sort of self-contained where you don't have to build in the infrastructure?
00:10:53:22 - 00:11:16:12
Brandon Thornberry
So one idea would be to have enough solar on these shipping containers so you don't have to bring electrical and then, you know, my thought would be to have one central bathroom. So you're not having to bring sewer and water to all these containers. Now, that only applies if you're setting these up at shops, right, like little retail shops and things like that.
00:11:16:14 - 00:11:40:14
Brandon Thornberry
So that's kind of what I'm exploring now is how can, how can you, um, I'm using this as my test model with these two and then looking forward to down the road. If I figure out the pieces like, okay, how could we, how could we find another commercial property off the beaten path? I picture it like next to railroad tracks at just a property that nobody really wants, right?
00:11:40:16 - 00:11:49:18
Brandon Thornberry
And bring in some shipping containers that have solar on them and just do it on a very low budget.
00:11:49:19 - 00:12:10:13
Michael Conrad
Yeah. The nature of how shipping containers are constructed with the sort of the corrugated surface is there. There's an immense rigidity just right as they lay. Yeah, drop them there. And like it's very, very hard to damage them. It's hard to work with them. Mm hmm. But you begin to have this modularity almost like Legos or building blocks.
00:12:10:14 - 00:12:35:00
Michael Conrad
You know, when we were kids that you could do so much. I've seen some of the designs around placing two of them together, molding them, and then blowing out that center double wall. That's where you get a big open space so you can start to stack them even in non-linear sort of ways. Not right angles. And you begin to create almost these shackles of strength that have a lot of potential open space.
00:12:35:00 - 00:12:37:18
Michael Conrad
I mean, and you can start small, right?
00:12:37:18 - 00:12:38:15
Brandon Thornberry
And you can build on.
00:12:38:15 - 00:12:53:07
Michael Conrad
You can build, yes. I mean, it's literally that same patchwork quilt idea, but almost intentionally built to be for that. Yeah, that's right. It doesn't hurt the structure to be built on over and over and over like that.
00:12:53:11 - 00:13:13:02
Brandon Thornberry
The two that we're doing right now. So they're kind of positioned like this and we're going to have a deck in between them and then shade sails between them with string lights to create this like outdoor space between them as a hang out area. And then they'll be French doors that like face into the deck. And so it'll just be this cool little vibe.
00:13:13:02 - 00:13:29:05
Brandon Thornberry
So that's one example of what you just said, how you can just kind of like position them how you want, you can build on to them, you can have shade sails coming off. You could, you know, have a shed roof coming off of them. There's just so many different ways that you can configure. Um, so I think it's really, it's really fun.
00:13:29:08 - 00:13:38:02
Michael Conrad
The tiny house community has been something that's been on fire for a long, you know, couple number of years now. And I think that there's a real intersection here.
00:13:38:02 - 00:13:39:05
Brandon Thornberry
Yeah, I mean, absolutely.
00:13:39:05 - 00:14:01:20
Michael Conrad
If you here's like $1,000,000 idea, if you were a development or construction company that had just add water plans, just add water construction practices where you're going in saying, look, we'll drop a container here and you can pick ABC or D? Yeah, or you could do two containers or three configurations. I mean, there's so much opportunity and the space is very efficient.
00:14:01:22 - 00:14:25:19
Michael Conrad
Yet you go into sort of really narrow spots and have, you know, all that set back issues aren't as much of an issue. And so I think there's just a lot of opportunity. I'm I'm looking forward to seeing how shipping containers creatively continue to get used in an urban environment like this where there's just less space and less infill opportunity and those hard to get that spaces like by the railroad tracks which you're referencing, those are the only ones left.
00:14:25:20 - 00:14:46:20
Brandon Thornberry
Yeah, absolutely. And I think there's and people are already doing this this isn't revolutionary, but there's so much opportunity to build out these containers in a warehouse and then just throw them on a truck and just have them delivered. So I think there's there's big opportunity there from economies of scale standpoint.
00:14:46:22 - 00:15:15:06
Michael Conrad
So this all of this is helping us see that real estate is not just one thing. Yeah, it's really easy to watch the TV or read the magazines and think to yourself, real estate is house's real estate is sale of houses, buying, selling, holding, whatever, renting out. But there's so many elements of real estate being developing land and putting the highest and best use in a place and putting people in those places.
00:15:15:08 - 00:15:35:16
Michael Conrad
Um, when you were starting in residential and now moving and connecting to all these different type of alternative commercial spaces, a lot of people see these as almost like learning and graduating to like higher levels of understanding in real estate. Like, oh, I started in residential and then I sort of slowly move into commercial and then I slowly moving to development.
00:15:35:18 - 00:15:58:21
Michael Conrad
But there's another layer that is kind of hard to get to sometimes, but you started really playing and that is commercial multifamily with a larger scale, which is almost an entire like a beast in and of itself. Sure. How have you found that transition to be? Were you able to take those skills that you previously learned and bring them to the table, or has it been an entirely new sort of learning experience?
00:15:58:23 - 00:16:45:07
Brandon Thornberry
So definitely both. I think some of the deal finding is is can be similar also to experience renovating and and project management transitioned over. It is a little bit different in the sense that I think multifamily is harder mentally because with single family and you know this because you own your own rental properties and have done real estate deals, like you feel like you're moving faster than you do with multifamily because, you know, it took me probably 18 months of searching and looking at deals before I bought my first multifamily so you can get a little discouraged.
00:16:45:08 - 00:17:12:00
Brandon Thornberry
So mentally you have to remind yourself that you're putting in your reps, you're learning, you're looking at deals. Some don't work and you know, you look up and then like the first multifamily deal I bought was 32 units, right? Yeah, about that time around that time I had purchased about 50 houses, right of rentals. Well, that took me from 2007 to 2019 to buy about 50 rentals.
00:17:12:00 - 00:17:27:02
Brandon Thornberry
Right? And then in one purchase I bought a 32 unit. So even though it feels like it's slower, you're actually moving a lot faster in terms of, you know, when you do buy a larger complex, the amount of units that you've acquired, there's just.
00:17:27:02 - 00:17:38:20
Michael Conrad
Less of them out there. Yeah, I mean, think of how many residential structures are around us. Yep. Conversely, with how many big large 32 unit multifamily is present, there's just less deals available.
00:17:38:20 - 00:17:39:10
Brandon Thornberry
Right?
00:17:39:12 - 00:17:47:13
Michael Conrad
So it's going to take you longer to acquire that. And honestly, some of them aren't going to be good deals. And so you can't step into that because the stakes are higher.
00:17:47:13 - 00:18:04:12
Brandon Thornberry
Yeah, yeah. And it's very competitive. There's a lot of people that are in this space, a lot of, you know, especially when you get into the larger sized complexes, you're dealing with large groups that are well-funded. So it's hard to compete, you know, when you're.
00:18:04:14 - 00:18:14:17
Michael Conrad
Why is that seen as a, uh, a desirable asset to acquire for these larger groups? Why is that such a competitive space?
00:18:14:17 - 00:18:46:01
Brandon Thornberry
Yeah, I mean, I think there are a lot of reasons. Um, one would be tax advantages. I mean, multifamily and commercial, there's just cost, segregation and things that are very powerful. Um, economies of scale like and you can just run these as a business, um, you know, especially if you get, you know, over 120 unit complex, you can have a leasing person and you can have a maintenance guy that are dedicated to that property.
00:18:46:03 - 00:19:10:09
Brandon Thornberry
So it makes it much easier to run rather than having 120 houses that are maintenance guys having to run around. That's a lot, you know, in like a couple of maybe an entire county, you know, that's just really hard to operate. And so I think when bigger groups are looking at, do I want to buy 120 houses or do I want to buy a 120 unit complex, it's a no brainer.
00:19:10:11 - 00:19:42:14
Brandon Thornberry
Um, but I think the most powerful thing about multifamily is you're in a little you're in more control of your own destiny. And the reason I say that is something called forced depreciation. So, um, with single family houses, your value is really based on your comps, right? Your surrounding houses, whatever they're worth. And so back when I was doing Single Family, I was doing the, you know, another bigger pocket's term, the BR method, right?
00:19:42:14 - 00:20:14:05
Brandon Thornberry
You buy something, you renovate it, you you rent it out and then you refinance and then you repeat. So take an example. I bought a $60,000 house here in East Nashville in 2010. I put 20 into it, it appraised for 150. So now I go to the bank, I get a 75% loan on that 150. So I pull out $112,500 out of that 150, I pay down my 80 grand that I put into the property.
00:20:14:10 - 00:20:43:11
Brandon Thornberry
Plus I got a little bit of a profit tax free. And then I take that money and I go do it again. Right? So that's just what I did, just that cycle, rinse and repeat with multifamily, what's even more powerful is the value is based on your net operating income. So instead of it being based on your comps, your surrounding houses, if you can actually increase the net operating income on your property, similar to a business, it's going to be worth more.
00:20:43:13 - 00:20:52:02
Michael Conrad
Because it's not being evaluated as a comparable property, correct? It's being evaluated and appraised and the appraisal method is being it's looking at it as a business.
00:20:52:02 - 00:20:52:12
Brandon Thornberry
That's right.
00:20:52:12 - 00:20:54:14
Michael Conrad
And so it's operating income.
00:20:54:14 - 00:20:55:07
Brandon Thornberry
That's right.
00:20:55:09 - 00:20:56:16
Michael Conrad
Is the valuation.
00:20:56:21 - 00:21:20:05
Brandon Thornberry
Absolutely. Yeah. So I can actually, you know, project out to a certain extent. I mean, there's some non control bulls but if I know the rents for an area and I come in and let's say I buy a ten unit rate and let's say the rents are a thousand and I renovate it and I bring those rents up to 1200.
00:21:20:07 - 00:21:48:00
Brandon Thornberry
So I increased the NOI by $2,000 a month at a six cap you multiply that by $200. So I raise the value by $400,000 by raising the rents by $200 and so I can actually say, hey, it's probably going to take me 18 months or whatever to realize those rents and then I'm going to do my refinance and I'm going to pull my capital out and then I'm going to go buy another one.
00:21:48:02 - 00:22:07:12
Brandon Thornberry
And so I think that's what there's one of the most powerful things about multifamily or commercial is you can come in and put a business plan together and you can actually sort of look into the future and say, Hey, I'm going to be able to, in theory, hit that mark, pull my money out and then go buy another one.
00:22:07:15 - 00:22:14:20
Michael Conrad
But the tricky, the sticky wicket here is that not every lending entity plays that game.
00:22:15:02 - 00:22:15:15
Brandon Thornberry
That's right.
00:22:15:16 - 00:22:26:17
Michael Conrad
Not every lending entity is going to be willing to give money out based on that business sort of angle evaluation. Yeah. Um, rather than a traditional sort of comparable.
00:22:26:19 - 00:22:27:08
Brandon Thornberry
That's right.
00:22:27:08 - 00:22:44:11
Michael Conrad
And so you have to have the right lending partners in place and the experience to not get trapped and not be able to raise that net operating income because either you got your underwater with expenses or you just can't kind of get to the where the market is going to bear those rents.
00:22:44:11 - 00:22:45:02
Brandon Thornberry
That's right.
00:22:45:03 - 00:22:48:13
Michael Conrad
And so there is a it's a high stakes poker game.
00:22:48:13 - 00:22:54:16
Brandon Thornberry
It is.
00:22:54:18 - 00:23:24:12
Jake Hall
Hey, everybody, It's Jake, director for the Business of Homes Podcast. I hope you have been enjoying today's episode, starting with Brandon's beginnings in owning rental properties. How shipping containers in small homes are shaping Nashville, and Brandon's pivot into owning larger multi-unit properties. After the break, Michael and Brandon dive into how different multi-unit properties can be, how to create an environment that makes your tenants want to stay, and how to transition from a real estate agent to a real estate investor.
00:23:24:14 - 00:23:44:03
Jake Hall
You don't want to miss it. Don't forget to follow us on Facebook and Instagram @thebusinessofhomespod, where you can interact with us and see some great bite sized pieces for smaller episodes. For you listeners out there, did you know our entire podcast are filmed and are on our YouTube channel? Check it out next time you want to see our amazing guests tell their stories.
00:23:44:04 - 00:24:04:02
Jake Hall
And are you currently watching this episode in video format? Don't forget to follow us on your preferred audio streaming service to take us with you on the go. Lastly, do you have any feedback or want to suggest someone for the show? Email us at thebusinessofhomespodcast@gmail.com. Please enjoy the rest of today's episode with Brandon Thornbury.
00:24:04:03 - 00:24:16:03
Jake Hall
Let's get back to it.
00:24:16:05 - 00:24:41:04
Michael Conrad
But the multifamily space is as different as the produce section. I mean, there is eight units 32, 96. I mean, and all of them are really operating at different speeds with different sort of demands on your time and your pocketbook. Yeah. You know, for the listeners here that are sort of curious more about multifamily, let's let's begin to differentiate out some of these products, because you've talked about a couple different versions.
00:24:41:06 - 00:25:03:07
Michael Conrad
You know, how close on the grand spectrum from like a single family structure all the way up to 96 units. You know, how close is the smaller four unit quads, eight unit complexes? You know, 1620s is the complex you're probably going to be seeing a lot more of in your neighborhoods. You know, where did those fall in this larger spectrum of risk reward accessibility?
00:25:03:08 - 00:25:04:01
Michael Conrad
Yeah.
00:25:04:03 - 00:25:37:22
Brandon Thornberry
Well, I will say the larger the complex, the easier it is to run. And definitely when you get up into that over 100 unit kind of ballpark where you can really start to afford some full time people for your property, it really helps to be able to provide excellent maintenance to your residents and just response time versus a scattered single family portfolio is just a lot harder to manage.
00:25:38:00 - 00:25:50:17
Brandon Thornberry
Um, I think my 30 and 40 units are some of the harder properties to manage because they're just not quite there to afford a person. But the.
00:25:50:17 - 00:25:51:16
Michael Conrad
Need is so.
00:25:51:16 - 00:26:12:14
Brandon Thornberry
Big, the need is there. I mean, and people, they want, you know, that response time in one of the biggest reasons somebody leaves a complex is because of maintenance. You know they just can't get their maintenance called, their maintenance request answered and so they're just going to move out. And so the 30 and 40 unit complexes are really tough.
00:26:12:14 - 00:26:23:05
Brandon Thornberry
I'm still buying them, but they're harder to they're harder to really provide a excellent service than 120, you know. So, yeah.
00:26:23:05 - 00:26:31:16
Michael Conrad
Yeah, I've heard it said that if you're looking in the multifamily space that you're you're really looking for quantifiably underperforming assets.
00:26:31:16 - 00:26:32:03
Brandon Thornberry
Absolutely.
00:26:32:03 - 00:26:53:05
Michael Conrad
You want there to be a real reduced sense of culture, a real reduced sense of owner responsibility that's currently present. Yep. And a real sort of missing amenities piece. I mean, you want there to be a holes in the formula that you yourself can improve upon or plug in too.
00:26:53:05 - 00:26:53:18
Brandon Thornberry
That's right.
00:26:53:20 - 00:27:13:18
Michael Conrad
What are some of the cultural elements is you're building amenities out and sort of that get the piece that gets people to stay. You know you talk about what gets people to leave. The thing that gets people stay is usually amenities and culture. Yeah. And so what are some of the things that you've tried to plug in to some of these multifamily is to sort of pick that part of the formula up.
00:27:14:00 - 00:27:15:02
Michael Conrad
Yeah. Improve the whole lot.
00:27:15:07 - 00:27:40:04
Brandon Thornberry
Yeah, Well a couple thing. That's things that come to mind. The first is um, you know, my tendency is one is to want to get into the units and start renovating those as quickly as possible, which, which I do. But you know, I'm trying to get better at doing the exterior first, you know, and just really come in very early on after acquisition and really do a drastic change to the exterior.
00:27:40:09 - 00:28:07:13
Brandon Thornberry
And usually that means painting, landscaping, things like that. Um, culturally I rely heavily on my property managers to really help with that. So that looks like community events. Um, things like as silly as they sound like door decorating contests at Christmas and different things like that, just to provide this community feel there. So I'm not so much personally in the weeds on like the culture because I'm not there.
00:28:07:13 - 00:28:13:00
Brandon Thornberry
Yeah, but definitely, you know working with property managers to, you know, help with that.
00:28:13:05 - 00:28:35:18
Michael Conrad
What is something that we can start to give the listeners here who are curious about these other aspects of real estate, whether it's development, whether it's multifamily, You know, if you're listening here and you're a real estate agent selling in real estate and you want to start to expand your skills set, what are some areas that we can start to touch or work in to develop this wider range of skills?
00:28:36:00 - 00:29:00:17
Brandon Thornberry
Yeah, I mean, if you're a realtor and you're wanting to get into real estate as an investor, I think it's kind of keeping your ears open to opportunities on deals that your maybe bringing to your buyers. You know, sometimes that can sound a little bit of like a conflict of interest, but I think there's more than enough that you can still operate as a realtor and still be buying deals yourself.
00:29:00:18 - 00:29:26:04
Brandon Thornberry
Um, and I think, you know, thinking back to when I was operating as a realtor because I was so focused on sort of that monthly income, I think I missed a lot of opportunities that I probably should have figured out just how to buy myself instead of taking to a client. Most of my time as a realtor was actually finding investment properties for other people.
00:29:26:06 - 00:29:51:15
Brandon Thornberry
And so I think after doing enough of those, I realized, Hey, I think I can just figure out ways to just buy these. Yeah, you know, And so I think I think there was a tipping point where I realized, you know, there probably was too much of a conflict of interest where, you know, if I'm just going to be mostly buying for myself, I can't just be putting out, like, the crappy deals, you know, the leftovers.
00:29:51:17 - 00:30:17:19
Brandon Thornberry
But yeah, I think, um, staying open to, uh, you know, how you might break into investing or partnering with your and your, your buyer clients if you're in that space, rather than just kind of like your blinders are on to just like, okay, how can I make my monthly commission, which I know is necessary? You got to put food on the table.
00:30:17:21 - 00:30:32:16
Brandon Thornberry
But I think, you know, if I could go back and talk to my self from ten years ago, I probably would say, Hey, think a little bigger, you know, like there's opportunity here. So that would be my advice to somebody that's looking to break in the pushback.
00:30:32:16 - 00:30:43:16
Michael Conrad
I hear a lot when people are probably considering those things is is capital. Sure. Capital is is the bottleneck for so many sort of new investor.
00:30:43:17 - 00:30:44:00
Brandon Thornberry
Yep.
00:30:44:06 - 00:31:08:17
Michael Conrad
And you and I both know that capital is readily available all around us, right? In places that it's not always visit all up to us and that acquiring a deal is usually a formula of trying to find the right thing with the right deficit of something. Yeah. And then apply the right capital to it. Sometimes your own, sometimes somebody else's.
00:31:08:23 - 00:31:25:22
Michael Conrad
Yeah. And then of course that rinse and repeat or that rinse, refinance and repeat sort of concept, you know, is how you maintain that little sort of moving wheel. That's right. What is, what are some of the early things that you did when you were trying to source capital to make sure that you could keep the wheel moving?
00:31:26:00 - 00:31:30:21
Michael Conrad
That didn't require you having to go back in your own pocket every single time.
00:31:30:23 - 00:31:51:16
Brandon Thornberry
Yeah. When I reached a point where I felt like I had more deals than dollars, uh, about that time I had met somebody who, uh, it just kind of naturally turned into a partnership where they were providing the capital, and we worked out a percentage split on deals, and so that worked out very well for a long time.
00:31:51:18 - 00:32:18:22
Brandon Thornberry
Um, to about the time when Nashville really kind of flipped from being a cash flow city to more of like an appreciation market. You know, as you know from being in Nashville, it's really hard to find cash flowing assets here. So it kind of pivoted to where I had more dollars than I did deals or access to dollars on my personal dollars.
00:32:19:00 - 00:33:02:17
Brandon Thornberry
Um, and so that that relationship changed from less of like an exclusive relationship to more of like a, hey, let's partner when it makes sense. And that's about the time when I branched out and started doing syndications and JVs and partnerships with multiple people. Um, and I don't know if this is accurate, um, I'd be curious to hear from maybe other people who have been around for 20, 30 years, but I have the sense that, um, the real estate world specifically has become more collaborative in the sense of like I think ten or 20 years ago if, like you and I were going to partner on something, we would say, Hey, let's partner on this
00:33:02:17 - 00:33:32:13
Brandon Thornberry
deal. But also moving forward, let's partner on like everything, right? Like you do for a marriage. You would form this company right? And I think now maybe the internet, maybe socials, whatever, since the rise of syndications, it's much more like I have I have many different partnerships with multiple people. And I think as long as everything's on the table and expectations are clear on the front end, that's working very well.
00:33:32:15 - 00:33:46:18
Brandon Thornberry
And I don't know. I'd be curious to hear what you think too. Like, do you think there's been a change in in ten years? I just think back ten, ten years ago, if I was partnering with somebody, it was very like, hey, we're going to partner and then we're going to be like, We're going to be in it.
00:33:46:22 - 00:33:47:06
Brandon Thornberry
You know.
00:33:47:09 - 00:34:22:21
Michael Conrad
You're you're scratching at this. It's a larger, um, move that's taken place. And I think a lot of aspects of society, um, people work places less. Why? Well, it's because relationship is less important in that particular space. Now people don't get married as much. I mean, I mean there's lots of, of things and I think overall it's we see that there are chapters and there are steps rather than one single sort of box that is a great journey together.
00:34:22:21 - 00:34:48:11
Michael Conrad
And so we now see that we have the chance to get together in blocks at certain points in time, and that that is allowed to exist and have validity and power and good. And that at the end of that block, which is relatively small and finite, there is a sort of a no harm, no foul, no strings attached sort of aspect of it, of like we part ways by default and we may come back together again.
00:34:48:11 - 00:35:20:14
Michael Conrad
Yeah. And the the old long term stickiness of relationship that you're sort of hinting at is now borne out of repetition of these sort of blocks of time or these chapters rather than a sort of a natural. It's obvious to both of us. Yeah. I also think there is a commodity of information, commoditization of information. There's this more information available to us, which means there's more relationships and people and knowledge about people available to us.
00:35:20:19 - 00:35:41:17
Michael Conrad
And so if you and I maybe formed a partnership ten years ago, we might not have known very many other options. And so if this one felt good, well, let's just keep it rolling. Yeah. And now we're aware of a grander sort of fabric of relationships in the business, an investment world, too, where we say, Well, I'd likely will have other opportunities with other suitors, so to speak, moving forward.
00:35:41:17 - 00:36:02:04
Michael Conrad
And so if this is good for now, let's just let it be now, which I'm not even entirely is a good thing in the grand scheme of the social fabric. But certainly the trend that we've seen societally in a lot of areas, both personal and professional. And so it's no surprise to me that investment, which tends to be it's just business, sir, you know, has gone that way as well.
00:36:02:05 - 00:36:22:18
Brandon Thornberry
Yeah, Yeah. I read a book probably a year to two years ago maybe. I can't remember. It's called Who, Not How. And that was really impactful for me because for the longest time I was, you know, the I'm, I'm disease, I'm going to do this and I'm going to do that and I'm going to stay on the floors.
00:36:22:18 - 00:36:40:03
Brandon Thornberry
I'm going to paint the walls and I want to find the deals and I'm going to sell the deals and be a realtor and just not enough hours in the day to do all those things. So partnering with people. And so instead of thinking, you know, how am I going to accomplish? Who do I know that can, you know, help me advance this goal?
00:36:40:05 - 00:37:00:22
Brandon Thornberry
And so that's just been really fun because in some situations I might just be the signer on a deal and I'm providing maybe just kind of an advisory standpoint on the deal, like I'm not in the weeds on it, I'm just kind of watching, making sure everything's okay. I'm very little time in it. And then other deals, I'm like the main operator.
00:37:00:22 - 00:37:13:08
Brandon Thornberry
I'm overseeing the renovation. So it just kind of depends on the size of the deal and like who's involved and where the deal is and what it needs. And, you know, so it's fun to craft that.
00:37:13:10 - 00:37:35:23
Michael Conrad
I think all of us want to be the linchpin. We want to have the skills and rely on ourselves. And if we're investment minded, we recognize that there is a of that sweat equity or value that goes into it that doesn't have to be paid out to somebody else. And so that feeling and I think it's very readily present in real estate and certainly that immediately touch real estate.
00:37:35:23 - 00:38:06:18
Michael Conrad
So think of construction. It's very common for people to want to do it all. And sometimes we label that micromanagement or sometimes we label that, you know, just working smart, you know, But at the end the day, it feels good to control. Yeah. You know, all of us are somewhere on the control spectrum, but it's as you go along that you realize that economy of time just doesn't work in your favor nearly as often because there is likely someone that knows it better.
00:38:06:18 - 00:38:36:05
Michael Conrad
Does it better, is more well positioned, and that slow journey and business around letting go of all the things that are you're not quite as well-suited for as others is really hard For some, it's a totally Zen like experience for others. Yeah, and I know that I sort of jokingly say that I'm a recovering micromanager, you know, at points, but it's because I know that the vision I had in business was super clear.
00:38:36:07 - 00:39:01:04
Michael Conrad
But I have learned over time that the vision for what you want and the doing the doing it there isn't necessarily always the same thing. And then others building their piece of it or providing their value in it. It enriches it strengthens the vision. And quite frankly, it's just a better economy of time, you know, and oftentimes of cost as well.
00:39:01:04 - 00:39:29:11
Michael Conrad
Yeah, So I like that because I think on this podcast particular, we're constantly looking at the tools we use in real estate to move forward. And sometimes it feels like me selling the home, doing the deal, negotiating desk, working with the client, whatever it looks like me doing all of that is naturally going to provide the best possible experience, which somewhere in my my caveman brain will tell me that I'll make the most money at the end of that little, you know, sort of formula.
00:39:29:11 - 00:39:51:05
Michael Conrad
But it's not true. And it's the quicker we get there to realize that it's a collaborative effort, internal collaboration in teams, you build external collaboration and partners, you create. Yeah, you know that that's really the magic that we're all kind of pushing towards and we're all trying to figure it out. So look around you and if there's someone who's better at it.
00:39:51:05 - 00:40:10:01
Michael Conrad
Get around that person. That's probably a good partner. That's some of the worse at it. Help them out. They might be an asset to you and you to them as well. And and I think that kind of brings us to an interesting close here as we as we've looked at multifamily and development of spaces, none of it is done by ourselves.
00:40:10:02 - 00:40:41:02
Brandon Thornberry
Yeah, it's very much a team sport. I mean, you hear that a lot in multifamily is specifically that it's a team sport. I think coming out of single family, I was resistant to that, right? You know, I had done all the things myself. I, I was the so I had like maybe source the deal negotiator did it, did the contracts, renovated it myself, then did the showings for the tenant prep, the lease for the tenant, took all the maintenance calls.
00:40:41:04 - 00:40:41:19
Michael Conrad
Talked to the lender.
00:40:41:19 - 00:41:01:22
Brandon Thornberry
Guthrie I mean, I mean, literally like everything, right? And now there's definitely more of like a team, like, I found that I don't like cold calling, you know, but I have a friend who's a broker who's excellent and he loves it. Yeah. So it's just like, I don't need to be calling up sellers all day long. And do you want to sell your multifamily?
00:41:01:22 - 00:41:28:06
Brandon Thornberry
Like, he's great at that. Just let him do that. You know, I finally, after years, hired a bookkeeper. You know, I have a CPA, I have maintenance people, I have property managers, and I can I can confidently say, I love the season that I'm in, right? Because I get to just focus on like what I really enjoy and what brings me energy.
00:41:28:08 - 00:41:44:06
Brandon Thornberry
You know, at the end of the day, I reflect on that, you know, like what? What brought me energy today? Like, where was I when I just like, was in the space and I was like, I could just do this, you know, like all day and like, I can't believe I get to do this and somebody pays me for it, you know?
00:41:44:06 - 00:41:49:20
Brandon Thornberry
Like, where was that? And and so I just I just love it, you know? It's so much fun.
00:41:49:22 - 00:42:20:04
Michael Conrad
Yeah. And that that piece of it that comes into identity and really starts getting that relationship concept that you were getting out of, We don't make those decisions to outsource or to bring that outside partner in to help us. We don't make those decisions because we think it has to be this long term marriage. Sometimes we can be confused into recognizing that they're that the people that you build around you, this team, it doesn't have to be your forever team.
00:42:20:04 - 00:42:39:20
Michael Conrad
That's right. It doesn't even have to be your internal team. You can just be a group of outsiders that are helping you achieve your goal. That's right. They have their own sort of landscape and business that they're running, and you can almost begin to rely on that. Their interest in surviving and staying alive will suit your interest and taken to the next step.
00:42:39:22 - 00:42:54:10
Brandon Thornberry
And it relieves a lot of pressure, too, because we're saying, hey, let's let's try it out on this deal. Right. And if it goes well, then we'll just we'll do another one, right? You know, But it's it's less of like, hey, we're going to set up this company and then we're going to be in business for 20 years.
00:42:54:12 - 00:42:56:10
Brandon Thornberry
Like, that's that's a lot of pressure.
00:42:56:11 - 00:43:22:18
Michael Conrad
My encouragement is the future of real estate and everything that touches it and surrounds it is collaborative. Everything about the future is team. Nothing about the future is isolation. And so you out there listening right now, building your team doesn't always look like hiring people to spend the money out of your own pocket. It looks like making the right right relationships, the who and what the how.
00:43:22:18 - 00:44:06:05
Michael Conrad
Yeah. And making sure that to get to the next step you have the people that to help you get there and not try to do it all yourself. That's right man great to have you here thanks very much for the time and really enjoyable and guys, hit the subscribe button. Keep listening here. We're going to continue to tell amazing stories about how to help you in your business and how to to learn this business of homes.
00:44:06:07 - 00:44:29:12
Jake Hall
Hey, everyone. Drake, again, director for the Business of Homes podcast. I hope you've enjoyed today's episode. A huge thank you to Brandon Thornberry for being a part of the podcast Go follow him on Instagram @bthornberry and let him know how much you enjoyed his story. Don't forget to subscribe on your preferred listening platform and make sure to follow us on Instagram as well @thebusinessofhomespod.
00:44:29:14 - 00:44:39:11
Jake Hall
Do you have any feedback or want to suggest someone for the show? Email us at thebusinessofhomespodcast@gmail.com. Thank you for listening and we'll see you again soon.