Ready to design the life you’ve always dreamed of?
In this episode, we’re joined by Brian Davis, the co-founder of Spark Rental the co-founder of Spark Rental and a self-proclaimed “recovering landlord.”.
Brian, who splits his time between the U.S. and Peru, reveals his journey from a conventional career to a life of intentionality and freedom.
Brian share his journey in real estate, starting from his early days working for a hard money lender to his experiences as a landlord, which ultimately led him to pivot away from active property management. He discuss the importance of financial literacy and the value of a strong community in achieving investment success. Brian provides insights into how Spark Rental’s investment club operates, the benefits of learning from one’s mistakes, and the importance of living with intentionality.
Tune in to learn about risk assessment, building multiple income streams, and designing your ideal lifestyle.
Key Takeaways:
- 02:58 Brian’s Journey in Real Estate
- 04:47 The Birth of Spark Rental
- 08:09 Understanding Real Estate Syndications
- 11:47 The Importance of Vetting Investments
- 16:51 Lifestyle Design and Intentional Living
- 22:28 How to Connect with Spark Rental
- 23:57 Final Thoughts and Encouragement
Connect with Brian@:
- Email: brian@sparkrental.com
- Website: https://sparkrental.com/
- Instagram: https://www.instagram.com/sparkrental/
- Facebook: https://www.facebook.com/sparkrental
Connect with Corwyn@:
- Contact Number: 843-619-3005
- Linkedin: https://www.linkedin.com/in/cmelette/
Shoutout to our Sponsor: EXIT Realty Lowcountry Group
Do you want something more? More Meaningful Moments opportunities, deeper relationships and memorable experiences? Do you want to make a difference? If you say YES, a career and real estate could be the opportunity you’re looking for guiding people to one of the most important decisions they ever made, the purchase or sale of their home can be both rewarding and lucrative.
EXIT Realty has a revolutionary compensation model training and technology that provides you with the tools you need to start and build your successful real estate career. Call EXIT Realty Lowcountry group today at 843-619-3005 that is 843-619-3005 or visit https://exitlowcountry.com/joinexit and make your Exit today.
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Support this podcast: https://podcasters.spotify.com/pod/show/corwyn-j-melette/support
CORWYN:
Do you want something more? More meaningful moments, opportunities, deeper relationships, and memorable experiences? Do you want to make a difference? If you said yes to any of that, a career in real estate could be the opportunity you’re looking for. Guiding people through one of the most important decisions they ever made. The purchase or sale of their home can be both rewarding and lucrative. Exit Realty’s revolutionary compensation model, training, and technology provides you with the tools you need to start and build your successful real estate career. Call Exit Realty Lowcountry Group today at 843-619-3005, that’s 843-619-3005 or visit join.exitlowcountry.com and make your exit today.
Good morning, good morning, and great morning to you guys. Welcome to another fabulous episode of Exit Strategy’s radio show. Hey, I am your host, Corwyn J. Melette, broker and owner of Lowcountry Group in beautiful North Charleston, South Carolina. Hey, if this is your first time listening to this show, you sir or ma’am are in for a treat because our mission here is very simple. That is to empower our community, empower our community through financial literacy and real estate education. Guys, we are legacy building. That is what we do. So guys, we have a super duper show set laid out for you today. Have an amazing guest. Want to give a quick shout out to those who listened to us faithfully from the sea all the way to Monkey’s Corner. All right, you guys rock. I appreciate you guys tuning in. For those who are listening to us from around the globe, guys, thank you for checking us out.
Please share the content. Please let your neighbors know, your friends, coworkers, family, whoever it is, because we always got a word here. Sometimes that word is for you. Sometimes if it’s somebody else, we do not want to hinder the gift that God has for people. All right. So guys today, I can’t wait for this one. I’m like, I’m all tuned in, all locked and dialed in. We have with us, look at, he calls himself a recovering landlord. I love that. I can’t wait to pick that apart and get into that a little bit. But we have with us none other than Brian Davis with Spark Rental. Now Brian is a podcaster. We’ve been on his show, had some great conversation, had a great time. So I know that same energy and his story is going to help motivate and inspire someone today. Brian, how are you doing today, my man?
BRIAN:
Oh, Corwyn, I’m doing great. Thank you so much for having me.
CORWYN:
You’re welcome. So I look at your bio and when you read it, it’s funny to me because I see the lines like ex landlord, which I took to say, I don’t want to do that no more.
BRIAN:
You read it correctly. That is exactly what I mean by that. I don’t miss it one bit. It’s not to throw any shade on current landlords and rental investors, but it’s not for me. I love real estate. I did not love being a landlord.
CORWYN:
I’m even going to go one step further because this is a recovering landlord, an ex-employee. So that says, hey, I don’t want to do that no more. And this right here ain’t going to do no more either.
BRIAN:
Well, that’s exactly right. That is exactly how I look at it.
CORWYN:
So Brian, if you don’t mind, for our listeners, if you could give that 30,000 foot overview of who you are and what it is that you do, and let’s get into that and unpack that today.
BRIAN:
Yeah. I graduated college in 2003, had zero clue what I wanted to do with my life. Like many young people, I fell into working for a hard money lender. And this is in the early mid aughts. Everybody’s making money, hand over fist in real estate. I’m working directly with investors, flippers, and people doing the BRRR strategy. And all these guys are just making so much money. I’m like, well, I can do this too. What’s to stop me from doing this? So I went out and I just bought a ton of rental properties. Every spare dollar I could, I was putting into rental properties, but I didn’t know what I was doing. I was young and arrogant and stupid and made every mistake you could possibly make in the book. I was too arrogant to get a coach or a mentor or a senior partner or somebody to tell me to watch out for that pothole and don’t make this mistake. So I made all those mistakes myself. And then 2008 hit me like a ton of bricks. Not only did all of my rental investments totally fall apart, but my day job working for a hard money lender, that all fell apart too, because I was earning money a hundred percent on commissions doing hard money loans, but no one’s borrowing hard money loans anymore. No one’s flipping houses all of a sudden in 2008. So I had to totally reinvent myself and figure something else out. Went, took a job working for a small family business, an online company that served mom and pop landlords. So I did stay in the industry, which was great because it kept me in the orbit of real estate. So even though I felt burned from real estate investing, I decided to think of my losses as tuition, as the cost of education, if you will. A lot of people get, they get burned by real estate investing. They just leave and never touch it again. And then that is truly lost money at that point. But if you learn from the mistakes and you forge ahead, then it’s just tuition. So it’s the cost of learning, the cost of knowledge. So anyway, in 2016, I left that company. A former colleague of mine and I started Spark Rental, which has been through many iterations over the years.
That’s one of the lessons of entrepreneurship I learned along the way from that, just as a quick aside, is that the business that you think you’re in is not necessarily the business that the market thinks you should be in. You think that your business is one thing, but maybe no one wants that one thing. Maybe everyone wants something else from you. Being in business, you kind of have to adapt and you have to listen to what the market is telling you. We started Spark Rental originally thinking it was going to be a software platform for mom and pop landlords, because there wasn’t really a good online property management software platform for little landlords at that point. There’s a couple now that are decent, but at the time, there was really nothing good. But neither my partner nor I are technical founders. We don’t know anything about writing code or building software or any of that stuff. So we’re like, oh, we’ll just outsource that. So of course, the first company we hired ran off with half of our seed capital and we had all that kind of stuff go on. The nightmare stories from entrepreneurship. We did eventually build that software, but along the way we did all kinds of other things to stay in business. We launched online courses and launched a blog, launched a podcast, all these things. And in listening to the market and trying to listen to what people were asking us, people kept asking us like, hey, I have a little bit of money to invest in real estate. I’m not quite ready to go out and buy my first property yet. Can I just partner with you guys on a deal? Can I invest with you guys? So we said no, like 50 times or a hundred times to people asking us that question. And finally, the dim light bulb went off and we were like, maybe we should actually listen to what people are asking us and say yes to them. What would it take to say yes to these people? Our core students had been asking us this. We said, all right, well, let’s try it. Let’s partner with somebody who’s on the ground investor and let’s try it. Let’s try investing in a deal together. And quickly learned that that was way too much work. There was no money in it for us. We weren’t making any money on it. So we decided to put a pause on that. But it was around that time that I had started just investing personally in passive real estate investments like syndications and crowdfunding and notes and funds and that sort of thing. So I said, well, buying rental properties with our audience members and our core students, that’s not practical. It’s not scalable. What if we partnered with some of our students on passive investments that we could potentially scale? We did a pilot deal and it was really popular. People loved it. So we decided to expand it into a regular investment club. And we had to sit down and talk to an attorney and make sure it was legal and all that stuff, all the SEC regulations and so forth. So that’s how our co-investing club was born. And that is today our main focus as a business, even though we still do have some of the other things like the landlord software and a series of other services. But our main focus today is our co-investing club.
CORWYN:
So one of the other things you touched on Brian, we’ve talked about on this show. So if our listeners, guys, look, go back, catch some episodes. We talked about the strategies, fix, fill up, buy, renovate, refinance, whatever, resell, whatever you’re going to do. We’ve talked about syndication, all those things. So this right here, Brian, and correct me if I’m wrong in this, essentially bringing this and saying, okay, boom, this is what this is. But this is essentially like crowdfunding rental real estate. Does that sound about right?
BRIAN:
No. So we don’t use a crowdfunding model. If you imagine an old school investment club where a bunch of people get together once a month and they puff on cigars and sip brandy snifters or whatever. And they talk about stock picks and they talk about stock investments. And then they go in on some of those together. It’s like that, but for passive real estate investments. So the bulk of what we go in on together every month are real estate syndications and real estate syndications. If anyone’s not familiar with that, these are just group investments basically, where some professional investor goes out, they find a big apartment complex or retail center or whatever that they can’t afford on their own. So they raise money from silent partners or limited partners or LPs, people like you and me, who just want to write a check and have a fractional piece of that large property without any of the headaches that come with it. So we do a lot of those, but we don’t just do those. We also sometimes invest in notes or funds or private partnerships. So any type of hands-off real estate investing where we don’t have to be actively involved, we will consider those. So we vet different deals every month. Any of our members who want to go in on that deal can do so with five grand or more, which might not sound like chump change, and it’s certainly not chump change, but it’s a lot less than the 50 grand or a hundred grand that you typically have to invest as a in private equity real estate syndications.
CORWYN:
So Brian, you guys have been doing this for some time. Currently, you guys have roughly how many, I don’t know what you call them. I’m assuming that you call them units or something of that nature, but how many properties currently are you otherwise invested in currently as a company with your co-investors, if you will?
BRIAN:
Yeah. So we’ve done around two dozen at this point, two dozen deals. Again, it’s around once a month that we average and what we aim for. I’m personally invested in every single one of those deals. I just invest as one more member of the club alongside of our members. I think that’s important to keep our interests aligned with all of our members in this club. It’s really a peer run club. My partner and I just help administer it. So that’s probably around 3,000 units for me personally at this point, but again, it changes every month. So it’s not like I have an exact number, but yeah, every month we’re adding a new deal. We’re going in on a new deal together. They’re all optional for every member. All of our members have different investment goals. Some of them are looking more for income. Some of them are looking more for growth and profit. Some are all about the tax benefits. We try to do a mix of everything. Some income-oriented investments, some more growth-oriented investments, short-term investments, long-term investments, everything in between. Some of these investments are so long-term that they’re basically infinite or indefinite holds where we’re pursuing infinite returns. That’s at a certain point after a few years, the sponsor will refinance and return some or all of our capital, but then we’ll keep our ownership interest in the building. We’ll keep collecting that distribution income indefinitely, even though we’ve gotten our money back and can reinvest it elsewhere. So it’s really fun. We get to invest in a ton of different types of stuff, different geographical markets, different sponsors. It’s a lot easier to diversify when you can invest five grand at a time instead of 50 grand or a hundred grand.
CORWYN:
So you guys essentially, so having done thousands of these, you guys have somewhat, and I mean, let me take the somewhat out of it, man. You guys have mastered passive investing. Somebody’s doing something, but for most, for some participants, they’re doing very little, correct?
BRIAN:
Well, yeah. I mean, I’d love to pat myself on the back and say that I’ve mastered it. It’s a lifelong learning, right? I mean, you never stop learning with this stuff. There’s always more to learn. That is what we are aiming to do is to get better every single month at vetting these deals together, at having dozens of different investors’ eyes on these deals, all trying to poke holes in the deal from different angles. Because all these deals are claiming that they’re going to deliver high returns. Every syndication projects that it’s going to deliver 15 to 20 or sometimes even more than 20% annualized returns. But some of those deals are pretty high risk. Some of them are pretty low risk and there’s everything in between. So the question is really, how do you identify the lower risk deals that are still likely to deliver those really high returns? And that’s what we are all just trying to get better at every single month as we were vetting these deals together. And as we just keep putting our eyeballs on deal after deal, part of what my co-founder and I do every day, it feels like, is looking at different passive real estate investments to come across our desk. We’ve looked at hundreds, maybe thousands of these at this point. I’d like to think that we’ve gotten a lot better at it. It doesn’t mean that we’re perfect. It doesn’t mean there will never be a swing and a miss. We try to get better and better at analyzing risk with every one of these deals.
And we vet these as a club. So again, it’s dozens of eyeballs are on every single one of these deals and everyone brings their own unique expertise, unique experience to these deals. I’ll give you a quick example. We’ve got a woman in our club who’s an insurance adjuster. She quickly picks apart all of the insurance protections for every one of these deals, which is great. Fed members raised their hand after we vetted a deal and said, hey, I live five minutes down the street from this 200 unit apartment complex. I can tell you everything you want to know about this neighborhood and this sub market. And that was great. And that’s the kind of stuff that you just, you’ll never get if you’re investing by yourself. That’s the advantage of investing as part of a community, as part of an investment club like this.
CORWYN:
That’s interesting because when you said that before about people picking apart, in all times, consumers, those people that either want to be or otherwise are venture investors or not quite novice, they don’t like to be talked off of a deal. They don’t think adversarial. They don’t think contrary. They just jump in four feet first and don’t pick apart and analyze the other aspects. Okay, what’s going on around it? How is this going to impact me? So they find these things out in the process. And like you said a little earlier, when they have an adverse experience, they’re completely done with and they’ll never do another deal again. I literally have someone I’ve talked to that did an investment deal with a partner and they were unknowledgeable. So they took the assumptions of someone else and that person didn’t fully vet it. So because they didn’t, they had all kinds of problems and issues through the project. And when they got to the end of the project, they literally were in a position where their profit margin was wiped out. I’m not certain, but I know they were either just in a lost position or barely just broke even to get back out of the transaction. And those kinds of things, again, are things like you said, when you have multiple people engaged and involved with different expertise, you have the opportunity to have a more vetted or fully vetted opportunity go across and be capitalized on versus one that wasn’t fully vetted, I guess to say that easily.
BRIAN:
Yeah, there’s a saying, and I can’t remember who this is credited to, but the quote basically goes that novice investors ask, how much can I make on a deal? Experienced investors ask, how much can I lose? So the more experience you gain as a real estate investor, or as any type of investor, stock investors, whatever, you pay more and more attention to risk in the deal and less to the potential for returns. Because again, all these deals, they all promise the moon, right? They all promise high returns. The real difference is in the level of risk. So that’s what we have tried to pay more and more attention to over time in our club is analyzing risk. We had a workshop last week that was all about six of the most common risks that we look at when we’re looking at some of these deals, because that is really the difference maker. You want to knock out the bottom of that or the left-hand side of that bell curve of returns, the losses. If you can knock out the losses, I look at these returns as they’re inevitably going to be a bell curve. Some of these are going to underperform. Some of them are going to overperform. Most will be somewhere in the middle. But the more that you can minimize that left-hand side of the bell curve, the better shape you’ll be in as an investor.
CORWYN:
Makes perfect sense. Now, Brian, you do a lot. If I recall correctly, you’re an author. You travel the world. Right now, you’re not in the States. You’re around the world, right?
BRIAN:
Well, I’m actually, in this moment, I am in the States, but I’m here visiting family just for a few weeks. We spend most of the year in Peru at this point, but we’ve lived in Abu Dhabi. We’ve lived in Brazil. Right now, we live in Lima. We’ve spent months at a time in Europe. So it’s fun. But yeah, so I can’t claim to be outside of the States at this exact moment, but we’re here visiting family.
CORWYN:
With that, you guys, your lifestyle. So your lifestyle, and then I’ve worked with some other people. Here’s something I found. Let me frame it this way. When you figure these things out like what you guys did, then you’re able to have the lifestyle of your dreams versus being tied to the lifestyle that, quote unquote, we believe is assigned to us. That sound about right?
BRIAN:
Oh, absolutely. I mean, most people, I don’t want to say this in an accusatory or a judgmental way, but so many of us just drift along the current of life. We fall into jobs. I mean, like I said at the very beginning, I fell into a job out of college. So we all, we fall into these things in life. And the more that you can approach every single aspect of your life with intentionality and intentionally choose, this is the kind of career that I want to have. This is how much money I want to make. This is how much control I want to have over where I work. Do I want to be completely location independent? Do I want to have total control over what hours I work? These are all the decisions that you want to make intentionally. Where geographically do you want to live in the world? The overwhelming majority of Americans live within 30 miles of where they were born. That’s not coincidence, right? It’s because people are just drifting along the current of life. And not choosing these things intentionally. I like to talk about lifestyle design, which some people find that kind of a pretentious term, but the concept is basically intentionality and bringing that intentionality to every single aspect of your life.
CORWYN:
So essentially making decisions while you were talking, I can have this visual. We become a society that, okay, hey, I want milk from the store. And it used to be that we go pick the milk up. So we go and drive to the store, walk to the we got there, go in, go to the section of milk, pick out the gallon of milk that we wanted. Sometimes it was the one on the front in the middle. Sometimes it was one in the back because we moved stuff around, but we were intentional about picking it up. Now we’ve become a society where we want somebody else to pick our grocery for us, which means that we get what they pick, not what we’ve intentionally desired to have. That right there just marinated in my mind while you were talking about that, because that is the difference. Success is something that you have to go get yourself. It’s not delivered to you.
BRIAN:
Yeah. And it’s more work, right? I mean, it’s more work to go to the grocery store and pick out your own tomatoes. When you do that, you get the beautiful, bright red, shiny tomato that you really wanted to further your analogy there. Yeah. It is more work to actually think through all of these questions rather than just blindly doing what you’ve already always done or living where you’ve always lived. It is more work, but it’s also so much more rewarding. My wife and I moved overseas about nine years ago. We thought we were just going to have a quick two-year stint in Abu Dhabi and then move back into our previous lives in Baltimore.
Of course, that was nine years ago. We’re still living overseas. Over the course of our first year or so being overseas, I methodically created multiple income streams that I can earn from anywhere in the world. We set up banking systems and all these things that we can access from all over the world and it took work. But when you put in the work upfront, that sets up freedom for you later on. Today, we can live and work from anywhere in the world, but that wasn’t trivial to set up. Most people don’t even think about these things. They don’t even realize they’ve made a decision. But even those who do think about it, oftentimes they’re not willing to put in that work. And I would just encourage everyone to write out with no preconceptions, what does my ideal life look like? What kind of work would I be doing ideally? Where would I live if I could live anywhere in the world? Because you can live anywhere in the world. It’s just a matter of setting up. What would you have to do to get there? So anyway, I’m straying a little bit far from the grocery analogy, but-
CORWYN:
And I love it because that’s one of the things that we talk about on this show, about essentially taking action. That’s the reason why we have amazing guests like you on the show, to demonstrate to people what is possible, what you can accomplish. However, we have to, we’d be doing a disservice if we did not communicate what is necessary, which is the mindset, which is the belief, which is the operation in conjunction with that. We air on a local gospel radio station and talk about faith, man. You got to act on it. It ain’t just, okay, I believe this is going to happen and I’m going to sit here and wait for it. No, I believe this is going to happen, so I’m going to move in expectation of it. And that’s the thing that we’re talking about and what you have basically, what you’ve done. Okay, well, look, we’re going to set up a life. We’re going to design a life this way. We’re going to be able to travel, live abroad. We’re going to be able to do this. I mean, you’re back in the States again, visiting the family. So I sat down with a gentleman yesterday and we were talking and I’ve known him for a long time, been in the business a long time, great guy. And him and his wife about to pick up and move to Portugal. Why are y’all going to Portugal? Well, I mean, we’re retiring and we want our life and this, and everything to work. And I’m like, well, have you ever visited? No. Wait a minute. So you just going? Okay. People are afraid to take those types of steps in life. It was mind blowing to me, not surprising, but I’m literally listening. I’m like, okay.
I mean, I understand why you’re doing it. I understand every piece of it and I can see it. But in my mind, my mind is blown because I’m thinking about how many people would just, we’re not doing that. No, you’re doing what? I can’t, no, you shouldn’t do that. And all this negative talk that would hinder someone from making the step, Brian, that is what you were able to release and move it. So I do want to get back around to Spark Rental. I want to make sure that folks can get to you, connect with you and join in with you. If so desired to begin to, if you will taste that fruit that’s out there. So Brian, let’s talk about that. How can people get in contact with you guys over at Spark Rental?
BRIAN:
Sure. So visit our site, sparkrental.com. You can also find us on all the social platforms, Facebook, Instagram. I guess it’s not Twitter anymore, X. Yeah, all that stuff. But yeah, you can also reach me personally by email, brian@sparkrental.com. Easy for me to say, right? Reach out personally. We are a very small mom and pop business. It’s just a couple of us. Send me an email. Don’t be a stranger. Happy to talk through with you how our investment club works and join the club and visit the next meeting or two.
Jump in, talk with us. And then if you decide it’s not for you, we have a no questions asked, refund policy. We only want people in the club who really want to be there and who are going to participate. So if it’s not for you, that’s fine. We’ll refund your money and we can go on to the next thing. But we would love to chat with you and have you join a meeting or two.
CORWN:
That is awesome. So really it’s community is what I just heard. It’s community. We want you here if you want to be here. If not, good luck. We wish you well on your future travels and endeavors and our community will be whole because we’ll invite somebody else in. I love that concept, man. I love that. That’s one of the fears that people have about being boxed in on something and not being able to get out. So that makes perfect sense. So Brian, thank you, man. Thank you for being on with us today. I really appreciate you taking the time out of your busy schedule and to be blunt about it, taking time from your family, man, in order to be on with us today. So I really appreciate it.
BRIAN:
Corwyn, thank you so much for having me. This was a lot of fun.
CORWYN:
Well, look, thank you. So for our listeners, guys, look, we’ve had an amazing show. We want to act. Our faith means nothing if we do nothing with it, OK? Faith ain’t meant to sit in the corner and collect dust. Dust your faith off and go do something with it. Take it out in the streets today and do something with it. All right. So, guys, look, y’all know how I feel. Y’all know what I say. Y’all know we put two of those things together and I give it to you this way, which is I love you. I love you. I love you. And we’re going to see you guys out there in those streets.
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