TGCI 197: Pivoting from Self-Storage to Housing

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Episode 197: Pivoting from Self-Storage to Housing

Copy of EP #18 - 2 Guests (1)

Summary

In today’s show, Pancham interviews Bryan Underwood – a founding principal of Responsible Residential and president of Responsible Real Estate, Inc.

From learning the language of real estate to getting involved in his family-owned real estate business and finally starting Responsible Real Estate, Bryan is the epitome of growth as he constantly works to reach his full potential! Today, he closely works with the construction and development department and has been working in bigger deals.

In this episode, get inspired as Bryan shares how he took the leap from working with his family to launching his companies and venturing from self-storage investments to housing developments. Learn about his mindset as he tells us why he chose to unlock his potential than living in a security blanket!

 

Listen and enjoy the show!

PanchamHeadshotTGCI
Pancham Gupta
Screen Shot 2022-06-21 at 11.47.20 AM
Bryan Underwood

Tune in to this show and enjoy!

Copy of Quote #00 - 1 Guest

Timestamped Shownotes:

  • 0:37 – Pancham introduces Bryan to the show
  • 2:07 – Starting his journey through a family-owned real estate business
  • 10:43 – Taking an unlimited risk by building his own business
  • 13:21 – On prioritizing growth and shifting from self-storage to housing
  • 22:18 – Why he chose to specialize in home building development
  • 25:17 – What’s next for Bryan and his future investments
  • 29:31 – Taking the Leap Round
  • 29:31 – Industrial building as his first investment outside of Wall Street
  • 29:40 – Overcoming his investment fear of losing money
  • 31:03 – Why pursuing investment deals would always go unexpected
  • 33:28 – Pieces of advice to jumpstart your investing journey
  • 35:42 – How you can connect with Bryan

3 Key Points:

  1. Ask yourself first if you’re willing to give up security that doesn’t have much potential to venture into something that has unlimited risks but has the ultimate growth.
  2. Identify what kind of investment strategy would you want to associate yourself with and make a plan from there.
  3. There would be a lot of risks in terms of housing development that’s why it’s important to continuously test out the business model.

Get in Touch:

 

Read Full Transcript

Welcome to The Gold Collar Investor Podcast with your host Pancham Gupta. This podcast is dedicated to helping the high paid professionals to break out of the Wall Street investments and create multiple income streams. Here’s your host Pancham Gupta.

 

Hi, this is Joe Fairless. If you want to diversify out of Wall Street investments and listen to The Gold Collar Investor Podcast. 

 

Pancham Gupta  

Welcome to the gold collar investor podcast. This is your host punch him really appreciate you for tuning in today. My guest is Brian Underwood. He is the founding principal of responsible residential and president of responsible real estate, a San Diego based real estate company. Prior to launching these companies, Mr. Underwood worked as the acquisitions manager for Castor properties and A-1 Self Storage since joining Castro properties in 2007, Mr. Underwood has played a key role in the acquisition and entitlement of over 1.5 million square feet of self-storage space with a market value of 200 million. His primary responsibility was to achieve the Caster family’s investment goals. To do this, he led the acquisitions team in their effort to uncover new self-storage opportunities and negotiate transactions. He worked closely with the construction and development department for initial project cost estimating site planning and the entitlements. He was the lead underwriter for each project and facilitated escrows and the completion of all the due diligence items. Brian, welcome to the show.

 

Bryan Underwood  

Thank you, Pancham. I’m excited to be here. I look forward to our conversation.

 

Pancham Gupta  

Absolutely, absolutely. So, before we get started, are you ready to fire up my listener breakout on Wall Street investments?

 

Bryan Underwood  

Like yeah, that’s what I do.

 

Pancham Gupta  

Awesome. Really excited about that. So, before we get started, Brian, why don’t you give our listeners about your background? Tell us more about how you got started. And, more importantly, the person behind that background?

 

Bryan Underwood  

Sure, yeah. So, one thing about me, I’m 17 years in real estate. So, over the last 17 years, I’ve chosen real estate as my career path as my profession. The IRS classifies me as a real estate professional, all my income comes from real estate. That’s what I spend all my time in. This goes back to 2004, maybe 2005, but kind of 2004, where I had a day job. And I had some interest in real estate because my family has a real estate business, A-1 Self Storage caster properties, and it’s quite large. So, I grew up learning about real estate, I grew up hearing about real estate, but I got involved in real estate really outside of the family business. I rotated out of my day job and started working for a guy named Chris, who I viewed as a mentor, and he was going through his very first real estate development deal. Now what we know about the fours, fives and sixes of the world, if you were in real estate, then as things were really good, you had to make really, really, really bad decisions to not make any money because everything was going up. Okay. So, understand that we’re in that, you know, sort of era, right. But I had a fundamental question that I was asking myself that I was I was pursuing the answer to, and it really came down to looking at a building or looking at land. How do you put a value on that? How does somebody say I want to pay x for this piece of land or Y for that building? And it really just because the way my brain ticks, it just fascinated me. And I was just like, how do I figure that out? And so, through my mentor who was kind of new at real estate, but he was a seasoned entrepreneur and business owner. He said, well, why don’t you get your salesperson license? So, I say, Oh, great. Yeah. So, I started learning this language of real estate. And if you are in real estate, like you Pancham or some of your listeners, you can often hear some of us talk and you say, I don’t know what you just said, because a lot of it’s a different language. Right. And so, getting my salesperson license helped me study a little bit of that language and understand some of the terms and what it meant. So, to kind of shorten the story a little bit what happened was, is I found a what I saw as an investment opportunity. Okay, so here’s me, I’m green. I’m reading books trying to figure out how to value real estate. I just figured out how to do like a back of the napkin pro forma, I found a piece of land in the city of Santee, which is a submarket here in San Diego where I live owned by the YMCA, and they wanted $250,000 and we offered them $150,000 And they took it and so what does everybody do that it has a good business idea or business opportunity. I went to my parents, and I said, okay, here’s my business plan, okay, and here’s my eight and a half by 11 back of the napkin pro forma on my industrial building, I’m going to spec out here, and here’s how we’re going to make money and all that stuff now. Thank God, she was supportive of me and a little bit ignorant. She loaned me $50,000. And I bought into this my it was my very first investment. Six months later, somebody made an offer for $425,000. All I had done at that point was trying to understand what a civil engineer was trying to understand when an architect was, I hired them to put together some plans, right? And I’m sitting back going, oh, shoot, we better sell this, you know, hopefully everybody agrees here. And I pay back my mom give her interest, and I walk away with $70,000 in the bank, right? And I’m going, okay, how do I do that again, right. I was hooked. I was absolutely hooked. Okay, so that’s kind of like my entry into real estate. That’s how it hooked me. And I had a little bit of a taste of some of the rewards that can come from real estate. And I said, okay, my family has a real estate company. How do I get in there? How do I get in there and really make a career out of this thing called Real Estate? And so, this was 2007 2007 is when I knocked on the family business door, my uncle Brian, who still runs it today, CEO of the company, and I said, Man, I love this real estate stuff. How do I work for the business? And how do I learn? You know, and this isn’t a knock on him. This is just big. I come from a very big family, right? He’s sort of trying to vet me, you know? Well, Brian, I don’t know if this is for you. I don’t want you really wasting my time. And I thought no, no, no, I want in, you know, so long story short, I negotiated myself sort of a six-month probation period, for them to say yes. And from 2007 to 2017, I was fortunate and blessed enough to be a part of the family business. I was the acquisitions manager, I deployed $60 million buying land. Through that process. I learned to track down owners, I learned to understand municipalities, general plans, zoning plans, overlays, negotiated contract, due diligence on the property level work with municipalities securing entitlements for self-storage, just you name it, right. I mean, I cut my teeth for 10 years, we did a million and a half square feet of storage. It was awesome. And that it kind of brings us up to the point Pancham is like, that were kind of what got me into real estate. That’s a little bit of what I did over a 10-year period, I will say there was a small part there. In the Great Recession, that I thought, Okay, what’s the next step? Because there wasn’t a whole lot for us to do in the Great Recession we did by No, which is kind of a separate story. But I went back, and I got my master’s in real estate from the University of San Diego, because I’m just one of those people who loves to put myself in a position of growth. And I thought, how do I just How do I get the 20 years of theory without the 20 years of experience? How do I expedite this learning process, and the University of San Diego has an incredible program for someone who’s interested in real estate to go study it and learn really, all the different touch points? And you know, you’re not going to be a master at everything. But as a developer hat, which is what I’m focused on is developing land, you must know really a little about a lot of things. So anyway, that kind of brought that a little bit about where I came from, is there anything in there that you have questions about or that you want to unpack a little bit?

 

Pancham Gupta  

Yeah. So, here’s the thing. I have couple of questions there on the timeline, really the so 2007 When you knocked on your uncle Brian’s door to work and his business and learn about it, and it’s been 10 years there. So that takes you to 2017. So that’s when he branched off of that and started something on your own. And so that’s question one and question two before 2007 When you bought your industrial building, and it was 2004 or five, and you got into real estate, right, and then you bought your first building. Before that you said you had a full-time job, what kind of career you were pursuing at the time, and I want to kind of talk about that a little bit as well and find out. Yeah,

 

Bryan Underwood  

well, let’s, let’s talk about that. And then we’ll we could get into the follow up so I wouldn’t say it was a career so to speak. I was a little bit of a late bloomer, okay. Now, I was one of those that went to school, and I got my two-year degree. And then I started working, okay, and my day job was selling women’s shoes at Nordstrom, which was a phenomenal job. I mean, I loved everything about that job because it was people and sales, and you could actually make some decent money. But at the same time, I’m 21 years old, I made $80,000 selling women’s shoes phenomenal, but at the same time, other than Nordstrom increasing the price of shoes, I’m my capacity, right? I mean, I got to a point, right? Like, this isn’t my career because I want to make more money. I had this, you know, it’s just this natural poll into real estate. I think one because I knew my family was involved in it. And then once I sort of just went through down that rabbit trail of what is real estate and what makes it tick, I was just kind of like, the more I found out, the more I realized I didn’t know. And 17 years later, I’m still learning. Because there are so many moving parts to this thing of real estate. I tried to simplify it, because it does get very complicated, but I’m still learning every single day, 17 years later, and it’s awesome. And I apologize, Pancham. But the follow up question, could you do you remember what it was?

 

Pancham Gupta  

Yeah, yeah, yeah. Yeah. So, you said that you kind of started in 2007 and spent 10 years that was 2017. Is that when you started your own company?

 

Bryan Underwood  

Correct. And I could talk, let’s talk a little bit about that. Because there’s really a lot that goes into this. And I’ll try to simplify it and shorten it the best that I can. But one of the things that you will learn about me is that, and I said it already kind of the show is I’m always in pursuit of growth, whether that’s personal or professional. And it’s one of the reasons why I like real estate, because there’s a lot of new things to learn all the time. One of the things that I found in our family business was and this is really true for any business is I was an employee and doing virtually 10 years of the exact same thing. Brian Underwood was tasked with finding the best two deals he can find every single year. That’s the company’s goals. That’s the strategy. That’s what I had to do. Well, just thinking about the 10,000-hour rule, okay, you get really good at that. Anything that you spend that much time doing, you get very good at it. I knew every city we want it to be in, I knew what zone allowed for me, I knew their restriction. I mean, you just get so good at finding sites that literally I could do this job in my sleep. And I hopefully I preface that enough. So, I didn’t sound arrogant, because I don’t want to sound arrogant. It’s just when you focus on something that much you get good at it. And so, one of the things that I struggled with in the family business, certainly over the last kind of like the last two to three years. And I poked around a lot. And I had candid conversation was how does Brian continue to grow in this business that is not mine. I’m just an employee. And that became challenging. And so, what I realized was, my next step in the family business was to be the CEO of a billion-dollar company, which on paper sounds fantastic. But Brian Underwood, in this business, knowing that’s my next step, was just really a title change for me, and not much else. And so, what I had to be okay with is saying, I’m okay, giving up this ultimate security, that doesn’t really have much potential to it. I mean, I always make money. But to me, there’s more to life than just making money. I have security, but not a whole lot of potential. Am I okay, with rotating out of that, taking on unlimited risk, but putting myself in a position of growth that has unlimited potential? And ultimately, I said yes to myself, right. And in 2017, is when I decided to leave and started responsible real estate. Got it?

 

Pancham Gupta  

Got it. So that’s an amazing story. Right. And you mentioned a couple of mindset related things there, which I wanted to tell you, too, even in 2004, when you took that plant from that job, but I think 2017 is when you really thought of the unlimited potential and the unlimited risk, right? It comes hand in hand, right? Yeah. So, and then you have on one side, you have that and you’re on the other side, you have your fixed, whatever potential and you have all this knowledge, and you have the desire to do more. So, talk to us about that mindset. How hard was it for you to branch out and you also at the time was doing self-storage, but then you started doing multifamily? Is it multifamily? Right. So, in 2017, talk to us about that mindset? Number one, how did you convince yourself to get out? I know, you talked about you know, unlimited potential, but was it hard for you? Or was it very easy for you? And number one, number two, and why did you pick multifamily? Given that you were doing self-storage?

 

Bryan Underwood  

Both great questions, thank you for them. So not an easy decision to make. There’s a lot of prayer and planning. I mean, I have kids, I have a wife, I have a mortgage right and then paychecks gonna stop. So right out of, you know, just sort of right up front. They happen to me, and I’ll happen to anybody. It’s almost as the fear sets in and you start saying, okay, that’s too much and you just, you kind of stick with business as usual. Keep your head down, you’ll be fine in 20 years. That’s not what you know, part of my brain meaning the way that I tick. And whether you think like me or not doesn’t matter. I’m just an advocate for growth. I don’t care what position you’re in and what you do for a living, there is always something to learn. And there’s always something to challenge yourself with. And so, for me, I had to sit back and say, is money worth the sacrifice? For giving up growth? And that’s an easy question to answer. For. Yeah.

 

Pancham Gupta  

For you. Yes. You know, depends on who you ask that question.

 

Bryan Underwood  

It depends on who you are. For me, that was an easy, it was an easy response. It came out naturally. I didn’t have to. I wasn’t hesitating. And so, when it came out, so natural, like, Heck, yeah. Then it was okay. Let’s plan for that. So, the fear will stalemate anybody on? I don’t know, if I have what it takes, I mean, all sorts of the natural stuff that seeps into our brain, the stinking thinking, but really, it came down to are you willing to sacrifice you know, your growth? And, you know, your God given potential for money? And the answer was no. Okay. Well, what’s next right, to kind of further that thought and go into the next question, which was, why housing? Right? Why housing? So, there’s two responses to that. But the first one was, okay. In the planning, if I leave the family business, do I create a self-storage company, which I just became an expert in over a decade, right, and start a competitor business to the family business. And I just didn’t have much interest in that. I’m fascinated with real estate, I wasn’t particularly fascinated with self-storage, while tremendous investment opportunity, particularly in inflation era times, just like multifamily, because of the short-term leases. Outside of that I wasn’t in love with self-storage. I’m in love with the process of real estate. And so, when I rotated out, I actually didn’t have the whole plan. Like, I didn’t leave day one and say, I know exactly where I’m going and how I’m going there. What I did was, say, I have a broker’s license that I’ve never used. And I know how to buy land, right? Because that’s what I did for 10 years. And so how do I put my broker hat on, reach out to my network, and just start bringing in some income, so I can focus on what that next opportunity might look like. And what I did is through the that first process is I got two listings, and they were both raw lands, and they were both multifamily development opportunities. And that is the time that I started studying housing. That was the reason I should say why I started studying housing. I knew everything about the development process, I knew nothing about home building. And so, like all of us, I mean, I have a, you know, 100-year network here in San Diego. And I started calling up, every single one of my friends and my buddies and colleagues that is in the home development came to ask them, what is this potential look like? And how do you do this? And how do you do that? And, and what I started discovering was, which you read about, you could pull it up right now there’s a recent globe street article for San Diego, just San Diego alone, we could build 108,000 units tomorrow to come online. And all we did was catch up what we failed to build over the last 20 years. Okay, we must build 15,000 homes per year in the county of San Diego, just to keep up with natural demand. This year, we’re going to build Seven Last year we build six. Okay, so we compound the issue every single year. And so, I’m looking at that through my lens of self-storage development. And I know all the metrics for self-storage, you know, every 14 people is demand for one more 10 by 10. Well, when you when you break that down to people, it’s like every two and a half people is a reason to build another dwelling unit. Okay. So, the opportunity for acquisition is exponential related to homebuilding, as you know, compared to self-storage. So, I need to use my skill set and learn this housing product and go build homes. And so well, what ended up happening was one of my listings, as I started picking up the phone, I’m calling all these people and figuring out this housing. I ended up buying it. Yeah, I ended up buying my own listing. And it’s my Brian Underwood’s very first residential development project. And we’re about to go full cycle on that. So, we’re about 30 days away from getting certificate of occupancy. I’m in the process right now of leasing up. And at Lisa, we will be selling that back pain our investors back, and hopefully, you know, we’re high fiving and I’ve got more in the pipeline. So, we’re already off to the next ones, but it’s cool to see that first one kind of go full cycle. It’s neat.

 

Pancham Gupta  

That’s awesome. So, can you share some details on that investment? Like how big it is If you can share some numbers, if you’re comfortable with that, now was working. Yeah,

 

Bryan Underwood  

absolutely. So, what we did on that particular deal now, going back to this was Brian Underwood’s first deal. I mean, I did a million half square feet of storage. I know the process right. But Brian Underwood’s not signing the back of the check. This is the first time Brian Underwood signing the back of the check, right. So, we kept this actually relatively small, okay, this is a 10 unit, build the rent townhome community. Okay, so I have two homebuilding brands, responsible residential, is a builder rent townhome and build a single-family home product. Our second one which has come out of the first and I’ll get to that is responsible, urban, responsible urban is a larger team that we’ve organically formed over the last 18 months of urban infill multifamily development, real high dense stuff. So, our first project together, we’re building 89 units on 14,000 square feet. So, it’s a very high dense project. Going back to the townhome project, we raised one and a half million dollars, we did this, this raises through friends and family. And we have a construction loan of $4 million. So, our total project cost on this project is round numbers five and a half million dollars, it’s actually five, four, we’re going to save a little bit of money, which is great, but five and a half million dollars, the rate that in which we’re renting up with standard lender underwriting and looking at what our projected expenses are going to be because we’re not quite operating just yet. We have a value that we’re out to market on of seven and a half million dollars. And so, we have essentially what we’re going to be doing is over two-and-a-half-year period of returning over a two-equity multiple to investors, which is pretty phenomenal.

 

Pancham Gupta  

Great. So, this is 10 units, you said Right, right. It’s awesome. Correct. That’s cool. So actually, before I talk about one of, we are actually doing our first development deal, actually this year, it’s a 15-Unit. 

 

Bryan Underwood  

Congratulations. 

 

Pancham Gupta  

It’s like our family, you know, small, high dense construction in New York, actually New Jersey. So, this particular project, right, like how did you decide like, because you were building self-storage in your previous life, you decided to belt go with the belt, instead of buying existing and then adding value to those? Is that correct?

 

Bryan Underwood  

That’s fair to say. And you make a good distinction, because there’s a lot of different ways to make money in real estate. And there’s a lot of people that specialize in just buying existing, you know, maybe there’s some management things they can get in and fix and they see value there. It could be improving the unit’s interiors, the exteriors, right, there’s ways you can get in and add value. I love everything about the development process. And so, while I have done an existing value add it was a 506-b syndication to buy 20 units and bay park, it was for a very specific reason. And if it wasn’t for that specific reason, my focus is our focus is homebuilding development. Because in San Diego, in California, probably much like New York or New Jersey, it’s very challenging, very difficult to do. That also makes the barriers to entry very high. It also makes the expertise that much more valuable. So, the value that we can create with the expertise that we’ve gained over the last 30-40 years of doing business in San Diego, is why we’re focused there. It’s not a matter of is it going to get leased up and at what rate, we’ve got great data, right? The two things I’m focused on is you got to be able to capitalize the project upfront. And then we must be conservative enough where I can sleep well at night. And if I can sleep well at night, trust me, you investors can sleep well at night, because I’m I check all this stuff. Start number one biggest risk and development is how do we get out of our construction loan? How do we get out of our construction loan? And so, what I’ve done, and what I noticed in the Great Recession, when I worked in the Self-Storage world is everybody that got in trouble in the Great Recession, which you know, some people saw was coming, some people didn’t, I’m not going to get into that. What happened was, is everybody that lost property, borrow too much against it. They just leveraged it up. They didn’t put enough in the deal upfront. Yeah. And so, while I can on paper, and in reality, juice my returns by saying we’re gonna get a 75 or 80% construction loan that will absolutely juice my returns. I always in our whole team were adamant about putting 35% equity in the deal. Again, the returns may not look as good, but our number one risk and you don’t have it and I don’t Have it and no one else has that crystal ball that looks out for five years. And so, what we do is we’re constantly stress testing our model for that takeout? Because to me, that’s the number one biggest risk.

 

Pancham Gupta  

Gotcha. Yeah, that makes a lot, a lot of sense. And thank you for giving all that background. So now talking about what’s next for you. You said you’re doing that 89-unit, high density, again, in San Diego,

 

Bryan Underwood  

correct? Yes, that’s in a submarket of North Park, which is very desirable place to live.

 

Pancham Gupta  

Got it. And what’s the project cap on that? Like, how big is the project? Yeah, so

 

Bryan Underwood  

through Santee, right. I mean, not only did I learn a ton, and continue to learn a ton, but what happened on that particular deal was I surrounded myself with an expert, an expert in homebuilding because Brian Underwood had, I haven’t even built a single-family home before. So, but now I’m about to build 10. Right. And I have investors and of course, I know this process, and I have a good head on my shoulders. I’ve experienced like a prime muddle my way through. But I don’t want to make a mistake that sinks the ship, I’m okay, making mistakes. That’s where you and I get better, right? But I don’t want to make a mistake, the sinks the ship. So, what I did is I reached out to a colleague of mine, Michael Dunham, who is now my partner in responsible urban and the large project. And Michael Dunham, has built 10,000 homes in his life. And I said, Michael, how can we work together on this project, where I can learn, we’ll get better together. But ultimately, you know, the rest that’s coming down the pike that I don’t even know is coming, I don’t want to get hit in the face. Helped me anticipate these things. So, we worked out a deal. And he’s been helping me through that whole project. And he has an extended team, a guy named Casey and Jake, two guys. And then I have a business partner, Sean, and there’s five of us. And we’re meeting biweekly, we’re going through this whole project, we realize you know, what, collaboratively collectively together, we have over 100 years’ experience building homes in San Diego, we would all be spending the same number of hours, as we are on 10 units as we would 100 units. In fact, 100 units, Mike is what your specialty is. So why don’t we together come together? Let’s form a group. Let’s go build 100 units. And let’s offer our investments to the world for the very first time and give them an opportunity to invest in our group who has worked in various capacities with various companies over the lifetime and build excellent skill sets. Let’s come together. And let’s offer our investments to the public. So, they know we exist, we’re in San Diego, we’re local experts. And we’ve got some of the best projects coming out of the ground. Let’s give other people opportunities to have some of that. So that’s a little bit about why the 89 we went from a five and a half million-dollar project, the 89-unit project is $32 million. Okay, so we will be raising this year, we’re raising $10 million. We’ve got two that’s our side that’s in the deal. We’re raising $10 million for that particular project.

 

Pancham Gupta  

Got it? Well, good luck with that project. And development is a lot of patience. And it takes grit to get result. 

 

Bryan Underwood  

It is the long game. Yes, it is the definition of the long game.

 

Pancham Gupta  

Yeah, yeah. Cool. Well, thank you for that. Anything you’d like to add before I move on to the next section of the show? Take us where you want. All right. We’ll be back after this message. Have you ever wondered why the rich keep getting richer? What is the secret that they know? But you do not? What if I told you that? Well, the people make their money work for them into different places. Yes, the same dollars invested into different places and working hard for them while they sleep. They utilize these special accounts that have been in existence for more than 100 years. Do you want to learn more about these accounts? Then you are in the right place? Listen to the episode number five by going to thegoldcollarinvestorbanking.com/bankingshow I repeat thegoldcollarinvestorbanking.com/bankingshow or visit thegoldcollarinvestorbanking.com. So, Brian, let’s move on to the second part of the show. I call this taking the leap round. I asked these four questions to every guest on my show my first question which I think you have already answered. But I’ll ask you again. When was the first time you invested outside of Wall Street? Was it that industrial building that you took 50,000 loans from your mom? 

 

Bryan Underwood  

Yes, that’s it. 

 

Pancham Gupta  

All right. So, did you have to overcome any fears when you actually bought that?

 

Bryan Underwood  

Tons! Because you have a gut feeling about where you’re headed? You have a business plan. It seems to make sense. You talk to people, and they nod their head that’s how we initially we get some feedback. You know, they’re not looking at me like I’m crazy. But the fear is it’s not my money. I’m shepherding family funds. And the fear is, well, what happens if I’m wrong for a lot of reasons in real estate? And I lose that money? Right? I think that that risk is true in a lot of different types of investments. However, I have to always ask myself, no, now I’m further along in my career. So, I’m investing actually the highest risk capital out of all of our deals, because I’m the pursuit guy. I’m the one that has $200,000 minimum at risk before even offer it to our investors. I mean, I’m already invested in the deal. But I always have to ask myself, if I had $10 million sitting in the bank, would I take that cash? And when I put it into this deal, and if I can say, yes, well, then I should be able to intelligently and eloquently share these opportunities with others. And there’ll be enough people that say yes to this deal that help us capitalize it. Right.

 

Pancham Gupta  

Absolutely. Absolutely. Cool. So, my third question, can you share with us one investment that did not go as expected?

 

Bryan Underwood  

Thanks. That’s every, every investment?

 

Pancham Gupta  

Yeah. Did you have anything where you actually lost money?

 

Bryan Underwood  

I’ve lost some of my money in pursuing deals. Really, it’s a cost of doing business, you have to be okay with it. Okay. So, as an example, another NorthPark project that I was pursuing last year. I have it in escrow. I’ve got money that’s, you know, in escrow my security deposit. That’s refundable, but I’m spending money with consultants, historical consultants depend on the type of project but on paper lost, maybe just about $60,000. On that particular deal. There wasn’t investors’ money is my money. That hurts, right? It absolutely hurts. No, no one wants to lose money. But in the field that we’re in, when you’re chasing deals, and you have to put security deposits up and you have to spend money to go investigate. It’s really you have to be okay, with that’s just the course of business. That’s the cost of business for us.

 

Pancham Gupta  

Yeah, absolutely. Yeah. Well, you do these things, like you said, it’s cost of doing business, you know, and these are the real-world lessons that you can have, you know, the school of hard knocks.

 

Bryan Underwood  

Absolutely. And the goal there is, right. I mean, for every one or two deals that don’t come together, I have three or four that do we do so much work up front, because we know the markets so well, that if I didn’t feel confident, I wouldn’t be spending that money, right. So, I already have a level of confidence of this deal. But that’s not always going to be right. And correctly. I mean, I lost money. So, but most of the deals that we take through this stage, are getting done. We’re going through and we’re buying the land, and we’re and we’re putting these deals together. But stuff happens. And that’s part of that’s the reason why we asked for some time in escrow, for us to spend our own money to investigate the property. Because every piece of land is different. Just like a building, what’s hiding in the walls, get your inspection, okay, well, we have inspections for land. Right? We have phase ones, and we’ve got title reports. And we have geotechnical analysis. So, there’s things that we do that’s similar to like a building inspection before land. And we need to be able to do those things before we buy a piece of land.

 

Pancham Gupta  

Exactly, exactly. cool. So, my last question for you, Brian, is what one piece of advice you is would give to people who are thinking of investing in Main Street that is outside of Wall Street,

 

Bryan Underwood  

so, I think, is put some money to work sooner than later. And that’s not with anybody or any product. But I think their people can be sidelined for too long. And think that they might need to read maybe one more book or listen to one more podcast or whatever it is, I’m not discouraging any of that. But there’s opportunities out there, if you’re not accredited, to just try to find some people who are out there that maybe you might know who’s doing a deal, you want to line up two things, I think when you’re investing in real estate, you want to line up two things, you want to know who and the group, if it’s a group, you want to know who you’re investing with, they should be able to show you track records, they should be able to get on the phone with you and talk to you, they should be able to give you bios, you should be able to get really comfortable with who you’re investing with. Okay, and into. And then second to that, even if that’s the group, you say, I want to invest with, you may not like every one of their deals. So, you need to trust the group. And you need to you need to have sort of that gut intuition about okay, this is the deal for me. But what we know about real estate, and what we know about passive income, and I look at virtually every family out there, that has incredible wealth. There’s a real estate portfolio sitting behind them somewhere. And what I’ve seen ain’t just in the Self-Storage portfolio. Thing doubles in value about every seven to 10 years, depending on what cycle you look at. The income grows every single year. Right? So yeah, sure you have cycles, you have these anomalies. But I’ll tell you what, you put $50,000 to work today. And you could put $50,000 to work next year, and on and on and on. You’re talking about, you are building some incredible wealth. I mean, I’m talking about life changing generational wealth. And so, my encouragement would be to do your research, find that group, find the products that you want to invest in and get started sooner than later.

 

Pancham Gupta  

Great advice. Thanks, Brian, for your time here. how can listeners connect with you if they really want to get in touch and find out more about what you do?

 

Bryan Underwood  

Yeah, that’s great. You can find me at invest with Bryan. That’s B-R-Y-A-N investwithbryan.com. Connect with me there. Actually, I look forward to meeting you. Let’s chat, love to share with you about what we’re up to.

 

Pancham Gupta  

Great. Thanks, Brian, for your time.

 

Bryan Underwood  

Thank you, Pancham. I Appreciate you having me. I enjoyed the conversation.

 

Pancham Gupta  

I really appreciate you for joining me today. To learn a bit more about Brian’s background. I hope that you got some value from it. If you have any questions do not hesitate to reach me at p@thegoldcollarinvestor.com. That’s P as in Paul at thegoldcollarinvestor.com This is Pancham signing off. Until next time, take care.



Thank you for listening to The Gold Collar Investor Podcast. If you love what you’ve heard and you want more of Pancham Gupta, visit us at www.thegoldcollarinvestor.com And follow us on Facebook at The Gold Collar Investor. The information on this podcast are opinions. As always, please consult your own financial team before investing.

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