233: Investing in Real Estate and Private Businesses for Financial Freedom
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In this episode of The Richer Geek, we welcome back Bronson Hill, founder of Bronson Equity, who has now raised over $50 million for real estate investments and is a general partner in deals worth over $150 million.
Bronson shares how he left a high-paying career in medical device sales to gain more control over his time through real estate investing. We talk about passive income, how investment strategies are shifting with the economy, and what true freedom really means beyond just money.
In this episode, we chat about…
Real Estate and Economic Shifts: Bronson discusses how rising debt costs and inflation are impacting real estate cash flow, despite strong housing demand and slower rent growth.
Diversifying Beyond Real Estate: His company now invests in private businesses, oil and gas, and real estate debt funds to improve cash flow and tax benefits.
Passive Investing Explained: Passive investing isn’t hands-off—it requires upfront due diligence on teams and deals. It's ideal for professionals with more capital than time.
Buying High-Cash-Flow Businesses: Bronson looks for scalable businesses with $1M–$4M in annual cash flow, often overlooked by larger firms. He shares an example of a nearly acquired e-commerce company with $5M in yearly profit.
Own Everything, Operate Nothing: Bronson focuses on owning equity while partnering with operators, allowing him to step away from day-to-day management and focus on investor relations.
Key Takeaways:
Time Freedom Over Financial Freedom: For Bronson, true freedom is about having control over your time, not just being financially well-off.
Networking and Education are Crucial: Bronson highlights the quote, "You'll be the same person five years from now except for the books you read and the people that you meet". He believes that education and networking are the "rocket fuel" for both passive and active investors.
The "Cigar Butt" vs. "Wonderful Business" Approach: Initially, Bronson studied Warren Buffett's "cigar butt" strategy of buying struggling businesses with one puff left. However, he now prefers Buffett's later approach of buying "a great business at a fair price".
Bigger Can Be Better: Bronson explains that larger deals, whether in real estate or business, can offer advantages like better teams, superior loan terms (such as nonrecourse debt), and a more attractive exit for private equity buyers.
Self-Made Millionaires are the Norm: A Fidelity Investments study shows that 86% of millionaires are self-made, demonstrating that wealth-building skills are learnable and not solely dependent on being born into money.
The Importance of a Strong Network: Jim Rohn's quote, "You're the average of the five people that you spend the most time with," underscores the need to intentionally seek out rooms and masterminds where you can surround yourself with people who are ahead of you and provide new insights.
Resources from Bronson
**Get a free copy of Bronson’s eBook “How To Use Inflation To Your Advantage” by texting the word “Inflation” to 33777
Resources from Mike and Nichole
+ Read the transcript
Mike: Hey, everybody. Welcome back to another episode of The Richer Geek. We have Bronson Hill back. The last time we talked to him was probably last summer, June or July 2024, I think. We're gonna see what's new in the world of real estate and see if he's shifting his strategies based on the economy. He's the founder, CEO of Bronson Equity. He's raised over $20 million for real estate investments. He's a general partner of over $150 million worth of real estate around the US. He's one of my heroes. Bronson Hill. How are you doing? Bronson: Good, Mike. Good to see you. It's always nice to talk to a good bald brother, The Richer Geek. If I can hang out with you, I'll just be a little richer and a little wiser, so I'm excited to chat today. Mike: Well, I think it'll be both ways. Someone just made fun of our logo with Richer Geek and they were like going, "Hey, that logo, the guy has hair." And I'm like, "Oh." Bronson: That's saying we feel good about ourselves. Right? God made only so many perfect heads and he covered the rest with hair. So we can, we feel good about ourselves that way, apparently. Mike: There you go. For those that might not have heard your first podcast, tell us a little bit about yourself and how you got started. Bronson: Some updates to my bio. I actually raised over $50 million now. So it's gone up the last couple years here. Yeah, so I started, I was a well-paid sales professional. I worked in the medical field, so I did medical device sales. So I'd go into surgery and I'd sell heart surgical equipment. It was very interesting and intellectually it got paid over $200,000 a year. There were a lot of things that were great about it, but the thing I did not have is I didn't have control over my time. And a lot of people will say, "I want financial freedom." But really, for me it was about time freedom, right? So a lot of people are just that, and professionals, they just can't take time off. They don't. I worked with a couple physicians, they made over $2 million a year each, but they couldn't take a vacation or when they were working it was like 60 to 80 hours a week. And it just, to me, just felt like that is not freedom, right? So it's the idea of like, what does freedom really look like? It is freedom of time and to be able to cover your rat race and your other financial freedom numbers so that you can live the life you want. I started to learn about real estate, did some single family, I realized that wasn't getting me to my goals as quickly as I wanted. Learned about raising capital, found a partner and a lot of things happened in between, but started raising capital for real estate. We basically help people get cash flow appreciation and tax benefits. And so we've shifted a bit from real estate only. We're doing a lot of buying from private businesses, which have very high cash flow. We're also doing oil and gas deals and provide ordinary income tax reduction, which is incredible. And also you mentioned the idea of debt funds, real estate debt funds. So there's different ways, you know, it's like as an investor. I think it's just so good to have a nimble approach where you not just be married to one thing. Like I only do flipping, or I only do multi-family real estate as being, you know, "Hey, I can do any asset anywhere if it meets my goals." And it's actually not that huge of a jump to jump from being a one type of investor to, to come into something else. So that's the advantage of being a passive I investor, you have choices. Mike: Yeah. Talking about passive investors, people are sitting there right now, it's like, "Oh my God, stock market, it loses a thousand points. It gains a thousand points." I'm talking to people's, well there it goes my retirement left. Now work another five years. And I'm thinking to myself, "You don't have to if you did some passive investing." So talk to us a little bit about, what your investors are looking for now, what has changed over the past year or so since we've talked, the economy, interest rates, expenses, where have you shifted your thought process? Bronson: We took a break from doing real estate multifamily until about last year. We started getting a little bit more, and then we've kind of like, not that we're not doing it, we just haven't been pursuing it as much. We talked about this, before we started recording, it's just that it's hard to have real estate deals. A lot of them make sense from an equity or a traditional investing standpoint. Meaning, you mentioned whether it's operating a hotel or it's a multifamily apartment. What used to have pretty good cash flow. It was just like almost from day one there was cash flow available. Now it's like, well, there's maybe a little bit, but it's all dependent on the value add. And the cash flow numbers are way lower and there's just more risk involved. They're solid investments because people are gonna need more housing. So it's kind of this weird dis equilibrium time where we have this incredible demand for this asset. We're not really building a lot more. But yet we're not seeing rents rise like we would think. Things spike and they go up and they go down. And so I think because of the debt cost, because of inflation, because of a lot of the tariffs, a lot of uncertainty around these things, it just caused the cost to go up quite a bit. And yet, we're still not seeing rents rise, kind of the equivalent level. So for that reason, I wrote my book, Fire Yourself, which is, in the background here , how to replace your working income with passive income in three years or less. It became an Amazon bestseller, but really the goal of the book was really to take someone who's trying to solve a problem. So people come to invest because they're looking for cash flow. Cash flow is really what allows you to leave a job to retire and actually fire yourself and there's also appreciation or tax benefits, but the biggest one, I think the most powerful one is cash flow. So we've looked into other things where we've been buying businesses. We had a large business deal we're planning to do, and the tariff situation with China affected that. So we decided to put that on hold. So it was a ton of work. It was some money out, out of pocket, whatever. Sun is the best deal, is the deal you did not do so we'll continue to look for other business opportunities, oil and gas, other projects, like debt funds that really provide consistent cash flow and safety. For a lot of investors they're like, "Well, where'd I put my money? Stock market's volatile, cash, you're losing money." Everything costs 50% to 100% more than it did five years ago. They can't say inflation is. 3% or 5%. We think it's just substantially higher so I think people are starting to become aware of this, that I've gotta do something different than what I've done before. And if I've only done one thing, I've gotta kind of learn some other avenues that could be a little bit better. So we've been continuing to do that in our business as well. Mike: It is very important for us GPs to start thinking. It's like you, you get in a rut. It's like, " I only do hotels, I only do multifamily because that's what I know. That's what I'm good at." But when you look at, for instance, one of my hotels, first quarter of this year, we've done $85,000 more in expenses, same period last year. Bronson: Wow. Mike: And nothing's changed. Our ADR, we're making more, but everything else is, has gone up so much. Free breakfast, free this and free that. And it's just like, "Oh my, God." The expenses are a real deal. Bronson: Yeah. Mike: Compound that with interest rates and it makes you pause and especially as an investor, they're starting to see these things. What kind of businesses are you guys looking at that you can say it's like, well, besides the tariffs and things like that, what are you seeing the type of business that you guys are going after that may be a little more recession proof? Might be a little more cash flow. Bronson: Yeah. Well, the interesting thing of buying businesses has become a little more popular. There's people like Cody Sanchez and other people that are saying, you could go buy a boring business and things like this. And from a cash flow perspective, I started looking at it from a cap rate perspective. So a lot of your investors are familiar with cap rates. If you own a property in cash, what percentage would you get per year in cash flow? Typically, I know it's higher in, what your genre is in hotels, but 5%, 6%, 7% kind of pretty normal, hopefully for apartments, maybe 4% depending on what market you're in. But these businesses we're seeing, they're selling for like three times profit, which is like a 35% cap rate. So obviously there are risks there. You have to operate them. And we're not talking. There's kind of a sweet spot, a small business that generates a million dollars in cashflow or less is kind of one you feel. It's kind of just a very small mom and pop thing. If you get over $3 or $4 million in cashflow per year, in profit per year, then it's the larger private equity groups they're doing. But there's kinda that sweet spot in between where you're paying, 3X earnings. There's many different types of businesses, but we've liked e-commerce in general. There's US e-commerce and there's e-commerce where they ship, it would be products from overseas. So we've liked those because you'll have one business we were looking at. This is the one we almost closed on. It was $27 million a year in sales, no sales on Amazon. It was a physical products, Dropship from overseas. And there were only three full-time employees, only three full-time employees. It was the suppliers were third party. It was basically just getting the sales and supplying the orders. And this company generated about $5 million per year in cash flow, right? And this was a company that we were able to buy for $13 million out of pocket. And then there's a little bit of an earn out for the owners. But when you see numbers like that, that's really attractive. So we like the scalability of that as well. And Alex Hormozi, I heard him talking about this as well, is that if you have a company that generates $8 or $10 million in earnings, so you basically doubled or tripled the size of the business, it'll sell for 10X to 12X earnings, right? So you get this huge multiple on just simply having a larger business. And why is that? It's because private equity wants to buy more cash flow. They wanna buy larger things. They don't wanna deal with a $2-$3 million cash flow type business. They wanna deal with $10 million. It is amazing that some people will pull businesses together, they'll buy a plumbing business, an electrician business. And also by, they're kind of some of the service businesses that can package them together. Those are things that people do, but I think it, it just depends on what you wanna do. We've really stayed away from things that are very high labor things, restaurants, other things like that where it's just big time labor. But things that are more scalable, that are a little less, also priced very attractively we really liked. Mike: Yeah, that makes a lot of sense. If you can make a gizmo or a gadget and it doesn't take, they've already spent the money on the machinery, so you don't have to do that. And it just takes a robot or a couple people to take it off the assembly line, and then you just have to, so what's the goal is to build up the marketing, do you just go out and say, hey, you know what? They're not even online, or they're not even doing exactly. Bronson: Yeah, that's great. My understand goal as an investor, and again, people say, well, how can you do multifamily? You're doing oil and gas and you're doing car washes, and you're doing like, well, my understanded goal, Mike, is to own everything and operate nothing. So that's what we wanna, like, invest my money and not have to do, obviously, and in my business, like we do, we communicate with investors, we educate. I have calls, we have our mastermind wheels, but like I don't wanna be the one to operate. So I've got a partner who's really great in e-commerce, who's really great in email marketing. And so for example, a couple value ads we saw in this business that we were looking at, we saw this business had an email list of 3 million people. And they weren't really doing any affiliate marketing, they weren't doing any sort of other types of. There are ways and this is just one example where you can take that list of emails and maybe, you know, 2 million of those are active emails. Some aren't as active, but you'll say, let's create a newsletter. And there are groups that do this. They'll create a newsletter around those, this is in the beauty space around those beauty products. They'll say, "Hey, here's some things you might wanna know, whatever." And then they'll create links that have all affiliate products that are not competing, but they're kind of adjacent to, and they'll sell on that. And you'll find that you can generate quite a bit of revenue by putting things in there. So we saw basically potentially a 10% to 30% increase in profit, year one. Just from simply implementing something like this. And there are other things like that in the business, but it's the same with real estate. It's so what's the value add? What's the thing that you can bring that maybe somebody else isn't even thinking of? And so when you have, you know, different minds, and so my business partner and I, when we think about, okay, how are we gonna do this? What can we do here? What, what can happen here? We're always thinking about what we can do to create more upside? Because it's great to maintain a business, but really businesses are kind of growing or they're dying. It's just thinking about how we could grow this? What's the value that we bring to it? And it's the same that we look at with probably hotels and apartments. Do we have the skills? Do we have the partners involved in the deal? That can really help us to take it to the next level. But, I think that there's different things that a lot of times people don't even see that you show up with your skillset and you're like, "aha!" Like I see something that we can actually pay more for this business and make way more money because we see the upside here. Mike: Do you try to go after the dying business, or do you want it to be, this is really performing. Yeah, I can go in and bump it up. Bronson: This is a good question. So Warren Buffett is somebody I've studied for a long time. He just recently announced he's retiring after, at age of 94 or whatever he has, he retired from, I know he's gonna stop tap dancing to work, but he would talk about when he first started investing, he did this value investing, which is, he would go after the, he call 'em cigar butt businesses. So it'd be like one puff left in the cigar. But he'd do all this and he'd try to, and over time he adapted to say, let's just try to buy a great business at a fair price, if we can find a wonderful business at a fair price. So I think that really exists in the business world too. We had actually a deal that we looked at, we made an offer on, the offer was accepted. This was, within the last 12 months. And we decided to not move forward on it. And then the person who bought it just absolutely got their butt kicked. It wasn't like we were just geniuses, we kind of smelled something. "Ah, something doesn't quite seem right here." Almost from day one, this guy took it over. It's like the thing just tanks. So now the same business that he bought for $3.5 million. It's an e-commerce, US e-commerce business. He basically is selling it for $1.2 million. This is less than 12 months later. So we looked at it and this was actually a call we had this week, and our partner was like, "Yeah, this thing just looks like a total crap show here." Like we could do this, but for the size, for the effort, for the amount of work. It's like, I would rather, one nice thing is when you have scale, same with real estate, when you have more scale, you can have better teams. Like the other business that we almost closed on, it was like, all we had to do is basically get the number of sale, like really work on the marketing engine and grow that. And we had some ways to do that. And then also just make sure that we can fulfill, or we have a third party group thing, help fulfill the product. If you're having to do all that in-house, which this other company did, it was like they're fulfilling their marketing. It requires a ton of work and it's a smaller business. So actually that smaller business would probably be way more work than the larger business just because of the teams that are in place in the larger ones. So I think sometimes bigger is better and actually you get better loan terms. There's like nonrecourse debt and there's things that you get that are much better. Same with real estate deals, the bigger the deal, they say if you can't pay your mortgage, right? For a real estate place you live, it's $300,000, $500,000 loan. It's your problem. But if you have a $10 million loan or $30 million loan, you can't pay. Whose problem is it? It's the bank's problem, right? So sometimes bigger, it can be better for a lot of reasons. Mike: Well, absolutely. Banks don't want the business. They're not landlords, they're not operators. So I can see that, if it gets their attention, they're more more than, you know, willing to work with you a little bit more instead of just writing off $600,000 or $700,000 Bronson: Yeah. Mike: That's very interesting. So let's dive into Fire Yourself, the book a little bit. What are people gonna find? We've talked about how they can go from passive income and try to get enough, but how do they start doing that? What's in the book that will really stand out for someone that skims through it. Bronson: Yeah, so I really wrote this book. I've had over 2,500 calls now with high net worth investors, average net worth of $2 million, some as much as $10, $20, $50 + million. I've just had so many conversations where people just like, how do I get started? What should I do? I know I should be doing real estate. I've got a little bit of money. I've got a million, $2 million. I've got some money for my retirement. I've bought a rental house, or two months rent. But like, this doesn't seem like it's working for me. And this idea of passive income. People say, "Oh, it's buying rental houses, or it's doing an online business, or it's online stock trading." And none of those things are actually passive income. Those are not passive because if you own, like, and this is where I was at, I own four rental houses, but I realized if I couldn't 10X the strategy very quickly, what I was doing without creating another job for myself, it wasn't actually passive income, right? So if I couldn't go from four rental houses to 40 rental houses almost overnight. Because of all the work it would take, you know, to acquire, to get them under contract, to fix them up, to get them ready. Even if I wasn't the one managing, it was a ton of work. And so I realized there's a big step to be able to do that. So I think for a lot of people, just realizing that passive investing, actually involves, the work is on the front end. It's not, nothing's fully passive, but you're doing the work on vetting a team, like a great group like yours that does hotels and other types of investments. And you'll say, well, who is this group? And there's a whole funnel of how you kind of vet both, I start with the market. What's the specific markets? So for example, hotels, what's the market for hotels in this specific market and what are the pros and cons? Then the operator, who is the operator of this, rinses and repeats what they've done before? Or do our values align? A lot of things kind of around who the operator really is and how it relates to this deal. And then you come down to actually what the deal is. Does the deal actually help you with your specific goals? Now if your goal is you do want to fire yourself, then you need to start working on your passive income, which can mean cash flow. It's not just making money someday. It's making money now, right? It's making money this month, this quarter. I think in the book, it just kind of really helps people to clarify what their goals are and then, if you've done a little bit of real estate, you've done some single family, multifamily, you've done some different things, how do I get into other asset classes? There's a system in there and how you evaluate any deal of any asset class. And it's just kinda the same model that I just mentioned about tar, starting with the market, whether it's, car washes or you know, businesses or whatever it is. And then kind of working down to what the actual deal is through the operator. Mike: Do you recommend, I pick up your book, I read it and I don't even know how to begin. He's talking about how I need to be this passive income guy and I need to be the general partner. I need to just get a JV agreement going, or family and friends. Maybe this is part of your mastermind, but how do you get them to actually understand? Because someone's gonna read your book and say, "Oh, okay, you know what? I'm gonna go to a legal website. Download a syndication paperwork, LoP, I have no idea what's in it, and I'm gonna just start raising money." Bronson: Yeah. How do you do it? There's really a couple options. I think when people start, I think it's really, do you want to be more active or do you wanna be more passive? And that's the question, an active investor is somebody who's raising money or who's doing deals, who's finding them, who's operating them, or wholesaling, flipping. All those things are very active. What I do is active, even though I talk about passive investing, I'm more active. I'm also a passive investor, which basically, passive investing is designed for, and I think this is kind of a good way to look at it, is, do I have more money than I have time? If I have a decent net worth, for example, I have a doctor who has a net worth of $5 million, he's only on stocks and bonds, well that's a great candidate for somebody to get involved in passive investing. For somebody, the $5 million net worth to put $50K or $100K in a deal is not the same as somebody who's got a $300,000 net worth, right? It's a totally different kind of ball game. So the person with $300,000 net worth, they may have more time than they have money, or maybe they're busy. Like for me, I was busy. I didn't have a big net worth, but I made the time. I said, I'm gonna make the time to go learn and learn this and scale it because the skill itself is so valuable that I can learn, I can grow. I was able to 20X my net worth 25X my net worth to multiple seven figures within four years, right? So it is possible, but it depends on what you want and what you want to do. The biggest thing I would say for most people, there's like two things. I talk about this in one of the chapters, I think it's chapter nine. It's what's the rocket fuel that gets you from here to there, whether you're a passive or an active investor. It's really two things. And they sound very simple, but they're incredibly profound. And there's a quote that I love that talks about this, but it says, "You'll be the same person, five years from now, except for the books you read and the people that you meet." The books you read and the people that you meet. So what is that? That's education and that's networking, right? So like, it doesn't have to look like books. It doesn't look like just, "Hey, I just met people at a thing." But it's like getting out to events, getting out to conferences, joining masterminds, getting in a place where you can. I went on a $7,000 week-long cruise six years ago. And then I pitched somebody on an idea and he said, "That sounds like a great idea." I probably made a million dollars off of that one conversation in the work we did over the next 18 months. It was unbelievable, right? So that happens. And then the education side, going to learning, reading the books. I have a huge learning goal every year. Last year I read 90 books. My goal here is 90, but I'm hoping I'm on pace for over a hundred. I just know that these are things that people that are wealthy. And people that are doing, they tend to really invest in themselves and they really invest in building networks. Robert Kiyosaki wrote the book, Rich Dad, Poor Dad. He said, "Most people look for work or look for a job. Wealthy people build networks." Right? So if I'm somebody who's building networks, if I'm talking to you, Mike, and I say, "Oh, you know Mike. You should connect with my friend over here." It's like, that's very valuable to you, to them, and you'll remember that, right? So I think that if we can be people that are connectors, we can be people that really provide value to others, that's a way to really grow your wealth. So it works actively when you're looking. Like I said, I went and I found a partner. We raised a bunch of money together. It also works for passive deals. I found some amazing passive deals just simply by being somebody who was in the room, who had a connection to somebody else who invested in a deal. It turned out amazing, right? Not every deal turns out amazing, but you know, times it turned out absolutely phenomenally well, and that's because of the people that I knew. So I think those are two kinds of two things that go hand in hand. Mike: Yeah. And ladies, gentlemen, that's they didn't even have to pay for that knowledge that Bronson just gave you. But it is one of the, probably the thing that is just paramount for gaining wealth and so important. I try to schedule a lunch or two every week with people that it's like, you know, I haven't heard from this person for a couple, you know, months or six months. So I'm always having lunch, I'm always taking people out. Join social clubs, The Rotary, The Lions, where people that have money spend their time. Golf membership. If you country club it, I've probably got more investors by golfing. Yeah. Because then I realized, do I want them as an investor, the way they act on the golf course. But it's crazy. I'm golfing at 9:00 AM or 10:00 AM on a Tuesday, and they're like going, you're too young to be retired. What do you do? Bronson: Yeah. Mike: Well, let me buy you a beer, you know? On the 19th hole and let's, so that networking is just absolutely phenomenal and always gaining education is paramount. So let's talk a little bit about how you educate people in the mastermind and the term mastermind is kinda like one of those overused terms. I get invited probably to 10 masterminds a month, and some of 'em are like, oh, that's not really a mastermind. But let's talk about your mastermind a little bit and the benefits. Bronson: So the term mastermind, it's interesting, it comes from a book, by Napoleon Hill, Think And Grow Rich, which has the same last name, he is not related to me unfortunately. But he talked about when you bring two or three people together or more and you kind of get around a problem, there's this kind of mind melding or kind of come together on something. And he talks about examples of Henry Ford doing this with Rockefeller, with other kinds of giants of industry, and they just get together and talk and it's like. It's amazing what you can learn and you can kinda help solve. I've seen what's been said, you know, how you treat your network is how you grow your net worth, and it really is true. Again, if I want to change, there's another quote by a guy named Jim Rohn who is a motivational speaker, and he said, "You're the average of the five people that you spend the most time with." And so if you're the average of the five people you spend the most time with, it's almost in every area of life I look at my health or my spirituality or my wealth. You could probably see the people I spend time with and I could probably guess if I just looked at the five people, what their net worth is that are around you or around our listener or even health-wise, I could say, "Okay, these are your health habits. This is kind of how much you're worth. This is what you're doing." So if you wanna change that, you have to really intentionally get in rooms, that is, people whose net worth is 10x or a 100x of where you're at. Because they're just gonna like it, even with their little comments that are like little sidebar comments. You pick up one thing and it can absolutely change your life. And I see you smiling because I know you've experienced that too, right? Mike: Yeah, absolutely. Bronson: We didn't even think it was possible. I'm writing my second book now called Rich Brain, which is how the wealthy changed their brain to change their bank account. So based on all these interviews, what are the mindsets around wealth? The thing in our culture, Mike, is that most people. I think that you are either born with wealth or you're not. If you look at, like, people will say it's about 60%, 65% would say, well, yeah, it has your natural advantages, your networks or your health, or maybe you were born with a silver spoon in your mouth, but in reality it's 86% according to a study from Fidelity Investments. 86% of millionaires are self-made. Which means they did not, were not gifted. They learn these are learnable, teachable things. And so that's the encouraging thing. So all that to say is that we gather a group of investors and high net worth folks and credit investors and just say, "Hey, we wanna learn, we're around personal development." The problem with people, once you get a net worth of over a million, couple million dollars, it's hard to talk about money with people because you talk to family about it. I mean, that just kind of creates problems in general. You talk to friends about it, they think you're crazy. Why don't you have a money person and a stock person? If you're doing some of this stuff like this, it's hard to find people that actually wanna talk about money and don't think you're crazy. So you get people in the room and the same kind of crazy and they're doing big things. And so we have investors in our group that are worth $2 million. We've got investors that are worth $50 million, and it's like you get around. It's just like one of the conversations, for example, we had a lady who came as a guest. She had 30 or so single family houses, and we were worth about $10 million. And she only had $400,000 in debt on it. She had 96% like, like very like 4% loan, very low. So, she was sitting by a guy who had raised money and been a part of 8,500 units. He's a syndicator, another guy kind of by himself, done about 2,500 units and say, and I just asked him, we're all sitting at the table. And I say, "Hey, what do you think? Well, what do you think would be the right amount of, should she take out more debt? Do you think she should sell them or whatever?" And just had a great conversation around that, right? Of Maybe a 50% leverage. You could go do this. You could do this. And like the whole return on equity conversation came, if you have all this money tied up here, you're probably making a 2% and your return per year. What if you could get one? A 5% or at 10%, you know, you get a little bit higher without taking on a lot more risk. So those are the conversations that we have. So it's really designed for getting people in the room that are kind of, you know, the same kind of crazy in a good way that are ahead of where we're at or peers. And some people won't do it 'cause they wanna give back. So that's why we created the Wealth Forum. It's been a lot of fun. So it's been going for about a year now and we have a small handful of people in it, but it's been a real blast. Mike: That's an important lesson to everybody. It's about surrounding yourself with the same crazy, because you know, there's so many people out there that want to put you down and say, "No, you can't do that." No, the interest rates, no this, and they have no idea how we think. And they're like, "Why would you ever buy this now you know, the economy?" And I'm like, " I don't care what it costs, I just wanna know if it's cash flow." And you try to get that to 'em and they just spin. Bronson: Yeah. Mike: And I'm like, I'm wasting my time with this mastermind because most of the people haven't even bought their first deal yet. The analysis by paralysis type of a person and all they want is free advice from me. And I'm like, I'm not learning anything here. Bronson: Yeah. Mike: So it's very, very frustrating to find that mastermind and one that is not $25,000 to get into, $30,000 to get into, there's some that are just really expensive and is there an ROI, so, I'd like to have that 30-day trial. Bronson: Yeah. Mike: On some masterminds to see what you get. I just don't want to give the creator that mastermind $50,000 and not get anything and that's everything in life. Are you doing anything? Do you have any open funds? Any open syndications? Bronson: Yeah. Well right now, I don't know if it'll be up to you. I dunno if when this will go live, but we're always doing deals. So we've got our investor club. So usually about once every month or so we'll have something we'll launch. We've got a couple oil and gas deals that we're wrapping up. One's an oil and gas drilling deal, which is a great tax play. Usually those are unique 'cause you get about 80%, 85% ordinary income tax reduction. I'm not a CPA, but generally people can take a pretty good tax, against ordinary income, which is amazing. And another one's more of a land play where it's, we own the land where there's existing wells and that's cash flowing pretty heavily even from the beginning. And then we can reinvest. It's kind of a unique place when you own the land. You get all the data, for example, from 140 wells on one property, and we can say, "Hey, we can participate in certain wells going forward just in a certain region." So if it's like the northwest area, this area is really booming. If anybody drills another well there, we want to put money in that because that's where the money is. That's where we see what's coming in. So we have some real upside and things like that. So yeah, we're continually doing things with our debt fund that we're doing. We're continually looking for more business opportunities, but we're pursuing opportunities that make sense. I would say we're positive real estate, we're doing more debt fund related stuff, but I think, there will come a point to be more of an equity investor on things. And the problem is sometimes if you wait too long, it can be like it's a good time. And then when everybody thinks it's a good time. Looking back, you've seen this as well, bet the sometimes the worst time to raise funny is the funds is the easiest time to raise it, which means like when everybody's super hot on it, we've had times we've raised, you know, $8 million in 24 hours and the deal was okay. It turned out fine, but it was like looking back, there were some times where it was not the best time to raise, but everybody was super excited about it. So it's funny. So it's like this whole, like, do you wanna be a contrarian? It may actually be a very good time to do real estate right now because looking at the long term and getting in and I'd rather even pay a little more and be able to refinance later if rates come down and it's just hard to say where things are gonna go from here. Mike: Yeah. And once you get educated everybody and read those, I'm not gonna read a hundred books in a year, like Bronson. Maybe 20 because my ADD will start, start going, "Ah, you know, I can't, can't do it's crazy." So let's talk about a couple things. Your mastermind, is it online? Is it only in person? Bronson: Yeah, so our Mastermind, the Wealth Forum, it's a combination of online and in person. We do once a quarter, we do an in person event. The next one will be in June in Orange County. We're really excited to be, we do a quarterly in person, so we'll have about probably 30, 40 people there. We have some guests and speakers that'll be there. It'd be fun to have you at one of our events coming up. We actually were just in Arizona recently. I didn't know, I think this is after we had connected, so I know you're not too far over there. But yeah, so that's kind of what we do. And again, it's really, we kind of create specific goals for each person. So it's like, "Hey, what would be a win over the next 12 months for this person?" It is a high ticket too. The funny thing is like and You mentioned this kinda thing you shared. I used to run a real estate meetup here in LA in Pasadena for six years and you'd get 60, 70 people in there. And there may be a couple people that like it, but you know who they are, right? That is high net worth. And it's like, it was hard. But when somebody's paying thousands of dollars to be in the room, they're gonna try to find a way to get value. They're trying to spread value and it's also less of a deal for them to be there, but it just limits who's in the room. So we're just really trying to provide value for people. But I think whatever people do, I'm in masterminds, I'm in multiple masterminds, of course, I run a mastermind. And I think it's just a great way to, to really put yourself in bigger, better rooms. And also whether it's finding specific deals, it's finding partners. I've heard about deals that someone just was the person to call and this person knew this person. This was a few years ago, they closed a real estate deal. They needed like, I think it was like a million dollars or a couple million dollars to just go into an account to help with the closing because the seller of the property was gonna keep $2 million in equity in the deal. But the lender wanted to see the $2 million actually be there, right? So it was like they had to give you $2 million. So this person made like 5%. It was like a 100K just like overnight for putting the money in the bank to let it close. So that's a very unique deal, right? That's like if you annualize that number, it's ridiculous. But there are opportunities like that that come up where, again, if you're just in the right rooms, you're around the right people, things will come to you. And if you get a reputation of somebody who kind of is a straight shooter and you do what you say you're gonna do, and I mean, that reputation really is huge. And so I think all those things are important. So I love paying to be in great rooms because I know if I'm paying, everybody else is paying too. Mike: That's right. Now let's talk about kind of a hot topic is, debt funds. And you're starting to see that a little bit more in our circles. Explain to our audience, how does that work? Bronson: Yeah. So yeah, debt funds are interesting. It is in a way becoming a bank. I think there's different types of debt funds. So not all debt funds are created equal. Honestly, even being from a finance background, I didn't really get this as much, but there's debt funds that are more first position, which are the safest funds. So it's similar. You think about your house, if you have a house that you know, maybe you. Put 20% down, the bank has 80%. They're the ones that own that's their first position out. Any other loans or contractor liens are secondary to that. So the bank or the first lender has to get paid everything first before a second or third lender gets paid. It's different from a lot of groups that come in with flipper funds or other types of second position or mezzanine debt. And that's where I always ask, that's a great question for somebody. This may save somebody a lot of money, ask, is it a first position debt fund? And a lot of 'em are not. You actually get those, a lot of 'em, you have to actually partner with a lender. You've gotta find some context. So we've got a lender that we've worked for that has been in the space for 20 years, small commercial properties. They're doing $5 million or less properties. And then it's usually 50 to 60% loan to value. So that means if this. It was a $4 million strip mall or something like that. Somebody, you know, the buyer brought $2 million of their own money. So if they were to not pay, we would take over at a cost of like two or half the price, right? Just about having only half or a little more than half the price and just take over immediately resell it or we would operate it for a while. And so we have this in a diversified pool of different loans. And so people get just steady cash flow. It's monthly, depending on how long they tie it up. If it's for a year, if it's for six months, if it's for three years. And depending on how much they put in and how long it is, it's typically a little bit more. But we're seeing some just amazing rates really. We are finding some of these debt funds are paying, like equity was a few years ago. So we're seeing it's not uncommon to see 10%, 12%, 14%, even up to 15% in some of these debt funds, which is phenomenal. 'cause you're basically in the safest position in the real estate deal, like literally the safest position. If no one gets paid, at least you're gonna get the land and then you can figure what you're gonna do with it and then have diversified across the pool of loans. So I think those are different ways to do it. And there are other funds, there are debt funds that can work as well. But I do like first position. I do like being with an experienced lender but I think there's definitely a lot of opportunities in the debt fund space now. Mike: So, ladies and gentlemen, Bronson Hill, bronson equity.com. People interested, they want to get to know you. What are they gonna find when they go to the website? Bronson: I actually have a good way to connect. I've got a free gift for your audience, Mike. We've talked a little bit about inflation and I was kind of looking at how much things cost and how everything is way more expensive. 50% to 100% more. And it's like every time you go to the pump, every time you go to the grocery store, some price has changed, something's higher. It. Seems like things are going up. So how do you get on the other side of the equation and use inflation to your advantage? So I wrote this guide. It's "How To Use Inflation To Your Advantage." About 30 pages. People can text the word, Inflation to 33777. So if you just get on your phone and text the word, Inflation to 33777, I'll send that to you for free and that a lot of people know about our offerings, what we're doing, if they wanna join our investor club all out there. But we'd love to give that gift to your audience. Mike: Fantastic. Everybody. Text it, get it. It's knowledge. Bronson, is there anything else you'd like to leave us with that perhaps we didn't go over today? Bronson: No, this has been great, man. It's been a lot of fun. Look forward to connecting more with you, Mike, and I would look forward to hopefully maybe doing some business together in the future. I love what you're creating as The Richer Geek and just love what you're creating for your audience. So thanks for the time. It is really great to connect with you and with your folks today. Mike: Absolutely. Bronson, thank you so much for coming on The Richer Geek Podcast. Have a wonderful afternoon. Bronson: Thanks brother.
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ABOUT BRONSON HILL
Bronson Hill is the Managing Member of Bronson Equity, a general partner in 2,500 multifamily units worth over $250M. As host of The Mailbox Money Show, he has raised over $45M for real estate and private equity deals. He authored the bestselling book Fire Yourself and leads The Wealth Forum, a mastermind for affluent passive investors. A sought-after speaker, Bronson has been featured on podcasts like The Best Ever Show and spoken at major events like the Limitless Conference with Ken McElroy. He regularly contributes to YouTube and his blog, sharing insights on investing and financial freedom.