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BiggerPockets Radio Podcast 003: Getting Started in Real Estate and Raising Money with Brian Burke

by Brandon Turner on January 31, 2013 · 44 comments

  
Getting Started

In today’s show we talk with Brian Burke, a house flipper and real estate investor from Northern California with a fantastic story and fascinating business model.

Two days ago, Brian wrote a wildly popular article on the BiggerPockets Blog titled, “Anatomy of the Grand Slam: How I Made $800,000 on One Flip” where he talked about flipping a large apartment complex using a combination of hard money and private capital he raised. In today’s Podcast, we’re going to look more in-depth at how Brian got started, the strategies he uses to flip over 100 houses per year, and how you can use the same techniques that he does to raise money for your next real estate deal.

Last week, the BiggerPockets Podcast reached #6 on the Top Business Podcasts in all of iTunes. This is an enormous honor and we want to just take a minute to thank everyone who has taken time to listen on iTunes or leave a review. As of today, we are up to 49 Five Star Reviews. If you haven’t yet left us a review and want to help us out, please click here to leave a review in your iTunes player.

Listen to the Podcast Here:

In This Week’s Podcast We’ll Explore:

  • How Brian started with no money, no experience, and without rich friends
  • How losing money on early deals helped grow Brian’s business
  • Investing in real estate when you look 15 years old.
  • Why dealing with sellers is Brian’s least favorite strategy for real estate investing
  • Brian, Brandon, and Josh’s differing opinions on using credit cards to finance real estate
  • Why raising private capital is one of the most important jobs for an investor
  • Three tips for raising private capital
  • Why Richard Branson gets in a hot air balloon and sails around the world.
  • How Brian funds dozens of real estate flips per month
  • Using property managers to get you inside information
  • The one piece of advice new investors can’t survive without.
  • Using partners to invest in real estate

Links from the Show

Tweetable Topics

“If you don’t screw up – you don’t learn.”
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“They won’t say yes if you don’t ask.”
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“Sometimes failure is your biggest boost.”
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“Whether it’s Harvard, Yale, or on the streets of real estate school – every lesson costs you money.”
(Tweet This!)

“Sell yourself… the more track records your build, the easier you can raise capital.”
(Tweet This!)

“If you want to change your situation, change your vocabulary.”
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“A lot of this business is sounding like you’re smart – but you’ve gotta back it up.”
(Tweet This!)

“If you don’t love your work – you’ll never make it to the next level.”
(Tweet This!)

Books Mentioned in the Podcast

About Brian

Brian Burke is co-founder and Managing Director of Praxis Capital, LLC, a real estate private equity investment firm created to provide high rates of return to his investors while tactically managing risk. He has been a real estate entrepreneur since 1989, and has purchased over 500 properties valued at over $150 million, primarily from foreclosure.

Brian’s BiggerPockets Profile
Brian’s Company Website: Praxcap.com

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{ 44 comments… read them below or add one }

Glenn Espinosa January 31, 2013 at 7:49 am

Truly another EPIC podcast from you guys! Much Kudos to Brian for providing all that info and for sharing his story.

I’m with Brian on the whole credit cards thing – sometimes you just gotta do what you gotta do. A big chunk of my first rehab was financed on credit cards but it got me into the game. A few flips later and by having a track record, I am able to attract cheaper financing from lenders and other investors.

SO, everything this podcast said regarding money and finding financing is 100% true!

Best,

Glenn

Reply

Brandon Turner January 31, 2013 at 8:23 am

Thanks Glenn! Yeah, credit cards are an interesting topic. It’s tough for me to say “don’t use them” when I have – but the fact remains I wish I had not. Might be a good topic for a future blog post, Glenn! ;)

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Brian Burke February 1, 2013 at 7:43 pm

I wish I didn’t have to use them, but at the time, I had no other options. I wouldn’t do it now, but I don’t have to now! If I hadn’t done what I did, I wouldn’t be who I am.

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Shaun February 6, 2013 at 9:40 am

The key to using credit cards to fund flips is having good credit.

I have about $58K in credit cards where every month I get offers for 0% interest for 13 months for a 4% transaction fee. So basically a 0% loan with 4pts.
No Balloon, no lien, no questions asked. Why WOULDN’T I use this before going to other lenders?
In addition I almost always buy my appliances from HomeDepot, or Lowes, or SEARS or whereever I have a store card where they will let me buy them $0 down and deferred interest for 6-18 months. Dont pay for them until after you sell the house usually.
I have a set of appliances I bought over a year ago for a house I sold last April that I don’t have to pay for until this coming June.

You have to be smart and responsible to do it, but if you have the right system credit cards can actually be very CHEAP financing.

Joshua Dorkin January 31, 2013 at 8:36 am

Thanks for listening and for the feedback, Glenn. I’m glad you loved the show!

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Trevor Probandt January 31, 2013 at 8:08 am

Just added a new RE goal to my five year list. Be on a BP Podcast.

Great info and helped fill in some blanks I was curious about.

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Brandon Turner January 31, 2013 at 8:24 am

Haha thanks Trevor! Podcasting is one of the most fun activities I’ve ever done!

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Joshua Dorkin January 31, 2013 at 8:40 am

Make it happen Trevor! The first set of guests and those we’ve got planned for the foreseeable future come from active users of BiggerPockets. Get your business going and stay active and perhaps we can have you on the show as well. The real reason to stay active, however, is that you’ve got an amazing network of peers to learn from and to do business with.

Otherwise, I’m glad you enjoy the podcast; do be sure to leave us a review over on iTunes if you haven’t already.

Thanks!

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Brian Burke February 1, 2013 at 7:48 pm

That’s a great goal, Trevor!

I co-hosted a radio show for Fox News Radio for about a year, and it was a total blast. I really enjoyed doing it. However, that didn’t have the awesome interaction with the listeners that this podcast has had. What a great idea that Josh & Brandon had to put this together!

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Joshua Dorkin February 1, 2013 at 8:34 pm

Thanks for that, Brian!

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Justin Pierce January 31, 2013 at 9:03 am

Very Good!

Reply

Joshua Dorkin January 31, 2013 at 9:07 am

Awesome Justin! I’m glad you enjoyed it. Have you had the chance to leave us a review on iTunes?

Reply

Brian Stone January 31, 2013 at 9:04 am

Great podcast and is a great help for someone that is just starting out or lost trying to figure out how some of the other professionals have gotten started! Thank you!!

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Chuck Redman January 31, 2013 at 11:35 am

Another great podcast!!!! BP is the BEST!! As a person who is new to REI and BP I am amazed that there are REAL experienced investors here with the intent of HELPING others without the “BUT wait that’s not all” sales pitch trying to get you to buy their stuff!!!!

THANK YOU TO ALL!!!

Reply

Brandon Turner January 31, 2013 at 11:58 am

Thanks Chuck! You are too kind :) You nailed it – there’s no upsell! I hope that’s what will always keep us distinguished from everyone else, along with having killer content!

If you haven’t left us a review in iTunes yet – please do! Every review helps us get more exposure in the iTunes marketplace, which helps us reach more people.

Thank you Chuck for listening and commenting!

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Ryan Lundquist January 31, 2013 at 2:42 pm

Really good stuff guys. I’m loving the podcasts. It’s nice to listen while I work.

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Joshua Dorkin January 31, 2013 at 3:00 pm

Thanks Ryan! I’m glad we’ve got you as a fan…

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Karin DiMauro January 31, 2013 at 8:49 pm

Great job, guys! One of my top goals for this year is to learn how to raise capital that will enable us to do more than one flip at a time, and this Podcast has given me an outstanding – and realistic! – outline for how to proceed.

You also helped reinforce the gut feeling I had that we had to just get out there and DO something, establish a track record, in order to really move ahead – rather than being overly caught up in whether our first flip was the perfect one, would fit a formula exactly, and kicking ourselves for using hard money rather than private, etc etc etc. (The numbers are good and it will do fine, but most of all, we’re building our portfolio! And the private money will follow – thank you for the positive reinforcement on that notion.)

Thanks again – and yes, Brandon and Josh, I will head over to iTunes…

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Brandon Turner January 31, 2013 at 8:54 pm

Lol thanks Karin! I’m actually in the same boat as you! I definitely feel better about pursuing some syndication after speaking with Brian. And I won’t mention iTunes… ;)

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Joshua Dorkin January 31, 2013 at 9:13 pm

Hey Karin and thanks for the message. I’m happy that the show was helpful and I do encourage you to dig deeper on the topic here on the blog and back on the BiggerPockets Forums.

Otherwise, we appreciate you heading over to iTunes.

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Brian Burke February 1, 2013 at 7:52 pm

Karin, I’m so glad you got something out of the podcast. I know what it is like to be stuck in the paralysis of analysis. I worked real hard to understand this business for three years before I did my first flip. I finally realized I had to get out there and DO SOMETHING or I would forever do nothing. Cheers to your success!

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Brandon Nelson February 3, 2013 at 7:29 pm

Excellent interview and nicely produced podcast you guys! Brian, I particularly keyed in on your statement about “being relevant” to a prospective investor or client. The way you articulated that one simple concept instantly gave me a sort of “mental license” to be pitching to way more prospects. I know what I do and have to offer is extremely relevant, and I know I can present it well. It’s appointment setting time! Thanks for that, and for the other golden nuggets you shared. Very, very impressive what you’ve done, and what you’ve shared.

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Joshua Dorkin February 3, 2013 at 8:01 pm

Thanks for the feedback Brandon. I appreciate the interest. Please be sure to subscribe to the show on iTunes and to leave a rating/review when you have a chance. Every new subscriber and review helps. See you around . . .

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Brian Burke February 5, 2013 at 10:01 pm

Brandon, I’m glad to hear that you got relevant information that helps you propel your business. Good luck getting your investors!

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Jesse M. Holmes February 6, 2013 at 6:17 pm

You are definitely on the right path with this podcast. There is so much valuable insight, and I really love the way you’ve added the books that were mentioned in each episode. I wish every community were so up front and simple.

In this episode, Brian mentions being an aviator of some twenty years. If I may be so indulged, I want to know what kind of fleet he has at home, and whether he finds himself flying more often for recreation, vacation, or business. I promise I’m not coming from left field—one of my great attractions to real estate is to earn enough passive income to afford flying with my family.

Reply

Brian Burke February 6, 2013 at 6:28 pm

Hi Jesse, I certainly don’t have a fleet (I wish!), but I fly a Cirrus and a Robinson R22. I used to fly 90% business 10% pleasure, but as my business has grown it’s left less time for flying. Now it’s probably 50/50, not because I fly more for pleasure, but because I fly less for business. Just getting out of the office to see the light of day would be nice… Private aviation is not a cheap enterprise, it would be nice if it were, but real estate makes it possible for me. I hope it does for you too at some point. I can’t think of anything more satisfying.

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Joshua Dorkin February 6, 2013 at 9:26 pm

Hey Jesse – Thank you very much for the feedback. I’m glad you like the format and how we put together the show notes to help out. Keep listening!

As for your questions to Brian — I’m sure he’ll pop back in with some feedback.

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Will Barnard February 7, 2013 at 12:19 am

Great show guys.
Brian, question for you. You stated that one of the major players in the investment management arena told you the answer to your problem of raising enough capital and it was that you don’t over promise. Then you went on to state how important you feel it is to stay real. So I am wondering, why did you not take his advice and in doing so, have you continued with the same problem of capital raising to fill deal flow?

Reply

Joshua Dorkin February 7, 2013 at 7:15 am

Thanks for listening, Will! Don’t miss today’s show with Frank Gallinelli…

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Brian Burke February 8, 2013 at 12:07 am

Brandon Turner warned me this would happen. When we were talking about writing articles for the BP blog, I wasn’t sure what I would write about. Brandon said that the best topics come from questions placed in response to my articles or podcast. Ha! He was right!

Will, as I thought about the answer to your question, it became apparent that I need to write an article to answer it. It’s too thought provoking of a question to just give a couple of sentences in response.

Stay tuned for the article! And, thanks for the idea!

Reply

Brian Burke February 22, 2013 at 8:44 pm

Hey Will, I posted the answer to the first part of your question in this BP Blog article:

http://www.biggerpockets.com/renewsblog/2013/02/22/how-to-raise-capital-for-your-business/

As to the second part of your question, I’m not convinced that I’ll ever raise enough capital to keep up with deal flow. It seems to me that most investors either have too much capital and can’t find enough deals, or they have too many deals and not enough capital.

I think that a key reason for this is that raising capital is the weakest skill set for most real estate operators. Interestingly, the people that are best at raising capital aren’t always the best real estate operators. I’m the first to admit that although I’ve raised many millions for my business, I’m a better real estate investor than fundraiser.

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Paula February 28, 2013 at 2:45 pm

Hi Brian:
Great podcast. I’m a real estate salesperson and want to start real estate
investing.
I’m based in New York city. Any advise is appreciated.

Reply

Joshua Dorkin February 28, 2013 at 6:05 pm

Hey Paula –
You should start by going through our BiggerPockets Ultimate Beginner’s Guide to Real Estate Investing . . . designed for folks just like you. AND – it is free and there’s no catches — just follow the link and check it out.

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Brian Burke March 1, 2013 at 12:15 am

Hi Paula, thanks for the compliments. Being that you are already in the biz, you have a big leg up. I agree with Joshua, the Ultimate Beginner’s Guide is a great place to start, and there is a ton of knowledge free-flowing on the forums. Best of luck and good fortune!!

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Skip Johnston May 7, 2013 at 12:14 pm

Is this podcast no longer available?

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Joshua Dorkin May 7, 2013 at 12:19 pm

You can listen on the page above or on iTunes. All our shows are available for listening still, Skip.

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Terry H May 13, 2013 at 9:00 am

Great Podcast Brian. I can relate to the part when you said you looked like you were 15 when you started investing at age 20. I have in the same situation, I’m 24 and I look about 15! I wonder if people will take me seriously when I actually do start investing. Great show!

Terry

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Terry H May 13, 2013 at 9:02 am

*I AM in the same situation.

*Typo

Terry

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Brian Burke May 13, 2013 at 9:10 am

Hi Terry, it will work out. If you are feeling self-conscious, you might try building a rapport with sellers and agents over the phone prior to a personal meeting. Once you have shown them that you know what you are talking about, appearances are less important. Good luck!

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Terry H May 13, 2013 at 11:03 am

Thanks for the response and the advice Brian.

Terry

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Danny Day September 2, 2013 at 3:13 pm

Awesome podcast. Great info.

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Joshua Dorkin September 2, 2013 at 7:46 pm

Thanks Danny!

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Jason Eyerly January 22, 2014 at 2:43 pm

I’m waiting for all of my marketing materials to arrive, so I can start wholesaling/flipping and my biggest fear is that I’m twenty years old, six feet tall, and about one hundred thirty pounds and I look about fifteen or maybe sixteen. I feel like people are not going to take me seriously, or when I show up to see their property, or even introduce myself as a real estate agent to buyers sellers and their agent, they are going to laugh at me and tell me to get out. I’m going to present myself to be as professional and clean cut as possible, and I’m just hoping for the best.

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Brian Burke January 22, 2014 at 3:02 pm

Jason, that is such a familiar story! I went through the same thing. You can get past it!

Reply

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