Why Smart Investors Are Buying Bank Notes Right Now

The Real Estate Investing Club

Join an active community of RE investors here: https://linktr.ee/gabepetersen  0:00 Introduction and Brad's Background  4:30 From Single Family Rentals to Commercial Real Estate  9:15 The Self Storage Business Model Deep Dive  16:30 Managing Occupancy in a Soft Market  19:20 Distressed Asset Opportunities and Note Buying Strategy  27:35 Quick Fire Round: Networking and Building Relationships  31:10 Biggest Lessons from the 2008 Downturn  35:00 How AI is Transforming Property Management Operations   HOW TO SCALE FROM RESIDENTIAL TO COMMERCIAL REAL ESTATE 🏢   In this episode, I sit down with Brad Andrus from Northbridge Commercial to discuss one of the most powerful scaling strategies in real estate investing. Brad shares how he went from managing 20 individual single-family rental properties to owning just 5 commercial tenants while dramatically increasing his cash flow and reducing management headaches. This transition story is something every residential investor needs to hear because it demonstrates the power of trading up through strategic 1031 exchanges and focusing on commercial assets like light industrial and self-storage facilities.   SELF STORAGE INVESTING IN TODAY'S MARKET 📦   We dive deep into the self-storage business model and why it's become one of Brad's primary focus areas. He explains the covered land play strategy that led him into his first storage facility and how he discovered the power of having hundreds of month-to-month tenants instead of long-term commercial leases. Brad shares his current approach to managing occupancy during the soft market we're experiencing right now, including the strategy of prioritizing physical occupancy over economic occupancy during the lease-up phase. This is critical information for anyone considering self-storage development or acquisitions in the current environment.   Want to learn more about our guest? Connect here: www.linkedin.com/in/brad-andrus   Want to learn more about the REI Club Podcast, how to invest with Gabe at Kaizen, or join our community of active real estate investors on Skool? Visit the podcast website at https://www.therealestateinvestingclub.com or click here: https://linktr.ee/gabepetersen  #CommercialRealEstate #SelfStorageInvesting #RealEstateInvesting #AIinRealEstate #DistressedAssets

Transcript

00:00all right we are back with another episode of the real estate investing club i hope you guys are

00:14having a great week wherever you are and whatever day it is for you should be a good one this is

00:20officially friday we always come at you from for on the fridays and we're back to it uh recording

00:25the episodes on friday so we're bringing that good friday energy to you um this is gonna be a good

00:30episode for all you guys out there who are interested in commercial like myself we got

00:34brad andrus with us on the show from north bridge commercial uh brad does development he uh he does

00:41property management and he focuses on light industrial self-storage with a little dash of

00:46medical office in there so it should be a good episode um he also runs a brokerage access realty

00:52group and he hosts a podcast called weeks ahead ai all about ai and how small businesses can use it

00:58so we're definitely going to be asking him a little bit on how uh how he recommends people implement ai

01:03in their business so brad i'm excited to jump into this thanks for hopping on absolutely looking forward

01:08to the discussion thanks for all right yeah i told you before we got on here we always start with

01:14stories uh we like to hear how people got to where they are so why don't you take us back to the

01:18beginning of your story in real estate and uh tell us how you got here all right well probably like a

01:24lot of people i mean my beginning really was the first first real estate adventure venture for me

01:29was purchasing my own home uh so a year or so out of college thought you know we're married was married

01:36kind of thought maybe be a good time to buy a house and anyway i remember i remember going through

01:41that transaction transaction working i was working at a community bank at the time and so i was working

01:45with one of our mortgage guys that worked at the bank and uh you know he'd get me approved we'd

01:51got in the house and contract he'd got me approved on the loan and uh i i i'm sitting there working

01:56one day at my office and i get a call from a lady uh she introduces herself hey this is kim with such

02:01and such title company and i was like yeah how can i help you she said well i'm calling to schedule

02:06your closing i'm like i don't know what you mean i'm working with phil over at the you know at the

02:11bank here and she's like no i know but i'm the title company and we do the i'm like i don't know

02:15what you're talking about let me talk to phil i'll get back to it so i had no idea what a title

02:20company was i didn't know what the process was you know but anyway bought that house and kind of felt

02:26like okay i feel pretty good maybe that's i really had no aspirations really beyond that but it wasn't

02:32six months later a buddy of mine came and said hey i think we can buy this old house and add on to it

02:39convert it into a duplex i'm like do you know how to do that he's like yeah i think i can i'm like

02:43all right i'll go get the loan i had i'd gotten one loan maybe i get another and so got that loan and

02:50he did all the work and and we rented out and it turned out great i was hooked from there on just

02:55hooked and so anyway i really started doing a lot of rent houses kind of you know from duplex a couple

03:01of duplexes and rent houses and about 10 year 10-ish years ago uh kind of through my lending

03:09background commercial real estate lending background kind of said you know what i think i want to shift

03:13everything over to commercial side and so sold all those rent houses and kind of really was fortunate

03:19to find one buyer probably left some money on the table but it allowed me to do a 1031 exchange out of

03:25all of those at one time into a couple of uh larger commercial properties and so that's kind of how

03:31i got got really my start as far as my direct ownership in commercial real estate nice i love it

03:38and this was all down in the dfw metroplex yeah yeah we're uh i'm in i'm north of dallas about 40 miles

03:46north of dallas in the denton area so denton county area yeah nice so it sounds like you had quite a good

03:52um footing when it comes to in you know individual single family rentals and that is usually how people

03:57start out and and kind of where they see their trajectory going is they're like you know we all

04:02live in houses that's what we understand and so they start buying houses and they they're like all

04:06right i'm gonna get 10 20 houses and then i'll retire um but once you get into real estate it's

04:12quickly a lot of people move over to commercial um and i always like to people like to ask people who did

04:17have success in the single family field and then move to commercial why did you make that transition

04:22what was it about the um you know commercial real estate that was different than owning the single

04:26family yeah i i you're right i had i had a plan once i kind of got hooked on it and was starting to

04:33acquire you know i've gotten up to 10 or 12 15 and i was like all right well there's no sense of

04:38stopping you know and i ended up coming i kind of told my brother well i remember telling my one of my

04:43brothers one day i was like i'm gonna i've got a i've got a payment pay it pay me every day plan

04:48he's like what does that mean i said well i'm gonna have 30 rent houses and somebody's gonna be paying

04:51me rent every single day for the rest of my life you know and i was like that you know it seemed like

04:56a pretty good plan at the time and really for the most part you know owning those those rent houses

05:02was good i mean i owned them most of most of them kind of one small town outside of uh the denton area

05:08and the you know demand was high supply was low and so i stayed full but you know it just got to

05:14be a lot of work dealing with you know not dealing but you know working with all those tenants all the

05:19little issues that would come up and the calls that would come and you know trying to manage those

05:23myself and i was like okay i'm either gonna have to flip these over to a real property management

05:28or again kind of having been exposed to the commercial side of things um through my through my

05:34professional uh background i was like you know i maybe i could trade 20 tenants for one or two

05:42what would that look like and how how would that simplify my life and so that was really kind of

05:47what got got the ball rolling for me and and it didn't end up being one or two i think that initial

05:52transition from 20 rent houses was probably uh four five tenants i guess five tenants is what i traded out

06:02uh four and so ended up being just a lot you know simpler uh management wise uh actually most of those

06:11tenants were on triple net leases that uh basically pushed all the expense uh you know expenses to the

06:18tenant for the most part and including property management and so you know at that point it was like

06:24really freed me up okay hire a property manager and really my tenants paying for it and so uh those were

06:30some of the big reasons i made that transition and and it and it was was a good transition for me

06:36nice so yeah it sounds like simplicity of operations you just wanted you wanted to replace the headache of

06:4120 you know managing 20 individual families or renters um and then replace it with you know businesses

06:48just a few of them and then obviously the scale there is a lot easier to scale from uh you know buying

06:54individual houses to to bigger properties um you mentioned triple net so it sounds like you you

06:59went into what what did your well those those were all yeah they were they were kind of what i call

07:06light industrial you know uh you know 20 well i guess 7,500 square foot was the smallest up to about

07:1425,000 square foot metal warehouse buildings you know little office mostly warehouse um uh kind of

07:21properties and so you know the the thing i love about those kind and there's other other type of

07:27commercial real estate that's similar but you know these are typically businesses small medium sometimes

07:32you get those large national tenants but uh small medium-sized businesses but they're they're just

07:38entrepreneurs operators they're out there hustling and doing their thing and when they have a problem

07:44they they deal with problems all day every day whatever business they're running and so when they have a

07:49problem with their real estate you know maybe their hvac or maybe there's a little plumbing issue

07:53they don't flip out i mean they just kind of take it in stride maybe they call you maybe they take care

07:59of it themselves you know and just kind of add it to hey hey sally take care of this as well while

08:04you're at it you know and so it it's it's very different from a residential renter

08:10how gabriel you still there yep yep okay somehow my little screen is is disappeared but uh it's very

08:19different from a residential renter that is you know calling me and just flipping out you know

08:26at 10 o'clock at night because there's a plumbing leak or or whatever and so um that that was really

08:32refreshing to kind of work start working with those kind of uh tenants yeah having businesses as um as

08:39the renter it's i mean it would be night and day in terms of the the accountability and the um i guess

08:45the agency that they they they execute over the property itself um yeah i still have i mean there's

08:52some downsides to it right i mean you you you know you trade you trade 20 tenants for four or five and

08:58and so one tenant moves out you have 20 one tenant moves out you you're now still 95 occupied so to

09:05speak whereas on the flip side you got four tenants one moves out you're you've lost 25 of your occupants

09:10so there's some trade-offs to it but uh for me over the last 10 or 12 years as i've really transitioned

09:16that route uh it's it's been more more positive than negative yeah yeah but uh industrial it sounds

09:23like is not where you stopped uh you moved on at that point you moved to self-storage um and you know

09:29everybody on the podcast knows that i love self-storage and we talk about it all the time um so i'm excited

09:34to hear why did you make that transition what what kind of brought your attention to self-storage

09:38well so then you know okay went from 20 tenants to four or five now how about this let me go to a

09:45thousand tenants you know or 800 tenants uh or 300 tenants whatever it might be uh we we had an

09:52opportunity um to buy our first um in this i'm referring to a little group that i'm now you know

09:59some of my partners in our investment group but we we had an opportunity to buy a storage facility kind

10:05in the down just on the outskirts of this down downtown area here in denton and really at the

10:10time we didn't know anything about storage but we knew as good real estate it's like this this piece

10:15of property someday it needs i mean it needs to be scraped these things be a you know a mixed use

10:19multi-family project it's not what we do but we recognize the value of kind of where that land is and

10:24so we'll just we just chalked it up as a covered land play you know there's a lady there in the office

10:30that she already kind of knows how to operate it we'll just keep her on staff and she can keep doing

10:35her thing and well we got in there and realized uh they seem to be a little low on their rent i wonder

10:41if we can't you know adjust the rents a little bit tweak tweak tweak and it's like every time that you

10:47made this adjustment barely anybody moved out and and starts to realize wow okay i my trade-off for

10:53having a bunch of month-to-month rent uh tenants and renters is that if the market justifies and

11:00demands and you know is strong enough that we can we can push those rents instead of you know a two

11:06or three four four percent annual increase like a normal commercial lease you know we could do five

11:12to ten maybe two or three times a year you know again depending on the market so uh that was pretty

11:18interesting especially where it was is that literally low uh they were really low on their rents

11:23so that was really in our first foray into it first exposure and said you know what this is a

11:29pretty good little business yes that in that is a good covered land play but we like this business

11:34and so from there we we we started scouring kind of trying to find some sites to build ground up and

11:39have successfully done that a number of times as well so uh great great little business but it is a

11:45business it's uh you know and when i when i was in banking i mean i kind of started to learn okay

11:50there are certain types of real estate that are not just real estate play they're businesses they're

11:57they're full-fledged operations associated with this real estate and self-storage is one of them

12:03uh you know car wash is another example you know and so there's several type of real estate real

12:08estate plays you can make that really also come with a full-fledged business and so you've got to be

12:13prepared for that i mean you can hire that out and do third-party management

12:17but even then you know you're you're as the owner you're kind of managing uh more than just an asset

12:24you're you're overseeing uh you know a business as well and so you got to really think about it in

12:30that way yeah yeah absolutely and that's that's something that i didn't when i got into self-storage

12:36it's something that i didn't quite understand um i mean somebody had told me but i didn't really

12:40understand you know on the ground kind of experience that it is a business and there you know you have a lot

12:46of transactions a lot of people coming and going um and so it's a lot different than the other asset

12:51that we own is uh mobile home parks and rv parks um it's a lot different than that that kind of

12:56real estate where people come they stay for months on end and uh there's not a lot of churn and so

13:00yeah self-storage is definitely different so do you guys uh manage all your self-storage facilities

13:05in-house are you guys vertically integrated or do you have a third party yeah we are now so when we

13:11when we started uh really when we started developing brand new and ground up and it was kind of the

13:17leasing aspect of it taking a facility like the first one we built was literally eight or 850 units

13:26and so it's like the that seemed pretty daunting we had experience managing like that first facility

13:34and then we had bought a couple more smaller ones and so but those were already you know 80 90 percent

13:40occupied and we're just managing rents managing tenants that kind of thing but it was a little

13:44daunting to say we've got zero tenants and we got to get this thing up to 85 90 percent occupancy right

13:50so we ended up hiring that out um and hired third-party managers and had really really good luck with that

13:57hired a group that owns a lot of their own facilities but does some third-party management in the dfw area

14:03so had a really good relationship with them uh for probably four or five years as we uh developed

14:10several others and about a year and a half ago we decided you know what let's take a hard look at

14:15bringing these in-house i think we've kind of gotten gotten a handle on the game you know how to do it

14:20even from a zero percent occupancy and so we've we have now brought all of all of them in-house

14:26nice um so lease up you guys it sounds like you've mastered that what is the strategy you guys use

14:32uh especially i mean new new construction you're taking it from zero to you're trying to hit that

14:37stabilize 85 90 occupancy um what is the strategy you guys use to get that occupancy

14:43well right now you know you probably can attest to this i mean this self-storage market's a little

14:50soft i mean storage relies on people moving around you know and so the housing market being soft right

14:57now you know is kind of keeping or you know interest people talk about they're locked into

15:01their interest rates they can't they can't move they can't justify selling their house and leaving

15:05their three percent interest rate and and so they're you know there's just not enough people moving around

15:11to really have a huge huge demand or strong enough demand uh for for the product right now so

15:18what what we're doing our strategy right now is just i mean i'm not saying we'll take any number

15:24but you know we're we're looking to get it full and so get it as full as possible and take kind of

15:30whatever rate get as aggressive on our rates as we need to be you know fortunately we we try and

15:35structure our deals where we've got enough equity on the front end that and enough you know interest

15:40only period in that development loan that we can you know take two or three you know even four

15:47years to kind of build up that uh that occupancy even if it's a blow you know they're talking about

15:54economic occupancy our economic occupancy is not where we'd like it but our physical occupancy is

16:00and we can rate manage that from there at you know in time and so that's been our strategy over the

16:07last couple years as things have softened up yeah i we've um we've also tried that and it's i feel

16:13like it's kind of a double-edged sword um you know lowering rates that much we we went like

16:18like 50 percent of market we we went pretty far down just to to boost occupancy and we found that

16:24we started attracting tenants that we didn't want in the facility yeah yeah and uh you know people

16:30people started living in their in their units you gotta kick them out and uh people will start

16:35breaking in um so how do you guys how do you guys manage that aspect of it of you know attracting

16:40the right clientele to start renting from you yeah you know i think we're trying to be in just

16:47just the right areas you know i mean for you know storage is an interesting business because it it's

16:54it's kind of been around long enough and it's kind of there's a little bit of a science to it and so

17:00it's really a three maybe five mile game right and so you know your tenants mostly are coming from

17:06about a three mile radius within about a three mile radius as you know and so we we just really

17:12try and focus on what where we're where we're putting it we might go into some areas that are

17:17a little green we but we know what growth is coming and the type of quality of growth that's coming and

17:23so we're just trying to be in areas that i'm not saying there's you know there's there's all kinds

17:29everywhere but you know if you can kind of target areas that for the most part the demographics

17:33are are good you know economic demographics are strong and uh you know and and i wouldn't say

17:40we've gotten quite as aggressive as you've said on on your on our rate cuts either so maybe that's

17:45part of it but it certainly happens and that happens in any facility or any property you have

17:50you're going to have some rotten tenants right and so you know management good strong management

17:54trying to underwrite that or take care of those problems just right off the bat as they come up

17:59you know management's key to any kind of uh real estate that you might own yeah i mean you mentioned

18:06uh location and that was a i um that was a lesson i learned the hard way right at the beginning i uh

18:12you know i was chasing i wanted to flip some storage facilities and so i bought yeah this facility

18:17it was just like you know it was dirt cheap in this area in hot springs arkansas um and i was like

18:24you know this is this is if i did this this would be like a 16 cap at the back end and so right i

18:30ended up buying it but i learned if you buy in the wrong spot you're going to get broken into

18:33every single day and it's it's a problem um yeah so we definitely have switched strategies since then

18:39yeah yeah um all right you've already mentioned a little bit about the market let's talk let's go

18:45one level deeper deeper into that uh you know there's a lot of uncertainty in the market in general

18:50right now um what do you see for the next year or two like what is your guys projections man we have

18:57been for for the last several years really thinking okay there's been a lot of talk of

19:02distress assets maybe we'll we'll find some opportunities in those and just you know loans

19:08maturing you hear about this in the news and and people talking about it it's like we're not seeing

19:12that not feeling that i mean yeah things are a little soft and people are are like you know

19:18developers are kind of having a little harder time filling up their space but i i don't know

19:23gave her something in the last and maybe it's this one particular asset class that we're we're starting

19:29to find some luck and and so boat and rv is another kind of type of storage facility right that a lot of

19:36times in our storage will add some rv and maybe some canopy you know some enclosed fully enclosed some

19:42canopy maybe a little bit open parking uh but you know 20 of our units are are that type of uh you

19:51know boat rv kind of facility or storage and so but we have also developed some just entire you know

19:59100 boat and rv facilities and those really you know that was kind of the thing to do out coming out of

20:05covid the demand was huge and so that has softened even more than just traditional storage uh we we

20:12still own and manage those um and again just just doing you know fighting tooth and nail you know at

20:18every turn on those but for the most part because we're doing them you know have good clean facilities

20:24we manage them tight we you know we're trying to keep the uptight uh the upkeep right you know we're

20:30staying full and so maybe not kind of quite at the rents we want but in the last six months we have

20:36started seeing opportunities to buy distressed assets and and this is one asset class in particular

20:43that we have identified that there's a lot of distress in at least in our area and so uh we've

20:51actually acquired uh the notes on four or five properties and kind of stepped into the bank shoes and

20:57if if we couldn't end up working out uh those loans you know have ended up foreclosing on those

21:03properties and so i i i don't know that this this will be our business model long term i i we're kind

21:10of enjoying it but you know like a lot of real estate uh small real estate groups we're opportunistic

21:16and so we're looking for kind of where where we can get some good returns and we we know how to own

21:22we know how to underwrite we know how to manage we know how to you know take care of

21:26properties and so where are those opportunities coming and i think we're seeing an opportunity

21:32for us anyway in the next year year and a half of probably playing in that realm of more distressed

21:39assets now if interest rates come down and they they are coming down as they continue to come down

21:45i think that they're it's certainly possible that people will will uh will kind of manage their way

21:52out of work their way out of those situations but you know it's i remember in banking we we used to

22:00say hey you know the market's about to turn and get really really rough uh at least the housing market

22:06when when you start to see all these new builders show up basically these guys that they're not

22:11builders they just hey i can make money building a house and i know how to call some contract some

22:17subcontractors and so they start building houses and you know you start to see a lot of that and

22:22it's like there's just too much hype too much you know going on here it's going to crumble and it kind

22:27of does well what i've seen in some of these asset classes there's just too much too much capital too

22:33many and i don't want to knock on anybody but i mean too many people that really didn't know what

22:38they're doing jumping into some of these spaces and so and i don't want to claim to be the

22:44the end all be all that we know everything but if you really aren't on top of your game

22:49well you can you can stumble pretty hard and so we're i mean i i hate to to take advantage of

22:56other people's misfortune but that's kind of what we're seeing some opportunities in so

23:00we're kind of excited about that really yeah um i mean commercial real estate is definitely no joke

23:06you definitely you need to have a game plan you need to be ready to build systems to uh to fix

23:12problems as they come up um one interesting thing that you mentioned there is that your guys are

23:17buying the notes and so you guys are are you buying like seller finance notes that people are

23:22have with their property and they're not able to to uh to um support them anymore or are you going

23:27directly to banks uh for for non-performing notes yeah these have been bank bank notes traditional bank

23:33community banks and you know in our little yeah you know that i still i would preach to anybody for

23:41for at least for my opinion real estate's a local game like i i just encourage people to just dig in

23:48dive into your you know 20 30 mile radius if it's a strong area and we're fortunate in our area that it

23:54is uh i don't even get outside of i mean there's plenty of opportunities in dallas or fort worth i don't

24:00even go down there hardly you know we're we're just kind of in our 20 30 mile little bubble here

24:05and get to know all the players get to know really what what makes you know what makes the real estate

24:12work in these this area get to know your your lender your bankers in the area your community bankers

24:17uh you know your your other developers your your property managers your title companies get to know

24:24these folks and as you kind of are successful in doing you know owning and managing real estate and

24:32have good relationships with all these people those calls start to kind of come your way hey brad i think

24:38there's you know i i'm a you know the community banker calls me hey i kind of got a little problem

24:43here what do you think you think you can help us you got any advice or maybe we just like to get rid

24:48of this one y'all y'all interested and so those now that's been upwards of 20 25 years of relationship

24:56buildings that's that's led to these kind of opportunities but i just don't think for us i

25:01don't think i'd have those same type opportunities if i was trying to play in 30 other markets you know

25:07it's just no way i could have those kind of relationships so that's what's worked for us yeah

25:12yeah and i've noticed um i mean we've done i think you're episode 610 so we've had a lot of

25:18guys on the show and uh i feel like people kind of fall into two camps they either focus locally so

25:25they focus on their market or they focus on an asset and they either get good at their market or

25:29they get good at yeah you know you name it um short-term rentals they get good at self-storage

25:34they get good at multifamily and uh you really do need to both you know both strategies work i mean

25:40people are out there crushing it with both strategies and so but you really need to focus in on one of

25:45them and you can't try to like do all of the different assets nationally um because you know

25:52if you don't have the you don't have the boots on the ground you don't have the the connections you

25:55don't have the experience uh and that's an easy way to to crash there that's a good observation and

26:01that makes it it really resonates with me pick pick yeah if you're gonna if you want to be in a bunch

26:06of places be very very very narrow in what you're doing uh if you if you're if you want to really

26:13cultivate the field around you you know yeah maybe you can diversify a little bit more yeah

26:18all right man well dang we've already passed we're way past the 20 minute mark we're at 26 so i do

26:23have to push us on i know it's all good though i do have to push us on to uh the quick question

26:29round there is a question in this section i wanted to talk about your uh your your focus on ai and we'll

26:34get to that um i'm still keeping it in this podcast because i want to know your opinion but we are

26:38jumping into the quick question round are you ready yes all right it starts with education it

26:45could be any form i need two recommendations uh one for general life wisdom and then one for real

26:50estate and this could be a book you've read a conference you've gone to a mentorship program

26:54you've been a part of anything like that okay well i think for for the just the net the networking

27:01is what i would i would you know recommend people get into and so if you're if there's a particular

27:06asset class that you're interested in there's there's some sort of uh you know network or

27:12association around that asset that's probably pretty local or somewhat local so that's where

27:19i would turn you know if you want to get into storage like the texas the texas self-storage

27:23association you know you just start attending those conferences and kind of networking with those

27:27people and and and even vendors like you go to the vendor fair and start talking to them and

27:31understand what you know they're trying to say something but you still you learn so much

27:35along the way so that's that's one of the places i point people nice so so conferences

27:42and then uh in general and networking um and you mentioned tssa um ssa has a has a conference they

27:48do it it's it's been bouncing around pretty much everywhere i was going to say they do it generally

27:52in uh in texas at least i've gone to a texas yeah there's been it's been here a lot yeah yeah

27:58all right uh let's move it on to the next question this is for the younger version of brad

28:03let's go back to that guy um let's say you know he was still working at the bank so many years ago

28:09just buying that first uh that first single family i said or duplex um with your buddy go back to him

28:14look him in the eye give him one piece of advice moving forward don't don't get too down on your

28:21failures man and because you're going to make some mistakes you're going to have some some failures and

28:26i i had i mean in that that downturn uh you know in 08 i i really stumbled and i had some some

28:34missteps and and uh you know but overall i can't i i can't appreciate those missteps and that that

28:41those failures enough because they really taught me a lot so i just say don't get too down on your

28:47mistakes i mean you got to learn from them you can't you don't want to repeat them but uh don't

28:51get too down it's a long game and if you keep fighting and grinding you know you can come out

28:56come out ahead yeah yeah absolutely keep moving forward and you are you're going to get hit in

29:01the face it's just going to happen everything like pretty much every deal something something

29:05goes wrong and so you just got to keep moving forward all right next question um this is kind of

29:11an easy question for you i think uh i know how you're going to answer it but i'm going to ask it

29:14anyways the united states is a big place there is a lot of opportunity out there give me the single

29:19metro you're most excited about investing in today yeah denton no yeah certainly this dfw area we love

29:30it so it's a strong great market to be in here yeah well and i mean i feel like you're you got you

29:36know luck is half of everything but the the the uh the i can't remember what highway it is from dfw up

29:43to denton you guys are having a huge yeah yeah yeah the all along that corridor you guys are crushing

29:49so that's definitely a good good area to be in it really is yeah all right and the next question

29:54is about finding deals um it all starts with getting in contact with the seller and pen in

29:59that purchase agreement so what is your favorite way to find new deals hmm like i said i i think my

30:07the building these relationships with other people and not not knowing again not knowing that

30:13deal it might take five years for a relationship to to turn into something and so i for me it's all

30:20about building relationships with other brokers uh with other developers bankers you know title

30:26company i mean we've got a great some great relationship with title companies that also

30:30from time to time call us and say hey you know you need to let me connect you with this guy he's trying

30:35to do something i want to sell something and so uh i it's for me it's all about the networking i mean

30:40you know i don't have a silver bullet and call you know if you're cold calling a seller and here's

30:45what to say for me it's it's about relationships and and hopefully somebody else can kind of that

30:50that seller trust can kind of make that warm introduction for me nice all right um speaking of

30:58things going wrong um let's talk about lessons learned not every deal we get into goes the way we expect

31:04it in fact as i mentioned pretty much every time something is going to go wrong and that's when we get to

31:10learn a lesson so give me a single deal that went a little bit sideways for you and then what was the

31:15lesson you pulled from it all right well i go back to that 08 i thought hey you know what

31:20i've been building some of these single family houses for myself rent houses that that i was i ended

31:27up i didn't tell this story but i ended up saying i i think i can gc these and it's kind of back to my

31:32point about hey not everybody's a gc but uh for my own rent house is like well i i'm having a hard time

31:38trying to buy some let me build some i can find these lots and build some and so that was working

31:42and then it's like some people were like hey can you build me a house too well sure i guess i can

31:47you know i know how to do it well that led me to you know there aren't enough lots out in this in

31:52this area so let me develop some lots and then i can build on those and and so anyway the the lot

31:58development game which a lot i know a lot of people are very successful in that business

32:02that's a dicey game and for me i got stung pretty hard there and and the primarily where i got stung

32:10was the fact that i i had i had debt on it so the biggest lesson i learned in that time and i've tried

32:16to apply for the rest of my career is i'm not i still like debt i mean you know leveraging using

32:22leverage and kind of maximize returns and uh you you just simply don't have enough cash to do

32:27everything you know the you know liquidity to have to do everything you want to do so i'm a believer

32:32in in leverage but for me it's only when i know that i've got a strong income source uh to offset that

32:41so i don't want i don't want debt on land raw land vacant land i don't want it on on i mean i might

32:47take it on a development deal where i know i've got a great plan for getting income coming in there

32:52but uh anyway that was the the big lesson learned there especially in particular don't take debt on

32:58raw land you know if i don't have a great way to repay it so yeah that makes uh that makes 100

33:04makes a lot of sense um you don't take debt on something that can't pay itself off so uh

33:09yeah i like it all right next question is the uh is the obverse of that it's talk about the highlight

33:16reels um sometimes you get into a deal and everything seems to go right and it kind of stands out in

33:20your mind it's one of your favorites so take us back to your favorite deal what was it and how did

33:24it go man i think i'm in it right now i'm just having a lot of fun these this has been a couple

33:30of these properties that we now own we acquired through foreclosure and again i i'm trying to

33:37glaze over the fact that somebody else was really suffering there and so i know that's a real part of

33:42it but for us it's really been enjoyable to work with the bank have again from a long-standing

33:49relationship that we initially said hey i think we might own the bank says we might own these could

33:54you manage them and i'm like do you really want to own them even for a short time no we'd really just

33:59rather get out of this okay can we talk about buying the note and so the negotiation of that

34:04that then led to trying to work it out with the borrower that then led to you know us being again as

34:10the lender going in foreclosing and now we own this thing that it's not through a traditional sale

34:16where the the seller is necessarily necessarily cooperative and sending all their files over you

34:22know this is a a foreclosure distress sale and so uh you're having to work through all those those

34:27kind of issues and then coming out on the other side of that we've sold a couple of those and and

34:33have been very successful in doing so so that those have been really fun nice all right okay so we're on

34:40to the new question in the quick question round and this one is about ai i have been uh i've been a big

34:45proponent of it recently well as long as i've uh i've been involved i've been i understood the impact

34:50it's been having or it could have on a business and i've been trying to put it everywhere i can

34:54responsibly do so um i know you got a podcast about ai so tell us how have you been implementing

35:00it in your business and what are some recommendations you guys or you can give people who want to uh start

35:05themselves yeah well so certainly love for any of your listeners to check us out weeks ahead ai uh

35:13all the streaming platforms on that podcast but for us one of the the thing is that we're finding is

35:20like hey let's just find some of those tasks that are really they're repeatable they're they're

35:28they're monotonous uh you know they don't take a lot of you know necessarily intelligence to handle

35:34but they're kind of you know something that's got to get done right identify that i love we love the

35:40plot i don't know if you're familiar with the plot but plot is basically it's a recording device that

35:45um you know it's an ai recording device you see them now in any zoom call you jump in somebody's got

35:51one on automatically jumping in but this is a separate device and i would just encourage people

35:56to check out that tool get it start talking to it just kind of talk through your day or your week

36:02and hey here's some things i deal with that i i they're so annoying i have to always do this and

36:08it tastes takes more time than i think i should be dedicating to it and as you describe it and then

36:13you let ai kind of give you a roadmap for how you could solve that there's some real gold there and

36:19then eventually from that we we're what we really believe in strongly is is building agents you know

36:26specific agents to handle specific tools or tasks i should say and so i'll give you one quick example

36:32gabriel we built an agent that analyzes our monthly uh financial reports that we property reports that

36:39we give to so we manage upwards 80 80 properties two-thirds of that's probably third party and so

36:46every month we send out our monthly property management report that's 40 50 pages i mean it's got a lot of

36:53detail in there and we were getting kind of having this bottleneck getting those out to our clients

36:59on a regular you know monthly basis in the timing that we wanted to and a large a large part of that

37:06was not just the compiling but the reviewing a final review did we have everything right is it or is it even

37:13organized do we have the right name on this thing and then yeah are there any variances in the uh the budget

37:18versus actual that we need to point out or we can speak to when we send this to and so we build an

37:24agent that just reviews hey before we finalize this and send it out review this report for these 10

37:31things and we've given it 10 very specific things to look for we throw it in there it does that

37:36analysis and now rather i mean it's taking our senior property manager it she was spending you know two

37:43days on these reports getting them out she now spends maybe two hours and so it's just things

37:49like that and so finding those whatever it may be in your business that that's kind of repeatable but

37:55monotonous and time-consuming and uh like what how can we train an agent to take care of that work for

38:01yeah yeah absolutely i mean even that my podcast uh you know it it went from taking the vas like 10

38:10hours per episode or per per week to get everything you know create the thumbnail get the description

38:16for youtube all that stuff took them a ton of time to do it every single week and now we've implemented

38:21ai at every step and it takes maybe 30 minutes it's crazy how much it it like cuts it down so yeah i love

38:27to hear that and that um plot is that the thing that you put it on it like it's like a lapel pin

38:32they do have a lapel pendant kind of thing i don't use that the one i use and i unfortunately don't

38:38have with me i'd show you but it just actually just it there's a magnet just clips right on the

38:42back of your phone and so you can use it while you're you're having phone calls or you can just

38:48have it out i mean it'll literally record phone calls for you but it you know also just take it off

38:53and just set it down there in the desk while you're meeting with somebody and so and we we've

38:58we've used it during lunch meetings even when we're when we're discussing something and and lots of

39:03noise around but it picks it up deciphers it and sends you kind of the that you can either get the

39:09transcript from it or the summary from that meeting so very interesting yeah i've been tempted to get

39:14into those i haven't done it yet but maybe get applaud get applaud gabriel i highly recommend it

39:19this will be the straw that uh that makes me actually do it all right that is the last question

39:25well actually there is one more question and this is for the listeners you've given us a lot to think

39:30about i'm sure people want to reach out get in contact with you uh this is a two-parter where can

39:34they find you and then what can they expect when they reach out all right yeah just just look for

39:39me brad andrus on linkedin at north bridge uh commercial real estate there that's probably the best

39:45north bridge inc is our website uh but you know i'm not not regularly posting on linkedin but i'm i'm

39:53fairly active in there and i think you can kind of find some posts that that uh you know you might be

39:58able to pull some meat from but uh you know that that weeks ahead podcast weeks ahead ai podcast i i think

40:05that's probably a great place for people to to tune in and get just get get your mind thinking about and

40:12again we're real estate centric focus but we're talking to other business owners and operators

40:16just start getting your mind open to what the possibilities are using ai and it's not going to

40:23we're not looking to replace all our employees we're just trying to augment and you know support

40:28and and like you say save some time and and be more productive so yep absolutely so i will put those

40:36links in the show notes if you guys want to reach out to brad um get involved maybe listen to his

40:40podcast all you got to do is click that little more in the description it's going to pull down

40:44that full description and in there you can find his links cool all right man that wraps it up thank

40:51you very much for hopping on the show yeah thanks for having me i've enjoyed it absolutely for everybody

40:56who's with us today thank you guys for showing up you are the reason we do this so if you guys have

41:00any questions reach out to me gabe with the real estate investing club.com if you guys want to

41:05support the show just leave us a review a comment anything like that other than that i hope you guys have

41:09a great week keep rocking real estate and i look forward to seeing you on the next episode

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