By Je’Don Holloway Talley
For The Birmingham Times
For property investor Brandon Brooks, cash flow is the name of the game. Literally.
“There’s a game called ‘Cash Flow’ that my friend found online,” Brooks recalled. “I played it with a group of friends every month for a year, and we realized that the objective of the game was not to chase big lump sums of cash but to generate cash flow to exceed your monthly expenses—and get out of the rat race.”
That was a turning point for Brooks in 2012, and two years later he bought his first multifamily property. Since then, Brooks purchased dozens of residential and commercial properties while working in corporate America. After winning the game—getting out of the rat race—in real life, Brooks decided to “fire my job!”
“If you gotta go to work to pay your bills, you’re in the rat race,” he said. “Once your passive income surpasses all of your bills, then you are out of the race.”
Passive income gives you a choice in the matter, he said, explaining that passive income includes earnings from a rental property, limited partnership, or other enterprise in which a person is not actively involved.
“Once your passive income can pay all of your bills comfortably and going to work can be a choice, you have achieved financial freedom,” Brooks said. “I got out in 2018. … Quitting corporate made me feel free, like I was no longer in bondage, no longer a slave to somebody else’s demands and not in control of my own time.”
Being a millennial investor gives you the ability to become financially free and get out of the rat race sooner, Brooks said.
“As opposed to working until the age of 65 like our parents, I’ve created a pension for myself that will allow me to retire sooner. I’ve already started college funds for my children, and it’s given me the additional income to live the way I want to live,” he said. “The advantage of being younger in the game is you get to take the advice of the people that came before you and take it to the next level.”
Building a Portfolio
Brooks, 38, who owns Brooks Realty Investments LLC, based in Birmingham, got into property investment at age 25 at the urging of his father, who urged the younger Brooks to start building his portfolio.
“I didn’t realize my dad was in real estate until I went to college [at the University of Alabama],” Brooks said. “My dad had a landscaping business, and I worked with him [when I attended Rutledge Middle School, in Midfield], through high school, [at Shades Valley High School]. [Because my father was] his own boss and not working in corporate America, it allowed him to come to all of my football games and practices. He was in control of his time, and I wanted that.”
Brooks wanted to understand the real estate industry like a pro.
“In 2010, I realized that I wanted to pursue real estate aggressively and make real estate a way of life,” he said. “I had my father coaching me initially, then I began to read a lot of books and watch various shows centered around real estate investing. The biggest thing I learned—which was the most life-changing—was to stop chasing large, lump-sum checks.”
“At first I had a perception from reality shows like ‘Flip This House’ that had me chasing big deals for a big lump-sum check,” he explained. “It wasn’t until I got into reading books and studying people that I learned the biggest game was cash flow, not chasing $30,000 or $40,000 checks.”
In 2008, Brooks purchased his first income property: a three-bedroom, one-bathroom house in East Lake.
“I put no money down. … I paid $54,000, and I collect $700 a month in rent,” he said. “I definitely made financial gains from that property, and I still have it 13 years later.”
Learned from Mistakes
Purchasing his first property was a breeze, but what followed taught Brooks a lot.
“With the purchase of each house, I learned what not to buy, what areas not to buy in, who not to rent to,” he said. “I learned how to properly renovate a house. You don’t want to cut corners on the renovation because that’s going to cost you down the line. I bumped my head a couple times in the beginning, but I learned from my mistakes.”
Brooks now owns 20 properties: two houses, 13 apartment complexes, and five commercial buildings spread across Birmingham, including the Ensley and West End areas. He has bought and sold more than two dozen properties in the past 10 years, and he also serves as a general contractor, which he never intended to become.
“People started noticing how I was renovating my properties and started contracting me to oversee their renovations,” said Brooks, who works with subcontractors to whom he relays the business; he makes sure the work is done in a timely fashion and up to code. “In this business, time is money because you don’t make money until the property is on the market, so you have to create urgency to make money.”
Several factors are considered when choosing new properties to invest in, Brooks said.
“I am looking at the purchase price, the cost to rehab the property to determine the [return on investment (ROI)], and the location,” he said. “Where the property is located [is important. You have to ask], What’s surrounding the property like? Do other people live in the area? Is it a desolate area? What’s the car traffic like? … I take all of that into consideration.”
It can take anywhere between 90 and 120 days to see a ROI, Books noted: “It also depends on if I have to rehab the property to put tenants in it. Rehabbing varies from property to property. For some, you have to go in and do a lot of construction. For others, you can go in and only have to do cosmetic repairs, [such as flooring, painting, etc.].”
The former financial advisor and registered investment advisor is husband to Brandi Brooks, and father of three: Aaron, 19, Bria, 4, and Braelyn, 1. And financial literacy has a direct impact on the Brooks household.
“My family has experienced a life thus far that I was not fortunate to have at their age. My wife has peace of mind. She doesn’t have to worry about anything financial. She doesn’t have the pressure of having to work; she chooses to work,” said Brooks, born and raised in Birmingham. “My goal is to create generational wealth and pass property and knowledge to my kids, as well as their kids.”
DISCLAIMER — The Birmingham Times does not offer financial advice. The content in these articles is for informational and educational purposes only and merely cites the opinions of the sources quoted herein. In order to make the best financial decision that suits your own needs, you must conduct your own research and seek the advice of a licensed financial advisor if necessary. All investments involve some form of risk and there is no guarantee that you will be successful in making, saving, or investing money, nor is there any guarantee that you will not experience any loss when investing.