JF2450: Achieving Passive Income with Bronson Hill
Bronson is the founder and CEO of Bronson equity. Bronson began investing in real estate 13 years ago, first developing a solid single-family portfolio before moving on to multifamily. He’s an expert dedicated to educating practitioners and business owners about how to gain financial independence by fully passive investing. Bronson is now the General Partner for 225 houses, and he is adamant about spreading the word about the advantages of passive investments in multifamily syndications. Bronson shares his first investment property story and how his mentor constantly pushed him to improve as an investor.
Bronson Hill Real Estate Background:
- Founder and CEO of Bronson Equity
- 15 + years’ experience
- Portfolios consist of 800 units as a GP, and over $60M of multifamily real estate
- Based in Pasadena, CA
- Say hi to him at: www.bronsonequity.com
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Best Ever Tweet:
“If you make yourself valuable to valuable people, you will find a place for yourself in any industry.” – Bronson Hill
Ash Patel: Hello, Best Ever listeners. Welcome to the Best Real Estate Investing Advice Ever Show. I’m Asha Patel and I’m here today with our guest, Bronson Hill. Bronson is joining us from Pasadena, California. He’s got 15 years of real estate experience and has a $60 million portfolio with 800 units. He’s also the founder and CEO of Bronson Equity.
Bronson, how are you today?
Bronson Hill: I’m doing well, Ash. Really excited to be with you and be with the listeners. I love this podcast. I’m really excited to be a part of it today.
Ash Patel: We’re glad to have you. Before we get started, can you tell us a little bit more about your background and what you’re focused on now?
Bronson Hill: Yeah, so my background – I was a high-paid consultant in the medical field, and basically, I was doing single-family houses. My goal was to basically retire through single-family. So I had gotten four or five houses in the Cleveland area… And I had a relative come to me and say, “Hey, your plan of getting 30 houses and managing them individually, that sounds like a lot of work. Why don’t you consider multifamily?” And I said, “Well, I’d love to do multifamily, I don’t have the money.” So he said, “Well, you could raise the money.” So basically it started me on a path on kind of learning more about syndication. He said, “Read this book, look at this,” and he’s a very successful investor, who has about 1,400 units himself. So basically, that kind of took me on a path where I just learned everything I could and ended up starting a meetup in Pasadena, went to a bunch of events and now I’ve raised about $15 million for real estate. So it’s been quite a journey here.
Ash Patel: And how many years ago was it that you read that book? And what was the book?
Bronson Hill: There wasn’t necessarily a book. Rich Dad, Poor Dad was pretty influential for me, but it was really that conversation with my cousin who kind of steered me down this path. But it’s been only about three and a half years, so not that long in the multifamily journey.
Ash Patel: That is a commendable rise to fame, $60 million in three and a half years. We want to learn how you did it. So single-family rentals, and you opened your eyes to syndication. What was your next step after educating yourself?
Bronson Hill: So after educating myself, as I was reading books and as I was networking, I realized, connecting with other investors is really important. So I’ve been a part of a meetup in my local Los Angeles area for seven or eight years. And so I approached the person who leads that and basically said, “Hey, what if we started a multifamily meetup?” We did another meetup at the same location and we were just specifically talking about multifamily.
So our first meeting, we basically had about 50 or 60 people show up. Again, at this point, I haven’t done any multifamily deals, I haven’t really done anything. But a guy approached me while I was there and said, “Hey, I’d be interested in investing with you.” So I thought, “Wow, this is awesome.” So I got coffee with him and basically, he said he would invest 100k in a deal if I had a deal. I kind of showed him a sample deal of what it could look like.
So there was also a syndicator that I had met at the same event, I was able to basically kind of bring those two people together and I was able to raise a small amount of money for my first deal. So it’s amazing how starting the meetup and especially that first event was really influential for me to kind of get started in actually investing and getting people to invest in the deals.
Ash Patel: Bronson, you said you had a syndicator that you brought into the deal. Did that syndicator already have a potential deal in the works?
Bronson Hill: Yes, the syndicator did have a deal in the works. They were working on raising for a deal, and so I had a conversation with them as well. In the process of the weeks following this event, I was able to connect these two people, the person who had money to invest as well as the syndicator who had this deal, who was looking for money. And I found in real estate, if you can just simply connect the deals and the money, it’s amazing what you can accomplish, right? Because there’s so many deals out there; some of them right now the deals are a little harder to find right now, actually really good deals. But there are a lot of people that have a money problem, meaning they have money and they don’t know where to put it, where it doesn’t feel risky, like the stock market, or where there’s some inflation hedges, and so I was able to connect those two together.
Ash Patel: And by connecting those two people together, were you able to get equity in the deal?
Bronson Hill: Yes, I was able to become a general partner in the deal. So there is something really powerful about getting your first multifamily deal, whether it is a duplex, or — this particular property was 225 units in Texas. So again, it was a small amount, it was $100,000, it was not a lot of money. I reached out to friends and family, but it was amazing that this guy was really the first person that invested with me. And then from there, once you get started, obviously as you know, it gets easier from there, because people know you as somebody who really adds value to the multifamily space.
Ash Patel: To give our listeners an idea of where you were, how many single-family rentals did you have at the time?
Bronson Hill: I had, at the time there was actually four; so we had four single-family rentals.
Ash Patel: Okay, so you’re relatively new. And now you do this deal where you become a GP, by marrying two people together in a deal. You’re feeling really good, and I’m assuming you want to rinse and repeat that.
Bronson Hill: Yeah, so obviously from there, the goal really is to do more deals and do bigger deals. And my next step on that path is I connected with a successful syndicator, somebody who’s a podcaster and had quite an audience, and I was able to develop a relationship with them. I was going to raise some money for one of their deals and partner with them. But through a series of events and over time, I was actually able to pitch this person on, “Hey, you know, you’ve got this great audience for active investors. What if we did something for the passive investors that might be listening?” So we created something together to really go after that group. So where this well-known person had trouble raising $600,000 for a deal, within a short time we were raising millions of dollars, basically, as we developed these systems together. And I talked to over 1000 individual investors on the phones, so I got a lot of experience doing that… But basically really providing in a partnership really what was missing. And there were some things missing for this person that I was able to come on board and help provide.
Ash Patel: And what specifically were those things that were missing?
Bronson Hill: Yeah, so like I was saying, this particular syndicator’s really great on the active side, does a lot of training courses and education and all kinds of stuff… But really, again, to have a list of tens of thousands of people, but not really have it segmented into, “Okay, these are passive investors.” And of course, my background too, is I’m a high-earning professional, I’m an accredited investor and I’ve been a passive investor before… So bringing my experience and my desire to say, “Hey, let’s really focus on this group of people that basically they’re very different”, right? Somebody who’s a physician, somebody who’s a CPA, Attorney or business owner – a lot of times they don’t want to necessarily go get another job and go to syndicate themselves, right? They’re trying to say, “How can I be a part of a deal passively?” So really, what was lacking is there wasn’t really a funnel or there wasn’t really information such as podcasts and videos and content, and somebody can get on the phone and just have conversations with these people to talk about what does it look like to actually passively invest.
Ash Patel: Alright, so you made it sound easy when you said your partner was looking for $600,000 and you raised millions. How did you do that?
Bronson Hill: So it was a team, it wasn’t me only. Obviously, a lot of systems that went into that, and there was some base there. But again, there’s this saying that I’ve heard and it really has changed my life, with the idea of “really making yourself valuable to valuable people”. So I’ve got a lot of value from this particular person that I had approached, and I thought, “Okay, what really is lacking here? What is the thing that they really need the most?” And the issue they were having is they weren’t able to raise money internally, they were having to go to external partners. So then we’ve got this huge audience; let’s see what we can do to really come in and really create a segmented audience and say, “Okay, we’ve got the active site of investors over here. What can we do with the passive investors over here? How can we create opportunities to have calls?”
So again, like I said, I spoke to over 1,000 investors over about a two-year period, all the accredited investors, individually over the phone. And how we did that is we created different resources and content, we talked about it on the podcast, “Hey, we’ve got deals, we’ve got this going on.” So again, from not focusing really on targeting passive investors to saying, “Hey, we’ve actually got this system, this process, this way to invest, we’ve got someone that you can connect with.”
So it was a team effort, but really, again, just making it easy for people to say, “Hey, I can listen to this, and I don’t want to run an apartment building myself. I don’t want to buy a duplex, I don’t want to get to a 200-unit myself. I want to be a part of that team, because I’m too busy with my job.” So creating another way for people like that to connect. So that’s kind of really what we did, is we created this whole other target focus for this group.
Ash Patel: Bronson, you mentioned physicians and CPAs. And I’ll just pick on those two examples. How do you pitch them? And what are the differences in how you pitch the two individuals?
Bronson Hill: Okay, so when you talk to wealthy or busy professionals, a lot of people are talking about this idea of what does the accredited investor look like, or what’s in the high net worth person, what’s in their mind? And really, a few things come to mind. And I have a lot of friends that are physicians, and a lot of them make sometimes millions of dollars a year, but they’ll be working tons of hours on certain weeks. So it’s not necessarily a freedom of time.
So when you teach them about passive investing and that, “Hey, you can actually put money in this other bucket we call passive income, and once you vet the deal, and you vet the sponsor, you don’t actually have to have an active role in it,” really a kind of light bulb goes on for a lot of people and they start to say, “Oh, wow, I can actually become more wealthy, I can actually have my investments grow without the volatility of the stock market. And it doesn’t take necessarily much more of my time.”
So time is a huge issue for busy professionals, between the two of those, I would say in general physicians are usually busier than the CPAs that generally I speak with. CPAs tend sometimes to get really into the numbers because they work with numbers all day, so they will kind of want to get really nerdy with it.
So depending on somebody who’s listening and they’re an active investor and they’re looking to target these groups, I would say just target one or target what fits for you. If you’re a real numbers person, then maybe working with CPAs may become a little bit easier, because you’re going to get deep into those numbers anyway. If you’re looking at working with physicians, just making it as easy as possible for them to have content to consume, whether it’s podcasts or ebooks or other things, just that really it can take for them just these complex issues really make them simple.
A second thing for physicians really is they’re taxed at a very, very high level. So if you can offer tax-advantaged investments or education around that stuff and you can take these complex things and make them very simple, they’re very appreciative. And again, if you become a trusted person by providing free content, then they’ll say, “Hey, I’m interested in investing with you.” And that’s really what happens. First, you provide the value, they get to know you and then they can say, “Hey, what else do you have to offer?”
Ash Patel: Interesting and good advice. So my wife’s a physician, and I agree with all your points. They work a lot, they often don’t make the best investment decisions… I don’t syndicate, but I’ve introduced or I’ve offered to introduce some of these physicians to the world of syndication. And the biggest block that I get from them is, “Oh, those numbers can’t be true. That’s too good to be true.” Do you get that?
Bronson Hill: Yeah. To be really honest, when I first started seeing the numbers, I had a too-good-to-be-true kind of feel. Because again, a lot of people that are physicians, they typically have a money person that they don’t even realize is taking everything—
Ash Patel: I’ve got a guy. Everyone’s got a guy, right?
Bronson Hill: Everyone’s got a guy. And then these fees – I mean, Tony Robbins wrote a book and he said that, the average fee for a mutual fund is somewhere around 3.2%, but there’s all these undisclosed fees. And then the money person themself takes another 1.5% to 2% on top. So basically all of your gains in the stock market are going.
So when people see a stock market gains, on average, if you don’t include the fees that are typically 6% to 8%… So when you’re saying, “Hey, I got a deal that we’re projecting 15% per year conservatively,” it can really sound too good to be true.
So what I try to do with those people, I try to connect them with other people, other investors, other physicians, other people that are in their field, or just that are more professional investors or people that are passively investing full-time; these are people who have been doing this for years, and their goal is to about double their money every 5-7 years. And I think that’s the amazing thing to me about passive investing, and if you are active or you are a high earner, everyone should be very interested in learning more about passive investing, because it truly is the way you can have freedom of time and freedom of money.
Ash Patel: And what are some of the things that you do to educate your audience or potential investors?
Bronson Hill: There’s a lot of things. We do a monthly panel where we bring on different syndicators, we bring on different investors. We’ve got — probably by the time this airs it’ll be over, but there’s one where we’re comparing experts in different fields about what’s the best investment right now – cryptocurrency, real estate or precious metals and we’re having experts in all of those come on and basically debate that topic.
So basically just talking through different things, we’re talking about vetting sponsors, we’ll bring in different sponsors and vet that topic. That’s something that we do. I have a free ebook, I have it on my website, that people can download. I try to be a guest on podcasts… In any way I can provide some sort of resource. And it happens also through phone calls, it happens individually, it happens in a group… I think there’s lots of ways you can do it.
Ash Patel: What advice would you give to people that are at the four single-family rental stage that you are at and they want to get into your shoes? What are some of the advice you would give those people?
Bronson Hill: Yeah, that’s a great question. I think there’s a couple things that I would recommend that you do right away. The first thing, typically the person that’s got three or four rental houses, people know you not as a real estate person; they didn’t know me as real estate Bronson, they knew me as medical sales Bronson, or consulting Bronson, right? So I had to start telling the story of, “This is who I am.”
So I recommend everybody, if you’re getting started out, just get a MailChimp account, it’ll cost you 10-15 bucks a month, and just go on there. Even if you’re just going to conferences and meeting people, and just start posting what you’re learning, posting what you’re doing, post what you’re doing about your houses, put all your friends and family on there, just have this list. And what will happen is these people want to invest with you necessarily right away, but these are people that they already know you and they already trust you. So if you start taking people on this journey with you, it can help people that when you are ready to get investors in a year or two, they’re going to be brought along that journey. So that’s one of the first things – start telling your story of where you’ve been and where you’re going.
And then the second thing is if you can start a meetup or you can start putting any sort of content out there, that’s just, “Hey, this is myself” trying to give to people in a way that’s going to help them on their journey. So if your target person is a physician, then doing meetups for physicians, or creating some sort of resource to reduce taxes for physicians or something that basically adds value to that conversation. Because people – they can stay awake at night thinking, “Man, I’m paying 50% or more of my money that I’m making in taxes”, and that’s crazy, but it’s true.
Ash Patel: That is great advice. And I made the same mistake. I was in real estate for three years, and most of my friends and family didn’t even know what I did. They thought I was still in IT, right? So yeah, that’s a great piece of advice.
Along those lines, what’s your best real estate investing advice ever?
Bronson Hill: The best advice that I can say is really that idea of finding someone that you find value from and really going to them and trying to ask the question, what is the biggest challenge in your business? What is the biggest challenge in what you’re doing?
And by asking that question, I promise you, they’re asking that question already. They know what their biggest challenge is, but nobody else is coming to them and asking that question. They’re coming to say, “Hey, I want you to mentor me.” Everybody wants something from them. But when you come as somebody who’s “Hey, how can I give to you? Is there any way I can help you?” And I wouldn’t even worry about how you’re going to get paid or how things are going to happen; you just try to find, is there something that I can do to help solve this problem?
And I promise you, if you make yourself valuable to valuable people, then you will find a place for yourself in any industry, because you are now somebody who’s coming in and asking the right questions. And if you have the ability to solve the problem or at least be able to understand it, it allows you to potentially become a partner with that person and do some great things.
Ash Patel: I hope people really take that answer in. I can’t tell you how valuable that is. I’ve had a lot of people come up to me, “Hey, I need to get with you. Hey, I need to learn what you’re doing.” I’m sorry, what? And then I’ve had other people, “Hey, what’s a bottleneck I can help you with?” And those people stand out so immensely. And I’m willing to bend over backwards, because they also put the time and the grind in to find solutions to whatever you present to them. What you just said is incredibly valuable. So it’s great advice.
Bronson, are you ready for the best ever lightning round?
Bronson Hill: I’m ready. I’m ready to get lit on fire, or the lightning, or whatever you want to do here, Ash. I’m at your disposal.
Ash Patel: Alright. Bronson, what’s the best ever book you recently read? I’ve read quite a few books recently. There’s a book called Never Split the Difference, and basically, it’s a book about negotiating. It’s written by an FBI negotiator, his name is Chris Voss; excellent book, talks about how everything in life really is in negotiation and I think that it will help you both in your personal relationships as well as your real estate.
That was one, and there’s another one that’s called The Slight Edge, by a guy named Jeff Olson, who talks about the subtle changes, the little decisions, the habits that you do every single day that allow you over time to get exponentially better. Or sometimes if you make the wrong decisions, you get exponentially worse. If you don’t eat well, you don’t exercise, you don’t do certain things. So the slight edge is also a wonderful book.
Ash Patel: Bronson, what’s the best ever way you like to give back?
Bronson Hill: For me, my big “Why” is I have a big number of money that I want to resource to be able to get, but it’s not so that I can have a Mai Tai or yacht lifestyle, it’s basically saying, “I want to give to this cause, and the cause is fighting human trafficking.” There are 20-40 million human slaves currently in the world in 2021. And it continues to be a bigger and bigger and bigger problem. So that’s really the cause that I want to give and I do give to.
Ash Patel: That’s an incredible mission. Thank you for that. Bronson, tell us about your book and tell us how the Best Ever listeners can reach out to you.
Bronson Hill: Yeah, you can go to my website, https://bronsonequity.com/. And I do have a free ebook there, that’s The Single Best Investment Strategy During (And After) A Pandemic. It really talks about some of the advantages of multifamily investing, especially during and after a pandemic. There’s some really neat things happening right now that will help. Also, if you are active and you have some things that you’re looking for, I’d love to be a resource for you. If you’re interested in learning more about passive investing, we have a couple deals we’re working on right now that are really exciting. So I always love networking with both active and passive investors.
Ash Patel: Bronson, this was a great conversation. Thank you so much. And you know, one of the first things you mentioned was what changed your life is when you learned to give value to other people. And the theme of what we talked about today – I don’t know if you’ve noticed that or not, but everything you’ve done is giving value to other people, whether it’s partners, investors, syndicators, your audience. So a lot of great lessons in here.
Thank you so much for sharing that advice. Incredible. And Best Ever listeners, thank you for joining us, have a Best Ever day.
Bronson Hill: Thanks, Ash.
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