Revitalizing Class C Neighborhoods with Brian Grimes

Brian Grimes Jr. CFP® is an Ivy League-educated real estate entrepreneur and coach. Upon graduation from Columbia University in 2011, he embarked on a career in Financial Planning at AXA Advisors before transitioning to high-net-worth asset management at Bridgewater Advisors. In 2015, Brian launched his own real estate development company in his hometown of Philadelphia and has since gone on to gut-renovate 300+ rental properties across the country using the BRRRR strategy. He is raising his sons, Brian III and Tomas, in the Bronx with his wife, Zila Acosta-Grimes.

24/7 Cash Flow University was founded by Brian to teach students how to create passive income and escape their 9-5 desk job. Through his 100 Key$ Master Class, Brian teaches students how to full-gut renovate, acquire, and stabilize cash-flowing rental property portfolios. The course contains Brian’s proven methods that allowed him to scale his operation from 1 deal to over 100 properties per year. Most 100 Key$ Master Class students that implement Brian’s strategies are able to retire from their day jobs within 12 – 36 months.

Episode Highlights Here:

Brian:

So I focus a lot of my attention on that long-term monetization, mostly now because, you know, I’ve done over 300 Full gut renovations. So some of that becomes easier and more like riding a bike.

Brett:

What’s the number one secret to revitalizing classy neighborhoods?

Brian:

I think the number one secret is not only to C-class neighborhoods, but we see it more in the C class than you have to experience in the B class. It’s picking winners. So when you’re in real estate, we all think about HGTV. We’re gonna go out and build houses, we’re gonna fork out rent a V, and we’re going to focus on development. But what we don’t focus on right now, in my opinion, is picking winners. Whether you’re doing commercial real estate or residential real estate, if you are renting out a shopping center, you need to pick a good Senate. And the way that we underwrite today is antiquated, right?

We’re still just assuming that people are their credit score. And that’s about as far as it goes. But people are more than their credit score. And when you get into the C class neighborhoods, and almost everyone has bad credit, now you have to get a bit craftier, you have to get into personality testing, you have to get into durability, and is their job recession proof, you have to get into different levels of underwriting. Like I recently had a tenant in a C-class neighborhood of Baltimore who moved in. They paid the first-month security last month. They might have had a 550 credit score, but they ended up paying five months in advance the next month. I gotta check five months in advance. There are people in a class, you know, rental property game that doesn’t get that they don’t have that happen, like ever. So the question becomes, well, how do I pick people like that? So I focus a lot of my attention on that long-term monetization, mostly now. Because you know, I’ve done over 300 full gut renovations. So some of that becomes easier and more like riding a bike. But the ability to pick winners is so important. When you’re in the C class neighborhood, you have to learn how to underwrite, you have to learn how to pick good people who will pay on time, and throughout, you know, recessions and the different things that you know, our country faces.

Brett:

So picking winners, making sure that the winner is the tenants, right? And make sure you understand the full story. Right? And beyond just the credit score, the job durability, your personality test get gets even more detailed and more intimate with your tenants. Is that a fair summary?

Brian:

That’s a fair summary. And I think that’s, you know, the most important outside of that, I mean, I haven’t grown up in the C class, I have a bit of an advantage, right? So one of my mentors, who was on the commercial real estate side of things, He gave me a principal. When I was just starting, I said, Look, you want to get into real estate. I see you’re kind of bent on it, like; you’re not going to, no matter what we say, you’re just gonna go headfirst into this thing. So here’s the principle I want you to have, by where you know, rent, or who you know, and you’ll always be successful. And what I took that to mean was buy-in neighborhoods familiar to you. They can either be the exact one like your backyard where you grew up or a neighborhood that’s similar to that, that has characteristics of that rent to people who are from a walk of life that you’re at now, or that you came from because you’re going to be able to understand them, what makes them tick, what problems they face, what they’re going through, you’re going to be able to work with them better. And if you do those two things, you’ll always be successful. And I found that to be the best principle in real estate. So if you grew up in, you know, the suburbs, you might have a lot of success there. There are some people also who look, and they say, Brian, should I invest in like mobile homes? And I say, Well, what do you know about mobile homes or the people, you know, the clientele of mobile homes, do you know anything about that walk of life? If you don’t, you’re gonna have a very tough time managing that asset unless you get the proper mentorship from somebody familiar who has walked that path and can understand what makes those types of tenants tick. So it’s just finding your pocket and then going to it. When it comes to seeing class, you know, I’m somebody who’s going to Columbia University, who’s managed money for millionaires, and who has that acumen to deal, you know, with the lenders and get on the phone and negotiate different contracts, and do all of those things. But also, I can get, you know, down into these neighborhoods and turn them around as well.

Brett:

I love the way you put that, by the way, you know, rent to people you know and or have been in your shoes, and you’ve been in their shoes. And it makes sense. You know, there’s a saying that goes Don’t be the how hire, right? And it’s almost like, you know, it’s almost like don’t buy real estate and try to try to figure out how to do that or how to be a mobile home park investor how to do that, per se. Now that man, I mean, you get a partner with you, right? And you take on the financial side of things, the strategies things and the broker relationships, and the Raising the capital side to negotiate with lenders. And then they’re the operations on the ground because they can manage that. So I don’t think Brian’s not saying that. But what he’s saying is, hey, if you’re going to start, start with where you’ve been or your location already do, and then start with the people that you know, service that a fair summary,

Brian:

Very fair, you got it, you got to start with what you know. And if you do that, you’ll be successful because then, when things go wrong, you will know exactly the type of people you’re dealing with. You’ll be able to operate and navigate within your environment a lot better than if you’re like a fish out of water and you don’t even understand this environment, to begin with. That’s going to be a recipe for disaster for most people.

Brett:

Well, we can learn more about and find Brian Grimes on youtube I going to Brian loves cashflow. Brian loves cash flow.