Table of Contents - Everything You Need to Know About Joint Ventures with Mandy Branham
George El-Masri [00:00:01] Thank you for joining me. It's George El-Masry and I interviewed Mandy Branham today, she is a phenomenal investor. Not only is she really knowledgeable when it comes to purchasing properties and joint ventures and all of that stuff, but she's really focused on helping people grow. She's worked on herself quite a bit. So that kind of separates her from other people that I've interviewed. And just to kind of break down the episode, for the most part, we talked about start to finish what it takes to have a joint venture that includes sourcing the deal, building relationships, having a Performa, having a letter of intent, securing the deal in your partner's name, securing a caution on title, and finally the reporting required after the fact. So once the property closes, those are just some of the things that we discuss. So this is this episode is great for someone who's getting into their first, maybe second joint venture. And they want to know what it looks like from a very experienced person's perspective. I would highly recommend listening to it. And again, if you guys know someone who's looking to invest, I mentioned this on a lot of the episodes, I'm always happy to work with them. So keep me in mind if they're looking at Hamilton. Well, in St. Catherine's. Reach out to me, George. Well off. See, I'm always happy to also have a conversation with you. So if you ever want to get together for coffee, reach out to me. It'd be nice to connect with some of the listeners know who's out there and I look forward to chatting with you soon. Have a good time listening to this episode. Welcome to the War podcast, where the goal is to motivate, inspire and share success principles. Today, I have Andy Burnham, the CEO of Solutions Driven Man, realized in 2007 that she was working hard to make others rich while she was just getting by and she decided to take matters into her own hands. Today, she has become a very successful real estate investor. So solutions driven. They focus on strategic real estate or they are strategic real estate investors. With over 11 years of experience, they find opportunities, negotiate creative terms, establish partnerships and streamline the buying process. Today, at least for a portion of the conversation, we'll be talking about joint ventures and kind of breaking it down to make it a little more simple for people who are just starting to get there. So, Mandy, welcome to the show.
Mandy Branham [00:02:14] Thanks for having me, George.
George El-Masri [00:02:16] You're welcome. If you guys remember, I think the first video that I ever released on YouTube, Mandy was the guest and that kind of launched everything. And then from there, it turned into a podcast. And so I'm just happy to have you back. I don't know if we did this the first time. I haven't seen that clip in a long time. But usually I like to ask about your childhood. So if you can tell me about where you grew up, what you remember, certain things that you remember from your childhood.
Mandy Branham [00:02:41] So I grew up north, near North Bay, Ontario. And what I remember, like some fun summer activities, we would be on our bikes for hours, hours on our own. And like, mom, I'm going to need a lunch. And we would put it in our backpacks and we would go, and there's this little creek. And we would ride our bikes down there and make little toys and watch them go down the river and literally show up dirty at home for dinner because because we were hungry again and pick blueberries and raspberries and like just outside quite a bit as a kid or cool.
George El-Masri [00:03:14] That doesn't even sound like Canada. That sounds like you grew up in another country.
Mandy Branham [00:03:19] No, it was awesome. And then winter times, like you remember building those, like, huge snow domes. You know, the the the guy would put a big pile of snow and we would just like carve it out. And ours again, like, mom, we're going to need a lunch and we would just go in there and, like, make a lunch and my dad would bring us a little nightlight. So we actually had a light inside of our snow home. So, yeah, it was fun just outside a lot.
George El-Masri [00:03:42] That sounds very cool. I never did anything like that. We used to build snow forts and throw snow at each other from across like a war zone. Yeah.
Mandy Branham [00:03:49] Road hockey. Right. You can kind of. Yeah, yeah. Fun. Fun.
George El-Masri [00:03:53] Very cool. So let's let's get right into it because there is a lot to share today. Obviously today you are known as the JV queen. Yes. And you do a lot of that sort of thing. You're very active. You own a lot of real estate yourself. Can you kind of walk us through what you're focusing on today?
Mandy Branham [00:04:10] Yeah. So I actually like, you know, I'm going to pledge allegiance or that there is a lot of money out there that doesn't know how to best be put to use. And I actually feel that we have a duty, people who are building their real estate education to be able to be somebody that that money can turn to in a trusted way to be able to put it to work. And so when you actually kind of get over the whole mindset of, oh, my gosh, I need money, I need money, and then you realize that the money needs you just as much as you're attracting the funds. The funds are looking for a very high quality place to be able to be put trusted with people who have the same values and ethics and timelines. And so, yeah, I, I realized that I had a bit of a duty to be able to put people's money to work in the real estate industry. So I do believe that everybody needs to have at least a piece of real estate or two one per child kind of thing to be able to diversify their investment portfolio. So I'm encouraging everybody. Yes, you are spouse and and stocks, some cash, mutual funds, maybe some gypsys, but everybody needs real estate. And so I thought but not everybody can get educated the way that I got educated and not everybody has the the motivation behind the real estate like I do. And so I just was like, I'm going to be the one a go to person for somebody to be able to invest in real estate without having to take the time to learn about it and the time to manage it in the time. So I remove the time factor.
George El-Masri [00:05:45] Exactly. So your role is very different from the people that you're working with. Do you want to talk about what you do and what your partners typically do, what their responsibilities are?
Mandy Branham [00:05:54] Yeah, sure. So the easiest breakdown of joint venture relationship in my eyes, I look for somebody who can qualify for the mortgage, somebody who brings the down payment capital. So down payment, capital, closing costs, carrying costs and the renovation costs. I need somebody who will maintain their credit so that, you know, in three years or five years or six months after after the renovations are done, we can refinance. So I need so if somebody in the middle of retirement and they're not going to able to qualify in three months, well, then maybe they're not going to be necessarily the best suited partner, somebody that's. Going to stay in the country, so not necessarily somebody that's moving all around and then what are my roles? Well, pretty much everything else. So I will source the property. I will do the market research. I will do the pro forma, run the numbers, make sure that we meet zoning and and bylaws, come up with the vision for the asset, what it is we're going to do with it, oversee the property management, oversee the project manager management, bring in my strategic partners to be able to make sure that we're getting into the right mortgage product, the right have the right insurance on the property liability wise, and then kind of sit on it. So I'm like I'm the person that assists with the dash of real estate. So there's the oh, I bought it in 2007 and I sold it in twenty seventeen. But the dash is where the wealth is built, the dash is where you have to deal with tenants and have to deal with winter frozen pipes and have to deal with all that stuff in between and, and in the real estate world, there's a lot of people that just like to think about when they buy it and when they sell it. So what I look after is the time during the dash.
George El-Masri [00:07:37] OK, very cool. Yeah, you do a lot of stuff and you've helped a lot of people along the way for the listeners that are maybe just getting into their first joint venture and that are just starting to understand this whole process. Can we break things down into a couple of steps to see what it looks like from start to finish? We've got a couple of points here that we kind of quickly discussed. So we were talking earlier. You said the first thing that a person should do is source a deal. So can you talk a bit about that?
Mandy Branham [00:08:06] Yeah, I want. So you mean let's even just kind of like paint a picture of who that person would be, so, you know, hey, I'm twenty four years old. I'm keen. I just finished school and I'm kind of in my job going, there's got to be more to the next 25 years than me doing what I'm doing. And they've kind of looked around and they've seen that some of the senior people at work or some of their friends are drive in different fancy cars or however that is. And they're like, what are you doing? And so they've got this piqued interest on real estate. And then but they're hold up or they're they're they're they're mountain right now would be the financing. And so so here's this. You say twenty four year old could be, gosh, a 34 year old who's like, I am done in my job and there has to be more cash. So I'm trying to paint this picture of the pain point of somebody. I want you to start to become a real estate expert. So I say source a deal. I want you to start to be able to see what are the deals that are out there? What are other people doing? What is a good price? What is a good market? Where do I go? Start attending these networking meetings, start to find mentors and fellow investors that you can turn to, that you can, you know, send an email to and say, hey, can I come check out your project, somebody that you can bounce ideas off of, somebody that you can ask who is helping with your financing? You have to start to set up your power team. So all of this stuff other than time doesn't cost anybody any money. And, you know, I guess I kind of in that first phase. So in step, no one is being able to know what a good deal looks like, like sourcing your properties. But it's also kind of my way of being able to encourage people to find the excitement about real estate. Why would that money turn to you having the the yeah. The drive to be the working partner have the enthusiasm about why this asset would be even a good one to be able to potentially offer to a partner. So so the first step is just. Yes, sourcing deals and starting to get really comfortable with what's out there. And and how does it work exactly?
George El-Masri [00:10:13] In order to source the deal, you have to have an understanding of what a good deal looks like. So you have to do your research, be around people who are doing it, go to networking events, educate yourself. So that's step one. Step two would be building relationships.
Mandy Branham [00:10:26] Yeah. So no different than congratulations on your recent fiance. Say thank you. Right. But did you ask her to marry you on the first date? Did you see did you see that she was a, you know, somebody that met a lot of your criteria and then you're like, hey, you're it. Do you want to go in on a relationship to get the hey, why don't we just skip the relationship and just jump right to marriage? It sounds kind of funny.
George El-Masri [00:10:48] Yeah, it doesn't make sense. Right.
Mandy Branham [00:10:50] And so to me, it's a perfect segue into let's build some relationships within joint venture worlds. You know, just because somebody has a great job, know your brother in law and your sister, maybe there are two teachers or a police officer and a teacher and you're like, oh, my God, they complain about money all the time, but they have really good jobs. And, you know, their house is more than paid off. They'd be perfect joint venture partners. But that doesn't mean that they're ready for real estate. That doesn't mean that they even want to enter into any kind of real estate. So you want to make sure that you're building relationships with people so that they can kind of go, oh, great, what are you doing now, Mandy? You know, like some other network marketing scheme or whatever? And you're like, no, no, no, no, no. Now I'm into real estate, right, so you kind of have to build you as a real estate investor and get to be known as somebody who has trusted somebody who is this isn't just a fad or a phase that you're going through and and and build relationships. So a lot of times I am finding my joint venture partners at other networking events. So I kind of talk about the readiness to invest scale from zero. Who's that? Your brother and sister in law who are like, stop talking to me about real estate. I want my mortgage paid off. I never want to own another asset. Twenty five percent is like, you know what? How did you just take two vacations a year? And you're like, well, I've got this real estate thing going. And so they you've piqued their interest and they're like, well, how do we kind of potentially get involved? And so you start to just, you know, nurture those initial relationships and then, you know, from 50 percent, they're at a real estate investing meeting. Maybe it's their first one. Maybe it's a free event, whatever that might look like. The 75 percent ready to invest person would be somebody that's like, hey, you know what? I've got a headlock on my house, but I'm nervous. I don't know where to invest in, but I know I want to. So they've made a major initial step and they are aware of it or they've had that inheritance in the cash sitting in the bank account or they were nervous in the stock market. And so they pulled out some of their money. And so it just sits there and they're like, I know I want something within real estate, but I don't know what. And then the person that's the one hundred percent ready to buy scale is the one that calls up and says, Mandy, I'm in the next deal you get. I'm I'm ready to go. And and they have already made the commitment. They've already done all the research. They've got themselves prequalified. And so they're they're 100 hundred percent ready to go. They're just kind of waiting to pull the trigger with the right person.
George El-Masri [00:13:22] Got it. Very cool. So basically being able to see the ready to buy scale within people to identify how much energy to put into them and where this relationship will go,
Mandy Branham [00:13:33] 80, 20 rule. So 80 percent of my time is spent on people who are at least 50 percent ready to buy and over. And only twenty four twenty percent of my time is is spent on on the other half. And that, you know, that doesn't mean that I don't talk about real estate to people, but I really encourage the listeners not to get distracted when somebody who is zero percent ready says, but that's so scary. And oh my gosh, what if the market crashes and don't you think there's a bubble? And so you kind of buy into their fear and you might be distracted from what it is you're doing. So I really only encourage people to spend just a little bit of time and just, you know, to those people go, you know what? It's OK. You know what? Thank you very much. I hear you. But I'm just going to continue to keep educating myself. And with education comes a reduction of fear, so.
George El-Masri [00:14:28] Exactly. And part of this whole process is practicing your pitch.
Mandy Branham [00:14:32] Yes. So step three.
George El-Masri [00:14:35] Yeah. So we kind of talked about practicing your pitch and then the education. So what do you have any suggestions or anything to talk about with regards to the pitch?
Mandy Branham [00:14:44] Yeah. In the mirror by yourself. You want to be able to do a 60 second pitch, you know who you are, what the deal is, why you feel it's good. What are some of the highlights? I don't want people to get stuck in the numbers. You know, sometimes, like if you are looking at somebody and they get that like deer in headlights look and they just kind of stand there and you realize you lost them, you know, three sentences back then. You need to keep practicing your pitch because we want to make sure that you don't lose people along the way or talk to high over their head. So it's definitely a practice.
George El-Masri [00:15:18] And this is a property specific pitch, not like a general elevator pitch. Both.
Mandy Branham [00:15:24] Both. I mean, if you are just starting to build relationships and somebody says, hey, what do you do in real estate? Well, that's a really good time for you to be able to have a bit of a pitch. Hey, you know, my name's Mandy and I specialize in passive investing. I look for partners who want the benefits of real estate but don't have the time factor. I actually help remove the time factor. You know, I'm pretty open to having a conversation if you'd like to hear a little bit more about what I do or or go on a mail list for me to be able to send you my latest deals or, you know, sit down and have a coffee boom. There's a bit of a of a, you know, who I am as a joint venture kind of introduction. But if I was there at some of our local investing meetings, they have an opportunity for somebody with a deal to be able to stand up. That would be a very specific deal that I would have. I would say, hey, I have a single family on the Hamilton Mountain under contract right now, and it's four hundred and ten thousand dollars. It's I feel it's a really win win situation. You know, there is grandma that had to move into a nursing home. And the reason that it's so inexpensive is because we actually helped them clothes quite quickly. Now, what I plan to do with this property is to add a single out a secondary unit legally I'm going to need about one hundred ninety two thousand for it. But when we're done and we refinance and I'll help you with all that, because I have very strategic business partners that I work with. You're only going to have about fifty thousand dollars left invested in the deal. So you'd actually be controlling about a six hundred thousand dollar property with only fifty thousand dollars invested, works out to about an 80 percent return on investment year over year after we've done the refinance. If you're interested in hearing more information, reach out to me so you get really good. I want you to and this is like literally people look in the mirror and start to say it to yourself. Practice on your phone, like record yourself. And in in my mentorship group, it was one of the hardest things that people had to do. And they like this is take 80. Well, it shouldn't have to be take 80, but it can be take 80 because the the first seventy nine are phenomenal practice for you to be able to do. Take 80 so
George El-Masri [00:17:32] far. And probably the biggest thing that that will do is give you confidence and that'll show with the person that's hearing that will think you're professional.
Mandy Branham [00:17:40] Yeah. And again, it's, you know, it's how you're standing there in front of somebody, what you're wearing, how confident you are in the deal. Why Hamilton? You know, and if you can say to them, you know, I can go on about why Hamilton. But realistically, you know, Hamilton is just Hamilton. Nobody really needs to do much market research on on Hamilton and what's coming and why it's going to be a city of the future. But if you don't see that in your and your partner is stuck on the city, then they're kind of, what do they say, missing the forest for the trees and the trees for the forest. Right? Yeah.
George El-Masri [00:18:15] Okay, great. So we talked about the whole building relationships, practicing your pitch. The next step would be to have a Performa. So basically creating a deal sheet for the specific property that you're looking at.
Mandy Branham [00:18:28] Yeah. So even with the pitch, so there's the generalized pitch and then there's the like. Here's a property specific pitch. So there's lots of different proforma analyzers out there. Certainly find one that makes it so that you understand the deal again. You want somebody to be able to ask you any questions, like where did you get this RV? And you have to be able to answer that. And, you know, like, what do you mean carrying costs? What's included in that? And you are able to explain it. Why? Ninety thousand dollars in renovations, you know, like good questions. I'm glad you asked. And you're able to answer all of these questions for people. So, again, that's kind of part of the pitch. Once you have your performance, you know that inside. No, that's what you're pitching. That's what you're getting really, really comfortable with.
George El-Masri [00:19:13] And and would you suggest having, like, a simple Performa or I've seen people have nine page analysis sheets and that kind of thing. What would be your exposure?
Mandy Branham [00:19:23] You can see my eyes, but the listeners can't because I get overwhelmed in those kind of things. And I and I, I've watched people look at performance that are like that and they're lost on the first page. And I've sent them back to people and and I've said I actually had a contractor in Hamilton and I sent it back to him. I'm like, this is retarded. Like, I don't even under I mean, I'm an educated person and I have no idea what you're asking me to look at here. So, you know, you just want to make sure they say and actually I said this to Larry the other day because I was trying to explain this potential, you know, interaction deal with him. And and I said, I'm explaining it to you like you're a five year old. And if you can get it, if I could explain it to Larry, not that I was not that I think he's a five year old, but I needed to make it so clear that a five year old could understand it. And so that's the difference between a one page forma and a nine page is as long as it's easy to read, you're good to go. But don't lose somebody in it just because you think you know. Yeah, I know more than them, so I want to overwhelm them with information. Hey, you know what? If somebody wants more information, I'm happy to be able to provide it. I can provide any number. You want to see the breakdown on the renovations. Here's an estimate of the renovations. But on the pro forma, it's just ninety thousand isn't perfect.
George El-Masri [00:20:38] Yeah, I keep it simple. The next step. So let's say you have this deal, the persons interested that you're potential joint venture co venture. And the next step would be to get well, some people do this, some people don't yet. But letter of intent.
Mandy Branham [00:20:53] Letter of intent. So it's kind of so a letter of intent is a is a general overview of the joint venture agreement.
George El-Masri [00:21:02] And it's usually simple, also very simple. Ten pages or 20
Mandy Branham [00:21:06] pages, I think mine's four, three with three plus signature page and it just kind of says joint venture financial partner. So JV agrees to partner with JV B Mandi Joint Venture, Brenham, and and we agreed to also. So there's two times you can have the letter of intent when there's a specific property that says, hey, you want to come in on this Hamilton Mountain property, no problem. Well, sign the letter of intent, very specific to that asset, and if we don't get that asset, then we're done right. The letter of intent is specifically for that property. And the other one is just to be able to say, hey, you know what? We missed out on that last one, but I really liked it. Hey, let's sign a letter of intent that just kind of gives me three months, gives the parties three months. And that three month letter of intent will say, I will hold my capital for you and my mortgage qualification for you to find an asset. And on the JVB side, Mandy says, I will go looking for a specific asset that meets the requirements that we've discussed here. So you like that Hamilton Mountain property? We like in the four four fifty range. We like knowing that there's going to be a six hundred thousand dollar RV where we go. And so I go shopping and you hold your money ready to go. But we put a time limit of 90 days on that because, you know, after 90 days, you know, what is granite credit and say cash is trash. So I don't want somebody to be having their cash tied up for me and then realizing, oh, I happen to go on vacation and all this kind of stuff. So you want to make sure that both or or did they go on vacation? You're like, hey, I found that perfect asset. Oh, my God, it's perfect. And you're like, you're where? Turks and Caicos. You didn't tell me you were leaving. You can't talk. You sign from down there. You can't all these kind of things. So I just want to make sure that within that that letter of intent timeline that everybody is in agreement that we're full force property purchasing kind of momentum. And in a way, you go, yeah.
George El-Masri [00:22:57] And one thing that you mentioned earlier when we were having a conversation, a lot of times, like when you're getting started in this, it's more about trust. It's usually about trust. So sometimes you don't need a letter of intent. If you want to do things by the book, it's good to have it. But you should really know that this person, you trust them, you're you're willing to move forward. You both have your values are in alignment and whatnot.
Mandy Branham [00:23:21] Absolutely. I had somebody say to me today, oh, I trust you, but I trust you with verification. And that didn't sit well with me. And, you know, so to this, you know what this is we're going into this with a relationship. And but, yes, there's going to be there's going to be an agreement on this. But there is definitely major parts of the joint of the purchasing process that that one party is taking a bit of a leap of faith. So either the the working partner puts an offer in their name, a bit of a leap of faith that they're going to have a financial partner say, yep, that's the one I want, or vice versa. There's this moment of time that you're your joint venture agreements not signed yet. And the offer is being assigned over to the to the joint venture financial partner. And they've you know, I've had people that are like, don't leave me, Mandy, like, you know, so the asset is all on them. The agreement's not done yet. We've not closed on it. And they would be clueless without me to be able to back them up and share with them what we're doing. So there is a definite trust factor both ways. And I want people to really understand that, that as much as it's about the property they've already bought or not bought you, you, you, how you show up you, how you hold yourself, you, how you just represent yourself in so many different aspects.
George El-Masri [00:24:39] So it's very cool. So trust is such a such an important factor in this whole process. The next step is to secure a deal after you that you've signed the letter of intent or you're deciding to move forward. You find the deal, you secure it and you put it in the joint ventures name.
Mandy Branham [00:24:56] Yeah. Yeah. So there you are. You you're going shopping. You said you wanted a property on the Hamilton Mountain. You found one. You are working with your trusted real estate agent and you can put the offer rate in their name.
George El-Masri [00:25:09] And sorry, when I see the joint ventures name, I mean, your partner, your Grekov venturers name. Yep.
Mandy Branham [00:25:14] Yep. So you put it into the core venturers name and then you start the due diligence process. So you're like, OK, we've got seven days for financing, home inspection, insurance approval. You definitely more than start the financing, getting all the documents. But you would potentially hope that within the letter of intent period of time that you would have got them going to your mortgage specialist so they could already kind of be pre-approved for that. And and away you go home.
George El-Masri [00:25:40] Great. So, yeah, you do your whole financing, home inspection, all that. And you also I don't know if you do this, but as part of a clause in your agreement, you request to get the permit process started while you're still in the conditional or before closing. I should say.
Mandy Branham [00:25:56] It's a it depends on on a scenario. I've actually a couple of years ago, I stopped doing that. It does get at times the owner's in a little bit of uplift that they've said I'm not selling to an investor. And it doesn't necessarily save any time per say. And so I actually don't put it on there anymore. We've got my power team very well oiled to be able to say that one of the walk through is that I will have. Is with a designer, so I'm not saying that I can't have a designer walk through and start to create the drawings that will be required upon closing, we go straight in and apply for the permits or start the application process. But I don't need to start the application process prior to I mean, if it's going to be a six month close and the sellers are very aware that you're converting it and it's vacant and they really don't care what you're going to do with it. But we definitely have people who they want you to go in as they come and be a big community person like we were. Our neighbors are lovely. And, you know, when they hear that you potentially are creating a rental property in their neighborhood, they get upset for what the neighbors will think.
George El-Masri [00:27:16] Right. Yeah. So it's a case by case basis. But for the most part, you don't necessarily start with the permit process until the closing date. Yeah, yeah. And it's something you mentioned that's really important is to have a power team in place that includes having the right realtor, having the right mortgage broker, because they have to know about the refinancing, having the right contractors and all of that.
Mandy Branham [00:27:38] So insurance brokers, lawyers, accountants and bookkeepers definitely need to be on your power team so that you can flip over and say, hey, we're going to be starting a renovation. Here's a new Dropbox for all the receipts for one, two, three, Main Street. And, you know, just being as organized as possible and quick introduction to be able to say, hey, this is my new joint venture partner. Hey, joint venture partner. When you get all the closing documents, I'll need you to upload them to the bookkeeper so that she can start our, you know, our trial balance sheets and stuff like that. So everybody in your network, even down to you need to open a joint bank account to make sure that the person at your branch understands that what kind of account you need and who is going to be signing authorities on it and that maybe you're not both in the branch at the same time. But how can we make that happen? So there's a lot of people that when you actually start to take all of it into consideration. Yeah, there's a lot of people that help with the success of a of a joint venture deal.
George El-Masri [00:28:39] And it's easy to get overwhelmed by all this. You're going to learn along the way and you're not going to have everything done right. But hopefully you can just add a few pieces here and there and just get to the point where men decide basically,
Mandy Branham [00:28:51] oh, my first joint venture partner, I we still smile and laugh at it today. But, you know, he was one of my biggest teachers. He probably asked me hours of questions and I'm happy to be able to. So it's Doug Anana Scott who are super successful investors themselves. And Doug taught me so much, but he was very patient with me. And I would say, well, I don't exactly know the answer to that, but I will get it for you. And so it's not necessarily about having all of the answers is about being resourceful and knowing that you do have the right people to ask and that your joint venture partner understands that as well. So together we laugh together. We've had some you know, we've had a phenomenal return on the assets that we have together. So it was worth the risk that we both took on each other.
George El-Masri [00:29:33] Yeah, absolutely. And for the people listening here, maybe you are on the positive side where you don't want to do all of the work that man is doing. But hopefully this breakdown will let you understand what it would look like from your perspective as well as a passive investor.
Mandy Branham [00:29:48] Oh, it's brilliant. I want people to be able to say, you know, did they what did they show me in their pro forma? You know, did they talk to me about our why do they talk to me about what's a backup plan if the renovation budget goes over par? What is a backup plan if there is water leaks and mold and whatever behind the existing drywall in the basement? When we go to remove it, you know, you want to be able to know that all of these things that we're sharing with you as to how a working partner can build themselves, that's what you're looking for in a working partner that you choose.
George El-Masri [00:30:21] Yeah, exactly. And then there is also the final sort of the final step here, the second step yet after closing and also potentially after you refinance, an option would be to secure a caution on title. Can you explain that?
Mandy Branham [00:30:37] Yeah. So let's see, Steven. So the property closes and we'll say that the work gets going. You know, the working partner goes straight to work. This is what they do. So they oversee the project management. They're running the renovations. They're interviewing tenants. They're opening and closing building permits. Away we go. And then once the refinance is done, if there is a refinance, if it's a turnkey property, then this can happen quite quickly. But that the working partner lawyer can potentially put a clause on title, caution on title, sorry, caution on title. And so they can register the joint venture agreement as part of that caution, which just kind of means that if the working partner, if something goes on in the relationship, starts to go downhill and the working the financial partner were to be like, that's it, I'm done and try and sell it from underneath the working partner or for whatever happens in. Relationships go sour, so let's not pretend that this doesn't happen, then there is this caution on title that when something were to go on to say, sell it, they would be like, whoa, wait a minute here. It says, there's a caution that I need to before there's anything to be done with this title, I need to call somebody called Mandy Brenham. And and so there would be a red flag right
George El-Masri [00:31:52] there and that would show up if you're refinancing as well. So you have to be careful. We didn't really talk about this, but typically the passive partner is the one that's on title, on on the mortgage, all of that. So sometimes the active partner doesn't show up as part of this whole process.
Mandy Branham [00:32:09] Absolutely. Let's be clear on this. I do not put any of my own money in the deal. Zip, zero, zilch. And that's OK, because the value that I bring is equal to the amount of money that I asked my financial partners to bring. But I do ask of my financial partners, I think I kind of like this in the both the rules is I'm looking for somebody to be able to qualify for the mortgage go on title. So my name is not on title anywhere. And this is very legal. This is taught in rain. This is taught in key. SPIA. This is taught all over. So there's definitely you know, it's this is all above board. But no, my name does not appear on title anywhere and it doesn't appear on the mortgage. Yeah.
George El-Masri [00:32:51] Yeah, and then after all that's done, so you've basically accomplished this whole ordeal with the joint ventures and you're going to pretty much report from that point on. So you agree on a certain timeline with your with Rocco venture. You tell them potentially quarterly reports and you just carry that through until the day where either you buy someone buys the other person out or you sell the property and you move on to the next thing
Mandy Branham [00:33:16] you know, again, you make that sound pretty regular. You know, once a property I mean, if anybody's owned a property for the first little bit less even just talk about your first primary home. Do you remember the first time you you got that payment? You're like, oh, my God. Like the mortgage is due in 30 days and you're like, I need to make sure I have money in there in the first three months. You think about it and then, you know, the rest of the time it just kind of happens and goes and goes. And so, you know, in real estate, we talk about the stabilization period of an asset. And I would say that post refinance. So whatever the term, what however long it takes to refinance, that's certainly not a stable period. You know, it's certainly not stable. Once the refinance happens and we've got tenants in place, we've got a standard mortgage that we know is going to come out every month. Insurance has been paid. We know when the bills are kind of coming in and the property starts to stabilize. So for the first little bit, yeah, it's great to be able to know what the quarterly what the quarterly statements are. But I just super nicely I mean, I probably do it for my eye. I do yearly report. If somebody wants to know what's going on, we can open the joint bank account. It's pretty. It's very transparent, actually. They can see it. I can see it. What's gone in, what's come out? You know, there's no there's only the payments that have come out of the account are are agreed upon. There's I mean, everybody knows what comes in and out of that account. So there's really nothing that we have to report on. And then, you know, and it's different. If we were like, hey, we're going to refinance, is it making sense? Where does the property stand? How much money do I still have invested in it? Things like that. That's a good time that we like. Hey, let's just get the bookkeeper to be able to do us up a statement as to where the property stands and where we go.
George El-Masri [00:34:54] So, yeah, so setting that expectation so they know that they're not necessarily going to hear from you quarterly. It's going to be an annual reporting period. And let's just say in general, because you've done this many, many times with all sorts of different properties, what kind of returns can a partner typically expect? Or I shouldn't even say that because you're both splitting. So what returns do you both expect to get?
Mandy Branham [00:35:16] Yeah, so I don't get out of bed for less than 30 percent, which would indicate that that would be a fifteen percent minimum for my partner and a fifteen percent return for me. Nuts, minimum amounts annual return. That's an annual return. And it's not too often that that would be a deal that I would act on. But that was certainly my my minimum. You know, we had a turnkey triplex in Kingston. I think it was a forty two percent return on investment will say twelve hundred and fifty dollars a month cash flow. So like right up front, my partner is taking six hundred dollars instant cash flow. So even though she has one hundred thousand dollars and it's not a sexy bird model or anything like that, phenomenal returns. So yeah, I mean every property is different for those high high ROIC like this Hamilton Mountain duplex. Bur right now it's about eighty percent. I think I want to say seventy nine. Well round it to eighty percent. Return on investment in total. In total like within. Yeah that's so how I kind of calculate it is you know somebody needs to have one hundred and ninety two thousand dollars invested total. That's down payment, closing costs, renovation costs before we refinance. So at some point they will have two hundred thousand dollars invested in this asset. Then we go for the refinance and in this case they're going to receive back one hundred and forty. So it's leaving them about fifty thousand dollars invested in the asset. Now my returns now I base my EROI, my return on investment post post refinance. OK, so I actually don't include the refinance in that lift. So that's just cash flow, passive appreciation and mortgage pay down that include those three total numbers divided by the amount of capital left invested after the refinance. So in this case we've got fifty thousand. That's how we calculate our return on in our investment.
George El-Masri [00:37:11] There you go. So typically you're saying at the very least you're talking about fifteen percent for the partner annual. But that's that's not a very common case. Usually it's higher than that, definitely higher.
Mandy Branham [00:37:23] And I think the the working partners need to understand that, you know, we both know of private lending opportunities, that somebody can just go and not have to qualify for a mortgage and they're getting seventeen cash on cash. So your deal needs to be significantly better than what somebody can get passively on their own quite quickly with minimal, minimal knowledge. And so if it's a you know, I've had people call me, they're like, oh my God, Mandy, there's this great new release of a. A condo in Toronto, I think I'd like to joint venture, and I was like, why would somebody joint venture for three years with you to make a twenty four percent return on investment? You know, now if it's exclusivity and somebody else wouldn't have an opportunity to be able to buy into that, then yeah, I get it. If we're talking family and one can qualify and one puts the money down. So, I mean, the other thing, George, let's just be super clear on this is there's many ways to to split a joint venture. I'm certainly sharing my model. It's a business model. It is a growth oriented model. It's it's a model that to me is win win. Not not everybody understands why I would receive 50 percent of the deal for not having to put in any of the money, whereas other people are like, oh my gosh, like your genius, you could do 70, 30, where one partner gets all the cash flow and the other partner gets a significantly higher equity share. That could be for a really high earner. That's like, hey, I make four hundred thousand dollars a year. I'm really not too worried about four hundred dollars cash flow. Why don't you take all the cash flow and I'll take a higher equity position. You could have somebody that says, hey, I almost have all the renovation costs. And so the working partner, let's say, puts in forty five thousand of the renovation costs. So you could have a 60 40 split, 60 for the working partner and 40 for the financial partner. If there's a split in duties there. I definitely have. I'm looking at right now at twenty five. Seventy five. So twenty five percent somebody is going to hold the mortgage for me, but I'm going to put in all the money and do all the work. So it's it's almost like a 50/50 split. Fifty percent for the working partner, which is me. And then there's the other side which is fifty percent for the financial partner. And in that case I kind of been putting twenty five percent of the share on the mortgage qualifying part of it and twenty five percent on the finance, on the cash side of it. So if I'm taking on the cash portion that just kind of gives me an extra split so you could do seventy five. Twenty five. And here's something that one of our mentors would told me do. Would it do what it takes to be able to get into your first joint venture because you know, the first one's going to teach you so much so you know, don't not do it. I put in free property management. I put in I don't think I ever put free bookkeeping, but I was I had indicated that I would be the bookkeeper until I realized that me being the bookkeeper was not an asset to my joint ventures. And so that was something. But I'm still the one overseeing the bookkeeping. So it is I got it down to a well oiled machine. I know the documents. I know when they come. I know what she needs. I know when your corporate year end is and what statements we're going to need to be able to complete that. And so so I don't offer that anymore. But if if you've got skills that you can add to the joint venture, the only the only skill that that I caution people on is when somebody says I'm a contractor and the working partner and as the working partner, you perceive that you would have to work for free. But I don't see it that way. I am a working partner and I don't do any of the contracting stuff. So I'm not encouraging a contractor to work for free. What I'm encouraging them to say to their financial partner is because of my expertize in the contracting world, I'm happy to be able to bring the skills to the table. I'm happy to be able to offer our joint venture all of the discounts that I've got through my through my contacts. I'm happy to be able to share with you some of the extra materials I have in my in my garage or whatever that is. And you know what? Instead of me making X percent on every staff member, I can reduce that down. But my contracting company still needs to make money. But you can minimize the amount of so it doesn't have to be profit to the construction company. But I don't want it to be at a loss. I do not want the contractors to perceive that they have to work for free to be able to make a profit. Yeah, here's one other thing. Sorry, I'm going to on this contractor. No, because I actually feel for them. I do not joint venture on Flip's if I want to do a flip. And so because there's a lot of working partners, are a lot of financial partners that will say, oh my gosh, the next flip you do, Mandy, I'm in like I'm happy to be able to do that. And I don't do that because if I want to be able to share profits, profits like that's a big deal to be able to share profits. On a flip, I'm happy just to borrow a private private money and keep more of the profits for myself. So if a deal is so good that you are like that partners want in, I really want you to make sure that you are evaluating it correctly and and choose. Do I want a joint venture partner in this opportunity or do I just want to borrow private funds. Yeah. Make sure that it makes sense to be able to do a flip. So again, I do not. Joint venture on Flip's Don't get me wrong, I will do a short term joint venture, which is maybe two years, and then we like, oh my gosh, the asset has gone up like crazy and we sell it. That's fine. I'm happy with that. But the anticipation is not just a straight flip.
George El-Masri [00:43:07] Yeah, and that makes sense. I can understand why you would go with a joint venture on a long term buy and hold, because obviously the banks kind of limit how many properties you can have. So it helps with your growth. But on a flip, if you're using private funds, it might be a little bit cheaper for you than to split the deal 50 50 with a partner. No, no. OK, what?
Mandy Branham [00:43:29] No, I'm saying don't flip a property with a J.
George El-Masri [00:43:32] Yeah, that's what I'm saying. It's cheaper to get private funds. Yes. Than to split the deal.
Mandy Branham [00:43:37] Absolutely. Mm hmm. OK. Yeah. You're confusing the story. Yes, absolutely. Yeah. Because, you know, private financing, let's just even round it to 20 percent to the max that you'd have to pay somebody 20 percent. I mean, I could probably super high level some numbers here, but I don't want to confuse the listeners. So, you know, if you're at the end and the profit is forty thousand dollars and you're splitting that 20 and 20, and you kind of realize that you could have done that with private money and you would have ended up with. So, you know, your you could end up with more money if you did a flip using private funds. No joint ventures. Yeah, exactly. Yeah. Yeah.
George El-Masri [00:44:15] OK, great. And before we move on to the next section, I want to ask you one more thing. Obviously, what you're doing right now is helping you build wealth. And are you at this stage right now where you can live off of I don't know, what's your plan? How are you going to live off the cash flow that your your profile is producing? Or do you have another plan in mind?
Mandy Branham [00:44:36] I'm still growing, so definitely not finished. Again, like I do feel right now, like girl guard duty that I have a duty to be able to get money working for me. And now that I know what to do, it's almost like that first responder that if you have CPR, you have this, like, unwritten oath that if somebody is not breathing and, you know, CPR, that you're going to help them. Well, I kind of have that same ability now, now that I know how to put money to work securely in real estate with all of the, you know, the tactics that I've that I've learned, I'm going to keep doing it. So, I mean, I would tell you that I'm still too new five years with a major real estate portfolio. And many of my properties, like 19 properties this year, they're not stabilized yet. They're not done with the renovations. They're not refinanced. They're not tenants up and down. And so, you know, it's a it's a chunk of time before you get really stable. So, I mean, on paper, my cash flow would be appropriate, but yet it's not there. Every month, you know, a furnace goes or a fridge goes or, you know, you've got a roof that we say, hey, you know what? We're going to need a roof in the next two years. Why don't we just accumulate cash flow? No problem. I think it's really smart. And I think it's a great conversation that as joint venture partners we can have. But that just kind of means that that's the portion of cash flow that's not coming to me. And that's OK, because it's a it's also a chunk of of capital, you know, the cash call that I don't have to bring out of my own pocket. And so, you know, I want to say that, you know, within 10 years, I will be yes, I'll be comfortable. I can see myself being on an international stage, sharing about the duties of people to get money working for them within the real estate industry. So, yeah,
George El-Masri [00:46:26] OK, very cool. So it kind of sounds like you're at one point going to live off of cash flow because I know some people like Gary Hibbard was recently. You should be the episode. Just before this, he was talking about how he liquidated half his portfolio and he's doing private mortgages with the with the sales proceeds and kind of living from the cash flow generated from that process.
Mandy Branham [00:46:47] Well, I think, again, our mentor, Mark Loffler, you know, would there's certainly a breaking point. You want to make sure that you have assets and you want to make sure that you have something that puts food on your table. And, you know, I certainly am painting an accurate picture when I say to potential people who want to be like Mandy, who want to build a large portfolio using joint venture money, that there's not a ton of cash. And so if that's your spouse still working or if that's liquidating the odd asset or if that's you doing a flip on your own every once in a while on top of the joint ventures to be able to continue? Yeah, there's definitely a balance. And and it's not it's not easily found right off the bat. So if you're a real estate agent and you make money through real estate, I think that's that's not a bad thing. If you are a mortgage broker and you're making commission insurance person that's doing some commission, that's great because the cash flow will come. But I would tell you five years to be able to stabilize a portfolio, especially if you're in growth mode of that portfolio.
George El-Masri [00:47:47] OK, very good. So let's go on to the next part, which is the random five. I don't even remember if we did this last time we got together. But five random questions. You just let me know the first thing that comes to mind. What's the first movie that made you cry? It just right away. You knew I was the one.
Mandy Branham [00:48:07] Yep. Yep. I think that was the first movie that I ever watched in the theaters, too. And there's E.T. go home. I was like I was classic. Yeah. Yeah, for
George El-Masri [00:48:17] sure. OK, so you remember that moment and what song do you most associate with your childhood
Mandy Branham [00:48:23] lady and Red Lady in red? I don't know. It's just a super slow song. Probably one of the first songs I remember dancing to in like grade five when you were like holding the guy at the hips and he was putting his hands on your shoulder, vice versa, and kind of trotting around. Yeah.
George El-Masri [00:48:39] So it was the first time you got intimate with someone. OK, what's your opinion on Feet Feet?
Mandy Branham [00:48:50] I, I believe that there's, you know, that there's a bigger purpose out there that nobody really understands and that life happens for you, not to you. And so, you know, you know what? You're creating your destiny every day as you wake up and make the decisions on our own, on purpose and and. Yeah. Act with intention.
George El-Masri [00:49:15] OK, very good. When have you felt most proud of yourself?
Mandy Branham [00:49:20] Oh, um, oh, January of this year, twenty nineteen, I was on the top of Kilimanjaro. Oh, very cool. Yes, it was one of the most physically daunting days of my life, probably just because it was very draining. And we climbed for about seven hours, arrived at camp, and then they kind of said about five o'clock, OK, go to bed or wake you up at 10:00. So you kind of have like potentially five hours of sleep, except nobody sleeps at five o'clock. And so they wake you up at ten and then they it's dark and cold and you start to make your way up the hill. So we started our ascent at 11 pm and I got back to my tent at ten, thirty a.m..
George El-Masri [00:50:02] Wow. OK, so that was to the peak and back down
Mandy Branham [00:50:05] peak in back to about
George El-Masri [00:50:06] 12 hours. Yep.
Mandy Branham [00:50:07] Yep. Yeah. Took us vote. I think somebody said like seven and a half hours to get up, eight hours to get up and then the rest of the time just coming down. So really slow. But I mean I was not having fun. It is mentally hard. It is physically with the altitude difficult. Not, not physically as in. Could your body do it like you could walk? It was really slow walking, but yeah, just to be able to get up there was very anti climatic, you know, you're up there and you're like, can we go now? Like I'm done, I'm cold. It's like crazy. But yet you come back down, you're like, holy crap, what did we just do there?
George El-Masri [00:50:44] It's hard to breathe right? When you're when you're up there, is it a little bit more challenging?
Mandy Branham [00:50:48] You're just really tired, like and. Yeah. You're just taking your time. Slow, slow play, play, play, play. Yeah. Slow, slow, slow.
George El-Masri [00:50:58] OK, well that's also good for you for accomplishing such a big thing. And the next question is what success principal do you live by? So as you know, Brady McDonald is on the show recently and he was the first person to ask me, what does that mean? So I decided to break it down just so there's a clear understanding. So I just did find I copy the definition of success and principal success is the accomplishment of an aim or purpose. And principle would be a fundamental truth or proposition that serves as the foundation for a system or belief or behavior. So what's the
Mandy Branham [00:51:34] charitable work harder on yourself than you do on your job? So every day I am reading whether it just be just connecting moments of gratitude, ensuring that that Mandy Branum is is who Mandy Branom needs to be, whether that be Mandy Brenham, the wife, Mandy Brenham, the mother, you know, the friend, the real estate investor, the coach, the teacher, the educator, the student, you know, and just really being authentic to myself, but making sure that I work just as hard on myself as I do on my job.
George El-Masri [00:52:08] And you go from making a living to making a fortune. I think that's
Mandy Branham [00:52:12] that's how the saying goes. Profits are better than wages. Although, you know what? It doesn't mean that you're not going to work hard like I am working harder the other night. Oh, my gosh. It just felt so good. I was like up until eleven thirty clean and my email getting stuff done. And I swear the next morning I was awake earlier because I felt like I had this relief off of my shoulders because I've gotten all that stuff done so you know, work harder on yourself and profits are better than wages. But, you know, none of that says, you know, four hour work week or take some extra time off. And, you know, but it's definitely I don't even want to say, you know, is balance a facade these days in this like, you know, tell Ellen must to have balance in his life and he'd tell you to go to the moon because that's where he's working so hard to be able to go. So, you know, I just I don't want to paint a an easy picture that, you know, investing with other people's money is so much easier and, oh, because it's not my money. It must be so easy and must be nice. And it is very difficult. Like, I make sure that my partners money is protected the same way that all of my money would be an asset that I would put my own money on is an asset that I would ask my partners to put their money on. And so it's it. Yeah, there's a lot hanging over your head. It's a lot of work, but certainly the rewards are going to be worthwhile.
George El-Masri [00:53:31] Right. And I think I agree with you. I think it's harder to invest someone else's money because your reputation is on the line. You obviously don't want to do anything to ruin that. So, yeah. OK, great. Before we finish things off, do you want to talk about what you're working on today and what services you provide and how people can reach you?
Mandy Branham [00:53:49] So, you know, I hosted a live show every week on Facebook called The Full Time Investor. I have some pretty cool guests, at least I think they're pretty cool guys. Probably like you. You're like, hey, I want to learn. So I'm going to have all these awesome people and what a benefit you actually get to share that with the world. So it's the same for me. I'm working on creating pods of investors in pods of properties in certain areas, making sure that I'm following the market fundamentals, but duplicating myself. So if I was able to build a. Part of 40 properties, how do I get a part of 40 properties in Kingston and how do I get a part in Hamilton and how do I get a pod? And so I'd like to have 10 pods over the next near future. And I'm just really duplicating my systems and being authentic to my joint venture partners and having that duty to be able to have their money invested solidly on an asset secure to right. So just staying true to the principles that I originally started with, the reason that I turned to joint ventures and yeah. Find me on Instagram, Facebook, I'm, I just I'm having fun doing it. Tick tock. Absolutely. Tick tock.
George El-Masri [00:55:01] LinkedIn is a tick tock for younger people, like really young kids.
Mandy Branham [00:55:05] Go check out Gary V. He's telling you that if you're not on tick talk and LinkedIn, you're missing out on some and oh my God, the belly laughs that I have when I'm watching some of these tech togs. It's hilarious. Just hilarious. So if it's just for kids, I'm telling you, you need to go do it and be a kid for a little bit.
George El-Masri [00:55:21] Well, I've never I've heard of it, but I've never looked into it. So that's something interesting to look at. Very cool. OK, so how do people reach you? You said Instagram,
Mandy Branham [00:55:29] Instagram, Facebook, Mandy, Brenham, dot com. I have a group on Facebook called a seven figure Canadian real estate investing group and super high level conversations that are kind of going on in there. And I'd be happy to have listeners come that way. Info Mandy Branom, Dotcom.
George El-Masri [00:55:46] Great. Well, thank you so much for your time. Just as a quick summary, we covered a couple of things, but we did break down the steps. The first one was sort of a deal. Build relationships, have a proforma and a specific deal. Letter of intent, secure the deal with your partner's name. After closing, you can secure a caution on title and then reporting after the fact. So thank you for everything and I look forward to seeing you again. Thanks to our thanks for listening to this episode. I hope you enjoyed the content. And as a valued listener, I'm giving away a sample letter of intent. This letter is used once your potential CO venture expresses interest in working with you. It outlines the general structure of the deal and intentions of both parties. You could visit w w w well off dossie forward slash letter to receive your free copy w w w well off dossie forward slash letter.