In episode 38 of The Kitchen Table, Ken Baden interviews his friend Brandon Brittingham, also known as Mailbox Money B, to discuss his massive success in the real estate industry. They point out the importance of cash-flow-generating assets and trust when it comes to investing. Ken and Brandon highlight the significance of starting the investment journey and acquiring knowledge about real estate investing.
Tune in to learn more about the current challenging times in navigating the real estate market.
TIMESTAMPS
[00:02:15] The Safe Play in Real Estate.
[00:04:09] Building Wealth with Single-Family Homes.
[00:07:47] Managing Assets and Passive Income.
[00:12:32] Real Estate as a Wealth Tool.
[00:14:19] Buying Opportunities in Real Estate.
In this episode, Ken Baden and his guest, Brandon Brittingham, highlight that investing in cash-flowing assets is a strategy commonly employed by wealthy individuals. They explain that wealthy individuals acquire these assets and hold onto them indefinitely. Instead of selling them, they leverage the equity in these assets when they need money, without having to pay taxes. This strategy allows them to maximize the potential of real estate and take advantage of tools like depreciation and cost segregation to minimize their tax liability.
In addition, Ken and Brandon discuss various ways to invest in real estate. They mention that starting with single-family properties is a common approach as it allows individuals to learn the process and gain experience before moving on to larger investments such as multifamily properties or storage units. Hence, they also stress the potential benefits of investing in real estate, including the ability to leverage tax advantages, build wealth, and generate cash flow through rental income.
QUOTES
SOCIAL MEDIA LINKS
Ken Baden
Facebook: https://www.facebook.com/TheKenBaden
Instagram: https://www.instagram.com/bluecollarcloser/
Brandon Brittingham
Instagram: https://www.instagram.com/mailboxmoneyb/
Facebook: https://www.facebook.com/brandon.brittingham.1/
LinkedIn: https://www.linkedin.com/in/brittingham/
WEBSITE:
The Kitchen Table Podcast: https://thekitchentablepodcast.net/
Intro/Outro00:03 - 00:16
Welcome to the Kitchen Table, a podcast about where business is done. So pull up a chair and join your host, Ken Baden.
Ken Baden00:16 - 00:38
All right. Welcome back to another episode of the Kitchen Table podcast where business is done. We've got a condensed episode because this young man here, Brandon, Mailbox Money B, by the way, one of my good buddies, good friend of mine, a local Maryland boy, but a massive success. My brother has amassed, I mean, close to a billion dollars in real estate. I mean, is that, that's accurate, right, Brandon?
Brandon Brittingham00:38 - 01:05
No, I've done over a billion dollars in real estate sales. We've probably got, um, I don't know, over a hundred million under management in real estate. And we've probably have what we own is probably somewhere around 50 ish million in today's evaluation of what we actually own in real estate.
Ken Baden01:05 - 01:30
So the reason why I wanted to get, and that's crazy impressive by the way, but the reason I wanted to get Brandon on is if you guys haven't noticed, things haven't been super awesome, right? And we've got the kitchen table, which is where business is done. We've got a lot of entrepreneurs, a lot of young people. And I wanted to get my friend on because honestly, he's the only person that I trust period. I mean, it's really hard to trust people to a invest in. And if you're interested in investing with Brandon, how can they, How can they reach out to you?
Brandon Brittingham01:30 - 01:39
Uh, Facebook DM, um, you know, just shoot me a DM and then I can kind of talk about what we have, what we do, things like that.
Ken Baden01:39 - 02:16
And that's Brandon Birmingham, but it'll be in the show notes. So, yeah. And I say that because dude, these are, these are scary times. And so what are some of the things, Brandon, I wanted to have one of the best that I possibly know. And he is arguably, first of all, I believe there. top five, if not number four in the entire United States, right out of Salisbury, Maryland. So that's something to be damn proud of. But what can we do investing in real estate? What's the smart player? What are a couple actionable strategies that people can do with what's coming up that is a smart play in real estate versus something that you advise against given the current conditions, the current market? What's the safe play?
Brandon Brittingham02:18 - 03:20
So I think number one, when it comes to investing in real estate, um, everybody over complicates it. They make it more difficult than it needs to be. I mean, ultimately at the end of the day, if you buy real estate and you hold it long-term, uh, it's going to go up in value. You know, if you get a mortgage on it, the principal balance is going to go down. There's a depreciation and all kinds of tax plays. If you understand that side of it. So number one, you know, it's gotta make sense from a cashflow standpoint, right? So you don't wanna go out and buy anything that, you know, you gotta write a check to, you know, have it every month. You want the rent that you can rent it for, whether it's a single family, a multifamily, whatever the case is, to be able to cover it. And, you know, there's, in my opinion, there's so many different ways to buy real estate and be successful. There's a number of ways to invest.
Ken Baden03:20 - 03:30
I mean, typically, uh, from the very suggest, by the way, not to interrupt you, but buying versus investing currently, or does that matter more like what you have to work with?
Brandon Brittingham03:32 - 06:59
So, I mean, you know, I think multifamily and storage units are two of the safest places to put your money long-term. When you first start, unless you have a substantial amount of liquid capital, going to buying an apartment building is not the easiest thing in the world to do. Same with buying a mini storage. So, you know, we, I bought a lot of single family before I got into multifamily. What I learned in single family prepared me to buy multifamily, right? But Like, even if you're like, you know, I'm not going to go invest in real estate at a ridiculous scale. If you buy, say 10 single family houses and you hold them and they eventually become paid off, give you the best analogy I can. Let's just say that you buy them, they're $300,000 a piece. They end up being paid off. And the time that you own them, they probably double in value. That's reality that happens. It's happened to me where over a 15 or 20 year period, even less, but let's just be conservative. Let's just say you held them for 15 years. They doubled in value. You paid them off. You got a $3 million asset that's now $6 million asset, right? And let's just say you're getting $1,500 a month in rent. Your rent usually doubles every time. So then now you're getting $3,000 a month. So now you've got a $6,000 or $6 million asset paid off. that's bringing you in 3000 per door per month. And you're not keeping all that cause you got some expenses, but let's just say that you keep 1500 of it and you own 10 properties. That's 15 grand a month. You got residual income and you had a $6 million asset. So, and that is if you only bought 10 houses, I believe Just about everybody in the world can meticulously invest to get 10 single family houses. And then there's other ways to do it where, like you do with me and some of our other investors, where, you know, if you want to be completely passive, you find somebody who's really good at it, like me, and you invest your money, and then you make a return on your money. I think the biggest thing is, what you have to understand is, We've been taught wrong about money, you know, where we've been taught, like, save your money and put it in the bank. And, you know, putting your money in the bank, what happens is you just lose value, right? Loses value every day. So nothing wrong with the stock market. You know, I just, I believe in real estate more because it's made, it's produced and made me more wealth and helped me do a lot of things. And I like the safety of it. But you have to invest your money somehow. I think real estate is a great play to do it. I think it's safe. You got to do it with somebody that knows what they're doing. And you just don't want to jump into it and do something stupid. But if you can buy assets that cover the debt, or you can invest with someone like me who knows what they're doing, then, you know, you can get into a safe real estate vehicle and, you know, get a great return.
Ken Baden06:59 - 07:37
Yeah. And then, so how, how low, I mean, we all know the real estate, well, excuse me, the market as a whole is currently struggling, but is the play, I mean, what would you suggest right now for somebody who's scared and going into the winter? You know, what's this, is it buying or investing? What would you recommend either of the two if they're, if they've got the capital by single family, or would you wait and say, look, single family is not really the move or the play. And if you don't have the capital or the liquid to go get multifamily or storage unit, then invest with somebody like myself and get your guaranteed 8%. What would you suggest currently with the current marketing conditions, where are we putting our money?
Brandon Brittingham07:38 - 09:13
So it's, you know, to be honest with you, it's personal. It is her personal choice. Right. So so here's the thing. You have to understand when you when you own assets, then there is a level of management, even if you get somebody like me who can manage the assets for you. It is some brain damage. I mean, I don't mean that in a negative way, but, you know, it is you know, it is something else you have to pay attention to and be part of, which there's nothing wrong with that. But you have to understand that that that's a reality, right? If you truly just want to be passive, you can put your money into something like with us and just get residual income. Now, I personally believe you should do both to be diversified. But what you have to understand is when you go to buy assets, number one, if you're successful at doing something else, like you're in the roofing business, right? You don't want to manage property, right? You want somebody like me that can manage it for you. So I think number one, if you go to buy assets, and you're gonna own assets, and let's just say that you're not in a market where Brandon can manage your properties, then you wanna make sure whoever manages your properties you can trust, and they got a great track record, and you can really do some diligence on them to make sure that you're protected, because the biggest part of the asset is the management once you own it. The other side, if you're just like, I don't wanna do any of that shit, I just wanna go passive, that makes sense too, but I personally believe that you should do both. That's just my opinion.
Ken Baden09:14 - 09:30
Last question, Brandon, because I know you're going to run, brother. If it's me, and I'm a great example because I am brand new at this, you know, I just bought my first home and my wife and I, because of that, I inherited her. So now I have two properties, one of which I'm currently living in, but we do want to make that over the next couple of years.
Brandon Brittingham09:30 - 09:36
How did you, how did you inherit your wife? Is this like medieval times?
Ken Baden09:36 - 10:21
I inherited a property through my wife, but Because of that, now we have this one, we have two properties. One we're going to put renters in, one that we're currently living in, and eventually we'll put renters in that as well. But what I'm saying is, A, would you suggest, hey, go, yeah, go get another house, right? Because Stuman was like, look, dude, you need to get six houses in the next six months. And I was all geeked up to do that. And I believe that that is the play. But she was just like, whoa, dude, we need to kind of, she's not as Uh, what's the word I'm looking for? Risk versus I am right. So what's the next move, man? What would you do? Like, okay, you're just, you got your first house. That's great. Now you've got your wife's house. Am I buying a couple more houses? And then I'm, should I have someone like you managing those properties to your point? You know, you put renters in there. That sounds like a nightmare to me. Right.
Brandon Brittingham10:21 - 10:38
You know that. Yeah. You certainly don't want to do it with the, you know, managing property is a full time job. Yeah. You know, so you don't want to do it. You want someone else to do it so that it's not taking away from what it is that you do and what you're good at.
Ken Baden10:38 - 10:43
So you find a property management company, put some people in it, you pay them. And if you break even, it's a win.
Brandon Brittingham10:44 - 11:13
as the cost of being paid off of? I mean, I would try to, you know, you want to bake actual cash flow into it. I mean, on one single family house, it's not going to be much, but you want cash flow in it because you don't want it to be a break even. And you can buy assets that aren't a break even. And, you know, if you got some cash flow baked into the assets, that cash flow is only going to grow over time. And that's going to help you with expenses or whatever the case is.
Ken Baden11:14 - 11:36
Okay. Well, beautiful man. Listen, I know that you are a very, very busy man. I appreciate you jumping on. We actually had some technical difficulties and he's still hung in here with us cause he's my boy. You know what I mean? So not everybody gets this kind of time, but we really appreciate you brother. I mean, this is not the easiest and it's not looking like it's going to get any better. I mean, do you have any comment on that? Like over the next year, two years, anything?
Brandon Brittingham11:37 - 12:41
Well, so I think with investing, I think what happens is people get overwhelmed because they think they got to earn a thousand house before they own one. And it's kind of like, you just got to start, right? So you just start, right? So you started, you invested with us, right? We've got another deal coming that we're going to get you in on. And then you'll start buying single families or whatever else works, right? So you just start, you get one, you learn it, you get another one, you keep going. See, the thing is, when you get really smart with this, this is what wealthy people do, they buy cash flowing assets and they never sell them. And when they need money, they pull equity out of them and they don't pay taxes. And they use things like real estate to leverage things like depreciation and cost segs to limit their tax liability. I mean, real estate is a tool of the wealthy. I mean, that's what it's used for. And, you know, I think the latest statistic is 90% of all millionaires came from real estate. Wow.
Ken Baden12:41 - 12:45
So, you know, 90% of all millionaires came from real estate.
Brandon Brittingham12:45 - 13:37
So it's a safe place to park your money if you know what you're doing and you learn about it, but it's not that difficult. And in my opinion, people overcomplicate it because they think they need to own a hundred houses or a thousand houses or whatever before they even own one. And my advice is just start, start the process. You know what I mean? Start investing in real estate, learn the process, get one house, get two houses, get a duplex, get a quadplex, get a triplex, whatever the case is. Just start building the portfolio or If you're like, you know, owning real estate scares me, I don't think it should. Then you find someone that's good with a good track record of a lot of wins under their belt of paying their investors timely and paying what they said they would, which is someone like us. And then you invest passively.
Ken Baden13:37 - 14:04
I couldn't recommend that more, by the way. And that's the last thing I have to say is if you want to do that, I sincerely, I don't know many people that I've tried. I don't know anybody. Actually, I've never invested anything with anybody outside of in myself. other than Brandon Brenningham. So, and this is not why he's on here, by the way. I'm just sincerely, I get nothing for this, but I can tell you that if you're interested in investing with someone that you can trust, Brandon is that person. I love you, brother. Thank you so much.
Brandon Brittingham14:04 - 15:10
And right now, I'll say this before we close out. If you can find an asset in today's current interest rate market that will pencil out with today's rates, it's only going to get better. So that's just, cause a lot of people were like, well, you know, I'm scared to buy right now. And it's like, well, shit, if you buy right now and you can make it make sense in seven and a half fucking 8% interest rates, then when we go back to five, it's just going to be that much better. You see what I'm saying? Cause you can refinance, right? Correct. And you're getting the benefit of the softness of the market. at seven and a half, 8% rate. So you probably get a better deal now today than when rates go back down to five and everybody's buying. So if you can find something now that makes sense, I think over the next year, 16, 18 months, there's gonna be a ton of opportunity to buy. So just start, pay attention and just start.
Ken Baden15:11 - 15:20
Well, you heard it here, man, the next 18 months and it's not likely to get much better, but that's how you look at it, right? Because you could look at it like this is a buying opportunity.
Brandon Brittingham15:20 - 15:23
When things are bad, that's when I love buying.
Ken Baden15:23 - 15:51
That's right. And this is how this man amassed his wealth. Brother, thank you so much for coming on and giving us some insight because, you know, we're clueless, man. We're just we're sales guys over here, dude. I mean, some of us might be real estate, but I'm trying to learn from you. I very much appreciate you guiding us on where we should be putting our money currently in this market. I love you to death, man. I wish you nothing but the best, and I will continue to invest with you, and I'm looking forward to learning from you. And I will be there on Thursday to learn from you in person in Texas. Awesome. Yes, sir.
Brandon Brittingham15:51 - 15:55
Love you, my man. You too, brother. All right. See you guys.
Intro/Outro15:57 - 16:17
Thanks so much for tuning into this episode. We sure do appreciate it. If you haven't done so already, make sure you're subscribed to the show, wherever you consume podcasts. This way you'll get updates as new episodes become available. And if you feel so inclined, please leave us a review. It is how new people find the show. Until next time, remember, there's always a seat at the table for business.