Building Legacy Wealth Through Apartments & Commercial Real Estate Investments.
Legacy Wealth Holdings is a trailblazer in the commercial real estate investment world. We are headquartered in Cleveland OH and invest in apartment buildings nationwide by joint venturing with local operators and passive lenders.
Our investment strategy is simple: only invest for cash flow, only buy at wholesale prices, and create (never speculate) appreciation through value-add improvements and sweat equity.
Legacy Wealth Holdings was launched in 2009 as a socially conscious real estate investment company. Founder Tim Bratz was drawn to real estate because he saw the long term benefits of a solid investment.
Tim began his career in the competitive New York City real estate market working as a broker leasing ground floor retail units. Here, he saw the true potential of real estate to transform lives. Although Tim was limited in means, he spent his time reading, attending workshops, and networking with accomplished entrepreneurs learning that being resourceful was the ultimate path to becoming successful.
With this knowledge, Tim embarked on building his real estate company in Charleston, South Carolina, where he had relocated in search of a better quality of life. Arriving in 2008, after the real estate bubble burst, Tim quickly adapted and using a credit card, increased his limit and then wrote himself a balance transfer check to acquire the cheapest property he could find.
Armed with his personal investment and plenty of sweat equity, Tim transformed a rundown duplex and turned a profit on his first deal. He then took those proceeds and reinvested them, while seeking private capital to expand his growing company.
Today, Tim still uses this formula for success, which all starts with being resourceful and having the right mindset.
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Jay Conner (00:02):
Well, hello there! And welcome to another episode of Real Estate Investing with Jay Conner. I’m Jay Conner, your host. Also known as The Private Money Authority. And here on the show, we talk about all things that relate to real estate investing. Single family houses, commercial deals, self storage, land, small apartments, big apartments, flipping, rent to own, et cetera, et cetera, et cetera. We also talk about how to get your deals funded without relying on local banks or mortgage companies. How to sell houses fast. How to automate your business. To where you’re running your business and your business isn’t running you. And I have fantastic guests here on the show. Today is no exception. But before I introduce my guest today, I’ve got a free gift for you to check out. And that is if you’re looking for more funding for your deals, particularly here in the midst of COVID-19 and you don’t want to rely on banks, mortgage companies, or any kind of traditional funding, then I have got an on demand, free training for you right now on the internet.
Well, hello there! And welcome to another episode of Real Estate Investing with Jay Conner. I’m Jay Conner, your host. Also known as The Private Money Authority. And here on the show, we talk about all things that relate to real estate investing. Single family houses, commercial deals, self storage, land, small apartments, big apartments, flipping, rent to own, et cetera, et cetera, et cetera. We also talk about how to get your deals funded without relying on local banks or mortgage companies. How to sell houses fast. How to automate your business. To where you’re running your business and your business isn’t running you. And I have fantastic guests here on the show. Today is no exception. But before I introduce my guest today, I’ve got a free gift for you to check out. And that is if you’re looking for more funding for your deals, particularly here in the midst of COVID-19 and you don’t want to rely on banks, mortgage companies, or any kind of traditional funding, then I have got an on demand, free training for you right now on the internet.
Jay Conner (01:14):
It’s only about 60 minutes long, but this training will show you the five easy and quick steps to get the funding for your real estate deals. Again, without relying on your, any of your own money, your own credit, et cetera. So you, after the show, you can check it out at www.JayConner.com/MoneyPodcast. That’s JayConner.com/MoneyPodcast. Well, my special guest today began his career in real estate in the competitive New York city. Can you believe real estate market? And he was working as a broker leasing these ground floor retail units. Well, in that experience, he saw and learned the true potential of real estate that can really transform lives. Now, although he was limited in his means and the amount of money that he had available to him at the time, he spent his time reading, attending seminars, networking, and hanging around very accomplished entrepreneurs, which by the way, is good advice for all of us.
It’s only about 60 minutes long, but this training will show you the five easy and quick steps to get the funding for your real estate deals. Again, without relying on your, any of your own money, your own credit, et cetera. So you, after the show, you can check it out at www.JayConner.com/MoneyPodcast. That’s JayConner.com/MoneyPodcast. Well, my special guest today began his career in real estate in the competitive New York city. Can you believe real estate market? And he was working as a broker leasing these ground floor retail units. Well, in that experience, he saw and learned the true potential of real estate that can really transform lives. Now, although he was limited in his means and the amount of money that he had available to him at the time, he spent his time reading, attending seminars, networking, and hanging around very accomplished entrepreneurs, which by the way, is good advice for all of us.
Jay Conner (02:23):
And he was learning that being resourceful was the ultimate path to becoming successful. What do you mean by resourceful? He’s going to tell us. So with his knowledge he embarked on building his real estate company and empire in Charleston, South Carolina, where he had relocated in search of a better quality of life. Now he got in Charleston back in 2008. Wow! After the real estate bubble had burst and he quickly adapted and he was using a credit card, increased his credit card limit, and then wrote himself a balanced transfer check to acquire the cheapest property he could find. We’re going to get him to tell us that story about how in the world he was able to use a credit card to buy his first house at only 23 years old. Well, anyway, armed with his personal investment and a lot of sweat equity. He transformed a rundown duplex and turned a profit on his first deal. Then he took those proceeds, reinvested them, and while seeking private capital to expand his growing company. Well, my special guest is the CEO and founder of Legacy Wealth Holdings, which was a real estate investment company that acquires and transforms distressed apartment buildings into high yield assets for their own portfolio. So with that folks, I’m so excited to have as my guest today, my friend, fellow mastermind member and real estate investor, Mr. Tim Bratz. Welcome to the show, Tim!
And he was learning that being resourceful was the ultimate path to becoming successful. What do you mean by resourceful? He’s going to tell us. So with his knowledge he embarked on building his real estate company and empire in Charleston, South Carolina, where he had relocated in search of a better quality of life. Now he got in Charleston back in 2008. Wow! After the real estate bubble had burst and he quickly adapted and he was using a credit card, increased his credit card limit, and then wrote himself a balanced transfer check to acquire the cheapest property he could find. We’re going to get him to tell us that story about how in the world he was able to use a credit card to buy his first house at only 23 years old. Well, anyway, armed with his personal investment and a lot of sweat equity. He transformed a rundown duplex and turned a profit on his first deal. Then he took those proceeds, reinvested them, and while seeking private capital to expand his growing company. Well, my special guest is the CEO and founder of Legacy Wealth Holdings, which was a real estate investment company that acquires and transforms distressed apartment buildings into high yield assets for their own portfolio. So with that folks, I’m so excited to have as my guest today, my friend, fellow mastermind member and real estate investor, Mr. Tim Bratz. Welcome to the show, Tim!
Tim Bratz (03:56):
Hey, I appreciate you having me here, Jay! Excited to be here, man. I always looked up to you and I’m super pumped to be here and be chatting with you and sharing some knowledge with your audience. So appreciate you having me, man.
Hey, I appreciate you having me here, Jay! Excited to be here, man. I always looked up to you and I’m super pumped to be here and be chatting with you and sharing some knowledge with your audience. So appreciate you having me, man.
Jay Conner (04:08):
Absolutely. Well, I’m so excited to have you on, because I mean, in just a few short years, you’ve got such a wide variety of experience. You have put your portfolio. I mean, my lands! Your current portfolio exceeds 4,000 units and is North with a valuation of about more than $350 million, Right?
Absolutely. Well, I’m so excited to have you on, because I mean, in just a few short years, you’ve got such a wide variety of experience. You have put your portfolio. I mean, my lands! Your current portfolio exceeds 4,000 units and is North with a valuation of about more than $350 million, Right?
Tim Bratz (04:32):
That is correct. It’s kind of crazy. Right?
That is correct. It’s kind of crazy. Right?
Jay Conner (04:35):
So I’m not going to ask my questions in logical sequence. I’m just going to do stream of consciousness with you. How long did it take from you starting in commercial, doing commercial deals to going to a portfolio of 4,000 units? I mean, is that a 10 year stretch? Is that a five year stretch? What is that?
So I’m not going to ask my questions in logical sequence. I’m just going to do stream of consciousness with you. How long did it take from you starting in commercial, doing commercial deals to going to a portfolio of 4,000 units? I mean, is that a 10 year stretch? Is that a five year stretch? What is that?
Tim Bratz (04:59):
First started studying real estate and learning about it in 2005 when I was in college. I became a real estate agent 2009 or a 2007. Invested in my first property in 2009. Bought my first apartment building at the end of 2012. And it was an eight unit building.
First started studying real estate and learning about it in 2005 when I was in college. I became a real estate agent 2009 or a 2007. Invested in my first property in 2009. Bought my first apartment building at the end of 2012. And it was an eight unit building.
Jay Conner (05:17):
Wow. You answered my question. That’s fast!
Wow. You answered my question. That’s fast!
Tim Bratz (05:21):
Since I bought my first apartment.
Since I bought my first apartment.
Jay Conner (05:23):
Yeah. And now you’ve got 4,000 doors or units, right? Yeah. That is amazing! So let’s start with, let’s start with your journey. Tell us your story of getting into real estate and how it has progressed your journey. And how has it grown.
Yeah. And now you’ve got 4,000 doors or units, right? Yeah. That is amazing! So let’s start with, let’s start with your journey. Tell us your story of getting into real estate and how it has progressed your journey. And how has it grown.
Tim Bratz (05:44):
Yeah, I think we all want it to go faster than it usually does. Right? And that was not any different in my case. I was going through college 2003 to 2007 when the market was going crazy before and everybody’s making money in real estate. And I was a money motivated kid at the age of 20 years old. So I had one of these painting companies in the summer rent a bunch of crews with my friends. We did a bunch of landscaping also. And then I interned for one of the largest home builders in the country and just realize I wanted to be a real estate investor, but I thought everybody got started in real estate and owning real estate by becoming a real estate agent. And so I’m from Cleveland, Ohio originally, but I moved out to New York city cause my brother was living out there at the time.
Yeah, I think we all want it to go faster than it usually does. Right? And that was not any different in my case. I was going through college 2003 to 2007 when the market was going crazy before and everybody’s making money in real estate. And I was a money motivated kid at the age of 20 years old. So I had one of these painting companies in the summer rent a bunch of crews with my friends. We did a bunch of landscaping also. And then I interned for one of the largest home builders in the country and just realize I wanted to be a real estate investor, but I thought everybody got started in real estate and owning real estate by becoming a real estate agent. And so I’m from Cleveland, Ohio originally, but I moved out to New York city cause my brother was living out there at the time.
Tim Bratz (06:23):
And after college I got my real estate license and I started brokering just like you had mentioned in the opening. Commercial and retail offices and retail spaces in Manhattan. And I, listen, I didn’t really know what I was doing. I was just kinda like doing the labor of going and finding, you know businesses that wanted to expand and then handing them off to somebody who knew what they were doing or finding a landlord who wanted to lease their space and then handed them off to somebody that they knew it was doing in our brokerage firms. So I was just really the workhorse, right? And so I knew enough that when I closed my first deal, it took about eight, nine months to close it. And it was 400 square feet.
And after college I got my real estate license and I started brokering just like you had mentioned in the opening. Commercial and retail offices and retail spaces in Manhattan. And I, listen, I didn’t really know what I was doing. I was just kinda like doing the labor of going and finding, you know businesses that wanted to expand and then handing them off to somebody who knew what they were doing or finding a landlord who wanted to lease their space and then handed them off to somebody that they knew it was doing in our brokerage firms. So I was just really the workhorse, right? And so I knew enough that when I closed my first deal, it took about eight, nine months to close it. And it was 400 square feet.
Tim Bratz (07:06):
And we signed a lease for $10,000 a month on this retail space. 12 year lease term, 4% annual increases. And I started doing the math and I’m like, Holy cow, this landlord’s gonna make almost $2 million from doing something once. And they’re gonna get paid on it for the next 12 years. Like I’m on the wrong side of the coin. I need to be owning real estate instead of brokering it. And so I moved down to Charleston, South Carolina for better quality of life and some good weather. And when I got down there is when the market crashed and everything was crumbling. And I was going through all these courses and seminars and learning as much as I possibly could. And when I was right, when I was about to pull the trigger on buying something that, you know, the market crumbles and I was like, I just showed up to the party and everybody’s leaving.
And we signed a lease for $10,000 a month on this retail space. 12 year lease term, 4% annual increases. And I started doing the math and I’m like, Holy cow, this landlord’s gonna make almost $2 million from doing something once. And they’re gonna get paid on it for the next 12 years. Like I’m on the wrong side of the coin. I need to be owning real estate instead of brokering it. And so I moved down to Charleston, South Carolina for better quality of life and some good weather. And when I got down there is when the market crashed and everything was crumbling. And I was going through all these courses and seminars and learning as much as I possibly could. And when I was right, when I was about to pull the trigger on buying something that, you know, the market crumbles and I was like, I just showed up to the party and everybody’s leaving.
Tim Bratz (07:50):
Right? And so nonetheless, nobody was giving money to a punk 23 year old kid. Who’d never done a deal before in the worst housing economy ever. And I had to get creative. And I think a lot of people say, Hey, I can’t do something because I don’t have the time. I don’t have the money, I don’t have the knowledge, I don’t have the resources. And I heard Tony Robin say, one time he goes, resourcefulness is the ultimate resource. You’re resourceful. You can find time and money and knowledge and all the other resources. And I think that’s something I’ve always kind of done is I don’t let somebody tell me I can’t do something. I asked questions about how can I do something. I think when you ask good questions that leads you down a path of getting good answers. It’s like Google, right?
Right? And so nonetheless, nobody was giving money to a punk 23 year old kid. Who’d never done a deal before in the worst housing economy ever. And I had to get creative. And I think a lot of people say, Hey, I can’t do something because I don’t have the time. I don’t have the money, I don’t have the knowledge, I don’t have the resources. And I heard Tony Robin say, one time he goes, resourcefulness is the ultimate resource. You’re resourceful. You can find time and money and knowledge and all the other resources. And I think that’s something I’ve always kind of done is I don’t let somebody tell me I can’t do something. I asked questions about how can I do something. I think when you ask good questions that leads you down a path of getting good answers. It’s like Google, right?
Tim Bratz (08:35):
I could Google search restaurants in Ohio. It brings up every restaurant in Ohio. And then I could Google search restaurants in Cleveland, Ohio, and it refines it to only Cleveland, then Italian restaurants in Cleveland, Ohio, it refines it even more. And so the more defined of a question that I think you asked, more definitive answer that you’re going to get. So I said, Hey, I can’t get money from the banks. I can’t get money from traditional lenders. All my friends are drunk in bars right now, cause they’re all 23 years old at the time. And not they’re blowing all their money at the bars. And nobody’s gonna lend me money. Like how can I get access to capital that I already have access? And I thought, well, I have a couple thousand dollars saved up in my bank account.
I could Google search restaurants in Ohio. It brings up every restaurant in Ohio. And then I could Google search restaurants in Cleveland, Ohio, and it refines it to only Cleveland, then Italian restaurants in Cleveland, Ohio, it refines it even more. And so the more defined of a question that I think you asked, more definitive answer that you’re going to get. So I said, Hey, I can’t get money from the banks. I can’t get money from traditional lenders. All my friends are drunk in bars right now, cause they’re all 23 years old at the time. And not they’re blowing all their money at the bars. And nobody’s gonna lend me money. Like how can I get access to capital that I already have access? And I thought, well, I have a couple thousand dollars saved up in my bank account.
Tim Bratz (09:17):
That wasn’t enough. But maybe I could get my credit card company to increase my limit. And I called them up and I said, Hey, I’m about to make a big purchase. Are you guys willing to increase my limit? And they said, how much do you need? I said, $100,000. And they said, absolutely not! Like, you’ve been a great customer for about 15 months, but that’s just not gonna happen. And I said, all right, well, how much are you going to give me? And they give me 15 grand. One five. And so I found the cheapest house in all of Charleston. This is after the market tanked in 2009 now. And I bought it essentially with a balanced transfer check on my credit card, bought it for $14,000 and put on sweat equity
That wasn’t enough. But maybe I could get my credit card company to increase my limit. And I called them up and I said, Hey, I’m about to make a big purchase. Are you guys willing to increase my limit? And they said, how much do you need? I said, $100,000. And they said, absolutely not! Like, you’ve been a great customer for about 15 months, but that’s just not gonna happen. And I said, all right, well, how much are you going to give me? And they give me 15 grand. One five. And so I found the cheapest house in all of Charleston. This is after the market tanked in 2009 now. And I bought it essentially with a balanced transfer check on my credit card, bought it for $14,000 and put on sweat equity
Jay Conner (09:57):
To make sure everybody understands, tell them about it. What is a balanced transfer check? Cause we’ve probably got some listeners that might want to use that strategy.
To make sure everybody understands, tell them about it. What is a balanced transfer check? Cause we’ve probably got some listeners that might want to use that strategy.
Tim Bratz (10:05):
Well, it was, you know, it’s essentially something that credit card companies use in order to say, Hey, go from your MasterCard over to visa. And if you transfer your balance over to us, we’ll let you, you know, give you a balanced transfer check to go write a check over to your MasterCard. And then we’ll just put that balance to overhear on your visa. And so I don’t know if they still do it. I haven’t used one in a while, but that was like a big thing back in 2008, 2009. And so I was able to get my credit card limit increase. I got them to send me these perforated checks and I just wrote it to myself instead of like transferring a balance or anything like that. I just wrote myself a check for $14,900 and I maxed out my credit card.
Well, it was, you know, it’s essentially something that credit card companies use in order to say, Hey, go from your MasterCard over to visa. And if you transfer your balance over to us, we’ll let you, you know, give you a balanced transfer check to go write a check over to your MasterCard. And then we’ll just put that balance to overhear on your visa. And so I don’t know if they still do it. I haven’t used one in a while, but that was like a big thing back in 2008, 2009. And so I was able to get my credit card limit increase. I got them to send me these perforated checks and I just wrote it to myself instead of like transferring a balance or anything like that. I just wrote myself a check for $14,900 and I maxed out my credit card.
Tim Bratz (10:48):
I put all that money in my bank account. And then I went and bought this house. It was, they were asking 25 grand. I got it for, I offered 12, right? They came back at 20. I came back at 14, we ended up cutting a deal on it. So, and then I personally did all the work, you know, of YouTube and how to change out carpet and light fixtures and plumbing repairs, and all this stuff. And I turned around and sold it. And a little over a hundred days and I made about $14,000 on it net. And I was like, I don’t even know what I’m doing. I’m making money, the worst housing market ever. So then I got into wholesaling, right? Wholesaling. I learned a little bit more about that. And I met amazing people in wholesaling who had money and were buying deals from me.
I put all that money in my bank account. And then I went and bought this house. It was, they were asking 25 grand. I got it for, I offered 12, right? They came back at 20. I came back at 14, we ended up cutting a deal on it. So, and then I personally did all the work, you know, of YouTube and how to change out carpet and light fixtures and plumbing repairs, and all this stuff. And I turned around and sold it. And a little over a hundred days and I made about $14,000 on it net. And I was like, I don’t even know what I’m doing. I’m making money, the worst housing market ever. So then I got into wholesaling, right? Wholesaling. I learned a little bit more about that. And I met amazing people in wholesaling who had money and were buying deals from me.
Tim Bratz (11:27):
I could make a couple of bucks on it. And eventually what happened was they said, Hey, this kid’s got a decent work ethic and he knows how to find a good deal. Hey Tim, I can’t, I don’t have the bandwidth to take on more projects myself, but I still have more money. How could I lend you money? We just come up with some sort of like equity split on the deal. And that’s how I started doing several deals. Probably. I don’t know, the first 250 deals I did with some sort of equity split with private investors. And so, built up a small portfolio and ended up moving back from Charleston, South Carolina, back up to Cleveland, Ohio, and partnered up pretty much exclusively with a couple of guys who had a traditional business, made a lot of money in it and invested with me.
I could make a couple of bucks on it. And eventually what happened was they said, Hey, this kid’s got a decent work ethic and he knows how to find a good deal. Hey Tim, I can’t, I don’t have the bandwidth to take on more projects myself, but I still have more money. How could I lend you money? We just come up with some sort of like equity split on the deal. And that’s how I started doing several deals. Probably. I don’t know, the first 250 deals I did with some sort of equity split with private investors. And so, built up a small portfolio and ended up moving back from Charleston, South Carolina, back up to Cleveland, Ohio, and partnered up pretty much exclusively with a couple of guys who had a traditional business, made a lot of money in it and invested with me.
Tim Bratz (12:09):
And so from 2012 to 2015, built up a portfolio, I don’t know about 130, 140 units in Cleveland. That’s when I bought my first apartment building. That partnership though went South in 2015, 2016, and we ended up liquidating everything. So I had to press the reset button on my business and it’s not exciting to do when you can. You know, I think that takes a lot of work to kind of get the, get the plane off the ground. And I’m like, Oh man, I got to start all over. But really it was a blessing in disguise where it allowed me to really spread my wings and do some other stuff. And people came out of the woodwork saying, Hey, man, I want to wanting to partner with you and want to do some deals with you. I’ve been wanting to lend you money.
And so from 2012 to 2015, built up a portfolio, I don’t know about 130, 140 units in Cleveland. That’s when I bought my first apartment building. That partnership though went South in 2015, 2016, and we ended up liquidating everything. So I had to press the reset button on my business and it’s not exciting to do when you can. You know, I think that takes a lot of work to kind of get the, get the plane off the ground. And I’m like, Oh man, I got to start all over. But really it was a blessing in disguise where it allowed me to really spread my wings and do some other stuff. And people came out of the woodwork saying, Hey, man, I want to wanting to partner with you and want to do some deals with you. I’ve been wanting to lend you money.
Tim Bratz (12:50):
And it just, it opened me up big time. Started to got into a mastermind for the first time in 2015, and that was just like mind boggling the opportunities that, and the connections that came from that. And so I liquidated my whole portfolio and in August of 2015, I started building my current portfolio. Although they took all my property away or not took it all away, but we liquidated all. They couldn’t take the insights, right? They couldn’t take the mindset, they couldn’t take the information. And I think that’s a really a key piece of once you learn, you get educated to how to do this stuff, you could do it over and over and over again. So I started from scratch and in August of 2015 and here we are five years later and I have a $350 million portfolio. It’s 90% apartments. And about 10% of some other asset classes. Office, a little bit of mixed use like retail. I have several self storage facilities. And a couple of vacation homes too.
And it just, it opened me up big time. Started to got into a mastermind for the first time in 2015, and that was just like mind boggling the opportunities that, and the connections that came from that. And so I liquidated my whole portfolio and in August of 2015, I started building my current portfolio. Although they took all my property away or not took it all away, but we liquidated all. They couldn’t take the insights, right? They couldn’t take the mindset, they couldn’t take the information. And I think that’s a really a key piece of once you learn, you get educated to how to do this stuff, you could do it over and over and over again. So I started from scratch and in August of 2015 and here we are five years later and I have a $350 million portfolio. It’s 90% apartments. And about 10% of some other asset classes. Office, a little bit of mixed use like retail. I have several self storage facilities. And a couple of vacation homes too.
Jay Conner (13:46):
So really these 4,000 units, you’ve built all that in just the past less well, less than five years?
So really these 4,000 units, you’ve built all that in just the past less well, less than five years?
Tim Bratz (13:54):
Yup. Just shy of five years now.
Yup. Just shy of five years now.
Jay Conner (13:56):
So you’re starting from scratch. Well, you’re not starting from scratch, cause you still own the real estate in between your ears. Right. And the experience you’ve got, et cetera. So tell us that story. How do you start from scratch? You know, looking for and attracting capital. So, you know, I’ve done a ton of that myself. I teach it myself. I really want to hear your story. So how do you start raising the capital and all these commercial deals? How do you start finding the deals? And then if you can keep it to the 30,000 foot level, what’s a structure of a deal look like? How do you structure a deal? And I’m assuming you’re looking, at this portfolio, this portfolio were those all existing apartments, et cetera, that were distressed and you turn them around?
So you’re starting from scratch. Well, you’re not starting from scratch, cause you still own the real estate in between your ears. Right. And the experience you’ve got, et cetera. So tell us that story. How do you start from scratch? You know, looking for and attracting capital. So, you know, I’ve done a ton of that myself. I teach it myself. I really want to hear your story. So how do you start raising the capital and all these commercial deals? How do you start finding the deals? And then if you can keep it to the 30,000 foot level, what’s a structure of a deal look like? How do you structure a deal? And I’m assuming you’re looking, at this portfolio, this portfolio were those all existing apartments, et cetera, that were distressed and you turn them around?
Tim Bratz (14:48):
For the most part, we do a little bit of new construction also, but most of it I’d say North of 70% of it is definitely existing property. Maybe 75%, 80% is existing.
For the most part, we do a little bit of new construction also, but most of it I’d say North of 70% of it is definitely existing property. Maybe 75%, 80% is existing.
Jay Conner (15:02):
Let’s start with raising the capital. What’s your strategy on raising the capital? Cause that’s a lot of capital.
Let’s start with raising the capital. What’s your strategy on raising the capital? Cause that’s a lot of capital.
Tim Bratz (15:09):
Yup, we’ve raised. I mean, I have, and I don’t raise money from institutions or hedge funds and REITs and stuff like that. I raised money from individuals, right? Somebody who’s got a hundred thousand dollars in 401k or some entrepreneur who just exited their business and they’re sitting on a couple of million bucks.
Yup, we’ve raised. I mean, I have, and I don’t raise money from institutions or hedge funds and REITs and stuff like that. I raised money from individuals, right? Somebody who’s got a hundred thousand dollars in 401k or some entrepreneur who just exited their business and they’re sitting on a couple of million bucks.
Jay Conner (15:24):
Yup. That’s what I do.
Yup. That’s what I do.
Tim Bratz (15:25):
That’s everybody that I raise money from. They’re easy to work with. They’re too busy to complain or like breathing down your neck about what’s going on with the deal. As long as their checks hit and their deposits are made. They like going back to doing what they’re really good at and they understand leveraging other people’s efforts. And they’re really good at making money. They’re not that good at investing it. So they put it with somebody who does know how to invest it and then I can help them deploy it, make a good return. So here’s what I found because I’ve done a lot of different things. I had a big turnkey business. We were flipping about a hundred. Like when I get out of that, that past a business partnership, I went back into wholesaling and I got into like turnkey of flipping houses because I needed to build up my cash reserves again. And so while I was doing that whole process, I learned that there’s some people, there’s essentially two types of investors out there, that are looking for two different types of returns.
That’s everybody that I raise money from. They’re easy to work with. They’re too busy to complain or like breathing down your neck about what’s going on with the deal. As long as their checks hit and their deposits are made. They like going back to doing what they’re really good at and they understand leveraging other people’s efforts. And they’re really good at making money. They’re not that good at investing it. So they put it with somebody who does know how to invest it and then I can help them deploy it, make a good return. So here’s what I found because I’ve done a lot of different things. I had a big turnkey business. We were flipping about a hundred. Like when I get out of that, that past a business partnership, I went back into wholesaling and I got into like turnkey of flipping houses because I needed to build up my cash reserves again. And so while I was doing that whole process, I learned that there’s some people, there’s essentially two types of investors out there, that are looking for two different types of returns.
Tim Bratz (16:18):
One is like a debt return, which is a very predictable, I deploy my money and I make 12% return on my investment at like clockwork. And I invest a hundred thousand dollars with somebody. I make a thousand dollars a month and I make 12% annual return on my money. That’s great. It’s very predictable. There’s no surprises there. And, but at the end of the day, they’re not building wealth, right. They’re making a good return and their army of money has a bunch of other soldiers now that they can then redeploy and they can make more and more money. And that’s one way of doing it. And then there’s other people that I found that like the equity investment side, where there’s equity upside, they can sell the property, double their money, but there’s also equity downside where they could lose money.
One is like a debt return, which is a very predictable, I deploy my money and I make 12% return on my investment at like clockwork. And I invest a hundred thousand dollars with somebody. I make a thousand dollars a month and I make 12% annual return on my money. That’s great. It’s very predictable. There’s no surprises there. And, but at the end of the day, they’re not building wealth, right. They’re making a good return and their army of money has a bunch of other soldiers now that they can then redeploy and they can make more and more money. And that’s one way of doing it. And then there’s other people that I found that like the equity investment side, where there’s equity upside, they can sell the property, double their money, but there’s also equity downside where they could lose money.
Tim Bratz (17:01):
And there’s not a lot of predictability in consistent monthly payments in that regard. So I’ve realized there were two types of people, two types of investments. And there wasn’t really anything in the middle. When I started doing on the single family side is I started structuring the way that was a no brainer. I said, Hey, listen, I’ll pay you either 12% on your money. Or 15% of the profit, whichever is greater. That’s a no brainer. Worst case scenario make 12% of my money and potentially there’s equity upside in this thing without any downside on the equity. So that was a no brainer. And then when I started investing in apartment buildings, I did something similar. I realized that I couldn’t pay somebody 12% cause we’re talking about big dollar amounts and it would really eat up the cash flow, especially on these not performing apartment buildings that are heavily distressed.
And there’s not a lot of predictability in consistent monthly payments in that regard. So I’ve realized there were two types of people, two types of investments. And there wasn’t really anything in the middle. When I started doing on the single family side is I started structuring the way that was a no brainer. I said, Hey, listen, I’ll pay you either 12% on your money. Or 15% of the profit, whichever is greater. That’s a no brainer. Worst case scenario make 12% of my money and potentially there’s equity upside in this thing without any downside on the equity. So that was a no brainer. And then when I started investing in apartment buildings, I did something similar. I realized that I couldn’t pay somebody 12% cause we’re talking about big dollar amounts and it would really eat up the cash flow, especially on these not performing apartment buildings that are heavily distressed.
Tim Bratz (17:51):
So what I ended up doing is I offered a little bit less, you know, 8% to 10% fixed return on their investment. And my whole model is based on flipping houses, right? Like I never went to a course. I never on commercial real estate. I never, I didn’t get a real estate degree from some Ivy league school. My grandparents didn’t know what a bunch of commercial real estate I just learned about it from the school of hard knocks. And so what I ended up doing was I took the formula of, I gotta be all in for 65% of the after repair value. And that’s what I needed to be able to buy and renovate these houses for in order to sell it and make a profit. I took that exact same philosophy and formula and put it into apartment buildings. So in apartment buildings, very predictable of what it’s going to be worth because it’s all based on the income approach, not on sales comparables.
So what I ended up doing is I offered a little bit less, you know, 8% to 10% fixed return on their investment. And my whole model is based on flipping houses, right? Like I never went to a course. I never on commercial real estate. I never, I didn’t get a real estate degree from some Ivy league school. My grandparents didn’t know what a bunch of commercial real estate I just learned about it from the school of hard knocks. And so what I ended up doing was I took the formula of, I gotta be all in for 65% of the after repair value. And that’s what I needed to be able to buy and renovate these houses for in order to sell it and make a profit. I took that exact same philosophy and formula and put it into apartment buildings. So in apartment buildings, very predictable of what it’s going to be worth because it’s all based on the income approach, not on sales comparables.
Tim Bratz (18:35):
So I know what it’ll rent for. I know exactly what the expenses are. And so I can just figure out if I improve it and I get a fully occupied, put good management in place. It’ll generate this much money of net operating income. And in that area, it’ll appraise it, this sort of cap rate, which is kind of like a multiple on the NOI. And so it’s very predictable. If it’s gonna be worth $10 million, I need to be all in for six and a half million. If it needs a million dollars worth of work, I need to be able to, my maximum allowable offer is five and a half million dollars. Does that make sense? So the difference is I don’t sell the property. I turn around, I refinance it. So I’ll go to the you know, Fannie Mae, Freddie Mac or an insurance company or CMBS.
So I know what it’ll rent for. I know exactly what the expenses are. And so I can just figure out if I improve it and I get a fully occupied, put good management in place. It’ll generate this much money of net operating income. And in that area, it’ll appraise it, this sort of cap rate, which is kind of like a multiple on the NOI. And so it’s very predictable. If it’s gonna be worth $10 million, I need to be all in for six and a half million. If it needs a million dollars worth of work, I need to be able to, my maximum allowable offer is five and a half million dollars. Does that make sense? So the difference is I don’t sell the property. I turn around, I refinance it. So I’ll go to the you know, Fannie Mae, Freddie Mac or an insurance company or CMBS.
Tim Bratz (19:16):
And I’ll get a loan once the property is stabilized, meaning it’s fully occupied, good managements in place. And then I’ll put a loan on it for 70% of that new value. So if I’m all in, it’s worth 10 million, I’m all in for six and a half. My new loan is 7 million. That means I’m able to pay back my investors able to pay off my short term construction loan. And I just put longterm debt, fixed interest rate debt in place. And now all my chips are off the table. Right now we can just sit on this thing, let the tenants pay rent covers all the operating expenses covers all the debt service pays down our mortgage property appreciates over time. And that is how real wealth is built. So when I, when I got into apartment buildings, I took my investors and I just, I started paying them 8% to 10% of a fixed return while their money was invested.
And I’ll get a loan once the property is stabilized, meaning it’s fully occupied, good managements in place. And then I’ll put a loan on it for 70% of that new value. So if I’m all in, it’s worth 10 million, I’m all in for six and a half. My new loan is 7 million. That means I’m able to pay back my investors able to pay off my short term construction loan. And I just put longterm debt, fixed interest rate debt in place. And now all my chips are off the table. Right now we can just sit on this thing, let the tenants pay rent covers all the operating expenses covers all the debt service pays down our mortgage property appreciates over time. And that is how real wealth is built. So when I, when I got into apartment buildings, I took my investors and I just, I started paying them 8% to 10% of a fixed return while their money was invested.
Tim Bratz (20:03):
And then they get all their money back at the time of the refinance. Let’s say it’s 18 months later. And then I give them equity in the deal forever. Even though all their money’s back in their own pocket, they keep maybe 20% of the deal forever. And so that then incentivizes them where now they see me as a longterm partner. They see me as somebody who’s like, you know what, if somebody dangles a 12% carrot in front of their face, they’re not going to go with it because they’re like, no, Tim’s my partner. Right? I have equity and deals with him that we’re gonna be partners for the next 10 years. And it allows them to just keep on rolling their money forward with me, where they make a good fixed return. Plus they have the equity upside and it’s a win-win all around them.
And then they get all their money back at the time of the refinance. Let’s say it’s 18 months later. And then I give them equity in the deal forever. Even though all their money’s back in their own pocket, they keep maybe 20% of the deal forever. And so that then incentivizes them where now they see me as a longterm partner. They see me as somebody who’s like, you know what, if somebody dangles a 12% carrot in front of their face, they’re not going to go with it because they’re like, no, Tim’s my partner. Right? I have equity and deals with him that we’re gonna be partners for the next 10 years. And it allows them to just keep on rolling their money forward with me, where they make a good fixed return. Plus they have the equity upside and it’s a win-win all around them.
Jay Conner (20:43):
So do you structure the deal with your private lenders? Are they investing in a fund?
So do you structure the deal with your private lenders? Are they investing in a fund?
Tim Bratz (20:51):
Yeah, so it’s not like a general open-ended fund. Every deal that I do, every apartment building I buy is its own investment, a registered sec investment with the federal SEC, Securities Exchange Commission. So every deal I do is its own. It’s its own entity, it’s its own registration. So I only raise on a deal by deal basis. So people aren’t, you know, it’s not like a stock where it’s or a mutual fund where it’s spread across many different properties. It’s a single property. So one, two, three main street will be owned by one, two, three main street, LLC. Here’s what the numbers are on one, two, three main street. What it’s going to look like, and what’s going to generate for income to the LLC. And then the investors, they invest in that LLC and they’re actual equity owners in the LLC. So they get a K1 at the end of the year and yeah, works that way.
Yeah, so it’s not like a general open-ended fund. Every deal that I do, every apartment building I buy is its own investment, a registered sec investment with the federal SEC, Securities Exchange Commission. So every deal I do is its own. It’s its own entity, it’s its own registration. So I only raise on a deal by deal basis. So people aren’t, you know, it’s not like a stock where it’s or a mutual fund where it’s spread across many different properties. It’s a single property. So one, two, three main street will be owned by one, two, three main street, LLC. Here’s what the numbers are on one, two, three main street. What it’s going to look like, and what’s going to generate for income to the LLC. And then the investors, they invest in that LLC and they’re actual equity owners in the LLC. So they get a K1 at the end of the year and yeah, works that way.
Jay Conner (21:43):
So you raise capital for its own project every time. Right? So, does most of your capital for a project that you’re looking to do, do most of those funds come from existing private lenders that you might have recently paid off from a refinance deal?
So you raise capital for its own project every time. Right? So, does most of your capital for a project that you’re looking to do, do most of those funds come from existing private lenders that you might have recently paid off from a refinance deal?
Tim Bratz (22:08):
Yeah, so you know, we were joking about it before we kind of came online and we said, Hey, you’re either deal heavy or you’re money heavy and very rarely both at the same time. Right? So I think, I think the most important thing you can be doing as a real estate investor, the only three activities that matter are Sourcing Deals, Sourcing Money, and Refining your Operations. Right? If you’re doing those three things at all times, those are the revenue generating activities that you need to be focused on all the time.
Yeah, so you know, we were joking about it before we kind of came online and we said, Hey, you’re either deal heavy or you’re money heavy and very rarely both at the same time. Right? So I think, I think the most important thing you can be doing as a real estate investor, the only three activities that matter are Sourcing Deals, Sourcing Money, and Refining your Operations. Right? If you’re doing those three things at all times, those are the revenue generating activities that you need to be focused on all the time.
Tim Bratz (22:40):
So we are always sourcing deals. We are always sourcing money. And we are always trying to refine our operations and tighten up that ship. And so, sometimes we have a refinance and we’re heavy on liquidity and we can roll all of our investors into that new project without having to raise any outside capital. Other times, like we got a bunch of refinance that were supposed to pop during this whole COVID mass. Right? And they all got delayed. And so now they’re all looking good, right? Knock on wood. But there was a timeframe where we were still buying some deals early part of this year. And we had these refinance that were supposed to pop it didn’t. So we had to raise a bunch of outside capital. But you know, it also happens where somebody invest with you in one deal, they have more money set aside. They want to diversify across multiple different assets, multiple different properties. And a lot of our existing investors came in on all those other projects, knowing that there are other funds are going to be pretty liquid over the course of the lateral this year.
So we are always sourcing deals. We are always sourcing money. And we are always trying to refine our operations and tighten up that ship. And so, sometimes we have a refinance and we’re heavy on liquidity and we can roll all of our investors into that new project without having to raise any outside capital. Other times, like we got a bunch of refinance that were supposed to pop during this whole COVID mass. Right? And they all got delayed. And so now they’re all looking good, right? Knock on wood. But there was a timeframe where we were still buying some deals early part of this year. And we had these refinance that were supposed to pop it didn’t. So we had to raise a bunch of outside capital. But you know, it also happens where somebody invest with you in one deal, they have more money set aside. They want to diversify across multiple different assets, multiple different properties. And a lot of our existing investors came in on all those other projects, knowing that there are other funds are going to be pretty liquid over the course of the lateral this year.
Jay Conner (23:40):
So, when you’ve got a project that you’re getting ready do, what’s your, the logistics of getting the word out to, like when you’re raising new capital? And what’s your funnel look like? Like with me, my funnel is all the time educating. In fact, you may have heard me saying that in the past time, I’ve never asked anybody for money. I raised a ton of capital without asking for money. I educate and I teach and once they get taught and enlightened and they know about self directed IRAs and they know about private money and how the program works, if they’ve got investment capital or retirement funds, they’re going to be chasing me. Right? But where do you go and what do you do?
So, when you’ve got a project that you’re getting ready do, what’s your, the logistics of getting the word out to, like when you’re raising new capital? And what’s your funnel look like? Like with me, my funnel is all the time educating. In fact, you may have heard me saying that in the past time, I’ve never asked anybody for money. I raised a ton of capital without asking for money. I educate and I teach and once they get taught and enlightened and they know about self directed IRAs and they know about private money and how the program works, if they’ve got investment capital or retirement funds, they’re going to be chasing me. Right? But where do you go and what do you do?
Tim Bratz (24:28):
Yep. So I’m very active on social media. So if you follow me on social media, I know we’re connected on social media. You’ll see me always talking about buying apartment buildings. How I structure the deal. What the returns look like for the overall project. When you’re syndicating capital, you gotta be very careful to stay in compliance with the SEC guidelines. You can’t just go out and tell people, Hey, I’ll pay you 12% because it’s not secured with a first lien position on a property. So because of that, you can’t go out and just generally solicit, you know, and as soon as you take two investors and put them into a single deal, you’re creating a security. So it needs to be registered with the SEC. Does everybody do it? No. Do I do it? Yes, because I have a lot of eyeballs on me cause I do the education stuff too.
Yep. So I’m very active on social media. So if you follow me on social media, I know we’re connected on social media. You’ll see me always talking about buying apartment buildings. How I structure the deal. What the returns look like for the overall project. When you’re syndicating capital, you gotta be very careful to stay in compliance with the SEC guidelines. You can’t just go out and tell people, Hey, I’ll pay you 12% because it’s not secured with a first lien position on a property. So because of that, you can’t go out and just generally solicit, you know, and as soon as you take two investors and put them into a single deal, you’re creating a security. So it needs to be registered with the SEC. Does everybody do it? No. Do I do it? Yes, because I have a lot of eyeballs on me cause I do the education stuff too.
Tim Bratz (25:13):
But I think educating people is the purest way of showing what you do, how you do it, and just naturally building trust and building relationships with people. And confidence and respect that they respect you as the authority of private money. Right? And so those are the two keys in order to raise capital. You need somebody’s respect and you need somebody’s trust. If you don’t have those two things, it’s gonna be very, very difficult to raise money. And educating people, whether that’s through social media or through formal courses, creates both of those things. You’re spending time with them. They know you, they know your core values, they know what you’re all about. And you’re obviously teaching, you’re standing up in front of the stage. You must be an authority. You must be an expert at what you do.
But I think educating people is the purest way of showing what you do, how you do it, and just naturally building trust and building relationships with people. And confidence and respect that they respect you as the authority of private money. Right? And so those are the two keys in order to raise capital. You need somebody’s respect and you need somebody’s trust. If you don’t have those two things, it’s gonna be very, very difficult to raise money. And educating people, whether that’s through social media or through formal courses, creates both of those things. You’re spending time with them. They know you, they know your core values, they know what you’re all about. And you’re obviously teaching, you’re standing up in front of the stage. You must be an authority. You must be an expert at what you do.
Tim Bratz (26:02):
So there’s a lot of respect that comes with that as well. So I think the whole education piece is a genius way of doing what you’re doing. So I do some of that on social media. I do have, you know, a coaching platform on teaching investors, how to scale from residential into apartments. And that generates a lot of capital. But I also just hang out in masterminds and I hang out with people who have capital who have money, who are really good at making money, but not good at deploying money. Right? Like most entrepreneurs are really, really good at making money. And then they blow it on stupid stuff. They’re not good at saving it. They’re not good at investing it. So I’m able to come in and be like, listen, man, you buy as many liabilities as you want, but first you gotta buy assets, right? Like here’s what system, what the process looks like to generate real wealth instead of just getting rich, let’s get you wealthy. And so that’s, that’s what I do.
So there’s a lot of respect that comes with that as well. So I think the whole education piece is a genius way of doing what you’re doing. So I do some of that on social media. I do have, you know, a coaching platform on teaching investors, how to scale from residential into apartments. And that generates a lot of capital. But I also just hang out in masterminds and I hang out with people who have capital who have money, who are really good at making money, but not good at deploying money. Right? Like most entrepreneurs are really, really good at making money. And then they blow it on stupid stuff. They’re not good at saving it. They’re not good at investing it. So I’m able to come in and be like, listen, man, you buy as many liabilities as you want, but first you gotta buy assets, right? Like here’s what system, what the process looks like to generate real wealth instead of just getting rich, let’s get you wealthy. And so that’s, that’s what I do.
Jay Conner (26:50):
Yeah. You just said that you know, you just hang around people, that’s got money and you know, I’ve been saying for a long time, the more money you wallow in, the more sticks to you. So I planted this and I also teach people to go where the money is. You know, sometimes they’ll say, Jay, you know, you talk about your warm market or relationship money. All my people are broke. I don’t know anybody with money. Well, wake up and smell the roses. How about let’s go meet some people that’s got money. And so obviously along with the education piece, networking is critical. Networking is critical to you know, to speak to the point of what you just said. Well, Tim, we are just about out of time, but thank you so much for taking the time to come on the show here.
Yeah. You just said that you know, you just hang around people, that’s got money and you know, I’ve been saying for a long time, the more money you wallow in, the more sticks to you. So I planted this and I also teach people to go where the money is. You know, sometimes they’ll say, Jay, you know, you talk about your warm market or relationship money. All my people are broke. I don’t know anybody with money. Well, wake up and smell the roses. How about let’s go meet some people that’s got money. And so obviously along with the education piece, networking is critical. Networking is critical to you know, to speak to the point of what you just said. Well, Tim, we are just about out of time, but thank you so much for taking the time to come on the show here.
Jay Conner (27:38):
And I know that there is a percentage of my audience that would like to follow you and learn some more from you. So let me ask you for two things. If people want to learn how to get into commercial investing themselves and learn from you and your education company, how would they, where would they go to learn more about that?
And I know that there is a percentage of my audience that would like to follow you and learn some more from you. So let me ask you for two things. If people want to learn how to get into commercial investing themselves and learn from you and your education company, how would they, where would they go to learn more about that?
Tim Bratz (28:00):
Yeah. Well, I appreciate it, Jay. Thanks again for having me, man. And again, I appreciate all the value that you continue to put out there and your abundance mentality. So thanks for having me here. Yeah, if you guys want to connect with me, I’m very active on social media. Find me on Facebook and Instagram. And follow me, connect with me, send me a friend request there. And then my website is LegacyWealthHoldings.com LegacyWealthHoldings.com. And you can learn more about the coaching side of things and how we can potentially do deals together. I’m always buying properties, selling properties, joint venturing on projects. So if you guys come across a good deal and want to talk about something or just need some insight, I mean, we’re happy to support and offer education any way that we can. So yeah, appreciate you having me, man.
Yeah. Well, I appreciate it, Jay. Thanks again for having me, man. And again, I appreciate all the value that you continue to put out there and your abundance mentality. So thanks for having me here. Yeah, if you guys want to connect with me, I’m very active on social media. Find me on Facebook and Instagram. And follow me, connect with me, send me a friend request there. And then my website is LegacyWealthHoldings.com LegacyWealthHoldings.com. And you can learn more about the coaching side of things and how we can potentially do deals together. I’m always buying properties, selling properties, joint venturing on projects. So if you guys come across a good deal and want to talk about something or just need some insight, I mean, we’re happy to support and offer education any way that we can. So yeah, appreciate you having me, man.
Jay Conner (28:44):
Absolutely! And for everyone that is listening in on iTunes, Google play and our other audio platforms, the spelling of Tim Bratz, his name, of course you got the TIM. But his last name, if you’re looking for him on social media is BRATZ. That’s TIM BRATZ. Well, Tim, I look forward to seeing you at our upcoming mastermind meeting, which hopefully is going to be in person. I haven’t heard the definitive word on that yet, but in any case, it’s been a pleasure to have you on, man. I appreciate you so much.
Absolutely! And for everyone that is listening in on iTunes, Google play and our other audio platforms, the spelling of Tim Bratz, his name, of course you got the TIM. But his last name, if you’re looking for him on social media is BRATZ. That’s TIM BRATZ. Well, Tim, I look forward to seeing you at our upcoming mastermind meeting, which hopefully is going to be in person. I haven’t heard the definitive word on that yet, but in any case, it’s been a pleasure to have you on, man. I appreciate you so much.
Tim Bratz (29:17):
Thank you! Thank you for having me. Take care.
Thank you! Thank you for having me. Take care.
New Speaker (29:19):
There you have it folks. Another show. I’m Jay Conner, The Private Money Authority. Wishing you all the best! Here’s to taking your real estate investing business to the next level. And I’ll see you on the next show.
There you have it folks. Another show. I’m Jay Conner, The Private Money Authority. Wishing you all the best! Here’s to taking your real estate investing business to the next level. And I’ll see you on the next show.
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