Mar 5, 2022
How to get out from the mindset that you need to trade time for money?
Spoiler alert! That’s difficult, but that doesn’t mean it’s impossible. Seth Bradley, Managing Partner at Law Capital Partners, joins us in this episode to tell us how he escaped his office life and built his passive income faster by exploring alternative income-generating strategies.
Formerly an attorney for a big law firm, Seth has been applying his legal background to help real estate investors find asset classes that fit their needs. He also offers free tips, insights, and ideas about how to stop trading time for money on his podcast, The Passive Income Attorney.
[00:01 - 03:38] Opening Segment
- From blue-collar to entrepreneurial
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- How Seth Bradley changed his mindset
- Seth spent 11 years in college, and here’s what he realized
[03:39 - 12:55] Trading Time for Money
- Seth explains how he applies his law background to real estate
- A common mistake that real estate investors make according to Seth
- These are the kinds of people Seth wished he met early in his life
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- And here’s the reason why
[12:56 - 17:26] Investing in Real Estate
- Seth shares his initial experience as a real estate investor
- Passive or active investor: Which should you go first?
- Why invest in recreational vehicle parks now according to Seth
[17:27 - 19:08] Closing Segment
- Your way to make the world a better place
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- Providing quality advice to law students
- Reach out to Seth
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- See links below
- Final words
Tweetable Quotes
“...when you start working for yourself, it's a lot different, and you don't mind putting in those 12 hours as opposed to working for the man and putting in 12 hours.” - Seth Bradley
“Trading your time for money isn't necessarily the best way and most efficient way to make money. You need to figure out how to find some sort of an asymmetrical return there on your time.” - Seth Bradley
“Use that active income [and] turn it into passive income. So, if one day you wake up and you're not happy going to the office, you can say, ‘You know what, I'm going to build [fewer] hours this year’ and you can do that because you have other income streams to fall back on.” - Seth Bradley
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Email seth@passiveincomeattorney.com to connect with Seth or follow him on LinkedIn. Start growing your passive income while you continue to practice law by visiting Law Capital Partners.
Know more about the Passive
Income Attorney by checking out his website.
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I love helping others place money outside of traditional investments that both diversify a strategy and provide solid predictable returns.
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Email me → sam@brickeninvestmentgroup.com
Want to read the full show notes of the episode? Check it out below:
Seth Bradley 00:00
I wanted to try to figure out how to take down a huge commercial property. I didn't know if there's going to be multifamily or an office building or what it was going to be. So I didn't know where to go at that point. I just started looking around, talking to people, networking, and I was advised early on before I even took that first big deal down was just to invest passively, to kind of even if you are interested in being on the active side, at some point in time, it's always a good idea to invest passive first. So I said, “Okay, let's do it.”
Intro 00:27
Welcome to the How to Scale Commercial Real Estate Show. Whether you are an active or passive investor, we will teach you how to scale your real estate investing business into something big.
Sam Wilson 00:38
Seth Bradley is a real estate entrepreneur and an expert at creating passive income while working as a highly paid professional. He's closed billions of dollars in real estate transactions as a real estate attorney, investor, and a broker. He's also the managing partner of Law Capital Partners, a private equity firm focused on multifamily and opportunistic transactions. Seth, welcome to the show.
Seth Bradley 00:58
Sam, thanks so much for having me on. I really appreciate it, man.
Sam Wilson 01:01
Hey, man, the pleasure’s mine. Same three questions I asked every guest who come to the show. In 90 seconds or less, can you tell us where'd you start? Where are you now? And how did you get there?
Seth Bradley 01:09
Where'd I start? Man, starting crossroads, West Virginia came from a blue-collar family grew up like that, you know, it's been a journey trying to get over that kind of blue-collar mindset into kind of the entrepreneurial mindset and to stop trading your time for dollars. That been a battle for me my entire life. I'm still dealing with that. Now. I went to law school. I actually went to med school, got my MBA, and then I went to law school. So I've been to every graduate school possible, ended up kind of going that traditional law route, got a big law firm job out of law school. I worked in that for six years or so. And then in the meantime, while I was working, I started investing in single family real estate, wholesaling, kind of did the whole gambit of residential real estate and kind of work my way up to larger multifamily actually started investing passively first and then got in on the active side. I can I want to continue to build that business, as well as my other businesses that I have as well outside of real estate.
Sam Wilson 02:02
Wow, that's a lot of steps and a lot of yeah, a lot of time spent studying. I mean, you've gone seven years, man, that's a long time. That's post-high school, right? Yeah, that's 11 years of college. Right? Good grief. Man. That's a long time, friend. It's ridiculous. Yes. And in the end, your ultimate goal is what?
Seth Bradley 02:22
Ultimate goal is, I think similar to a lot of people, man, I just want freedom, flexibility, and fun, right? Freedom of your time. flexibility with your time. I don't shy away from working hard. I mean, that's instilled in me from the very beginning. I probably work more now than I ever did as a big law firm attorney. But you know as well as I do when you start working for yourself, it's a lot different and you don't mind putting in those 12 hours, as opposed to working for the man and putting in 12 hours.
Sam Wilson 02:48
Yeah, man. That's absolutely true. It's a comment I don't think I've made because I've always worked for myself, but made in my adult life is like, oh, man, is it five o'clock? Yeah, it's like every day is like, Oh, crud, it's already five. How's this happening to me? I need more time.
Seth Bradley 03:04
Yeah, it's crazy. Man. I think back and I remember like going to the office and just being like, dreading going to work, like waking up in the morning just going, oh, man, I gotta get ready. I gotta go to work. I put on my suit and tie, I gotta go to work. Go to the office, you know, chug some coffee, because I'm going to fall asleep at my desk. If I don't, you know, having 50 bosses just trying to like, keep my door closed. Leave me alone. I just remember those days and just think, you know, that was crazy. It's crazy to go through, put yourself through something like that.
Sam Wilson 03:33
Right. Yeah, absolutely. When? Or do you still use your law degree? You're still practicing law in some capacity, right?
Seth Bradley 03:39
Absolutely. Man. I mean, I use it every day, especially in my real estate investing. I mean, when I partner with people on the GP side, I'm typically doing some if not all, of the attorney work on the deal, whether that's the, you know, the securities work and quote-unquote, dirt work, the real estate attorney work. And that's how I kind of partner with people, or that's kind of how I've developed to partner with people. So yeah, I use that every single day. You know, I talk to attorneys all the time. And they're kind of, you know, they get pigeonholed into a box. And they're like, you know, I'm a securities attorney, or I'm a litigator. And they think, what else can I do now, because they've been doing this for so long. I'm like, when you learn to think like a lawyer, and think you know, about all the liabilities, the risks, and kind of that balance, that delicate balance, you have a business, you can use that in anything, man, any endeavors that you go about, and that that's not just business, but that's also just with life and relationships and everything else.
Sam Wilson 04:31
Right, man, that's really intriguing. So when you come to a deal, do you come to the deal and say, hey, look, I'm going to take over or I'll handle the paperwork, the legal side of this, how do you structure that? Like, do you say, hey, you know what, you can just roll my fees into the deal. Do you? What does that look like?
Seth Bradley 04:49
Yeah, I mean, when it comes to the deal, at first, I would prefer to just kind of act as quote-unquote, this isn't exactly right. But in-house counsel, so to speak for our kind of our little LLC that we're going to form, and then just kind of farm out the work. So I will work, I'll find the securities attorney that I like working with a real estate, the local real estate attorney I like working with and kind of oversee their work, put, you know, an extra set of eyes on things and just kind of manage them. Because a lot of times, you know, you hire attorneys, we don't necessarily know what they're doing, you're just like, hey, get this done for me. And hopefully, that's right, I trust that you're doing it, right. But there's some value if you have somebody on your team that actually knows if they're doing it right or not. So that's what I prefer to do. But I will take down some of the work, I will do all the work if I need to, if that's what the team needs, it really just depends. And then you know, there's all kinds of ways to structure it. I mean, you can structure it any way from, you know, adding some, you know, I'll get some equity for doing this much work or, you know, maybe we'll roll some sort of a fee in there.
Sam Wilson 05:46
Right. That's really, really intriguing. What are some things that you feel like you see, or have seen in the legal doc preparation process where you go, or even when they get the finished product to you and you say, You know what, this isn't right, that maybe the ordinary investor or the ordinary sponsor just wouldn't catch?
Seth Bradley 06:03
Well, a lot of times people try to get away without doing offering documents at all right? They're like, Oh, well, we've only got a couple of people, a couple of money investors in the deal. And they're not really doing anything, you know, we'll just structure it like a JV. And that's not the right way to do it. If there's any passive money, people involved, and they're not taking an active role in the business, it should be structured like a syndication, it should there, that's an offering. So it should be structured that way. So a lot of people, you know, it's not the worst thing in the world, you know, if you have one or two people doing that, and just coming from attorney, so take it with a grain of salt. But you know, people do it every day, we'll put it that way. People do it all the time, but it's not the right way to do it. And there are other times when it's a little bit more egregious well, they'll have you know, a lot of money investors involved, and they don't bother putting together the offering documents, so they think they can just find something off the internet securities is not something you want to mess with. You want to have an attorney involved. You want to have your documents in place and your ducks in a row.
Sam Wilson 06:57
Right. Yeah, absolutely. What are some, I mean, because it because there's even inside of getting your docs together, there still, I mean, you can pay anywhere from two to $30,000, to get a set of syndication docs put together, and some come with certain bells and whistles, or certain insurances that your attorneys may cover, or may hold or not hold and things like that, like, how does someone make the right choice on that front?
Seth Bradley 07:22
Yeah, you really got to talk to the attorney that's going to be involved, ask them how involved they're going to be. Ask them if they're going to be able to make deal-specific changes, or they're just going to give you a template and say, Here, this is all we're going this is all you're going to get for $3,000 because there are services like that, we're like, hey, we'll give you our templates, we'll fill in a couple of the blanks, but there's not going to be any, you know, you're not going to call me up five times before this deal closes and give you an hour of my time. That's usually what you get for those two or $3,000. On the other end of the spectrum, it goes even higher than that, man, if you if you start dealing with DLA Piper, which is the firm that I worked for, for a while, you know, that's the number three law firm in the world. Their fees are upwards of 75, $100,000 for typical syndication. But man, if you haven't worked with them before, you might not realize all the things that they'll do that other securities and real estate attorneys don't do. For instance, one thing I know that people were surprised, I was actually surprised that I myself, I've worked at law firms before, but DLA Piper kind of takes it to a whole new level. I mean, they're looking at each and every piece of marketing material you put out there, not just the legal docs, but let's say it's a one page, you know, deal summary, and you say a factual a quote-unquote, factual statement about, you know, the city that you're investing in? Well, that should have a reference that needs to have a citation attached to it. And that citation that reference, when you check it, it better not be the Chamber of Commerce for that city who kind of just makes it sound really good no matter what they want to make everything sound great, it's got to be a legit, third-party neutral reference that you're citing from just in case that somewhere down the line, think about it if an investor loses their money, and they're pissed off, and they say, You know what, I read that one-page summary once upon a time, and I've read about that fact about the city. And that really changed my mind about whether or not I wanted to invest in this. They're not dependent on that. Maybe that's probably not grounds to win. But that's just one of maybe many things that they might listen to, you want to make sure you have all those things covered.
Sam Wilson 09:18
Wow. Yeah. And it's amazing in our sue-happy society, you know, that that's the granular level of detail that you have to go to now to really protect yourself. Right. What about it?
Seth Bradley 09:29
You said, but yes, right. Yeah.
Sam Wilson 09:31
I mean, what about insurances and things like that, you know, your attorney should be carrying?
Seth Bradley 09:34
Yeah, insurance policies, you've got to, and usually, you know, if I'm the attorney on the deal, I'm going to defer at least with the insurance stuff specifically to the insurance agent to your, you know, your insurance consultant. You know, there's obviously going to be some legal jargon in there that needs to be reviewed as well. But we work hand in hand with the legal consultant themselves.
Sam Wilson 09:56
Got it. The insurance? Yes, consultant. Gotcha. Okay, that's really great. interesting that one of the things you mentioned early on was that, you know, the idea of not trading time for money, that kind of blue-collar, which is, you know, I was below blue-collar raised. And so there's a common struggle we've share, and that you're always you were taught to work hard, but you weren't taught to work smart. And so talk to us about that struggle for you and then what do you see the path forward? What's the way out for you?
Seth Bradley 10:25
Yeah, and just a little background, my mom's a retired school teacher, my dad's a retired coal miner, typical kind of West Virginia careers, you know, provided for my family. But you know, again, work hard, maybe not the smartest, you know, exactly what you're putting into what to put getting back out, you know, my dad destroyed his body working in the coal mines, you know, for decades. And it's crazy what you sacrifice for a couple of bucks. So what you do learn from that blue-collar background is how to work hard, right, you learn what it takes to put in a good day's work, and to put your head down and work, we learned how to do that. But at the same time, there's that double-edged sword. And that's that, you know, maybe putting your head down and working as hard as you possibly can for as long as you possibly can, isn't necessarily the best and most efficient way to do so. Trading your time for money isn't necessarily the best way and most efficient way to make money, you need to figure out how to find some sort of an asymmetrical return there on your time. So you know, I went to med school first because I thought that was the best job I could get was being a doctor, trading your time for money. And then after I didn't make it there, I went for a year and about two weeks into my second year before I just dropped out because I hated it. And I knew I didn't want to do it, went to law school because I thought that was the second-best job, I could get trading time for money, which is being an attorney. And it took being around the right people, I think that's what it comes down to, is exposing yourself to the right people as early as possible. If I would have been exposed to some business folks a little earlier in my career, perhaps I would have seen the light a little bit sooner. But you know, when I was an attorney, I was working with, you know, real estate investors as clients, and I was just, you know, seeing them come into the office and just realizing that they're not, you know, these crazy people that you put on a pedestal like Warren Buffett or something, you know, it's not Warren Buffett walks into the office, it's just everyday guys like you and me that are taking down these $50 million-plus properties and you're advising them on you know what to do and what not to do. And after a while, I started thinking, I want to stop getting paid on this table and be on the equity side and start living life like them because they're doing it the right way. Right. So that was kind of the mindset shift was being around those types of people that I was not around when I was growing up.
Sam Wilson 12:36
Yeah, that's absolutely brilliant. And that's, I mean, that goes back to the network, your network is your net worth idea. And it's amazing how just surrounding yourself. You don't have to have like amazing conversations. It can be just you just watching and being in the company of other people who are doing great things. You go, Okay, that was really cool. What was your transition when you said, hey, you know what I want to do what they do? How did you do it?
Seth Bradley 12:56
Yeah, well, you know, I started small, I started investing in single family rentals, my first one was a house hack into a duplex, and lived in one half ran the other half out. And I went from there and then started doing some fix and flips, mostly from a distance at that point. And I kind of got just bogged down by right, I'm trying to do fix and flips and single family houses from 2500 miles away, working with low-level contractors, low-level property managers, and is just taking a lot of my time and my energy and my decision making that you know, you only have so much decision making power, and each day, and it's just sucking the life out of me. And eventually, it took away from my career, I ended up getting fired from my last full-time legal job, because not only because I was doing, you know, all this stuff on the side, but then, you know, it was just taking away from my concentration and being able to devote my time and effort into being a great attorney, I had to worry about whether this contractor is trying to stiff me for $200. And that's the kind of stuff you have to deal with residential, you know, one to four units, when you start working your way up and start working with commercial contractors, commercial vendors, things get a lot better because they have a reputation to defend and they care about rather than some of those guys that are doing the fix and flips and you're trying to find the cheapest help.
Sam Wilson 14:14
Right, man, I wonder how many just a picture for the rest of us. Like how many of us would get fired from jobs that we personally hold inside of our own companies right now? Because we're trying to do too many things at once. Right? Yeah, a company would come in and audit me and be like, “Yeah, you're fired for that. And for that, and for that,” because looking at all of them, and then you're not getting the thing done. You're supposed to be getting done. Right. I think that's really, really intriguing. How did you do your first deal? What did you partner with somebody on a larger property? What did that look like?
Seth Bradley 14:41
Yeah, so you know, I'm a commercial real estate attorney. So I wanted to jump right in. I wanted to try to figure out how to take down a huge commercial property. I didn't know if there's going to be multifamily or an office building or what it was going to be so I didn't know where to go at that point. I just started looking around talking to people networking, and I was advised early on before even took that first big deal down was just to invest passively to kind of even if you are interested in being on the active side, at some point in time, it's always a good idea to invest passive first. So I said, “Okay, let's do it.” So I invested passively a few times, kind of got a feeling for and I do totally agree with that pathway. I think, even if you ultimately want to be on the active side, even seeing it from a passive investors’ perspective first, because at some point, you will have your own investors to know where they're coming from what they care about, it will help you in the future. So that's kind of how I got started. And those were all multifamily deals, to begin with.
Sam Wilson 15:34
Right. Yeah, I think that's brilliant. And that's the way I started out as well, in larger deals was going in as a passive investor. So you get a front-row seat like you get to see everything you get to ask everything you get to find out what you like, what you don't like what you're going to do differently. You get to really learn all the vernacular. Yeah, I mean, yes, it's on your dime, but you're getting paid to do it. So it's like, okay, that's a very different educational experience, maybe than, say college. So that's really, really intriguing, man. I love that. And so what you know, one of the things you said here in your bio, that I read there in the beginning, is that you guys are doing multifamily and opportunistic acquisitions. What is in the bucket of opportunistic?
Seth Bradley 16:12
For us right now is RV parks. So we're really looking, we haven't gotten one yet. But we've done a couple of due diligence blogs, we're constantly you know, underwriting, you know how hard it is to get a deal nowadays, and we want it to meet certain metrics. So we haven't gotten one yet. But we it's just a matter of time before we take the first one down. But I've got a group that we're looking at RV parks specifically just based on you know, better returns and what we're seeing kind of in the market and multifamily is just getting really compressed right now and competitive. So it's, it's even more difficult in multifamily to find a deal. So we're looking at other opportunities to opportunities like RV parks,
Sam Wilson 16:45
Man, that's great. I love that. Yeah. And I think that's part of the pivoting process is where you go, Okay, there's maybe opportunity, better opportunity over here, there's still opportunity to multifamily, it's just a lot harder to find. And of course, you know, for every 10 people investing in multifamily, there's maybe a half of the person investing in RV parks. So exactly. That's really, really cool. Seth, I've enjoyed this, thanks for taking the time to break down your story. Tell us a little bit about what you see, you know, in the future for you guys kind of your backstory on, you know, digging out from the blue-collar mindset and background, and then really going long here in commercial real estate, and then what else to look for, of course, in the attorney and legal side of things. So I think you bring a variety of skill sets to the table, and it's been been a blast to have you on the show and learn from you. Let's jump here into the last couple of questions. But when it comes to investing in the world, what's one thing you're doing right now to make the world a better place?
Seth Bradley 17:35
I'm talking to you a lot of people, law students, so law students are actually looking and seeing my podcast and are asking, “Well, hey, you know, he, got along.” I like continuing to big law or, you know, pursue that career. I mean, I just give them a realistic picture of what to look for and what you can expect. And I tell them that, you know, I'm not telling you not to be a lawyer, I'm telling you to go ahead and be a lawyer, because you've already made it this far. And you probably, you know, have some sort of passion for it, I would hope. And you know, but maybe keep those alternative investing strategies in the back of your mind, because you'll be making some good money soon. So maybe use that active income, turn it into passive income. So if one day you wake up and you're not happy going to the office, you can say, You know what, I'm going to build less hours this year. And you can do that because you have other income streams to fall back on.
Sam Wilson 18:18
Right, man? Yeah, that's great. If our listeners want to get in touch with you or learn more about you what is the best way to do that?
Seth Bradley 18:24
Check out the podcast, go to passiveincomeattorney.com and you'll get access to everything from there, man, you'll get access to you know, our deals and our investor club and the podcasts and free content and all that stuff. That's probably the best place to find to get started looking me up.
Sam Wilson 18:39
Man. That's awesome. Seth, thank you for your time today. I do appreciate it.
Seth Bradley 18:41
All right, brother. Thanks.
Sam Wilson 18:43
Hey, thanks for listening to the How to Scale Commercial Real Estate Podcast. If you can do me a favor and subscribe and leave us a review on Apple Podcasts, Spotify, Google Podcasts, whatever platform it is you use to listen, if you can do that for us, that would be a fantastic help to the show. It helps us both attract new listeners, as well as rank higher on those directories. So I appreciate you listening. Thanks so much and hope to catch you on the next episode.