In case you missed it, BAM founder and CEO, Ivan Barratt, appeared on the Bulletproof Cashflow podcast earlier this year. You can listen to the full podcast here; and we boil down some of the important take-aways in today’s edition of the BAM Blog…
Ivan’s History: Ivan graduated Indiana University after completing the Real Estate program through the Business School. Thinking he wanted to get into development, he went to work for a developer, and accepted payment on sales only. The position taught him the ins and outs of the business, and also gave him a front row seat to the 2008 crash. In debt (though not to the extent of many contemporaries) and disillusioned with development, Ivan realized he needed to go a different direction; at this point, he started his property management company in 2010 and took on anything from duplexes to condos to D assets. From there, BAM only went up…
BAM Growth: BAM went from being run out of a spare bedroom to having north of $200 million in assets under management. In the beginning Ivan managed everything; however, BAM today has a dedicated executive team and the properties have on-site staff. Ivan puts forth a top-down vision of driving BAM to be the kind of company people want to work for, and both attracting and retaining top talent. BAM is also tech-focused, and Ivan notes that people need to have access to tools and tech that help them succeed.
On Early Mistakes: Ivan candidly discusses the role mistakes played in his current success. He says that in one particularly memorable early deal everything that could go wrong, did go wrong. He paid too much, expensive equipment that had already been replaced hadn’t been installed properly and then failed prematurely (requiring expensive replacement), and there were problems with bad tenants, area addicts trying to squat at the property, and more. Yet, even in this situation Ivan and his then-partner learned from the experience. Ivan was able to make improvements: he stabilized the property, got it occupied, cleaned up, and eventually sold to a buyer who specializes in that type of property. Even in this scenario, he says that it resulted in 9% IRR on cash-invested.
Building a Good Team: Ivan says that if you’re going to be an operator, accept that you’ll make mistakes. The best thing you can do is make them early and learn from them, and the less they’ll cost you. When it comes to building a good team, that’s part of the learning process. Early on when building a team at BAM, Ivan learned that he would have to fire key people who weren’t ready or able to grow with the company. Now, Ivan has a great team in place. He accepts that his team occasionally makes mistakes; however, he notes that they learn and become better leaders and pass that on and help train the leaders below them. BAM’s culture now attracts great people, vs having to go out searching.
Tough Love: Ivan says he’s a firm believer that you can’t just follow the old advice “do what you love.” Rather, in order to do what you love, you must first learn to do what you hate. As he puts it, he didn’t go into property management because he loved the stress of dealing with “tenant (problems) and toilets” but it generated real, repeatable money. Even though there was a time in which Ivan managed 70 units alone, and every time his phone rang he could feel his blood pressure climb, he says if he lost it all and had to start over, this is where he would start.
Reality Check: Ivan discusses how he loves to talk with kids about how he’d do things if he were in his 20s now, but it concerns him when young people think they’ll get into real estate and be financially free and lazy. As he says, people may see his nice car and home today and forget the early sacrifices it took him and his family making to get to that point. Ivan says he drove the same old Camry for 14 years and lived in a small house with his wife and kids until they reached their goals. He says that the rules for real estate and what he does are simple, although it’s anything but easy. It takes a lot of hard work to do it right.
Ivan’s Mindset: Ivan is a big believer in continuing education. He spends time in entrepreneur organizations, a forum with other entrepreneurs in different fields, and also believes in the value of seminars. According to Ivan, if he spends a few thousand dollars for a seminar that results in even one valuable nugget of wisdom, it was worth every penny.
Ivan’s Philosophy & Recommendations: Ivan says that he mixes philosophy like Stoicism with his Christian faith to help keep him motivated. He’ll remind himself of sayings like “the obstacle is the way” to stay focused. Above all Ivan’s family, his wife and three children, motivate him to be a good example and to live an abundant life, and to have a healthy family and marriage. He recommends the following books: Lead the Field, by Earl Nightingale, Antifragile, by Nassim Taleb, and Conspiracy of the Rich, by Robert Kiyosaki.
If you’re interested in hearing more from Ivan, head over to ivanbarratteducation.com. You’ll find a free library with videos and articles featuring Ivan himself, full of his industry know-how and experience.