Anders Jacobson - From $0 To Millionaire At 27
LISTEN TO THE FULL EPISODE ON:
After winning a college basketball national championship and receiving MVP honors, Anders Jacobson felt on top of the world. However, just weeks later he overdraft his bank account, found out he'd have to pay his own way for school, and hit an all-time low. In just a few years, he entered the door-to-door sales industry, became the #1 producer, started 2 companies and lead over 500+ sales professionals across 17 states, and became a millionaire by 27. Today, Anders is an investor, and founder of Brighton Capital. He's invested in 17 assets and 2500+ units across 5 states. His mission is to help others to live a life by design, not by default. He helps investors achieve the 5 freedoms: Freedom of finances, freedom of time, freedom of geography, freedom of relationships, and freedom of impact.
In this episode, you will be able to:
- Maximize your real estate investment success with proven strategies for long-term growth and profitability.
- Discover the secrets to renovating multi-family properties for maximum profit potential and increased property value.
- Learn the art of strategically raising rents to optimize your property's income without sacrificing tenant satisfaction.
- Master the skills needed to effectively manage large multi-family properties, ensuring long-term stability and tenant retention.
- Explore the impact of diversifying your real estate investment portfolio and discover how it can supercharge your financial growth.
The key moments in this episode are:
00:00:00 - Finding Success Through Sales Training
00:05:24 - Discovering Real Estate as an Investment Vehicle
00:10:29 - Transitioning to Full-Time Real Estate Investing
00:13:24 - Selecting Markets and Operators for Investment
00:15:20 - Strategy for Acquiring and Improving Properties
00:18:37 - Tenant quality and rent increases
00:22:20 - Real estate syndication simplicity
00:23:12 - Economies of scale
00:25:17 - Short term rental investment opportunity
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Anders Jacobson
I had recorded my manager's sales pitch. I listened to it on repeat for a good 30 minutes, just writing down line by line what he had said. And then I sat there for another 30 minutes, memorized it, and I got up and made two sales that day. And long story short, I became the top rookie salesman in the company that summer. And it kind of launched me into a sales career in the door to door industry where I eventually started two solar companies and really paved the way for me to get into real estate.
Mike Swenson
Welcome to the REL Freedom show, where we inspire you to pursue your passion to gain time and financial freedom through opportunities in real estate. I'm your host, Mike Swenson.
Mike Swenson
Let's get some REL Freedom together.
Mike Swenson
Hello, everybody. Welcome to another episode of REL Freedom, where we're talking about building time and financial freedom through different opportunities in real estate. I'm your host, Mike Swenson. And with today's story, we've got a really cool story of somebody who had a lot of success in sales previously to that athletic success as well in basketball, but sales background kicked it over into real estate and now does investing in some very large properties. So we've got Anders Jacobson here. He is the founder of Brighton Capital and he'll talk a little bit more about the types of deals that he's doing. But now we're looking at, what, 17 assets, 2500 units across five states. You're going to be launching short term rental fund as well. So just a lot of great stuff that you're doing. We're so excited to have you on the show, Anders.
Anders Jacobson
Yeah, excited to be here. Thanks for having me.
Mike Swenson
Mike, share a little bit about your background before real estate and getting into real estate, and we'll go from there.
Anders Jacobson
Absolutely. So I'll take it back to 2011. It was summertime, beginning of summer in May. Just finished up my first year of college, and I was sitting on the sidewalk in Detroit, Michigan, and honestly was one of the lowest points of my life. And people were driving by wondering, what the heck's this kid doing? I was, I had just gone out there to sell home security systems door to door, and I had done that because about a month prior, I was told that I was going to have to pay for the rest of my schooling myself and I had just overdrafted my bank account. So I didn't just have no money, I was in the negative. So I was at this low point, had this opportunity to go sell home security systems door to door, completely out of my comfort zone. No experience doing anything like that. But they told me I could make enough money to pay for my school the next year, and my basketball team had just won the national championship, and I was named the mvp. And so the last thing I wanted to do is have to change schools. I was picturing repeat champions, all these records that were going to break. And then it comes crashing down, saying, oh, you may not even be able to go back to school, and you have absolutely no money. So I go out to Detroit, michigan, and I got a total of 2 hours of sales training, basically just shadowing my sales manager as he knocks on doors. And this was on a Saturday. And after lunch, he says, all right, anders, you're on your own. Drops me out of his minivan. That's where he drop us all off in our neighborhood and say, I'll pick you back up at 09:00 p.m. So he drops me off, and I knocked on my first door, and it was just a complete disaster. I just stumbled over my words. Looked like a fool. The person obviously shut the door on me, and I walked away just tail between my legs, deflated, and I sat down on the corner in this neighborhood on the sidewalk. And as I'm sitting there, it was kind of this pivotal moment for me where it was like, look, I can quit and go home and try to get another job or get three jobs and try to figure out a way to get back to school, or I can go take out loans, whatever it may be, or I can do whatever I can to fight my way out of this corner and position I'm in to make it work. And so I sat there. I had recorded my manager's sales pitch. I listened to it on repeat for a good 30 minutes, just writing down line by line what he had said. And then I sat there for another 30 minutes and memorized it. And I got up and made two sales that day. And long story short, I became the top rookie salesman in the company that summer. And it kind of launched me into a sales career in the door to door industry, where I eventually started two solar companies and really paved the way for me to get into real estate. So that's kind of my background and what really launched me to where I am today.
Mike Swenson
I was a business major in college, and we took this management course, and the professor at the time said, the best thing you can do is go into sales because you learn so much about business, you learn so much about yourself, handling rejection people skills. And I remember thinking, I don't want to do sales. And so I found every way to not do sales for the first 1520 years of my career. And then now I feel like I've learned so much as a real estate agent, as an investor, talking with investors. It's sales, but it doesn't feel like sales. You're just having good conversations with people. But I think I could have probably fast forwarded things by getting into sales much sooner, like you did.
Anders Jacobson
Yeah, I think the best salesmen don't come off as salesmen. And I feel like that's really been kind of my strength is I'm not a sales guy. I never considered myself a sales guy, and I truly cared about the people and the problem we're trying to solve. And lucky enough, I was able to sell a product long term in the solar industry that I truly believed in. And now real estate believe in it the most. So, yeah, been lucky enough there. But, yeah, I definitely believe sales skills correlate and can benefit in so many other ways.
Mike Swenson
So talk about kind of that journey into real estate, what caught your eye? What got you excited about it, and then kind of that point where you're diving in.
Anders Jacobson
So I got into sales, was doing really well, and I transitioned into solar in 2015 and was making more money than I ever thought I would. And at that point, I'm trying to figure out what to do with it. And everyone smarter, and everyone I've talked to growing up has talked about investing. And when I heard the word investing, I always just automatically thought stock market, that's what it means to invest. And so I was newly married. We took a large chunk of our money, it was about a fourth of our savings, and had put it in one stock in the stock market. It was really smart on my end, one stock, it was the largest renewable energy company in the world at the time. They had just positioned to buy one of the largest residential solar companies in the United States. Everything was trending upwards, at least that's what they said. And every brokerage anything said it was a good time to buy. So we bought a lot of it. And then come to find out the company was run by a CEO who was doctoring books, and they were doing some shady things and they went bankrupt, and we lost all our money. And so it was super embarrassing for me. I remember feeling sick to my stomach and just having the thought like, I will never let this happen again. And so from that moment on, I really was on a journey and motivated to find a better vehicle for investing. And I started devouring books, podcasts, going to in person events, really just trying to figure out what are the ultra successful people in the world doing? What are they investing in? And the one common denominator that I found was commercial real estate, multifamily real estate. Everyone who was successful and wealthy was investing through that vehicle. And so that's really how I learned about it and started to dive in the next year by investing in a large property passively. I had just launched my first solar company, super busy, didn't have the time to go out and be finding properties on my own, and so I invested passively with an operator, and it was great. I loved it. Started getting passive income and tax benefits, and I saw the real potential with it. And then I had a buddy from a mastermind group that introduced me to doing some flips. And so I tried out a few different avenues and did flips, did some long term rentals, we bought a couple of short term rentals, and along the way, still investing passively. And at the end of the day, I kept coming back to large multifamily. It was what I loved and what I saw had the most benefit, especially just with being passive for me and with how busy I was. And so kind of went all in on that in 2020 and haven't looked back since.
Mike Swenson
So then now you're full time investing. At what point did you get rid of the day stuff, or did you sell your company, or how did that work?
Anders Jacobson
Yeah, so sold my company the beginning of last year, and that's when I started my real estate company, Brighton Capital, where I help investors who are like me get into large multifamily deals passively. And so I was doing that already when I sold my solar company. It was time to go all in on Brighton Capital and really focus on that. And so last year was the first year where we really started to reach out to investors and really build a large investor pool and start vetting. I've been vetting operators for years, but really start deciding which ones I wanted to work with long term.
Mike Swenson
Now, talk about how this works. Where you have your own company, you can kind of choose where to place funds. So, like, you're building relationships with investors, and then you're finding essentially great investment opportunities for them, but you're kind of an independent party in the middle of that, which I think sometimes people don't always understand how that works in the multifamily and syndication side. So kind of talk about you've got Brighton capital, but yet you can be placing things in with other larger vehicles, which is what makes this part really cool. It's flexible, it's scalable, you can choose different people, different types of asset classes. So kind of talk about that process of finding the operators and matching them up with your investors in the deals they want to invest in.
Anders Jacobson
That's a great point, I love it. To your point, not being exclusive with one operator has been huge for me and our investors because if we were exclusive with one operator we're limited to the deals they find. And I'm very big believer in not telling anybody to do anything that you haven't done yourself or aren't willing to do yourself. And so for me I invested passively and I vetted these operators for years and now I can speak to my investors and say this is what I've done. I've looked everywhere, these different asset classes and I've found the best of the best. I've actually put my money where my mouth is. I invested first, I put my capital at risk and saw how they performed, how they communicated and they've exceeded expectations this operator has. So now I'm going to partner with them and allow other investors to come alongside me for the ride and invest in their deals. So I love it. And being able to expand in the different asset classes and do the same vetting process there has been really fun as well.
Mike Swenson
Talk about some of the deals you've done or some of the markets that you've explored and what's kind of been that thing, that tipping point where you said okay, this is the deal that I'm ready to do with this operator in this market.
Anders Jacobson
So I have a specific buy box that if the deal doesn't meet this criteria for my investors then just on to the next one. And so some operators consistently find deals that fit into that buy box where others, maybe it's one or two do per year and I'm willing to look at those. But in general we're heavily focused on the southeast. From North Carolina, live in Raleigh, I lived in Charleston, South Carolina for six years and know the southeast very well. It's where I operated my solar company. Outside of the southeast really like Texas, like know Sunbelt, we really target those markets, but with an operator we're vetting them out specifically maybe even more than the deal because the operator from what I've seen is a bigger impact than maybe even the asset itself. So you could have the greatest asset in the world, but a Bad operator doesn't know what they're doing and it could fall flat where the opposite goes. If you have a decent asset but a great operator, they can turn that into a slam dunk.
Mike Swenson
Talk about the strategy on some of these properties. So for people that maybe haven't heard of the large multifamily, what that looks like, it's not like I'm just flipping a house. Sometimes I actually explain like a long flip. Right. It takes time to flip all the units in a property. But talk about that strategy maybe in light of one of the last deal or two that you've done as an example.
Anders Jacobson
Yeah. So we just closed on a property, basically, Charleston, South Carolina. It's one of the suburbs, Mount Pleasant, and I lived there. We found an amazing asset. It's 108 units. And we bought this property is 100% occupied, which is rare. The reason why it was 100% occupied is because it was owned by a family and they didn't know where the market rent was. They were charging 1200 a month for rent and the market rent was 2200. So they're $1,000 under market rent. So no surprise people weren't moving out.
Mike Swenson
People were just piling on top of clawing at people to get in those units for $1,000 off.
Anders Jacobson
Exactly. And then it was managed by the family's daughter completely, and she was just super lenient on people paying late. There was no reason for anybody to move out of this property. So 100% occupied. When we purchased it, obviously we are going to give them notice, say, hey, you guys are paying 1000 under the market. Rents are going to bump up. When we announced that it wasn't $1,000 all at once, we bumped it up about $400 right away or gave notice that we're going to do that. Nobody wanted to move out still. So that was a good thing. And then we also had a large amount of people on month to month. At most properties, you're going to have a handful of month to month tenants. And when you're doing a value add project, you need to strategically turn these units or renovate these units, because if you let everybody know, if you buy a property and you let everybody know that they need to vacate the property, then there's no income. So you have to strategically do it where you take, hey, we're taking ten apartments this month and we're going to renovate those. And while we'renovating those, we're giving notice to the next ten that we're not going to renew their lease or they need to move out in 60 days. And so you're constantly renovating units while giving notice to tenants that they need to move out because we need to renovate theirs. The first wave of tenants is usually the most difficult because especially if it's 100% occupied, you don't have anywhere to move them. So they essentially just need to move and find a new location. But once you get through that first wave, you give notice to the next group of tenants. But now you have brand new apartments that you just renovated, and you can give them the option of moving into a brand new, nice unit, which is always nice to offer them.
Mike Swenson
Yeah. And then you're really keeping the cream of the crop, the folks that are willing to pay the most and want to stay there the most. And then you slowly find the ones that now want to move into those units. So it does take time. And I think that's what the tricky part that sometimes people don't always realize is, number one, it's real people. But number two, you're raising maybe the quality of tenant, the type of tenant, or maybe more honing in on your ideal future tenant by slowly going through those changes.
Anders Jacobson
Yeah. And I think I have investors that ask all the time or sometimes are concerned with raising rents that much on a tenant. And the way I had concerns, too, when I first started investing, I was like, whoa, are we really going to be able to raise the rent 200, $300 in that short of a span? And I can tell you from being on the other side, on the management side now, it's been eye opening to see some of these units haven't been renovated in 20 plus years. And the quality of the living environment is just really low. We had units where people were paying $650 in one of our properties, $650 a month, which is super cheap, but their cabinets had holes in them. Their walls were falling apart. There was so many issues in the unit. And then we completely renovated it, made it look brand new. Rents went up about $500 at this property because we made it look brand new, and we expected a lot of these tenants to move out, and not a single one did. They were so willing to pay that extra money to live in a clean, safe, new environment and unit that they were willing to pay that extra amount.
Mike Swenson
Your investors that you work with that aren't going to necessarily have eyes on the property or go visit the property, what are maybe some of the concerns that they have or barriers that they put in place where they're like, you know what, Anders, I'm not sure I want to invest in this property or into this particular market. What are some of those top issues?
Anders Jacobson
I'd say one is they've never been to the market, so they don't know the growth that's happening there. And the others, a lot of times they're just new, so they're thinking small. They're thinking, to your point, kind of just like a regular flip. They don't realize that there's so much more involved in these large properties. You have a whole operations team that we're doing this consistently where as soon as we buy the property, we have whole plan in place where it's systematized, where X amount is happening. So I think a lot of it's just unknown. You can't just Google and find answers or get tons of information on these investments. And so I think a lot of it's just lack of knowledge and the unknown is what they're really trying to overcome or what I'm trying to help them overcome when I'm chatting with them. But I love that part because people can act like this vehicle is super complicated and real estate syndication sounds fancy, but it is really simple model. We're really just joining forces to buy these large properties because we couldn't do it on our own. We don't have the capital to take down a $30 million deal on our own. So we bring on partners who they don't have the time to take down or manage this property. And so we give our time and our energy to manage it. They give their capital to invest and we give them great returns in return for their investment.
Mike Swenson
Now talk a little bit about the economies of scale here, because somebody might say, hey, I can just go take that money, buy a house and flip it myself, or buy my own duplex and do it myself. Why would I want to invest in a hundred plus unit apartment?
Anders Jacobson
So, Mike, the whole reason we don't have time to get into this property on this podcast, but I kind of went over it quickly. But I did a couple of flips, some long term rentals, and one of them in particular was kind of what broke me and said, I'll never do these small properties again. It was a four unit deal, and obviously four tenants on paper, if everyone pays rent, everything goes smoothly, I'm making 1500 plus a month on this property, which sounds great. That would have been an awesome return. Long story short, ran into every issue in the book of this property. Covid hit tenants weren't paying rent, had to do a handful of evictions, finally get it filled. One of the tenants children catches a unit on fire. Everyone has to move out. The fire department comes, busts all my windows that were brand new, cuts a hole in my roof. Just every issue imaginable. But the biggest thing that I found was that if two tenants don't pay rent at this property, I'm in the negative. Where if I have 170 unit property, two tenants don't pay rent. That's actually already factored into our underwriting, we expect it to be about 94% occupied. So that 6% is already factored in. So we have a buffer there. And so the economies of scale is just, even if we have ten people at the property that don't pay rent that month, it's actually okay. We're still cash flow and we're still making good money. Where even if I didn't run the issues on that four unit, and I just had a couple of hvacs go out that year, then there goes all my profit for the year. That economies of scale is huge.
00:25:13 - Mike Swenson
Now, talk a little bit about what you're doing here coming up with short term rentals.
00:25:17 - Anders Jacobson
Yeah, so me and my wife purchased a handful of short term rentals, and we still have those, and we love that vehicle, and had the opportunity to partner with some operators who have really taken it to a whole nother level. So they've taken the multifamily large apartment syndication model and done that with short term rentals. So they created a fund where they buy single family properties and convert them into these unbelievable short term rental stays, put them on Airbnb, Vrbo, all the sites. They have colorful basketball courts, pickleball courts, go kart tracks in the backyard, these amazing pools, they have murals on the wall. They're just these unbelievable stays for families, businesses, family reunions, whatever it may be. And they do it in markets that are heavy vacation markets. So they're not going to run into any issues legally or laws changing in these markets regarding short term rentals. So partnering with this group, bringing on investors and have really exciting opportunity where long term could package all these properties together, which we hope to get about 100 properties in one portfolio and package it and sell it to private equity. Or we could sell them individually, so there's a lot of flexibility there.
Mike Swenson
Great. And yeah, you're doing a great service where instead of going back to your story, like kind of picking one stock and hope it succeeds, you're giving people a few different options of things to invest in. You're personally going and vetting all these people out. So a busy salesperson doesn't have to do that work, they just have to put their trust in you and know that you know what you're doing, vetting them out. But yeah, it's just such a great tool and syndication is just a great opportunity for people to be able to put in some money and just have a much bigger impact in economies of scale. So very exciting what you're doing for people that want to reach out to you and learn more about it, how can they do so?
Anders Jacobson
Yeah, go to my website, it's ww dot brightoncapital IO. Just click join the club, plug in your info, and then you'll get an email to set up a call directly with me and love to chat with you and hear what you're interested in, see if we can potentially partner together. Awesome.
Mike Swenson
Well, thank you so much for coming on and sharing your story and hopefully inspiring others and helping people build wealth through real estate. So thanks so much.
Anders Jacobson
Yeah, thank you, Mike. Appreciate it.
