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Dave Dubeau [00:00:09] Hey, everyone, this Dave Dubeau here with another episode of the property Profits Real Estate podcast, today we’ve got the J.V. Queen on the other end of Zoom land. Mandy Branham Mandy, how are you doing today?
Mandy Branham [00:00:20] I’m excellent. Thanks for having me, Dave.
Dave Dubeau [00:00:23] It’s my pleasure. So JB Queen, that is a wonderful title. It kind of sets high expectations. So tell folks how you acquired that very, very well-deserved title.
Mandy Branham [00:00:37] We started off in real estate. My husband and I doing our own little thing, working our own little butts off and making our own little Profits, and there was people that were like, Hey, the next deal you find, that’s that good. Let me know and I’ll come and partner with you. This was 2014. We just paid a big chunk of money to join a coaching group because we didn’t know what the heck we were doing. But we had lots of energy, lots of youthfulness and our time. And so, you know, as we’re doing these deals, next thing you know, I found another one. Another great deal. And somebody would say, Well, I said, Well, if you said you were looking for a great deal, I have one, and they said we would like to partner with you. And so I’m working, working, working on somebody else said, Hey, we’d like another one of those great deals. And so I mean, I had a lot of people fall off because you got to talk to 10 to get one. Tip number one in the joint venture world is it doesn’t just happen when you talk to one person, you get one joint venture, you have to talk to tend to get one. So. So we were talking to a lot of people. We would scare off a lot of people like, Oh, here comes Mandy again, talk about real estate and look at Mandy’s Facebook, you know, talking about real estate. And so we had a lot of those people feel this fizzle away. But we started to attract a lot of people that did like the conversations that we were having and did like the people that we were becoming. And we liked talking about it. So as we continue to grow. We just kept I kept finding more deals that worked and attracting the people that came in. And so it started to become a very balanced portfolio. And now I have about 50 joint venture partners just under a 300 units of real estate in since we joined that coaching group in 2014.
Dave Dubeau [00:02:18] Now we were talking a little while ago and you’ve done some amazing stuff right smack dab in the middle of the whole COVID thing. I think you bought pretty much three quarters of one whole town. I’m exaggerating, but if you bought a good chunk of property in one time, tell us a little bit about that. How many properties did you buy and in what timeframe?
Mandy Branham [00:02:38] You know what, even Dave I remember being on, you know that COVID broadcast that you had phenomenally put together with some amazing experts and everybody was there like going to what’s going to happen with this COVID thing? So at first, I was like, OK, let’s stand back and take a look at it. And this summer, we were able to go up to a city. So we did hundreds of hours of research going up to Northern City called Sudbury in Ontario, and we’ve purchased forty four forty five. We got our offer on our forty six asset right now, waiting to hear back. If we are going to
Dave Dubeau [00:03:12] be like units, we’re talking about different properties, right?
Mandy Branham [00:03:14] So yeah, so forty six assets, I think that would put us close to one hundred and thirty units. We our first purchase was October 28th of 2020. So we just kind of were quietly doing all of this and we actually kept it very quiet. We had our joint venture partners, signed an NDA, a non-disclosure agreement so that they wouldn’t tell everybody where we were going because we didn’t know if we should even be telling people were really actively buying. We were following all the COVID protocols, all that kind of stuff. But then we just let it out. And the JV partners were like, I’m in so well before the whole rash of twenty one, we kind of had all of these assets under contract for like, Wow, I’m kind of glad we did what we did when we did it, because now it’s difficult to get into the market.
Dave Dubeau [00:04:07] All right, let’s talk about JVs, because that’s your thing, that’s for sure, and it holds a special part in my place, my art as well. So first, just rewinding a few years, so 2014, when you’re kind of getting started with this and you’re probably doing like a lot of us and self-financing your first few deals, it seems like you’re not very shy, Mandy. But how was it that everybody knew that, that you were doing all this real estate stuff? And how did you get them kind of reaching out to you saying, Hey, if you got a really good deal, let me know. How did that look?
Mandy Branham [00:04:40] You know, I started to fish in a pond that I knew there were fish, does that make sense? I was going to networking groups at the time that we were networking. So in this time of virtual and digital networking, I want you to go where there’s other like-minded investors so you don’t need to go on to work outside to try and find a joint venture green joint venture partner. I want you to be going to like-minded sites with people who are talking and thinking investing. So we were surrounded by people who we knew because we had also part of the same conglomeration of coaching people and networking groups. The Durham area with Quinton de Sousa, you know, just the right club in Burlington, Ontario. We can’t go there and not talk about real estate. So we went around, so people knew that we were investing. I always showed up with a deal. I always had a deal. I had my little piece of paper. It might have been a conditional deal. It might have been a deal that had just come on the market. Maybe I didn’t even have it under contract yet. It might have been a deal that Larry and I were going to buy on our own with our own two cents. And if somebody happened to want it, I was happy for them to be able to come on for it. So it started out that a deal had to be so good that I was willing to put my own name on it. And so people kind of got that confidence level of well. Well, if Mandy’s willing to put her money on it, then I’m willing to put my money on a deal that I know.
Dave Dubeau [00:06:08] Maybe he’s kind of saying, Hey, this is a great deal. We’re looking for partners, but we can’t find one. We’ll just go out and buy it ourselves.
Mandy Branham [00:06:15] Yes, I always ask myself three questions How can I buy this deal? How can I change and add value? And how can I sell it? What’s my exit strategy? And for that first one could have been private financing, could have been an islander or B lender could have been a VTB, or it could be a joint venture partner. So it doesn’t you don’t go into a deal thinking only if a joint venture partner comes along. You go into the deal thinking, What are my options for me to be able to buy this deal right now?
Dave Dubeau [00:06:44] Very cool. Now, something that kind of pops to mind that other people might be thinking is, well, man, if you’re hanging out at the right club and the decides on in his group and rain and all these real estate investment clubs. Why is that a good place to find joint venture partners, isn’t everybody they’re looking to buy deals, right? How does that work?
Mandy Branham [00:07:11] It’s true. It’s an interesting mindset. Yeah, there’s a lot of other people who want to be active investors, but there’s always those people and you know, I have lovely partners that showed up to me at a door, Maria, and they said, That’s it. We’ve been listening to you every month for the last six months and you showed up with a deal and you bought another property and we thought we could do this on our own. And we can’t. And so we just like to partner with you. And I said, Well, I happen to have a great deal. Why don’t you come on in with a deal like this? Or I would go to these meetings and there’s a lot of people who do want to attract money and they’re very quiet. I’m not that kind of person, so I would stand up and I would share my deal and I’d fail. And I’d say it horribly. And I learned what not to say. And so with that fail forward kind of attitude, then I was also getting to be very knowing that Sandy was going to show up with a deal. And so if I hadn’t found a deal or the market was too crazy or I was too scared, I have a lot of partners that are like husband and wife, and they’re lovely, but they can’t agree. And so the only thing they can agree is that they can’t decide which person they want to have. You know, do the investing. So they’re just going to come together and agree that they’re going to work with Mandy.
Dave Dubeau [00:08:28] Interesting. Yeah, that’s what I was expecting you to say, because I’ve seen it over and over again. Real estate investment clubs have the doers, probably about really active doers, probably 20 percent. And then you’ve got 80 percent of people that are watchers and waiters and thinking about hours and talk, it’s OK. Right? And they love the camaraderie. They love the idea of real estate. But as Ted Thomas says, they never get off the rusty, dusty and actually do anything or very, very rarely so. So that’s something that’s really good to keep in mind is don’t get intimidated going to real estate investment clubs and showing your deals, thinking that everybody else there has a lot more experience than you do or knows a hell of a lot more than you do because there are a lot of analysis paralysis, people there and in every real estate club, would you say that that’s fairly true?
Mandy Branham [00:09:24] Hundred percent. And, you know, being consistent to these clubs, to these online networking groups, being consistent? Guess what? I’m showing up with the same kind of deal, you know, and I could probably tell you, you know, 10 other people and you stay in your lane. So if you show up one night and you got this great article and you show up the next night, you’re looking for private money. Lenny e-shop that next month and you’ve got some property in Moncton and then it’s in Calgary, and then it’s whatever. Nobody really understands where you’re going. So, you know, I showed up there consistently every month. I would have a property every month with property would be a joint venture opportunity and that joint venture opportunity would be in. Typically, when I started with Simcoe County, which is where I live. And so people would be like, Well, they wouldn’t come to me and say, Hey, I found a great property in Windsor. Do you want a joint venture with me? Like, No, it’s not my lane. So show up and continue to be, you know, just consistent to who you are and the type of assets that you’re providing and people start to get to know you for what you’re really good at.
Dave Dubeau [00:10:23] Awesome. So, Matthew, we were talking a little bit before we hit record here, and we thought it might be a good idea to talk about some of the stuff that’s actually in a joint venture agreement, because you and I agree that this hardly gets talked about in podcast. So. So what are some of the, you know, if somebody is thinking about bringing on a joint venture partner? First of all, what are some of the biggest mistakes you see people making when it comes to joint ventures and joint venture agreements
Mandy Branham [00:10:53] is trying to split it down the center and say, We’re both going to go on title and we’re both going to bring equal money and you create an expectation that you’re both going to do equal in the work and the management and the bookkeeping and the, you know, dealing with tenants and, you know, that kind of stuff. And the second that somebody kind of slides and this happened to me, like totally, the project was 70 percent done. It’s my conversation to my joint venture partner. I felt like I was parenting a partner. I was like, Look, dude, we are 70 percent of the way done, and we have done 80 percent of the 70 percent. OK, so I’m going to give you an opportunity to be able to come finish the project. We will be 50 50 joint venture partners continue to be working partners, financial partners, egos. This comment? Well, we’ve got holidays booked was like perfect. You can take those holidays, come up here and finish the project. He’s like, Well, we’re going camping. I was like, OK, that’s my option. So he went back and he talked to his wife and they came back and they said, Kate, you know what? We are going to be happy for you to take over the projects, you know, as long as we get compensated for the finances at. We’ve been in there in the financial partner that we are for the money that we’ve got in. We’re going to walk away from the deal and I was like, OK. So Larry and I go in and we finish up the project and we paid him every penny, plus some of the profits for having borrowed some of the money. Like all that kind of stuff, there was no animosity left in between. But I realized in that moment that there can be too many cooks in the kitchen. So again, my fear is that like, let you be good at what you’re good at and don’t try and overcompensate or think that you have to do what the other partner does, because that’s the beauty of coming together with your unique, your uniqueness. Let somebody qualify for the mortgage and bring the money. Maybe it’s the money for the down payment. Be very clear. I’m bringing the money for the renovations and I’m doing the renovations. OK, clear. Have your rules clearly identified so that nobody has to make an ass of you and me and assume that somebody was or wasn’t supposed to do that? That’s the practice I see.
Dave Dubeau [00:13:13] So what do most of your JVs look like these days? And we’ll get back to what’s in the agreement in a second, but just out of curiosity. So it’s because what I’m accustomed to, at least, is, you know, if I’m the active partner, I’m bringing the deal to the table. I’m bringing the expertize and the team to the table. My joint venture partner is bringing cash and perhaps qualifying, and that’s it. I don’t they don’t want to have anything to do with their attendance, toilets, maintenance, any of that kind of stuff. What does it look like for you? Because it sounds like your jobs might be a little bit more active?
Mandy Branham [00:13:50] No, that’s spot on. I’m very active, but I used to have an affirmation. I attract millions in joint venture capital. And then after this example that I just shared with you, I added a word to my affirmation I attract millions in passive joint venture capital, OK? And so that word passive became super important to me. And so I have partners that I love them to pieces, and they are geniuses for having to come on board. But they live in British Columbia where you are, and I’ve never shaken their hand. They’ve never set foot in their property and their returns are amazing. OK, so I attract passive investors, so somebody will say I would like to learn. I’m happy that somebody can learn the process, they learn the financing process, they learn the bookkeeping process. They learn the monthly day to day transactions in a joint bank account. That doesn’t mean that they have to swing the hammer and knock on the tenant’s door and post notice and show up at Landlord Tenant Board. That doesn’t mean that that’s the active side. So your joint venture ways is the same way that I am attracting my joint ventures to do small multifamily two to six units, six units we get with some creative couple institutions for financial residential financing where we go.
Dave Dubeau [00:15:11] Yeah, very cool. So, Manny, let’s talk about some of the stuff that’s in the original joint venture agreement, some of the important terms that you think that we should put in mind.
Mandy Branham [00:15:21] Yeah. So whose name goes, who is holding the joint venture? Is it going to be a personal name to a personal name? Is it a corporation to a corporation or is it a personal to corporation like it? It really, you know how we hold the joint venture. We mine. We don’t own a corporation together unless the building is larger than those six units, we might enter into the ownership of a corporation together. But in the most time, it’s just two people holding on agreement. The tax law that we follow is profit sharing tax law. So it’s not actually a joint venture tax law, so we share everything within that property at a profit sharing 50 50 is the profit sharing that I do. So you might hold it in a corporation. I’ll hold it in a corporation. We might pay different taxes based on our, you know, type of corporations, but that we are how we hold the asset in the joint venture is one of the important factors that people need to understand. Another thing to really understand is the exit strategy for the joint venture to be able to go in, and that’s identified in the joint venture agreement. This is a five year buy and hold. This is three year flip or this is a three year buy hold. And so nobody’s shocked and shaken when five years comes up and we say, excellent, thank you so much. That was great. I hope it was as good for you as it was for me, and we’re ready to sell the asset. There’s no emotion that kind of goes on in there. And the other thing really, really, really big in a joint venture agreement is just kind of like my first story is to identify very clearly whose roles and responsibilities are going back to the joint venture agreement before somebody said, you are responsible for the bookkeeping? Well, there is a bookkeeping fee. Well, I oversee the communication to the bookkeeper, but I don’t have to pay the bookkeeper fee, and it says in there that any fee that’s associated to that property will be paid by the property bookkeeping fee, garbage removal fees, maintenance fees, tax levies, whatever those might be. And so in this case, we had to go back to the agreement was clearly identified that I was responsible to communicate to the bookkeeper. But I was not responsible to have to pay the bookkeeper. So just one of those little things that we don’t often go back to the agreement. But it had been clearly identified what my roles and responsibilities are. So in there you might be thinking, Well, do you do your own property management? I do not. I have a dedicated boutique superior property management company that actually only manages my joint venture assets. But for that company, there will be a fee paid by the joint venture identified within the joint venture agreement that will be paid every month to this company. Something else is you have.
Dave Dubeau [00:18:17] Correct. That’s your brother.
Mandy Branham [00:18:18] Yes, I have ownership of this company. Yeah, can’t say that. It’s like just me. I’m not. I’m not on Marco Island having this conversation with you.
Dave Dubeau [00:18:27] There’s it’s a thankless job. They should be damn appreciative that you have the property management company taking care of it.
Mandy Branham [00:18:33] Yeah, yeah. So something else that’s really important in the joint venture agreement, you will hear the word transparency for me because that’s me. I want you to know that you know, what goes on in our property is something that you will know. I might not tell my joint venture partners everything because they don’t need to know or I’ve already got it all figured out. Or I’ll tell them the aftermath of, you know, we just had a pig in one of our units, a pig. What’s against bylaw? The tenant didn’t tell us all this kind of stuff, and now there’s this little piggy running around
Dave Dubeau [00:19:04] the pork belly big or so.
Mandy Branham [00:19:06] So, you know, the partner is like, What’s going on? Why does the tenant leave? And we’re like, Well, like, do you want to see the text in the bylaw and all this kind of stuff? So but the majority of my joint ventures are very transparent. So one of the clauses in the in the joint venture is that any purchase over $500 or maintenance and expense over five hundred dollars. You know, and I could probably with the cost of wood and materials, probably increase that now to a thousand dollars. But you know, you can tell where my comfort level is with my joint ventures, but anything over five hundred dollars has to be agreed upon. So, you know, what’s an example? Well, I could replace a used dishwasher with a two hundred and fifty dollar dishwasher. Put it on the and put it, you know, say here you go. There’s a two hundred and fifty dollar invoice and there’s nothing that a joint that we would have to discuss. But we’ve got an amazing family and we want to put it in a brand new dishwasher or a brand new fridge. And brand new fridge is like seven hundred bucks, eight hundred bucks, nine hundred bucks, thousand bucks. That’s a phone call, a text say, Hey, the tenant’s fridges died. I don’t want to go used. I want to go new, value them very much, and it’s an agreed upon choice. So nobody shocked and shaken when they get an invoice, it’s like, what the heck? I didn’t see that one coming. It would have been cost that would have been agreed upon this question.
Dave Dubeau [00:20:26] So do you when you do have those kind of extraordinary expenses, are you paying for that 50-50 with your Georges partner? Do you have a contingency fund already in place so you don’t have to have any of these kind of cash calls?
Mandy Branham [00:20:40] Excellent. Yeah. So five thousand is my new zero. Typically for a duplex that will increase, that reserve fund will increase based on the size of the property based on the amount of rents like the monthly rental rate and depends on if we are, you know, post refinance or during renovation costs, OK. So we have a minimum reserve fund that we just never dropped below. So, you know, let’s just say we’re writing at five and I, you know, I also don’t pay cash flow monthly. It doesn’t mean that we’re not accumulating cash flow monthly in our five thousand is now six and it’s now seven and it’s now eight. And it’s now it’s nine. It’s 10. What if we have a thousand dollar fridge that needs to be repaired? We can just take it out of our cash flow and pay for it, and nobody has to do a cash call if there happens to be a cash call for a tenant turnover. Let’s say that we’ve owned the property for three years and a tenant chooses to leave, and we know that the rents are going to go from a thousand to fifteen hundred K, but that tenant turnover is going to be $15000, probably not inappropriate. We’re increasing the rent quite significantly. We would each have to pay seventy five hundred dollars, so we’re actually in it for 50 percent of the profit and 50 percent of potential any losses or expenses that come along the way, the only costs that are not split. And again, this is something that’s very clearly. To fight in the joint venture agreement when I do it, my original pro forma and I asked my JV partners for Look at this. Four hundred thousand dollar duplex one two three Main Street. And you need eighty thousand dollars for closing costs for down payment and $50000 for renovations. Cool. $50000 for renovations. If we get in there and the roof, we didn’t know that the roof needed to be done and the sewer line backed up and three more tenants left in the renovations just, you know, like, went up and up and up. Anything over that fifty thousand dollars is split costs because they were there, not initial renovations. They would have been unforeseen maintenance and repair and maintenance and repair is split 50 50. Got it
Dave Dubeau [00:22:59] made sense. All right. Very, very cool. Now what about an escape clause? Like, if you’re two years into a five year deal and your JV partner goes through a divorce and just has to liquidate? Is that contemplated in your JB agreements as well? Yeah.
Mandy Branham [00:23:17] You know, Dave, you manage assets, you manage tenants. And, you know, if somebody doesn’t want to be in the agreement, I don’t want to be in the agreement if they don’t want to be in the agreement. Right. And, you know, unless we’re in a negative situation and I have been in a negative situation where the partner had gotten in over his head cove, it had happened. Delays because of COVID had happened. Like, you could just tell this. I think the guy’s wife had lost, just like he was just a overthink or whatever. I said we should really hold on to this asset. This was like October of 2020. And if we just would have held on to it until spring of 2021, we would have made an extra fifty to eighty thousand dollars. Who knows, right now we need to sell. So I don’t want to be in a joint venture with somebody who doesn’t want to be in. So yes, there’s clauses in here that would say, I need to take you to mitigation or we going to go through this and I can buy you out. You can buy me. And I was like, You know what? I don’t want to argue with somebody. I don’t want to be in a relationship that nobody that you don’t want to be in, either. And so we sold the asset. We are at a loss of fourteen thousand dollars in 2020, which meant that he got all of his money back for renovation down payment, except for $7000. And I’d actually, at that point invested some of my own money. And so I got all but $7000 back and I’m talking to a T. There was a last water bill that came in and I sent him 50 percent of the water bill. Like, we split everything on that property, 50 50 at a loss. I do not want to be in an agreement, so I always say that there’s relationship on one side and a joint venture agreement on the other. And we need to have a relationship to enter into with that know, like and trust. And we need to have an agreement because gosh darn it, my lawyer, my accountant still tells me I need to have an agreement. But we like to stay here a little bit of back and forth a text to be able to say this is a shitty situation, but how are we going to work through it together? And so we have the agreement to know that we can say, Well, you know, you are on the line for half of the expenses. Mandy and I say, well and you’re on the line like, you know,
Dave Dubeau [00:25:29] whatever, but everybody knows that going into the into the
Mandy Branham [00:25:32] that’s right. Yeah. So as long as you can understand that you’re staying, you got the agreement. But we’re basing this on, let’s communicate here and try and, you know, work our way through a problem. And if we can’t, you know, my escape clause is my mental health. See, later, like, it’s not worth it.
Dave Dubeau [00:25:49] Well, said awesome, Matty. Time flies when you’re having fun and we’re talking JVs and all this kind of good stuff, and people want to find out more about Mandy Bradham and the J.V. Queen. What should they do?
Mandy Branham [00:26:00] Mandy Brenham dot com If you’re interested in investing, you can book a discovery call. If you want to learn and to do what I do and become a joint venture expert yourself. Gosh, let’s have that conversation. See if I might be able to help you grow a portfolio based on passive investing. Follow me on social media. Joint Venture Queen, YouTube, Instagram and Facebook.
Dave Dubeau [00:26:21] You’re very, very active on YouTube. You’ve been doing that for a while, right? I had the pleasure being on your show. Not that
Mandy Branham [00:26:27] long. Yes. Yeah, you did. Yeah, you did. I love it. I’m having fun because I’m putting out there that you know what? If I could cut open my brain and share all the wisdom with the world, then my grave is going to be a little bit emptier. Whenever I come to that time, I don’t want to. I don’t want to leave knowledge, you know, to come with me, so. So I’m offering it out to be able to say, you know, what I do is not rocket science. So how can I share that with other people?
Dave Dubeau [00:26:51] Fantastic, Randi. Thank you so much. It’s been a lot of fun.
Mandy Branham [00:26:54] Thanks, Dave.
Dave Dubeau [00:26:55] All right, ready. Take care. We’ll see you on the next episode. Rob. Well, hey there. Thanks for tuning into the property Profits podcast if you’d like this episode. That’s great. Please go ahead and subscribe on iTunes. Give us a good review. That’d be awesome. Appreciate that. And if you’re looking to attract investors and raise capital for your deals, we invite you to get a complimentary copy of my newest book right back there. There it is the money partner formula. You got a PDF version, an investor attraction book dot com again. Investor attraction, book dot com. Take care.