In today’s episode of Cash Flow Pro, we sit down with Jeff Davis, the Managing Partner at Bridgestone Capital. Jeff has been active in real estate since 2008 and is here to share how he scaled from single-family units and flipping homes to...
In today’s episode of Cash Flow Pro, we sit down with Jeff Davis, the Managing Partner at Bridgestone Capital. Jeff has been active in real estate since 2008 and is here to share how he scaled from single-family units and flipping homes to partnering with two large apartment syndications with over 500 units.
Bridgestone Capital helps supply chain professionals generate a passive income without having to deal with the volatility of the stock market. They understand that the growing demand for multi-family rental units is an excellent opportunity to reap the benefits of real estate investment through syndication.
In this episode, we discuss:
Make sure to tune in on this episode to find out more about scaling your business and how to reach out to new investors.
Find your flow,
Resources mentioned in this podcast:
Casey Brown 0:06
Hey there, and welcome to today's episode of cash flow Pro, your daily real estate investing podcast and YouTube channel. I am here today with Jeff Davis of Bridgestone capital. And prior to the show, we were talking and we've been kind of hitting around on what he's got going on. And the rays that he just oil is completing as we speak, and what that is tied to and so many different things that that could potentially help you. If you are a beginning capital raiser, and you're looking for ideas, it is imperative that you listen to what Jeff has to say, because he's been through it. He's done it, and he's succeeded. And now we want to hear your story. So Jeff, how are you today?
Unknown Speaker 0:57
I am good. I'm good. It's already been an active morning. Also, here on the Gulf Coast, and busy.
Casey Brown 1:04
That's great. That's great. We love activity because we don't want to when you're sitting still you're not making money and your investors aren't making money. So we want to keep everything pushing forward and moving up. So man, tell us a little bit about your background. I know prior to the show, you said that, you know you've got a you know, kind of some logistics and some some other stuff that that very systemized type businesses but I want to hear a little bit about like even prior to that, where did you come from? What did your What did your background look like? Yep.
Unknown Speaker 1:34
I grew up in New Orleans, Louisiana. So married in June of oh five and then Katrina hit, which brought us over to Houston, Texas. August of oh, five. So as newlyweds, we were running away from a hurricane. which put me on a path to knock on doors and find a job. Okay, I got into the logistics business man. I was I was doing data entry and learning the freight business. And that is a career that was really a blessing it provided for me and my new family. And I've been doing it ever since. So 17 years in the logistics business.
Casey Brown 2:18
Man. That's, that's awesome. Real
Unknown Speaker 2:21
good, then real good. And from there, I got into real estate. of 2000. And guess 2008 11. After we bought our second house, we bought a house moved in. And then we bought another house. I kept that first one. And we just we were renting it. And I got that taste of a rental check. And never
Casey Brown 2:54
mailbox money mailbox. Money. Never. I never looked back, man. Yeah, man. That's awesome. That's what a lot of people do. They get there. They're like, I don't I don't know what this is. What is this? And then they cashed that first check. And they're like, Wait a minute. I didn't actually have to exchange my time for this. And yes, sir.
Unknown Speaker 3:13
Yeah, bought on. You know, and I will tell you, not every story and not every experience with real estate was a great one. Sure. I've had some heartache. It was like, You always come out. I've pretty much always come out smelling like a rose with experience.
Casey Brown 3:33
Yep. Yep. Well, that's all thing a lot of people forget to, to somewhat monetize that, that in their minds the experience and say, you know, damn, I lost this or Damn, I lost that. But did you really? Or did you actually gain knowledge of, of how things are? And you know, so yeah, if you if you got education out of it, it was definitely worth something.
Unknown Speaker 4:01
Well, you got to take, you know, I'm big on accountability. Yep. And owning my mistakes. And, well, it's not real estates fault. It was something that I should have done differently. And I made this error and not make that error again.
Casey Brown 4:19
Yep, and mental note it. Yep, paperclip it to everything else and roll on and just know that the next time that shows a TED that you do want to go a different direction. So I've always said, you know, when I first started in real estate, it I remember telling myself the word account. The word account was was huge, whether that was accountability, whether that was accounting, or whether that was, you know, keeping accounts for customers and following up on those accounts. And so, I ever I always thought accountability was huge, especially when you're self employed or you're in the real estate business because you don't have somebody getting up Every day saying, Come on, let's go. You have to basically be that guy. And the person that gets up and comes on. So, yeah. So so oh eight? Is that what you said when you start first got started?
Unknown Speaker 5:14
Yeah, and I may correct on that. It was a little bit before I apologize for that. It was not before. Oh, wait is when I went to a class and learned and kind of had my my mind shift? Sure. And I give all credit to Dell Wamsley for that. I don't know if you're familiar who he is. But here in Houston, he runs a shop and so, but after it was actually 2012, when we when we did that? Gotcha. I don't know why I got my years mixed up. Gotcha. So that's when we asked when we bought the next house. We've done in the next, you know, 10 years. So we had that rental. I really learned some some huge benefits because I refinanced. Yeah. And between refinancing buying another rental and cash flowing there, and cashing more rental checks, selling that rental. I mean, that's essentially, you know, I took tax free money and made rental checks. Yeah. I mean, that's just
Casey Brown 6:30
tax free gains, for sure. I guess you did. 1031.
Unknown Speaker 6:35
No, I didn't, my taxes at the end. Okay. I had talked to a 1031 guy. And he actually advised me, he gave me advice, and I took it, because the specific circumstances surrounding the 1031 in my situation, okay. And his advice was, I'm gonna advise you to just eat it.
Casey Brown 7:03
That's, that's pretty honest advice when somebody that's dealing in 1030 ones tells you not to do a 1031. I mean, that's, that's definitely somebody listened to. And I think a lot of people forget that some of the circumstances that do surround like kind exchanges, and I've had people that have told me over the years, they're like, Hey, man, just pay the taxes, and then you get the, then you get the benefit, the full benefit of the money if you're if you're wanting to use that money for operating type needs, you know, if you if you don't nest because because there I've seen all kinds on the app, especially on the agricultural side, where people, some people are like, they're flipping a farm, and they're going to make good money on it. But they're like, Hey, I just didn't pay the taxes on the gains and let's move on. But then I've got the guy over here, who's also a client who, absolutely, he's got a 1031 15 something that he's gonna have to pay $15 in taxes on, he's gonna go through the 1031. And so, you know, it really comes down, there's, there's not, there's not a right way. It's not a one size fits all correct, it's got to benefit one way or the other. And sometimes again, if you're in a if you're if you're in a highly leveraged position, with maybe your operating money, that you're using the money to operate daily, then maybe it is beneficial to say, hey, I'll pay the 30 taxes, put the money towards your operating, bring your interest down, then you're paying less in whatever. So, again, yes, every scenario is different. And finding somebody that's honest about that, or that knows how to facilitate your specific needs at the time is huge.
Unknown Speaker 8:45
Yeah, and, and part of it was the era of taxes, being extremely with the era of taxes that we were about to go into. Sure. He was easy. Just consider that because all of his clients were saying, We're gonna bite it right now. Just gonna eat it right now. Right now, because it ain't getting any lower. Yep. Yeah.
Casey Brown 9:11
And, and that's the and that's the thing, and unfortunate and fortunately, interest rates didn't go up. So it's made, it's made things where maybe that was the writer right decision, or maybe it was the wrong depending on the time. But, you know, when interest rates were looking at, at going up, it's hard to say hey, yeah, let's do a 1031 and then be paying interest somewhere else. So it makes sense. But, so So tell us a little bit about this. This you we talked prior to the show about this raise that you just completing, I think you said it's gonna be complete today or tomorrow. Tell us a little bit about the how you came to, to kind of buddy up with somebody on that. And then what that's looked like going going forward. So I'll go ahead and take the mic on that.
Unknown Speaker 10:02
Yeah, I'll take the mic on that. One raise masters, I got into a syndication group to learn multifamily. It's a small kind of niche. Right. Super small but and partnering with and learning the multifamily thing last year because I could not scale, single family every time you were starting something new. Yep, doing flips and wholesaling is
Casey Brown 10:29
something else happens every time.
Unknown Speaker 10:34
Yeah, a lot of stories about that. And we had another baby. Oh, yeah. I have this. I have some cool pictures about starting this flip. And I'm inside a dumpster. And then I left there. Picked up my wife go to the hospital same day. So
Casey Brown 10:54
Unknown Speaker 10:58
crazy, crazy summer. Yeah. I just, you know, watching my friends. And they're scaling. And the time that I'm doing doing single family properties. Yep. Apartment complexes. And we have a good relationship. I watched and talked to him and said, this is a much more scalable business. And that's why I got into red Hunter Thompson's political learned about him. And this is the easiest path. And easy but raising the capital as a way to partner with syndicators and operators to multifamily. So joined raise masters, Hunter Thompson's group, talk with Adam for quite a while. And learning about the operation here. Really liked everything they had to say. And the group is some really knowledgeable people. Yeah. And so jumped on a couple phone calls with Rob. And he had mentioned he had a couple of deals coming and one of them, there would be an opportunity for me to have my first race, be a co GP and that that happened to be here in Houston. Because he only operates in Houston. And one out funding deadlines this week.
Casey Brown 12:26
Yeah, well, good. And you, you know you had now I'm a huge proponent of res masters myself, and I'm actually a student of res masters also. And so as my listeners are aware that, you know, when when Hunter teaches things, he's very matter of fact, he's very straightforward. He doesn't, he doesn't, he's wants to teach you from his experiences. And what he knows, and really just a knowledge base of things. And the thing I like about Hunter, too, is and I don't mean for this to be a huge rise Master's plug, but it's going to be because the thing that the thing that I like about Hunter, is that he basically takes an attitude of if I don't know what the answer to the question you're asking, I will go find out. And I will ask as many people as it takes until I get an answer. And so and and but but much of what he much of what he already knows is he knows much of what you're going to ask and so on. And of course, that was the same direction that we went, we took the stance of a fund to fund and have have since partnered with with a few different operators, for ours. And so what were the challenges when it came time for you to actually like, make the first phone call and say hey, will you send me 50 grand? Or hey, will you invest 50 grand, or 100 grand or whatever the case was? What tell us a little bit about like, how did that first phone call go? What were the butterflies and and maybe if the first phone call was was apparent or something along those lines, maybe go to the second one somebody? Let's talk about somebody that maybe you you didn't have a full on prior relationship with how did that conversation
Unknown Speaker 14:23
look? Yes, so I think it's more of a pride thing. Because my expectation was, hey, I'm in a commercial roll. body that I deal with, I already asked for money. Yep. And everybody that I asked for money from I have a very close relationships with and we millions of dollars and they know that I do real estate and we get talked about my deals. I show them pictures. Yep. And we have have dinner together. And in some cases, we talk kids and some of them have been to my house, this is going to be a very easy transition. Yep. That was not the case, was a difficult, more difficult transition than I had anticipated. And because now we're going from, and what I realized was ongoing from asking from them from a procurement manager, writing the check for their company that they work for them signing over. And while they know that I, personally do have some success with real estate, it's still a different dynamic. Sure. So I was probably definitely overconfident. not prepared for that. And I think I went in overconfidence.
Casey Brown 16:04
Well, that makes sense. And and I've dealt with that for to a certain degree. And it's hard for people to understand sometimes when you're dealing with somebody that's writing a check for their company, and they so freely sign their name and send them and pay bills, and this and the other. It's it is it's it's, it's it's a it's an it adds an entirely new layer of complexity. When you're like, Hey, man, can I have some of your personal money? Can I have some of your personal paycheck? Can I have not have, but can you invest some of your money? And so that makes perfect sense that one would think that, yeah, I'll just call these people. They're always writing checks. They're always doing this and the other, but that man, that makes perfect sense. And then, and then it's a little different when you start asking them for their piggy bank. Now, what what initial resistance did you have? And what was? What was the premise? Like, what was the premise behind why they were being resistant? Or were they just like, Man, I really don't know. Or, or what was the I just need? I need some more information, or what was that?
Unknown Speaker 17:21
A lot of, you know? Yeah, man, I'm definitely interested, I just need some more information need to go Yeah, I'm gonna need to research this. And then some of them, were just gung ho, I'm in. Yep. And I told the story last night. And I hope to use this to save other investors, if they had not run into this. I had two who were in two $100,000 investors that were in these were not customers, these were, I guess we'd call them friends who had already completed a divorce. But not completed. A, I guess you'd call it the financial settlement. Okay, that distribution of the divorce, so they just needed to confirm with the attorneys. Okay. And both of the attorneys said, this will really blow up the asset, Division of your divorce settlement, whatever that aspect is. So that was an expected. So I know moving forward, if I find out that somebody has not done with the asset, distribution of their divorce. I'm just going to tell them, Don't bother. Wait until everything is really settled with your divorce.
Casey Brown 18:47
Yeah. Because I mean, that's especially if they're if they're not fully legal, legally divorced, it's hard to add another asset to that makes sense. So, so so they were, there was two
Unknown Speaker 19:04
people like that to $100,000 investment. Yes.
Casey Brown 19:08
Wow. Wow. Wow. So so when you start that now, that's the that seems to be the did you put together a pro forma? Did you put together a pitch deck kind of scenario for the people that you were calling and saying, Hey, can you would you be willing to invest?
Unknown Speaker 19:24
Join the webinar, and do the whole thing. Yeah,
Casey Brown 19:27
gotcha. And then so so what was the idea behind more information if they had all of the stuff in front of them? What was do you think that maybe the more information maybe was a little bit of a cop out? Like maybe there was something else they didn't like or want?
Unknown Speaker 19:44
I believe that this was a cop out. Just uncomfortable because, you know, this is a change of mindset. It's
Casey Brown 19:55
yeah, and there's a lot of people that don't, because Because see the the thought process behind And these assets and the stuff in syndications are have been reserved for basically the the institutional investors and institutional lenders and institutional people that have always said, okay, hey, we're gonna go out there. And we're the only way to scale is through multifamily. So they've traditionally owned, you know, they've they've done their own portfolio. And now this is kind of down one notch, where they say, okay, hey, these accredited investors can buy these portions of these things. And the people are and again, you're right, it's a mindset, because they're like, what do you what do you mean by, by by share of what and then? So it makes perfect sense. And I think that I think that that's why it's so imperative to educate people. And part of was there a percentage of your webinar that was based around educating and bringing them along? Or was there was it all based around the investment itself,
Unknown Speaker 21:02
all about the investment, but my, you know, my emails are designed around the investment, or passive investing as an education and nerd? Sure. I just don't know that it is. It needs to be more effective. I need to improve on that. Yep. But I also think that the need to initial network that I've been going after is still learning that, except for the people that I talked to, and they were kind of, it wasn't an objection. It was a You mean, like Grant Cardone? At which point I said, Yes, yes, exactly like that. Yep. And then I knew we could have a meaningful discussion. In fact, my very first boss, she was, she was excited, right? She said, are you doing like Grant Cardone? And I said, Yeah, I mean, and we talked, and I mean, I get excited, because she says, Yeah, I've been doing this Grant Cardone thing. She says, I put a little bit of my commission every month. Yeah. So she's like, Yeah, I'm in, you know, my, to my next condition. I'll put it in.
Casey Brown 22:17
Well, and you know, it, let's be to be quite honest. You know, it might be new, a new concept, a lot of people but I mean, people have been raising money for 1000s of years. I mean, crowdfunding is not it's, it's only new, the term is the only thing that's new or newer. It's the fact that, you know, all of these businesses that you look at, have been funded by somebody somewhere outside, even if it's, even if they're a quote, unquote, private company. Yeah, they're or taken private, you know, they're still a crowd of people. It's just fewer people. And the fewer the people that have more money invested in each Does that make sense? And so, you know, just just for instance, and then that's the other thing people people talk about Warren Buffett, okay. Warren Buffett is, is for all intents and purposes, a fund of funds. And it took me a long time to realize that it took me a long time to realize that what he's done is he's created a layer. People invest with him because of because Berkshire is Berkshire, they invest with him, because he's Warren Buffett. And then he had he takes that money. And he has a certain set of standards that he has in place prior to purchasing such and such other companies with his investors funds. Then he turned around, of course, and monetize that in the form of a share a Class B class share. And so it all makes perfect sense when it comes around in that direction. And so, again, yeah, these terms are the only things that that are really new about this whole deal. The the, the form, or the idea of raising money or raising capital is, I guess, as old as humanity. So will tell us a little bit about what's so this this deal that you've done, that you're completing your eyes on. And you did a you did a webinar, How many webinars did you have to do prior to getting people really to start saying, hey, I'll invest with you?
Unknown Speaker 24:30
Well, I did. We did the one Rob. Rob hosted it, and I sent out a couple of different so what I did, I sent out the webinar invite I had pretty good attendance on that one webinar. I sent out the replay to my entire list. Man, I tracked everybody that clicked and I sent out a second replay to everybody who I saw click a couple 100. And so that's that's how I kind of sent that out.
Casey Brown 25:08
Gotcha. And how did how to how well did that go? How many of your so So you told me earlier you raised? I think you said you raised 500. And how many? How many different investors? Is that? 500? Does that 500 Represent?
Unknown Speaker 25:23
Is at five investors?
Casey Brown 25:27
Five investors. Okay, and and did?
Unknown Speaker 25:31
I'm not there yet. I have 300 in. Okay, I have four more people who are out to water.
Casey Brown 25:37
Gotcha. Gotcha. Okay. Cool. And then so the webinar was somewhat successful. Yes. You sent it to your list. Now, let's talk a little bit about where are you finding? Where are you finding people for your list? I mean, how was that? Are you just doing social media? Are you just doing how are you representing your company and what you're doing? So what
Unknown Speaker 26:02
I initially did was had my VA go to my LinkedIn contacts, okay. I have 1500. Okay. All my business, right? Yep. Do for sales. And she went to every single one. And with a with kind of a canned message individually, hey, I'm doing a newsletter. Based on buying apartments, would you like to kind of send it to you? Can I add it to my list? If they said, No. And I said, I don't want to be your friend anymore. I'm just kidding. But I was like, really? Wow, that's a good one. You thought I was serious. So we're approaching every single one that has been successful, right? If they say yes, she sends, you know, a follow up message of hey, look for my email, check your spam, and check out my website. Cool. Guys, one, she just finished that same process. On my Facebook, I'm not nearly as possible popular in social circles. I only have about 250 Facebook friends. Okay. What I'm doing now to improve my open rate, which is at 20%. However, I've learned that's pretty
Casey Brown 27:26
common, it presents pretty high.
Unknown Speaker 27:28
It's pretty high.
Casey Brown 27:29
But what I'm saying is actually like about four times, actually, I think the industry average is like 2%. No way. Yeah, I don't know the industry averages is two to 3%. Now, specific, opt in lists tend to tend to be higher, but I still think those are even 1011 12%. So you're Yeah, 20% is pretty high.
Unknown Speaker 27:53
Oh, good. Okay. Can you make me feel good? Yeah. 20%, open rate. What I'm going to do is she started this Friday, she's going back over the list of all the people who said yes, and saying, hey, thanks so much. You know, can you just double check your spam folder and make sure that you're receiving my, my newsletters and deals? And just to see, you know, because maybe, maybe we can take that up a little bit, because I know I'm going into spam. Sure. Sure. Yeah. Just want to
Casey Brown 28:28
add, I'll give my guy I'll give my god Jason right. A plug here. Well, Jason, Jason, yeah. He he set all of my automations up. And of course, I had to I had to go behind them not not, because they didn't do any because they didn't do it right or anything. I had to go behind them and then add my like, my personalized content to what they did. And he Jason has been on my podcast. I hope the listeners know how to reach out to him. If not, let us know. We'll be glad to be glad to hook you up. Jason's a good dude. But
Unknown Speaker 29:02
also vouch for Jason. Yeah. automations
Casey Brown 29:06
intentionally inspirational. And Jason's a good dude. So all right, well, listen, we're getting close to the end of our time here. I want to ask a couple of different questions. And these are these can be answered however you you see fit. There's no right or wrong answer other than I don't know. That's the only wrong answer to either question. First question is what is the best book that you have recently read or are reading or are planning to read that you know of
Unknown Speaker 29:36
fiction or nonfiction? Whatever,
Casey Brown 29:39
the best book what's the best book I have a lot of people that say hey, this book did more for me. With my business this book did more for me in real estate. This book did more for me personally, whatever the case is, what's the best book you've recently read? Or Oaktree?
Unknown Speaker 29:53
Yeah, well, I'll give you one of each. You know, we talked about accountability years ago, I read extreme In ownership, Jocko willing, you know, I read a lot of nonfiction. I think we all probably do read a lot of business books, but that book was hands down a fantastic, you know, talk about everything because we all can improve our situation. Absolutely. Probably how we communicated to somebody for for fiction. I'm a big fan of Harlan COVID, right. If you read four hour workweek, he says do your nonfiction in the day and then your fiction at night before you go to bed because it kind of turns your brain off. Yep. He's got some good suspense novels.
Casey Brown 30:39
Yep. Oh, yeah. I love my wife likes to thrillers and those kinds of things. I'm pretty much I pretty much stick to the nonfiction it seems like I need to it seems like I have to read books a paragraph at a time because when I lay down at night, I read one paragraph and then I fall asleep. So obviously, that's, yeah, yeah, yeah. Audible. So alright, so what is the what is the best trip that you have taken or vacation that you have taken or vacation? dream vacation that you hope to take? Any of them?
Unknown Speaker 31:09
Oh, over to the East Coast. We've never been to the West Coast, over driven West, up to ballsy. Virginia. Virginia, I forget the name a little town, but it's up in the Smoky Mountains. We did like a 10 day trip. And it was phenomenal.
Casey Brown 31:28
With kids or no kids.
Unknown Speaker 31:29
We got we got five kids, man. We can't leave them. Oh, I got you. Nobody will watch them, man. Yeah,
Casey Brown 31:37
I'm in the same boat. That's what I've got five there. We were at the baseball field till nine o'clock last night. So it was great. It's great. I love getting them up the next morning too. So
Unknown Speaker 31:48
Right? Yeah. About baseball dinners either at 410. Exactly. Right. That's exactly right. And we're out of the baseball phase. It's kind of I just texted my old my son's old baseball coach. I was like, man, is old baseball picture with my oldest.
Casey Brown 32:05
Yep. Yep. Some personal memories. And I feel like I'm gonna miss these days when, when it's it's the four o'clock dinners or the 10 o'clock dinners. I don't know, they say that. But But My oldest is moving on up. And the youngest is he's the one that was playing last night. So anyway, all right. So Jeff, tell the listeners if they've heard something they want to connect with? Or maybe they have, have some advice for you or want to get some advice from you? What is the best way for them to reach out and get in contact with you?
Unknown Speaker 32:34
Yeah, so my my site is Bridgestone invest.com. And just go to my site, you can put in your information little it'll get your information through my automation. So Bridgestone, invest.com
Casey Brown 32:49
Cool, man. Good deal. Well, hey, I want to thank you for taking the time to be with us today. I know the listeners can can pick through there and get some value out of what you said and especially if they're starting up and and are trying to nudge their way into this business. That's the your story was was one of a kind and hopefully they can get some value from that and maybe it'll help them on their journey. So Jeff, thanks again for being with us. And I hope everybody has a wonderful rest of the day. Awesome.
Transcribed by https://otter.ai