Ep #495 – From Pro Snowboarder to Multifamily Entrepreneur
Dan Brisse is a multiple gold medalist and fixture on the Winter X-Games. His transition to multifamily real estate is a very interesting story.
- Success is a habit
- Burning desire
- Overcoming limiting beliefs
- The power of meditation
- Funding properties in a crisis
- Break even strategies
- Due diligence process
To find out more about our guest:
For info in Dan’s Snowboarding Career:
Full Transcription Below
EP491 – From Pro Snowboarder to Multifamily Entrepreneur – Dan Brisse
Rod: Welcome to another edition of “How to Build Lifetime Cashflow through Real Estate Investing.” I’m Rod Khleif and I‘m absolutely thrilled that you’re here. Very excited to interview the gentleman we’re interviewing today because he’s got kind of a unique start to life and in general. So, his name is Dan Brisse and Dan is a professional snowboarder. And now he’s got, you know, over 1200 doors as a GP and an LP. And it’s just such a unique start to getting into the multifamily business. I’m really excited to dig into how that transpired. Welcome to the show brother.
Dan: Yeah. Thanks so much Rod, I’m stoked to be here. Thanks for having me.
Rod: You bet. So take us back. How does somebody get started snowboarding when what, I don’t want to take your thunder away. I want you to brag because it’s very impressive what you’ve accomplished in that field and then obviously, what you’ve done in the multifamily space as well. But take us back if you don’t mind.
Dan: Yeah. Thanks, yeah. So, you know, I found snowboarding through my cousin. When I was 11-12 years old, my cousin shows up with a snowboard and we were riding it in his backyard. And I just remember thinking, this is so much fun and it’s something that I couldn’t stop thinking about. So, you know, I ended up getting a snowboard. Eventually, I worked for it a summer job and ended up getting a season pass at Powder Ridge in Central Minnesota which is where I grew up. There wasn’t a lot to do in Minnesota in the winter time. So, you know, winter sports were what I loved and I loved doing sports already. And my parents were pretty athletic. My dad specifically and I love sports. So, it really just, I latched on. And, you know, after a couple years of riding here and there at our local resort, I started to get better. I started to excel a little faster than some of my friends. And I got better than my brother which was a huge thing for me in my mind. And, you know, just fell in love with the sport and after a few years of riding, I kind of made this decision where I want to be a pro snowboarder and I’m gonna go all the way. So, that was kind of the introductory of how it happened before leaving high school.
Rod: Wow! So, tell us how far you took it? I mean, I don’t want again, I don’t steal your thunder because it’s very impressive.
Dan: Yeah. So, I ended up moving to Salt Lake City after high school. And, I thought I was really good. I thought I was gonna get paid soon. I thought I was like the next guy and I realized how far away I really was from being a pro rider. Getting in the mountains and getting around other athletes that have grown up in the mountains, I had a long ways to go. So, I worked these night jobs: Blockbuster, Red Lobster. I mean, you name it. It was a horrible work. Yeah. Every night I’d work and I would, you know, snowboard during the day. And after four years, I finally got to the point where I went to a contest in Aspen Colorado called the “Aspen Open.” I was so broke. My buddy drove me there and paid for my hotel and I won that contest. It was 275 riders. They come, it’s just like the US opening golf. Anything, anyone who wants to show up can show up. You pay your $150 and you’re riding. Yeah, and it’s on the X games course which is in Aspen Colorado. And, you know, with winning that, my career started to kind of take off with some of the brands I’ve been riding for, for a long time.
Rod: No kidding. And I mean, I’m just gonna say, I mean you’ve won gold medals. You’ve won silver medals. You’ve, you know, competed in the X games now, six times. So, when did you, I mean, was it an age thing? When did you transition into real estate?
Dan: Yeah. So, midway through my snowboarding career, I became friends with a lot of my heroes. These guys, who I only knew through movies. And they were getting to the end of their career and I saw some of them come to these harsh endings. And just, you know, losing everything, and they’d have these big homes up on the mountain and be driving these really rad cars and then it would just end. And, I just didn’t want to be that guy. So, I started to read some books, you know, get educated and try to understand what I could do when I’m done being a snowboarder so that I didn’t have to go back to working at Red Lobster.
Dan: Yeah. So after, you know, like you said, I was fortunate to be in X games, six times. I got two gold medals there in that called “Real Snow”, and then a couple silver medals. But after that, I was kind of coming to a peak. I could see the writing on the wall that I maybe had five years left if I was lucky. So, that’s where I started getting educated with Provision. A company that they do my CPA work. They basically, you know, had some classes there. I started to take it with them and I started to buy some smaller real estate on my own. Duplexes, nineplexes and I bought a 24-unit deal. And that’s kind of my transition into multifamily. And seeing what it could do for me with cash flow, you know, forced appreciation, depreciation, all the good stuff.
Rod: What market were you buying in buddy?
Dan: Yeah. So, I live up in Vancouver, Washington or near Vancouver, Washington just North of Portland Oregon. And I bought in a little town called Longview. The duplex and I bought a 9-unit deal in Chehalis, Washington. Two very small markets. My timing was good. Markets were going up. I don’t think you could have lost but, you know, I came into those two markets and then also being, I grew up in Minnesota, it was Saint Cloud, Minnesota where I bought the third property, a 24-unit deal.
Rod: Well, I know you’re in Phoenix now doing due diligence on an asset. So, you certainly haven’t stayed in the cold, you know. So where are these, you know, I know you’re in 500 doors as a GP, 1200 total. Where are the 500 that you’re GP?
Dan: Yep. We’ve got four in the Saint Cloud, Minneapolis market. We’ve got one currently in DFW and we’re working on trying to break into Phoenix. Those are kind of our three markets that we’re specializing, focusing in on building a team out. And, you know, trying to go vertical in those markets.
Rod: Nice. Yeah, we love Dallas. We’ve got an asset there that’s just a home run all the way down the line. Love it! We’re not in Phoenix. Actually, we try to stay Southeast because we’re in Florida. So, it’s just easier, you know, Dallas of course. You can get there from anywhere but we haven’t gotten much further West than that. But, so let’s talk about, so here’s an interesting question. How do you think your snowboarding expertise helped you in the multifamily business? What pieces of that helped you be a success in this business?
Dan: Yeah. That’s a great question. I personally believe success is a habit. It’s a way of thought, you know. You find the right people that think the right way, you’re gonna get those results. So, in snowboarding for me, it was laser focus. One goal no matter what. You know, I was so committed to being the snowboarder that I was willing to die to be a pro snowboarder. And if you watch any of our videos, you’ll see the risks we take we’re life-threatening. So, you know, I think number one is, first develop a burning desire for whatever you want. And then, just don’t quit. And if you have those two yeah, “Think and Grow Rich” that’s funny. I almost.
Rod: I just held up, “Think and Grow Rich” because that’s the first chapter of “Think and Grow Rich”. Have a burning desire and by the way I’m reading this again. I’ve read it probably 10 times, maybe more than that but I’m sorry I didn’t mean to.
Dan: I love that! When I said that burning desire, I’m like, I should probably mention “Think and Grow Rich” but I didn’t. So, I’m right there with you. I love that book too. I’ve read it several times, I probably should read it again as well. But, you know, I think that’s the biggest piece and if you can harness that desire for a goal and you can. Anyone can do it, you know, you’re basically programming your mind. You have the ability to program your mind which is such, something that’s just never talked about in school. And if you don’t dig for the information, you might not ever figure that out. So, those are what I would say are the biggest things is, figure out a goal that very much excites you that you have massive passion for. And then, start focusing on what’s in front of you now and just take baby steps every day and just don’t quit. And think that that’s the piece that will separate people from making it in, in anything. You gotta have some natural ability. No doubt about it. I mean, you gotta have something that and usually you pick if you love something, you’re gonna pick that piece. So, those are the two pieces that I would say helped me the most with real estate.
Rod: Yeah. Let me expand on what you just said because it was very very powerful. And, you know, that’s why that burning desire is why the first thing we do at any of my boot camps including the live stream ones is, we spend an hour and 20 minutes on goals. Getting very, very clear on what it is that you want and why you want it. Because if you don’t know that, you’re never gonna get it. And so, you know, how are you gonna get anything if you don’t know what it is? Is, number one but you’ve got to have that burning desire to push through fear, to push through limiting beliefs, or to get uncomfortable. And you also touched on focus and, you know, it never clicked with me. And that’s why I’m glad I asked the question about the parallels between the, you know, your previous career and this. Focus is, you’ve got to be honed or you lose your life in what you did before and focus in this business. Focus is power. And so, you know, the more you can enhance your focus, the more powerful you are. In fact, you know, I listened to a podcast called “Tim Ferriss” and, you know, I get excited because I’ve had nine million downloads on my podcast. Well, I think he does that a week on his. But he dissects the best of the best of people. You know, he deconstructs the best in the world. Athletes, you know, and movie stars Schwarzenegger, Ed Norton, Jamie Foxx, billionaires Ray Dalio, he’s the best of the best, bullet politicians. And I started to notice a pattern, because he deconstructs how they achieve their success. They all meditate. And I thought well, what does meditation enhance? Focus. And so, you know, I really wanted to hammer home that comment and then the last thing you said was to take steps. You’ve got to take action guys. Even if they’re small steps, you know, because you said baby steps in your description and that’s a great safe, you know, non-intimidating way to describe it but you’ve got to move forward. And, you know, that was awesome brother and so, it kind of ties into another topic that you and I thought we might dig into a little bit more which is the word “Passion.” One of my favorite words, if not my favorite word. So, let’s drill down on that a little bit. Where does that come into play?
Dan: Yeah. When I was young, my parents always told me they never did what they love to do. That was all I heard growing up, you know. It still makes me tear up a little bit that, you know, they’re old and they didn’t do what they wanted to do. And, you know, with my parents saying, “Hey Daniel, just do what you love.”
Dan: So, with that piece in mind, you know, for me it was just, it was clear. I was like, okay, this may not work and it was unknown. But I’d rather try and give it everything I got then I always wonder because I knew what it was like to wonder. So, that’s why.
Rod: Yeah. And you know, these lessons that we get can swing either way, you know. It’s so great that your parents said what they said, you know, because sometimes you will model what you see. And other times you’ll use it as a, you know, as an example of the, you know, of choosing a different direction which you did.
Rod: And so, but the key here and the key to all of these guys is something he said, which is do what you love. And when you do what you love, and you can even make it a little more micro than that. In this multifamily business, it’s critical that you play to your strengths. And so, that might mean that you do the analysis on the deals or it might mean you bring the, you might be the investor relations person because you’re more outgoing. It might mean that you’re the deal hunter and you’re building relations with brokers to find the deals or you’re great at operations and you’re doing that piece. But if you focus on what you’re good at, it’s gonna be something you love and when you’re doing what you love then you’re inspired. And that’s the only way you’re gonna have passion. Would you agree with me Dan?
Dan: 100% agree. That’s where the magic happens. If you can get into that zone where you’re excited for Monday. You know, I hate the comment of happy Friday. I’m about happy Monday. I know that sounds odd but that’s just the way, you know. If you’re in your strength zone and in your passion is, you’re excited to go to work. And that’s what I think is the most rewarding piece is, if you can have income with something you love. Not only are you probably gonna get paid the most because you’re focused in your goal.
Rod: Because you’re good at it. Because you love it.
Dan: Good at it. Right. So, that’s all that’s where it comes together. And I think if that was pushed a little more in society, instead of just go to college like, I’m for college. If you know what you want to do and it’s something you love to do. But if you don’t want to go and you don’t know what you’re gonna go for and you’re going because your friends are going, just rethink that, you know. It doesn’t mean that’s the best path especially in the information age. Maybe in the industrial age but things have changed, the world’s changed. So, I think those are things that I want to make sure my kids understand. And I hope that younger people coming up don’t just follow their parents blind eye because they’re maybe giving you the best advice they have but it might not be the best advice for you.
Rod: Well, it’s the advice that, it’s all they know. And you know what, you know, I ask a question at my live events. It’s, you know, who here went to college? Raise your hand. All right. Keep your hand up if college taught you about mindset and psychology to go out there and conquer the world and create the life of your dreams. Keep your hands up and maybe one hand stays up. You know, and somebody didn’t hear the question. But you know, it’s you know, we were talking about this before we started recording. And you know, my big thing is mindset and psychology. I believe 80% to 90% of your success in anything is your mindset and psychology. And, you know, I got that hammered into me by someone I met early on and then the course I spent 20 years with Tony Robbins. Following him around the planet and that’s all it’s about. But so, and guys, what I want to say to you about this is, if you don’t love multifamily real estate yet, I would tell you to try to find a piece of it that you do love or associate pleasure with something that you might love and you can learn to love it. But if you end up not loving it, then for God’s sake, go do something else. Life is, do you agree with me Dan?
Dan: I 100% agree with you. You know, if it’s not for you it’s fine. Keep searching until you find what is for you.
Rod: Yeah. So, let me ask you this. How do you feel about the market right now, and how do you feel about the future with what’s happening with Covid and unemployment, and you know, and a lot of businesses going under, and you know, and things of that nature? What are your thoughts?
Dan: Yeah. You know, it’s concerning.
Dan: Very concerning as to how many businesses stick around, you know. Is our market a free market now or is it controlled with the Fed deciding who lives and who dies? You know, those are huge pieces. The part I love about multifamily and coming back to it is, it’s a necessity and you’re in a market. You’re swimming in this market, right? What’s the story of the property in that market and what can you do with it? What’s the supply and demand? You know, how’s the debt structure? And it’s so unfavorable right now. So, you know, as far as what’s to come in the market economy, I’m not gonna try to predict that and I just, I’m uncertain of it. But with that being said, I feel the best still, placing capital in multifamily instead of letting it pile up in my bank account due to how much printing is being taken place.
Rod: Yeah. No question. Agree. I couldn’t agree more. I interviewed Harry Dent, an economist on my show and it was the same conversation. Get in assets that pay you returns. He thinks the crash is coming for sure. I actually think it is as well. You know, I got crushed in 2008, lost $50 million and this feels like 07’ to me honestly. So.
Rod: Yeah. And so, you know, the reason I asked the question is, guys if you’re in the stock market I would highly recommend you get out because I really believe there’s gonna be a bump there, a big one. And whether or not the real estate crashes as much as I think it’s gonna, you know, I’ve been wrong before. I’m wrong a lot. I just feel pretty strongly we’re gonna have some serious reset in this country. But it’s not something to be afraid of. It’s something that, you know, yes it’s gonna suck for a lot of people and there’s that. But, you know, I try to look at this through rose-colored glasses and look for opportunity. And there will be incredible opportunities if it does happen. But we’re buying right now. We’ve got an asset under contract. And, you know, we’re very, very conservative. Now, I don’t know. Let me ask you a question. How are you stress testing your deals buddy? And what are you doing for property reserves today if you close on something? What are your thoughts there?
Dan: Yeah. We are using an exit cap rate. That’s about a point higher than we’re buying at.
Dan: You know, will those go up with rates dropping? I don’t think they will. Truly, I really don’t but if they do, we’ve got some protection there. You know, we’re using historical rent growth in these markets based off of CoStar, based off of the last 10 years.
Rod: So, you haven’t adjusted the rent growth? You’re still throwing in the three percent or whatever it is?
Dan: We do after 12 months. The first 12 months we’re keeping zero.
Dan: Yeah. First 12 months, no rent growth. And then, you know, depending on the market, one and a half maybe two percent thereafter. We’re trying to stick more to Freddie Mac debt instead of Fannie Mae keeping more of our capital on hand. You know, I’m a fan of Fannie Mae but I like the liquidity in our bank account depending.
Rod: What kind of liquidity do you hope to keep? Like, do you have a metric for that or.
Dan: Yeah. We don’t, necessarily a metric, you know, we’re buying a $7 million deal right now in Minnesota and, you know, for something like that, I’d like to have $500k, you know, just like.
Rod: Perfect! That’s what I’m talking about. Yeah. We just bought an asset for $9 million in Atlanta and we’ve got a half a million but it’s a B asset and it’s 100% occupied. I mean, we’ve already met. Before we closed, we met our first year numbers. The existing management had gotten our first year numbers which was incredible. And we’ve got an asset that’s more of a C asset in Cincinnati. We’ve got a million sitting in the bank.
Rod: You know, just in case. Yeah. And so, good. Good. Now, you know, the other thing that we do is, we look at our break-even point. And we’re very, very conservative on that. Do you do anything special there or what? No?
Dan: No. I guess, you know what, when we’re going into the deal, we’re valuing our value-add plan based off of that market. So, you know, if we’re in a market where we’ve got high demand, vacancies very low, and we feel very confident that we can beat the competitors in our area. You know, we’re looking at more of a five-year plan of how we’re gonna hit those numbers. Now, I mean, if you’re looking at how to break-even and not lose investors money, gosh! If you do that, I feel like you get an “f” and you shouldn’t be a syndicator personally. If that’s what you mean when you say a break-even point?
Rod: Well, you know, I lost $50 million. So I am, you know, hit me once shame on you, hit me twice and it’s my own damn fault. Okay? And so, like for example that Cincinnati asset? It’ll break even at 65% occupied. So, I mean if the world falls apart, we’re okay. Okay? Because even in 08’ my multifamily assets only lost 11% in rents. And so, you know, easy to sustain. That asset in Atlanta, 68%. We can be, and so again, I am super conservative based on what’s happened to me. I like to look at worst case and work backwards from there. I’m not saying that you have to do that, but I believe in the lowest leverage you can get and still have great returns. And I’m blessed because, you know, when we throw it, we have, you know, 500 students around the country sending deals in. You know, we bought 1500 or 1400 doors with our students in the last 18 months, less than 18 months. And so, you know, I’m kind of nice that, in a nice place with that. So, we can really kiss a lot of frogs and move through them quickly and find really screaming deals. But anyway, that’s why.
Dan: Great. Yeah, that’s good stuff. I think that’s a great way to go about it and something extremely important to be looking at right now, definitely.
Rod: Let me ask you this now. If, you know, you’ve got CapEx projects going right now, I assume? You’re making distributions right now, yes?
Dan: Yeah, that’s correct. We do have some CapEx projects going on a deal in Minnesota. We have some going on a deal in New Mexico. We did stop distributions for a little bit. We’ve just restarted them, since we, you know, haven’t seen much of an effect thus far. You know, we are seeing some delinquencies this month, creep up compared to previous months.
Dan: But nothing again, where you look at that income or your net rental income, and you’re concerned. It’s, you know, it’s minimal. So, yeah that’s where we’re at.
Rod: Okay. Now, I know you did, you’re doing due diligence literally today on an asset. Talk about what you did. Just enlighten my listeners as to what you did today, what you’re doing. You know, maybe there for a few days. What are the sorts of things you’re doing? Just for those that have never experienced someone doing due diligence. Enlightenment them.
Dan: Yeah, you bet. So, we’re here today with our property manager that’s gonna be managing the property, assuming we do close. We like to have our property manager complete due diligence, so they get to know the property along with us. We’re basically going through all 140-units and investigating everything you can think of, you know, everything, exterior, window siding, foundation, roof, electrical, plumbing, you name it. We’re verifying the condition of the property to make sure that we’re not caught with our pants down for like a better term when we close. You know, we can find anything and everything that’s wrong with the property now, we can be prepared for it. It’s the things we don’t know about. We did just have a potential, potential deal. We got to quote back potential deal killer with our mechanicals. Chillers are not good and the piping underground may need to be replaced, and when you start seeing that, we luckily have no more hard money.
Rod: That’s big money! That’s big money. Okay.
Dan: And we have no hard money on the line. We’ve got 30 days to do our inspection. So, you know, no harm, no foul, we’ll walk if we need to. But, you know, those are the pieces we’re digging in on, and then Elise audits as well. You know, verifying the leases match up with the rent roll. Probably gonna be needing some bank statements to verify their rent roll is in and utilities are matching up, just to be absolutely certain. And, you know, if a seller’s being honest, you shouldn’t have any problem releasing that information, and we wouldn’t.
Rod: At the very least, you know, I just had a student back out of a deal that discovered that 14 of the units that were rented were being paid by the owner. Yeah. Which is, and these were occupied units. They were paying the tenants’ rent to boost the NOI, and it’s very very hard to discover that. But then luckily, they did discover it. So, you guys, now you’ve got an idea. You’re gonna do a physical inspection. Go through every single unit. You know, I assume you video or take pictures in every single unit as well. You do the unit number first and everything behind it is that unit. Because you may not be in there for years. And so, you know what’s there. You, of course, check out everything around the property. You were smart. You had vendors, that new chillers. Go check that out and, you know, roofs of course, foundations, all that stuff. And then you do the paperwork. You do the, you know, the contracts that are on the property. You look at the, you pay special attention to the laundry because they survived the deal, and the leases, and rent roll, and all that business. And, you know, you’ve got the hat on that says, “Why do I not want to do this deal?” And sometimes that’s a tough shift to make mentally because you’re excited, you’ve got it under contract, you’re looking for reasons to do the deal but you can’t do that. You’ve got to put on that hat, because you’ll overlook subconsciously, overlook something that you shouldn’t overlook. You agree?
Dan: That is a huge piece right there. When you get emotionally involved in these deals, you want them to work. But the reality is, what the reality is, the truth is there and the costs are there. And you better budget for them and be real on it because when they come back, when you’re looking to exit, I’ve been there before on deals we bought in Minnesota. Our early deals where if you didn’t get the CapEx right, you’re looking to exit. All of a sudden, you’ve got a rabbit that people don’t want. You got a deal that is hard to unload. So, critical.
Rod: Yeah. And, you know, it’s human nature. Once we make a decision on something, we’re looking for reasons to bolster, shore up, substantiate that original decision, to buy that asset. You can’t do that. You’ve got to be looking for reasons not to do it. Because sometimes, the best deal is the one you don’t do, good gut. I mean a chiller can be, like, hundreds of thousands of dollars. So, that’s a really big deal, if that hadn’t been discovered, so. Okay. Well, let me ask you this. You know, I’ve got a lot of listeners and I’d love to ask a couple of questions. One of them is, is knowing what you know now, is there anything you might do different with, you know, knowing what you know now?
Dan: Yes, definitely. You know, my mistake was not getting a thorough enough education sooner. If I could go back, I would have definitely brought on my CPA first as the quarterback, setting my business up, setting some very clear goals which they help very much and educated very much. But then take it a step further and do a deep dive into multifamily value-add investing, and learn from people who already have the results and who are crushing the game, and then just, you know, repeat.
Rod: Yeah. Well, thank you for giving that subconscious plug for my coaching program, I appreciate that. It’s so important. Let me ask you this; What motivates you, brother? What inspires you? Who inspires you or what inspires you? Any famous quotes you love, any people that you look up to that, you know, dead or alive?
Dan: Yeah. I’d say Michael Jordan. You know, he just came out with this thing “The Last Dance”, and watching him and hearing his mindset, I can relate so much. I mean, you know, just the way he looked at it, the way he used anger and motivation to push him to do what he needed to do. He was super intense. He was laser-focused. He wanted it so bad, he was willing to do whatever it would take for as long as it would take and just, I love people like that. They inspire me and that, if you haven’t had a chance, check it out, “The Last Dance”.
Rod: No, I’m definitely gonna check it out. I had never even heard of it. It sounds awesome and I would tell you, I would venture to say, it’s not so much that he wanted it, he just decided it was done, it was gonna happen. No matter what. And that’s, you know, “Think and Grow Rich” talks about that. Having a definiteness of purpose. All right, awesome. And so, you know, is there a question I haven’t asked you that you wish I had that might add some more insight?
Dan: No. I mean, I think you touched on it pretty well. I think, you know, it’s not about what you’re doing in life. It’s about your desire for it. That’s really what it is, you know, multifamily is just a vehicle to get to financial freedom for me and it can be for whatever it is that you really like to do.
Rod: But you love it. That’s the key thing man. And that’s so important, guys. So freaking important. So, all right, well, listen buddy, I really appreciate it. I know you’re in your hotel room because you’re doing the due diligence on a deal. I appreciate you taking the time to jump on and add some value. It’s very much my pleasure to meet you and I’m sure that we’ll talk again very, very soon my friend.
Dan: Looking forward to it, Rod. Thanks for having me.
Rod: You bet.