RG 334 – Unlocking Your Unlimited Potential with Bryan Underwood

Have you ever thought about leaving your comfort zone? Perhaps switching your focus to a new asset class? Or starting a new venture you know nothing about?

Bryan Underwood is the Principal Founder of Responsible Real Estate, Inc. (RRE), which purchases land and develops multi-family properties in California. Before RRE, Bryan played a vital role in acquiring over 1.5 million square feet of self-storage while working as an Acquisitions Manager at Caster Properties, Inc./ A-1 Self Storage.

Bryan started his real estate journey at just 24 years old, having borrowed $50,000 from a family member. Today, he partners with multiple investors to secure amazing real estate deals in San Diego, Boise, Austin, & Raleigh.

Interested in becoming an Investor with Reed? Click here to join his Investor email list.

Bryan sits down with us today to share his story about working for a decade in the family business before finding his own way. Spoiler alert: it wasn’t easy. Let’s hear how Bryan left a comfortable path, ignored the naysayers, and took the courage to “do his own thing.”

Key Takeaways

• Some of us will hit the ceiling at some point in our careers, at which point we need to find a way to grow.

• When you come across something you know nothing about, it’s a sign to start learning.

• Knowing a city from the inside out can give you an advantage in getting a project off the ground.

• Whatever happens to your business, you have to pay yourself.

LINKS
https://www.responsiblere.com/
https://www.linkedin.com/in/bryanunderwood/

Be Bold, Be Brave and Go Give Life a Crack!

Remember to join my Investor Database for the latest Investment Offerings!

Reed Goossens (00:00):

Good day Good day guys. Now, before we dive into today’s show, I want you to let you know that some of you may be aware that over the past eight years, I have built a substantial multi-family real estate portfolio here in the US worth over half a billion dollars. And in that time, my passive investors have received fantastic double-digit returns. And now you too can invest directly into my deals for as little as $50,000. So if you’re an interested investor, head over to reedgoossens.com to find out more. That’s reedgoossens.com. Now, back into the show,

Bryan Underwood (00:40):

I think right now, uh, the economy is literally outta halt. Jobs remain good, capital’s not flowing. So between now and the next 12 months, um, capital will start to flow. Um, I think things will normalize. I don’t think interest rates come screaming back down, but normalizing is good because the Fed has been acting erratic, which, which puts fear into everybody. They’ve done something they’ve never done before in the history of the Fed. Um, so whenever they do something like that, like raise rates as fast as they’ve done, um, people sit back and go, my gosh, we didn’t expect that because they’ve never done it before. So you, you’re just at a time where people are very fearful. So, um, that’s okay. I’m actually, uh, not, not necessarily, I don’t wanna think excited about it. It makes it much more challenging for our current projects, but it makes me that much more motivated to actually get them to breaking ground because I think it’s going to be the perfect time to put a shovel in the ground. Kind of like Q q3, Q4 of, of, of next year. Life is not gonna be a better time to build cuz no one else is.

Speaker 3 (01:40):

Welcome to investing in the US a podcast for real estate investors, business owners, and aspiring entrepreneurs looking to break into the US market. Join Reed as he interviews go-getters, risk takers, and the best in the business about their journey towards financial freedom and the sheer joy of creating something from nothing.

Reed Goossens (02:01):

Good day good day a Ladies and gentlemen, on welcome to another cracking edition of investing in the US podcast from Los Angeles. I’m your host, Reed Goossens. Good as always, Debbie with us on the show Now. I’m glad that you’ve all tuned into it. Learned from my incredible guests and each and every one of them are the cream of the crop here in the United States when it comes to real estate investing, business investing, and entrepreneurship. Each show I try and tease out their incredible stories of how they have successfully created their businesses here in the us, how they’ve created financial freedom, massive amounts of cash flow, and ultimately created extraordinary lives for themselves and their families. Life by design, as I like to say. Hopefully these guests will inspire all of my cracking listeners, which are you guys to get off the couch and go and take massive amounts of action.

Reed Goossens (02:47):

If these guys can do it, so can you. Now, as you know, I’m all about sharing the knowledge with my loyal listeners, which is you guys, and there’s absolutely no BS on this show, just straight into the nuts and bolts. Now, if you do like to show, the easiest way to give back is to give us a review on iTunes, and you can follow me on Facebook and Twitter by searching at Reed Goossens. You can find the show wherever you podcast on iTunes, SoundCloud, Stitcher, and Google Play. But you can also find these episodes up on my YouTube channel. So head over to reedgoossens.com, click on the video link, and it’ll take you to the video recordings of these podcasts where you can see my ugly mug, but the beautiful faces of my guests each and every week. All right, enough outta me. Let’s get cracking in into today’s show.

Reed Goossens (03:35):

Turn the show I the pleasure of speaking with Bryan Underwood. Now Bryan is the founding principle of Responsible Residential, which is also called rr, and he’s also the president of Responsible Real Estate, Inc. RRE, which is a San Diego based real estate investment company. And Bryan started both companies after spending over a decade in his family business called A One Self Storage. Now, since 2007, this is when Bryan first got started in the business. He has purchased over 1.5 million square feet of self storage with a market value of over 200 million. So I am really pumped and excited to have him on the show today, this year. He’s incredible knowledge and insight with me, but enough outta me. Let’s get him out here. Good. Hey Bryan, welcome to the show. How do to mate?

Bryan Underwood (04:19):

Excellent, Reed. Uh, good to be here, man. Uh, thank you for having me. Yeah, really excited about our conversation here.

Reed Goossens (04:25):

Yeah, man, well look, a lot of stuff to talk about. I do want to get involved in, uh, you know, San Diego. I’m sure you’re a surfer like I am. Um, uh, and you know, I I’ve been down to trestles many, many times and it’s, uh, the, the winter’s coming as they say here in California, and that’s when the big swell is. So I’m just up, I’m, I’m up the road from you in Los Angeles, so we definitely should, uh, meet up sometime for a beer and maybe even a surf. But before we get into your story or in, in the background of what you do, can you rewind the clock and tell me how you made your first ever a dollar as a kid

Bryan Underwood (04:56):

First ever a dollar as a kid? Yeah, jogging my memory a little bit. Um, I really wanted, uh, to buy some roller blades and my mother said, if you want some roller blades, you better figure out how to make some money. And, uh, I said, okay, what do you suggest I do? So she said, well, we’ve got some fruit trees, why don’t you pick some fruit and sell it? Wow, that’s a fantastic idea. So I literally picked, I don’t know how many bags of oranges and lemons and limes, you know, southern California, stuffed avocados, bagged it up, went down to the busy street, which is greenfield by my house. And, uh, I think I made like a hundred bucks, which was like 25 more than what I needed to buy my roller blade. So I was like, hell yeah,

Reed Goossens (05:51):

. Well, well, thanks mom and dad for the, for the fruit trees, right?

Bryan Underwood (05:55):

. Yeah. You know, know, there, there was no, uh, cogs. Right. You know what I mean? There I didn’t have to account for right. The, the water bill or planting of the trees. I literally just gotta literally pick the fruit and go sell it for money, which was awesome.

Reed Goossens (06:08):

Yeah, I I I’m sure mom and dad would’ve had their handout saying, okay, well here’s the, where’s the maintenance cost? You know, the growing over the last 10 years, you know, you hundred bucks is gonna look a lot less than, uh, if they take out their costs outta of that .

Bryan Underwood (06:21):

That’s totally right.

Reed Goossens (06:22):

But mate, walk, walk us through the journey. You know, I mentioned in the beginning you, you, you used to work for your family business, so clearly you’ve grown up around real estate, but what was the pre real estate Bryan doing and, and, and why did you get sucked into the family business? Okay,

Bryan Underwood (06:36):

I, I’ll try to make this as short as possible. I mean, um, I, I’m a, I’m a storyteller, so, uh, it makes it kind of difficult to condense it all, but really what Bryan was doing before he got into real estate, um, many things, but I, you know, I was a server at a restaurant. I kind of, you know, I, I I, I, I grew up, you know, I started at the busboy, became a server. Um, so service industry stuff. Uh, right before I got into real estate, I was actually selling women’s shoes at Nordstrom, which was phenomenal job, but not my career job. I mean, I, I was 21 years old, made like, I think it was like 80 or $85,000 selling women’s shoes. And I was like, wow, this is pretty incredible stuff, you know? But I was making more money than everyone else around me, and a lot of people around me were much older than me.

Bryan Underwood (07:21):

So I’m like, all right, well, clearly I’m not gonna do this for very long, but it’s fun right now. Um, and it was a, um, uh, um, a friend of mine was getting into the real estate business, but he was, you know, 30 years older than me and came from power electronics and bought a piece of real estate and was looking for, um, a, you know, really a mentee. And so, um, uh, he became my mentor. And what we did was, uh, I, I sort of stumbled across a piece of real estate and it, it started just, uh, just really started my deep dive into my real estate journey as I said, okay, well how do I put a value on this piece of real estate? Right? And so then I started like reading books and I got my salesperson license and like, through some of his guidance, like just trying to figure out what is this piece worth?

Bryan Underwood (08:12):

And we ended up making a offer on this, um, as a light industrial piece in the city of Santee, um, for, uh, $150,000. They wanted $250,000, it was donated to the Y M C A, so we kinda lowballed them, but they took it. And so, um, it was at that point that I was like, well, shoot, I don’t, like, I don’t want to just like, uh, learn here. I wanna be a part of this. Right? And I was 24 years old and I put a eight and a half 11 sheet of, uh, paper together with my back of the napkin proforma and my business plan. And I sat with a family member and I said, I need to borrow $50,000 cuz I found this piece of land and I want to be a third owner in it, and we could build a 7,500 square foot spec industrial building.

Bryan Underwood (08:55):

Here’s how I pay you back. And because they were supportive and maybe a little bit ignorant, but I’m, you know, I’m, I’m happy for both. Um, more supportive, right. Uh, because I, I, I at least had a good story to share with them. Um, they, they loaned me the $50,000 and about four months later we got an offer on a piece of property for $425,000. Wow. And I, I’m looking at that going, well, shoot, that’s like my profit now, as opposed to taking all this risk and liability and debt and everything else that goes along with real estate development. So we sold it, gave the money back with interest, I think after closing costs, I had about 70, maybe $80,000 sitting in the bank, and I was hooked. And, and that was my entry into real estate, .

Reed Goossens (09:40):

And so your, did I mention earlier that your family was involved in real estate as well?

Bryan Underwood (09:45):

Yes. So grew up, um, talking about real estate. My grandfather started the business, um, back in 58. Um, he, wow. He, he basically started in, um, what’s considered Grantville in San Diego, which is like East Mission Valley. He started, um, basically just getting a hold of family owners and saying, I’m gonna long-term lease your piece of property. And they said, well, what do you wanna do with it? And he said, I wanna, you know, wanna build a grocery store. I wanna build this guy’s building. And he just kind of went, I mean, now that piece of property he still owns today, it’s 18 acres right in the center of the universe in San Diego that operates its flex industrial space right now today. Um, so, so I kind of grew up around it. Um, the family got into self-storage, so in junior high, one of my jobs was to go wash doors, , you know, make, make some summer money.

Bryan Underwood (10:39):

Um, so what happened from my, my sort of entry into real estate, which was sort of, you know, was influenced by the family, but I didn’t go work for the family right away. I kind of found this passion through this first deal and some of the people I was working with that, that it, I, you know, I basically stepped out of that deal and I was like, gosh, I love this stuff. You know, my family does have a sizable real estate company. Maybe I should go talk to my uncle who runs it and see if there’s a place for me there. And initially the response was no. Um, and whether that was true or not didn’t matter because I, I don’t really take no for an answer. I just kind of poke around the edges a little bit. So initially it was no, and, and come to find out it was no, because, uh, they didn’t want me to waste their time.

Bryan Underwood (11:22):

And, um, so I said, okay, well, um, tell about you give me like a six, six month trial period here, you know, if I’m wasting time, then I’ll leave. Right? Um, anyway, you know, you fast forward, I spent 10 years at the family business and, uh, through the family business, you know, I, I got to spend 60 million buying land securing entitlements for the million and a half, uh, square feet of self storage that you talked about. And, and I, I really, yeah, I mean, it’s where I cut my teeth. It’s where I honed my skills. It’s where I learned all the different facets of real estate development. Um, you know, everything from how do I, how do I talk to a potential seller? Um, you know, e I guess even a precursor to that would make sure it’s a property that you wanna buy, right?

Bryan Underwood (12:06):

So making sure the size works for storage, the zoning works for storage access works for self storage, right? So every the filter of like what the site analysis component, then you’re getting a hold of, of owners negotiating a deal on putting together contracts. Uh, you know, I’m opening escrows and reviewing title reports and looking out the exceptions and making sure that the title’s clean. Um, I’m working with the city, so civil engineers, architects, city, getting entitlements, managing all the due diligence, uh, property due diligence, you know, so you got not just your civil engineers, but you got surveyors and you’ve got your geotechs and you’ve got, you know, I mean, it just goes on and on and on and on. I didn’t learn it overnight, right? It’s like 10 years of like, literally, this is all I did. Um, and, and so yeah, with the time, with the self, uh, the family and self-storage was awesome. Uh, really credit them to a lot of, of what I learned. And, uh, and, and then ultimately in 2017, I left to start my company.

Reed Goossens (13:09):

That’s awesome. And, and how was that leaving part? Because I’m sure with all the skills that you learned, there was just always gonna be a ceiling, right? You wanted to go flap your own wings, you know, the, the birds fly away from the nest. What was it? I assume it was amicable, but, you know, was it, you know, bittersweet at the same time?

Bryan Underwood (13:26):

No, yeah. Bitter bittersweet for me. Um, uh, so to your point, right, uh, there, there was absolutely, um, and you know, really in every business, um, unless it’s yours, you know, unless it’s yours, there’s gonna be some stealing. Um, and I had sort of talked to my uncle who ran the business for several years, trying to just figure out what’s, what’s something more that I can do in your business to help me continue to grow professionally and personally, not just, not just on paper or like financially or net worth, clearly that’s important, but just always continue to build my skills and not just kind of be asleep at the will, just kind of, you know, sliding into the day and let’s just coast. Because after you do the same thing for 10 years, you get really good at it. Mm-hmm. and the family business is set up where, um, my, my job as the, um, acquisitions director was to find the best two deals I could find in a year.

Bryan Underwood (14:29):

Okay. So we had only planned to do two deals that year. Not that we can’t do more or or less, but my, my, you know, I had, I checked all the boxes when I found two, and I could just about do that in my sleep, certainly towards the end of my career with them. And I don’t mean that as like puffing my chest, you again, you just get really good at what, at, at the lens lens and what I was trying to do. And so I was in the trying to figure out, you know, what are other ways that I can continue to grow? And the, the response unfortunately was always like, keep your head down, you’ll be fine in 20 years. And I was like, well, shoot, that’s not me , you know, like, I’m not a not really a keep your head down kind of guy, , so mm-hmm. ,

Bryan Underwood (15:10):

Um, you know, I realized in 2015 that this is probably gonna be coming to an end mm-hmm. . Um, and so I started kind of planning my exit. Um, it, it definitely wasn’t really mutual, unfortunately, like hmm, bittersweet for me to leave. I would love to have stayed if there was ways for me to grow within the family business, but it became obvious it wasn’t. So I decided, okay, like rotate out and, and let me sort of forfeit this very secure job that I’ll never be poor. I’ll probably always make more money, but really there’s a ceiling and I’ve got limited potential. So let me, let me sort of rotate out of that, take on a bunch of risks, but kind of have unlimited potential. And when I thought about it in, in that sort of phrasing, I was like, yeah, this is a no-brainer. I’m, I’m, I’m gonna go off and inherit a bunch of risk, you know, I’m not gonna know where my paycheck’s coming from, but let’s use the skills that we learned over the last decade and, and let’s go figure it out. Um, so yeah, it was, it, it be, it was actually a surprise to the family when I decided to leave. They, they didn’t know that was coming. Hmm. Um, some people understood it, some people didn’t. But, um, uh, here nor there, you know, I guess we’re 2022, so we’re way long gone. We’re, we’re past that now . Right.

Reed Goossens (16:22):

And, and what was, what was the thesis going out, you know, in terms of creating your own residential real estate company? Was it to, to emulate what you’d learned to, so self-storage, ground up development.

Bryan Underwood (16:32):

That certainly would be the logical thing to do. And I think that’s what everybody expected me to do. Um, there was some sensitivity to the family of kind of going in cuz people had done this in the past, going in, learn the business and then go off and do your own stuff. And so that’s why they maybe were a little bit frustrated or, you know, um, didn’t really like my approach. But, um, no, I actually wanted to go into, of all things I thought I was gonna go into co-working space mm-hmm. , um, uh, you know, kind of new at the time or newer ish. Obviously WeWork was, you know, a name brand. Um, I really thought that there is an opportunity and, and, and quite frankly, I, I think there still is, I just don’t wanna be in that space any longer. But it reminded me of self-storage, how self-storage.

Bryan Underwood (17:18):

And the genesis of how it became, how it came to be like in 1968 is, you know, you basically have industrial warehousing. And what we did is we chopped up a big box in a smaller boxes and rented it out to, you know, consumers for a, you know, higher price per foot. You know, it’s essentially what you’re doing with co-working space. You’re taking a great big space, you’re chopping up into smaller boxes, you’re, you’re creating amenities around it. So there’s a lot of symmetry to what I have learned in self-storage to what co-working space is as a product. Um, a lot more service-oriented in obviously co-working space and then in self storage. But there’s a lot of similarities. And, and really, um, in hindsight, it was a blessing because I spent the first 12 to 18 months actually putting together a really robust business plan. I wanted to be like the spokes to the hub so that we work, go out and, and go downtown and, and build 200,000 square feet of class a office space out. I wanted to be in the La Mesa of the world, the Encinitas of the world, and I wanted to build 10 to 20,000 square foot spaces and ultimately package up and sell to them as again, sort of the, the spokes to the hub. Um, so, uh, after I had two properties in escrow raising money for the business, everything just stopped.

Bryan Underwood (18:34):

And I was like, whoa. Didn’t see that coming. And by necessity, I had to put on my broker hat for the first time to, uh, bring in a paycheck. And that launched me into home building . So the, my, my very first, um, listing that I got was raw land. Okay, well I know Raw land , that’s what I, that’s what I was hunting for. Self storage, right? Um, I know I, I know how to buy raw land. Now let’s kind of turn, turn, turn the table around. Let’s figure out how to sell raw land. Um, I know everything about self storage. I know nothing about home building, so let me learn. So I, I just, I, I went down the rabbit hole of, of home building. I reached out to everybody in my network in San Diego to figure out what, you know, what, what do I need to know?

Bryan Underwood (19:23):

What, what, what drives the home building? What are, how, actually, what are the first questions? I was like, how come we’re not building more of these things? Cause the demand is so huge. , like self storage, you know, I knew all the metrics, self storage. I needed 14 new people for demand for one new, 10 by 10, and I’m gonna be building, you know, thousand of those for one facility, right? So the demand metrics were like very, you know, very, very limited. Where 2.7 new bodies, I can build one new unit, right? I mean, there’s like, the demand is so astronomical, how come we’re not building more? And my buddy who’s actually one of my partners now, Jake Schwartz, he said, go find a deal . And I was like, well buddy, uh, that’s exactly what I know how to do. It’s find a deal. Cause that’s what I did for 10 years, right?

Bryan Underwood (20:11):

So, um, actually getting ready, really excited, getting ready to go full circle on my, I I’m using like kind of air quotations on my very first project, you know, where, where basically I signed the front of every check, um, that went out, which was the most substantial amount of money that has ever been in my bank account and has ever left my bank account. Okay. Um, getting ready to fill back up, knock on wood. But we, um, my first deal that I was brokering for a friend of mine was an entitled, um, townhome project in Santee, which is kind of funny cause that’s the same city that I launched my real estate career in, right? That I was just talking about earlier. So, um, I started marketing this property for the guy and just to broker the deal. And then I realized I know more about this deal than anyone else in the entire world, and perhaps this is my deal, not anybody else’s. And so we just struck a deal. I was the broker, but, but I ended up buying it. And, uh, 10 builder rent townhomes in Sant. Um, we have now completed the project. We are all leased up and we’re under contract to sell and scheduled to close next week actually on that. So first project to go super nest on, which is really exciting.

Reed Goossens (21:26):

For those of you who are interested in staying up to date with all the latest happenings in my business, or to learn more about passively investing directly into my multi-family value add deals, then head over to reedgoossens.com And sign up for my monthly newsletter. By signing up, you’ll automatically be notified about my new up and coming investment opportunities. You’ll be able to stay up to date with all the latest real estate news here in the United States and much, much more. So head over to reedgoossens.com and sign up to date now back into the show.

Reed Goossens (22:03):

That’s, that’s incredible. Um, just rewinding back to the co-working space, I actually happen to invest personally in a, a space, a buddy of mine, a speech city capital here, the local here to la sort of Long Beach area. Mm-hmm. , uh, a thing called local collaborative. Um, so very same sort of niche of not being the big box kind of retailer of co-working, right? But looking at those cooler spaces, 10 to 20,000 closer to the beach, you know, in, in a good walkable area that you can come and turn it into, um, office space that people need, which just is, is very, uh, but, but in class A locations, uh, it’s very, very difficult to come and find that. And, and, uh, you know, I’ve passively invested in a couple of those deals and, um, why didn’t it work out in, in the long run on that? Because if it feels like there’s still that need there, particularly you, you’re hedging a risk of of of only taking on 20,000 square feet. You’re not taking on the million square foot like we work did.

Bryan Underwood (23:00):

Yeah. The, so, um, the story, the story gets personal, but that’s okay. Um, the reason why it stopped is my large investor was like on the real estate side and in the business. So they are very supportive of what I was doing. I left the family business to go launch and they said, uh, you go find two awesome locations and you raise half the money for your business, we will be the real estate investor in the real estate and we will match dollar per dollar what you can raise on the business side. So I needed, uh, I needed a $1.5 million per location for ff and e to launch the business on, on all the cash flow and buildout. Yeah. Right. For the, for everything. And then on the real estate, um, there was a, there was a building in La Mesa and then there was a building in La Jolla.

Bryan Underwood (23:52):

Uh, we’re gonna be my first two locations, which are great markets. And, um, you know, I spent a lot of my money, uh, you know, obviously under contract doing due diligence. And, um, in July, excuse me, it’s August 20th, 2018, um, it was when my grandma passed mm-hmm. . And it was 20 days before that that we found out that she had kind of full blown cancer. And so 20 days later she passed, and that was literally the time that’s supposed to close escrow and, and do all this robust business planning. And it was one of those, like, this is much bigger than Bryan Underwood. This is like, you know, our, our little, our our rock and our family. I don’t have a small family. It’s very large, uh, just passed away. And the last thing that I’m gonna do is be selfish and think of me and my business plans and real estate and everything else.

Bryan Underwood (24:40):

And I was like, we’re, let’s take care of family. Let’s, don’t worry about my, um, mm, we’ll I’ll, we’ll figure it out. And so, because I had hedged a lot on family participation in that and didn’t really contingency a plan around that, it really halted all of my plans. And, um, which is again, not bad. I, I look, I, you know, you ask yourself why at the time, and I go, okay, like I, I, you know, I, I found myself in a home building. Love it. Got a big awesome team. Like, you know, COVID was tough for all of us. It would’ve been very tough if I had owned real estate and had debt and couldn’t have anybody occupy office space. So I’m glad I wasn’t in that business at the time. Um, but I do think o on more of a macro level of co-working space, coming out of something, particularly like Covid, there’s never been a better time to be in that type of office space.

Bryan Underwood (25:30):

Like, that is the future. It’s, it’s, people are gonna be going back to the office. And I do think that the employers probably eventually win, but I do think that, um, all in order to, to create, I shouldn’t say that, attract and retain good talent, you need to be a little bit flexible. It can’t be this adamant, like you gotta be in the office five days a week. So I think coworking space is a good supplement to traditional office space where there’s business relationships that you have and the business is actually a member. Like maybe they’ve got 10 memberships and, and if you got people that live in National City or Oceanside or El Cajon, whatever the case may be, hey, we’ve got a relationship with my company name was Office Local, we got a a we got a business relationship with Office Local. Why don’t you go to the one close to home two days a week? You know, there’s, there’s access control. Like, you know, when they’re in there, cuz it, there’s smartphone tells you that they’re in there. So you, you know, they’re in the office, you don’t have to check in on ’em. There’s, there’s just a lot of really cool things that I, I do believe that that is the future. So, um, it would be a a, a good time, I think to be in that space right now because, uh, you know, sky’s the limit. Hmm. No, uh, I

Reed Goossens (26:42):

Think, think it is, and you’re right with this, the, the, the sort of spoken hub type of scenario where people want to be flexible but not, not necessarily want to go all the way into the major corporate office, but they want to have the interaction with other human beings, particularly coming outta Covid. And, and, and my condolences to, to you grandma, but it, it, it’s sort of, it’s funny how these life-changing alter events put in pers to perspective and, you know, if you’d gone down that path, you might have been in a different scenario because of what happened during Covid. So definitely. Right. Um, what, what are you seeing right now and what are you focusing on in terms of, you know, where we are in the economy, the, the ground up construction, the cost of, you know, lending and, and, and just what’s your sort of 2 cents in, in your, in your sort of, uh, crystal ball?

Bryan Underwood (27:25):

Yeah, so, um, so what we’re focused on, I still very much like the build direct communities. I’m looking at, um, some town home opportunities. I’m looking at even some single family home development opportunities. But on the, on the build direct side, um, I, over the last year became a partner in, um, a company called Urban Housing Partners. This is kind of new information. I’m not even sure if I’ve shared this with anybody yet. Um, urban Housing Partners is synonymous with, you know, infill, high dense residential development in San Diego. They’ve been around for 40 years. And, um, we, I have a good relationship with these guys and, um, my, my partner in responsible residential, him and I realized we don’t want to build 10 town homes again. We wanna build a hundred apartments, you know, if not even larger than that. And that’s gonna take a much larger team than just him and I.

Bryan Underwood (28:20):

And so we have reached out to Urban Housing Partners and through some business that we are working on, we talked to Mike, Jake, Casey, and Sherm, and we said, Hey, here’s what you guys have been doing. Here’s what we’ve been doing. Why don’t we go work together and do something bigger? And, uh, they kind of noded their head. And so we have two projects in San Diego. We bought land last year in North Park, um, and we are actually about to submit for plan check in about a week on 89, um, market rate apartments. And, uh, really, really excited about this project. We’ve been working on it for, you know, what a year and year and four months. And we’re just getting ready to submit for plan check. So, um, back to how come there’s not more housing? It takes a long time. . Okay, so that’s why there’s not more housing.

Bryan Underwood (29:13):

I mean, 89 units is a very large project. Okay? This is gonna be a 37 million project. Okay. But it’s 89 units, right? Sandy off the bucket, it’s a, it’s a drop in the bug San Diego. We need, I think over the next six years just to catch up on organic growth and, and, and the lack of what we’ve been building is like 108,000 units. Okay? So here’s 89, right? By the time I break ground, it will have been, you know, a little over two years. It’s gonna take 22 months to build and then I gotta lease it up. Okay? So you’re talking, let’s call it four and a half years, maybe, probably closer to five years before I start moving in my first tenant, right? And you’re talking about 89 units. It’s like, it, it just, it

Reed Goossens (30:01):

Blows. It’s just ridiculous.

Bryan Underwood (30:02):

It blows your mind like, it’s like holy smoke. So, um, but that’s what we’re focused on. Our relationships are very deep in the city of San Diego. We know the development code, we know the regulations, we track it. I mean, it’s just like that. We know how to get product out of the ground. And so while it’s very difficult, a lot of people shy away from California in general, if you have a competent team that understands it, has the relationships and can get product outta the ground, we can create some massive value there. Um, so, so we are, um, for the first time ever actually attracting, looking for capital relationships for our projects to help, help assist us, get them out of the ground. Um, so in the, in the past, these guys didn’t take on any capital. They usually worked with other property owners. Me, I’m going, I love taking on capital cause I wanna build product. So, you know, kind of combine that’s our efforts is let’s go build, go use all our skill and get product outta the ground. We are early on, early stages on a 240 unit, um, in National City, and then we’ve got a few more in the pipeline that we are kicking around. Um, so that’s Urban Housing partners and that’s what we’re focused on right now. I, forgive me, you had asked like a follow-up question and I, I forgot what it was.

Reed Goossens (31:20):

No, no. It, it’s, it’s interesting. Um, the, I I, I’ve, I’ve come from development myself. I’ve worked in Long Beach and my background in structural engineering, I know how long it takes to entitle and get stuff built outta the ground. I think particularly here in California Yeah. But also, you know, across most major cities. How’s the, the, what, what’s keeping the lights on, like the business itself? Like how do you keep the lights on in the development world, to your point of getting five years to get a, a product out of the ground and leased up. Like, I know I buy existing multi-family value add in five years, I’m probably selling my deal that I bought five years ago and making a bunch of money from my investors. And so how, how do you sort of justify that and, and keep the business going, uh, employees paid and all that sort of stuff when, when development is so, um, it’s a, it’s a long, it’s a true long term game.

Bryan Underwood (32:10):

It’s, it’s, it’s not easy. Okay. I mean, it is, uh, it, I mean, it’s really a challenge every day because I mean, even though I’m five years in on my company, like, we’re still, we’re still very, very, very young. Okay? So mm-hmm. , um, I would like to be in a position where I’m focused a hundred percent on building my next a hundred units on San Diego. But the reality is like, until those projects get far enough along and are fully capitalized, I can’t take my development fee. Like, it’s not until I get them so far down the road. Okay? So like, when I was building Santee Townhomes, that was my very first project. I did not work in any fees for myself, which is not good, by the way. Don’t ever do that , because you gotta keep the lights on, you gotta pay the bills, you gotta feed your kids, right?

Bryan Underwood (32:53):

You can’t just have this project that’s gonna take three years. Like, you have to be able to, you have to be able to pay yourself. And so what ends up happening is, is your focus goes someplace else. Okay? So, um, like last year I brokered for friends and family. I brokered two different, uh, apartment complexes, a 24 unit and a 30 unit, right? So between those two deals in Southern California, pricing like that filled up, you know, my business account and it pays me a salary. And that’s how I, that’s how I keep lights on, right? But same team about the sell, that’s, that’s gonna give me a nice little cushion. But you have to, you have to get the projects far enough along where you have your capital stack, it’s fully funded, and then you can start taking some development fees. And, you know, when 38 million projects, those are pretty substantial, you know, um, so you have to, but you have to have several going on.

Bryan Underwood (33:43):

And it’s taken five years to even get to where I am and we’re not there yet. So n not easy brother. And, um, it’s not for the faint of heart. It’s, it’s, um, you know, people look at developers and they go, you know, you greedy bastards. And it’s nothing like, it’s just like, it’s crazy that people didn’t think that way. Like, you have no idea how much risk, not just for me, for for my own money, my investors, my family. Like it is so much stinking risk that I’m putting on the table to build just even 10 houses. It, it, it blows my mind. Some people would say, why would you even do that? And part of it is, well, I mean, yes, you can get paid well if you, if you don’t make a decision that stinks the ship. But the other side of it is I just love this stuff. Like, I wouldn’t wanna do anything else. I just, I love everything about it. Um, so I, I love it from a job standpoint, you know?

Reed Goossens (34:36):

No, I, and I’ve seen both hands. I work for a b uh, a ground developer and a body of mine, Jason, who runs Beach City Capital, he’s been on this podcast a couple of times. Um, he and I started our companies together. I’m a value-add multi-family guy. He’s a ground up construction guy. And you know, there’s div been different scale. I can, I can attract money. Invest is when I can say, look, this thing cash flows from day one, putting lipstick on a pig. It’s in the secondary markets, tertiary markets, you know, primary markets in our other states. And he’s, you know, slogging it out with Redondo City Council, which I’ve been to a couple of meetings on, and they’re talking about some freaking, you know, it’s all, we’re we’re in the coastal zone and you know, you gotta provide more for, you know, uh, bloody parking.

Reed Goossens (35:19):

It’s like, well news, I’ve already, I’ve already built a, I’ve already built a speck, I built a code, like, no. Yeah. And it, it’s taken four years. Yeah. And it’s just, I I, and then the attraction of capital, particularly risk capital at the beginning, it’s super tough. Mm-hmm. , like it’s, you know, the average, the people, the reason I do this show is to educate the masses about, you know, financial freedom. But out of all the people that I attract capital from, there’s a very, very, very small percentage. I’m talking probably less than 2% Yeah. That would understand the risk tolerance needed for ground up development Yeah. To then put their money in pre-development, preen entitlement, like, and, and, and understanding where that all falls along the line.

Bryan Underwood (35:57):

Absolutely.

Reed Goossens (35:58):

It’s, and I just say that for the, for, for the listeners, because it’s not of the fainthearted. I, I’m, I’ve been very close to the, to, to, to the fire in terms of that, seeing the inside of that business. Um, and it’s, it’s, it’s tough to make a profitable business sustainable while you’ve got five years between drinks. Right?

Bryan Underwood (36:14):

That’s right.

Reed Goossens (36:15):

You know, and, and the other thing, the amount of time, like one asset manager for me and my multi-family stuff, he could probably cover four to six assets across, you know, different markets you need, I was a project manager for development in Long Beach. I could only do maximum two. Yeah. Right. Where I’d be a pest at the city, you know, going back and forth, getting permits, you know, entitlements, you know, dealing with the g the, uh, the, all the consultants, the architects, the geotech, just getting it to permits, getting it through, you know, entitlements, getting it through, you know, to, to you getting CDs and then coming out the other side and getting it through construction and then just so, so the, the actual bandwidth of of, of human capital you need to run a development company is also doubled because, you know, I can go out and do six or seven deals a year, and my value multifamily, I probably have one person cover that. From an asset management point of view, you probably need him to do the same equivalent. You probably need like four bodies to project manage that same song. Yeah. It’s, it’s tough. And it’s just, it’s very difficult.

Bryan Underwood (37:13):

Yeah. It’s tough. We, we rely, um, so Mike Downham, he’s, he’s our, the, he is the construction partner on the team. You know, he’s been a gc, he’s worked for the big home builders. He’s been with urban housing for, you know, 30 years. He’s done, you know, 300 million high rises to you name it, just about everything. And to have a partner like that on the team that understands the project management construction process, right? Because we’re very much relying on actual project managers. We’re hiring our gc, their superintendent, watching all the subs. But to have a partner that understands that, that that component from soup to nuts is invaluable for us. So, I mean, it’s, it’s uh, definitely a huge value add when you talk about our group and the ability, and you’re right, it’s very difficult, you know, no one, no one just has $7 million sitting in their bank account to then go, right? Oh, well, um, yeah, let me just buy this property real quick. You know, they can sit there for two years not making any money and let me go spend another $3 million with architects and consultants to get the, to, to get the building permit. Now I’ve got the golden ticket where I can go raise equity and put my debt together and go fund the project. Right? Like that’s what you need

Reed Goossens (38:28):

And then you’re breaking ground. Yeah.

Bryan Underwood (38:30):

Yeah. And then you’re breaking ground. So, you know what I mean? We are just, you just make it happen. Yes. Like fast forward. We’re not at, at our stage right now, like forever, like fast forward, I think we have some very, very good, um, uh, I mean initially like code GB partners that are willing to go 50 50 50 on the pursuit, like the high risk capital, like that, that, that’s right. That’s huge for us because now I can go do probably three more projects than what I can do right now. If I had someone supplementing and go, we know you guys, we know what you’re looking for. We know you, you, you know, the city. Like go get three more deals and we’ll go 50 50 with you on high risk capital. My gosh. Same. Like, we’re going, you know mm-hmm. . So those are, those are the types of relationships that we’re working for because every bit helped. Like we’ve got, we’ve got the talent, we’ve got like literally the bandwidth to go make it happen with this team. Like it’s, it’s awesome. I mean, just look at these two projects they’re working on right now are just phenomenal. Like really, really excited about them.

Reed Goossens (39:28):

That’s great. That’s awesome, mate. Look, I’d like to ask the question at the end of the show, what’s gonna happen in the next 12 months, you think, coming out of this very volatile time with interest rates?

Bryan Underwood (39:38):

Uh, well that’s a, that’s really open o open-ended question. What’s going to happen? Um, I think right now, uh, the economy is literally outta halt. Jobs remain good, capital’s not flowing. So between now and the next 12 months, um, capital, they’ll start to flow. Um, I think things will normalize. I don’t think interest rates come screaming back down, but normalizing is good because the Fed has been acting erratic, which, which puts fear into everybody. They’ve done something they’ve never done before in the history of the Fed. Um, so whenever they do something like that, like raise rates as fast as they’ve done, um, people sit back and go, my gosh, we didn’t expect that because they’ve never done it before. So you, you’re just at a time where people are very fearful. So, um, that’s okay. I’m actually, uh, not, not necessarily, I don’t wanna say excited about it. It makes it much more challenging for our current projects, but it makes me that much more motivated to actually get them to breaking ground because I think it’s going to be the perfect time to put a shovel in the ground, kind of like q, q3, Q4 of, of, of next year. Like, it’s not gonna be a better time to build because no one else is.

Reed Goossens (40:53):

I completely agree. I think it, this, this time is an extremely valuable time to be making a lot of money because there is so much uncertainty in the market, but that scares a lot of competition away. And if, you know, if you’re really, really good at what you do at your trade in terms of being an inch wide and mile deep like you are in San Diego with a local city council understanding how to entitle dirt, having the team behind you that understands the risk, then you, you start, you, you start separating the, the hay from the chaff, right? Yeah. And the cream will rise to the top and you will start to get opportunities that probably weren’t presented to you maybe five years ago when you started your business. Absolutely. So, yeah. So sticking around the hoop in these hard times is extremely important. Yeah. Well, mate, at the end of every show, we’d like to dive into the top five investing tips. You ready to get into it?

Bryan Underwood (41:37):

Let’s roll

Reed Goossens (41:38):

Mate. Question number one is what’s the daily habit you practice to keep on track towards your goals?

Bryan Underwood (41:43):

So the, the key there is I, I practice. So I’m not perfect at it. I practice it. I, I like to get up and read the Bible first thing. Mm-hmm.

Reed Goossens (41:49):

Got it. Interesting. Awesome stuff. Question number two is, who’s been the most influential person in your career to date?

Bryan Underwood (41:56):

My grandfather by far.

Reed Goossens (41:58):

Right. And he, he’s still alive, right?

Bryan Underwood (42:00):

He is,

Reed Goossens (42:01):

Yeah. That’s awesome. He’s the one that started the business, correct? Back in 1958.

Bryan Underwood (42:04):

Yeah. You, you went, you wouldn’t know that he’s 92. He is. I got, I’m, he’s, um, like, people call me a deal junkie and I’m like, well, you haven’t met my grandfather. . That’s awesome. He, he is the epitome of a deal junkie.

Reed Goossens (42:19):

That’s awesome. Question number three is, what’s the most influential tool in your business? And when I say a tool, it could be a physical tool, like a phone or a journal, or it could be a piece of software that you just can’t run the business without. What is it?

Bryan Underwood (42:31):

Yeah, my, um, I, I started a long time ago. I, I’m gonna, I’m gonna call it a journal, but I, I, I have a notepad that I have used since, uh, I I was like 23 or 24. Um, same style of notepad. I, I go through ’em about every six months and I have every single one. Yep. I mean, it’s, it, it’s the same cover. Okay. But I change the notepad inside. Right. Uh, so, uh, just a tip that I got early on from a mentor of mine that said, write everything down mm-hmm. and, uh, I haven’t stopped. That’s just, uh, you, when you write it down, I, you, you just, you remember it. I, I remember stuff that people are like, how do you remember that? You know, and I’m like, let’s play in my journal , you know? Right. But yeah,

Reed Goossens (43:12):

No, I completely agree. Uh, it’s so, it’s so valuable, you know, having a journal. I’m, I’m I just for those people who weren’t I, who were watching this on YouTube, I flashed my own journal in front of Bryan. Cause we, we both, yeah. I, I’ve gotta physically write it down. There’s something about the art of writing it down. It goes into your brain and is in the back of it. You remember it. So, so awesome stuff. Yeah, absolutely. Uh, question number four is, in one sentence, what’s been the biggest failure in your career and what’d you learn from that failure?

Bryan Underwood (43:37):

My biggest failure, um, I think the biggest failure is, is the coming to fear. So not, you know, I, I’ll get in my own head and I, I, and I’m, I’m, I’m sharing this cuz I know I’m not alone. I get in my head and say, you’ve never done that before. You don’t have all the pieces put together, you know, on and on and on. Like, just that, that thread that causes you to just sit still and not move and nothing’s more costly than sitting still and not moving. So, um, get that junk outta your head and, and go and who cares if you fail? Um, you know, like, make sure you can still feed your kids. So, so don’t be, don’t be stupid, but go fail because you will be like so much further ahead than almost everybody around you.

Reed Goossens (44:36):

I love it. Absolutely love it mate. Last question is, where can people reach you to con continue the conversation? They wanna be in your sphere, where do they go?

Bryan Underwood (44:43):

Yeah, I’ve got a website set up that is investwithbryan.com. investwithbryan.com. So my name is spelled Bryan and vessel of Bryan.com.

Reed Goossens (44:54):

Got it. Awesome stuff, mate. Well, look, I wanna thank you so much for jumping on today. So I just wanna reflect some of the things that I took away. I think the, you know, very lucky to be, to be born into a, a fa or just, you know, Kik that your family was involved in real estate, but having the announced to be a persistent and be a pest and say to your uncle, Hey, I can be valuable. And then going and learning the trade over 10 years to then taking the risk and jumping out and, and taking on that more risk. You know, it’s, it’s, you, you, you mentioned fear earlier and I think that’s so important that you gotta get comfortable with fear and not having all the, the, the, the traffic lights turn green at the same time to say like, let’s go off and go.

Reed Goossens (45:31):

Um, there’s that element to you and I think that’s, it’s really, really powerful. But also then you’re breaking down how difficult it is to run a development company over the long term. And some people don’t actually realize that, to your point, they just think, you know, greedy developers. But the soup to nuts of finding, identifying the dirt, doing the prelims, going all the way through, getting the consultants it takes, takes a lot of money and a lot of risk to to, to getting it, you know, out of the ground and leased up. Five years is a long time. And, and you know, I I sort of shared some of my experiences versus the, the, the value I multi-family. How do you sort of balance the two businesses, keep the lights on, uh, knowing that this is a long-term game. Um, did, did I leave anything out in that summary?

Bryan Underwood (46:09):

No, man. That’s a great summary. I

Reed Goossens (46:11):

Love it. Awesome. Awesome man. Well again, thank you so much for jumping on today’s show. Enjoy the rest of your week and we’ll catch up very, very soon.

Bryan Underwood (46:18):

All right. Thank you Reed. Appreciate it.

Reed Goossens (46:19):

Well there you have another cracking episode jampacked with some incredible advice from Bryan. Remember, check him out and invest with Bryan with the com. Uh, he’s got some cool stuff going on in San Diego. If you are in the San Diego area, you need to look, you need to contact Bryan cuz he is a guy that’s going an inch wide and a mile deep in that region. Um, and some people would probably see, see San Diego and go, oh, it’s too, there’s no cashflow. I can’t invest there. Well, Bryan is investing there, making money there and making it his, you know, muse in terms of he knows it in and out from the city through developments through finding dirt. So definitely check him out and invest with Bryan.com. Uh, all the short links from today’s show will be up on my website @reedgoons.com. And if you do like this show, the easiest way to give back is to give it a five star review on iTunes. We’re gonna do this all again next week. So remember, be bold, be brave, and go give life a crack.