Easiest Way To Get Started as a Fund Manager using Hard Money Loans

Hey guys, welcome back to the show. Today we're gonna talk about an easy way to get started in the fund world and to get going, build momentum for yourself, taste that blood, build a track record, and take off. Now, I've talked to some people, they're like, Bridger, I wanna start my private equity firm right now. And they don't have any experience, they're starting from nothing, and they're like, Bridger, I love your content, I wanna get started. And they wanna go start buying multi-billion-dollar companies and being a true private equity fund manager. And I go, well, hold on one second. I don't know if that's going to happen. To be fair, some people are like, Bridger, there's no way you could do that. You're probably right, right off the bat. However, there are easy small funds that you can go after. Be a small fund manager, build confidence in yourself, build knowledge in yourself, build out a team, build out a track record, build up an investor base, and slowly work up to that. I think that's definitely plausible, and I think the easier way to go. A lot of people, and I'm this way too, You have these amazing ideas for businesses, right? You have this incredible idea, oh my gosh, we're gonna make so much money, and nothing happens, right? Ideas are a dime a dozen, execution is what makes things happen. And so I've heard that from, you guys have heard that forever, right? You just gotta execute, you gotta make things happen. And so I decided for me to execute, I've gotta make it as easy for myself as possible at the beginning. Because if it's not easy at the beginning, if my, to do my business idea, I'm gonna need $13 million, an army of programmers and a whole team of engineers and whatever, it's probably not gonna happen to be honest, right? It takes a lot of drive, a lot of willpower, a lot of savings to go and do that. So for my business, I was like hey, I'm just gonna go get a couple quick wins at the beginning and first that'll prove the model to myself, give myself momentum to keep moving and keep rolling and I can get bigger and bigger over time and that's the approach I took. I've started a number of businesses in my life, and the ones that I've tried to start that were these big ideas, and I was gonna have to raise tens of millions of dollars over time, and they never panned out because there wasn't that momentum at the beginning. And I, you know, I'm like a lot of people, right? Inside, I'm kinda lazy, right? And I'll say that on camera. I'm not gonna be that guru, you gotta wake up at 6:00 AM every day and, you know, crush it. Like, that's cool, but motivation wears off. Momentum, if you can keep getting small wins and small wins and get bigger wins and bigger and bigger and bigger, your confidence builds up, people trust you, They wanna work with you, and it's easier and easier to build big teams to go after that big dream. So with all that being said, I wanna give you an easy way that I found to go out and launch a fund to get in the space, and this is actually the funds I do. I went out and I said, I wanna start a fund. It's gonna be pretty hard to launch like a full-scale private equity fund that does multi-billion-dollar buyouts day one. That's the goal though, maybe in 10 years from now, but day one, how can I start small? So I started a lending company doing loans. Small-term bridge loans, and it got me going. Let me walk you through how easy these are to do. So, when I talk about lending and bridge loans, lots of different things you can do here, but I'm gonna walk you through 1 or 2 scenarios to give you— get your mind rolling, and you can start to think about where is— where can I interject money that'll just help a business flourish or grow, and I can get back alpha or return. Okay, so a lending company and I, we started looking at real estate lending, okay? Real estate loans. So what is this and I actually was talking to a friend, he had flipped over 300 houses, flipped. Incredible what he's been able to do. Done this for a decade, flips tons of houses, has teams go out and he goes, Bridger, the funny thing about flipping houses is you know who makes the most money? I go, who? He goes, the lender. The lender who gives me the money to flip the house, they end up making most the money and they don't do anything. He goes, if you could be on that side of the table, that would make all the difference and so I said, okay, I'm gonna do— what do you want to do? And these, I'll give you one example for house flippers, okay? So for a house flip, a house flip right here, they're going, they found a house, they want to flip it, okay? The house is right here, beautiful house. Let's just use round numbers. Let's say the house is $200,000 to buy and they don't have the money. They got to pay cash for it, whatever. They want to get a mortgage on it or whatever because it's going to be a quick flip. It's only a couple weeks. So what they do is they call me up And I say, hey, $200 grand house, awesome. And that's the appraised price of it, whatever. I will give— and depends on your terms, however you want to do it, but I usually say, hey, I'll give you today $170,000. You've got to put your own $30 grand in, and I get first position on the house. Meaning if you don't pay me back the money, if something happens, you run to the Bahamas, I go take The house and now it's my house and I can fire sell and I believe— I'm not a real estate expert but I believe if I took the house today, I could probably sell it for maybe $190,000. Put it on discount, $10,000 discount. I think I could sell it and still make $20,000 profit, okay? And we set up this loan and it's gonna be for 6 months, okay? Ta-da, 6 months and I give him the $170,000. He goes, he puts $30,000 down, then he does the renovations, things like that, and sometimes what we've done too is we'll give him a line of credit Because he needs money to renovate. So I'll say, hey, I'll give you a line. It's, you know, $30 grand, and you can draw down $10 grand at a time. And I want to see the improvements on the house to make sure that the money is going into the house. You're improving my asset. Because I hope they're not taking my $10 grand and running gambling in Vegas. I want them to take my $10 grand and improve the house. So we got to do weekly checkups or monthly checkups before you draw down more money on that line. And ta-da! I give him $170 grand. In 6 months and 1 day, all of it's due back. So 6 So let's say I gave him a $30 grand line. So $200 grand total. In 6 months, he pays me back the— he'll sell the house hopefully for, you know, $300 grand. A good house flipper. He's going to pay me back $200 grand plus— and I usually charge a couple points up front. So percentage points. So let's call it 2 points. So that'd be $4 grand. And then let's call it 10% interest. But it's only on 6 months. So it'd be about 5%. So another $10 grand. Okay, so he pays me back and you know it varies, right? But let's say he pays back 214 grand in 6 months and ta-da, I just made 14 grand not doing that much work. This is hard money loans, right? This is lending bridge loans, easy way to get started. There are so many people doing real estate that need money for a down payment that want to get started, want to get going, and you tell them, hey, I'm a guy with the money. I'm I'm the guy with the money and I will help do this. Now, Bridger, I don't know. I don't have the money. I don't have $200 grand. Go set up a syndication deal. Go talk to investors. Say, this is what we're looking for. These are the perfect deals. We want to collateralize our loans with real estate and we will do these types of loans. And if, you know, if they don't pay us back, we just take the house and we have insurance on it, right? If the house burns down, the insurance pays for it. It's a hard asset. He can't steal it and take the— we take the money. And, or we take the house, we fire sell it, and we'll take the money and get paid back and we don't lose any money. Not bad, right? You do that twice a year, you flip your money twice and you make, you know, somewhere between a 6— I don't know, 14 to 18% return every year doing hard money loans on a 6-month loan. Now, some of these loans, I don't— I think 6 months is a little bit long. And by the way, IRR, I've talked about in other videos, IRR is based on an annualized— it's an annualized number. So if you made back 12% in 1 year, that'd be a 12% IRR. But if you made back 12% in 6 months, that's a 24% IRR. If you made 12% back in, let's call it, 4 months, okay, that would be a 36% IRR. The time it takes you to flip your money makes you more and more money. So in my fund, what I do, my loans, these, they're not backed by real estate, but I do loans. They're usually about 45 days. And I make back usually about 20% On my money in 45 days. Can you imagine the IRRs I have, right? Easy way to get started. I do small loans. My loans are like $5,000 to $15,000 apiece, way smaller. And it was an easy way for me to get started. I went small and then I've slowly scaled up and I do some of these real estate deals now is where we have people come in, they need money for a house or they need, let's call it, let me erase this really quick. Another way to do these, very easy way to get started. Everyone needs money, right? You put it out there, guys, I got money, I got access to money, I have access to investors, come call me if you need money. They call you up, they say, Bridger, I need $1 million. I actually had a deal just like this, okay? Bridger, I need $1 million. I said, okay, and then he's doing some, I don't even care, right? He's gonna do XYZ, he's going to Argentina, and he's gonna do all these cool things. It's usually a wild deal, by the way. And I, by the way, the scammers are gonna find you when you're in here, so you gotta be aware and beware of scammers. So I say, okay, I don't even care what your deal is, what you're doing. I'll give you $1 million if you can provide— Proof. A property that's worth $1.3 million, appraised current value of real estate, and I want a first position on that property. So they say, hey, I've got a cabin or a beach house in California. It's all paid off. I can take one point— I can put a first position lien on their house at $1.3 million. So if they don't pay me back, I take their house and I get first position. And I say, great. And I go call my investors up, hey, I got a great deal, we're gonna get $1 million, and if he doesn't pay us back, we take his home. It's a good deal, right? Call my investors, it's a no-brainer, we give them money, $1 million for, I think we had one for 5 months, just barely. 5 months, this was the deal we got pitched. 5 months, and they were gonna pay us back $1.2 million in 5 months, that was the deal, 'cause they needed the money like now and fast. And typically these deals, that's what they're looking for, and banks won't touch 'em, it's just too out of the ordinary. That's where people like us step in. $1.2 million. I just made $200 grand in 5 months, and I pay my investors back their pref, and I take home a good chunk of change. Very easy way to get started. And Bridger, how do I find deals? Start telling people you have money. Start telling people, this is the deals I'm looking for. I'm looking for people that have collateral on real estate, or maybe it's a car collateral, or machinery, whatever it is. I'm looking for house flippers that have collateral, and I will lend very quickly and very fast. In your area, just your community, there are people looking for you. I get probably 6 or 7 of these deals every single week in my inbox. Now, I don't do all 6 or 7 of them, but I get them in my mailbox. I get to look at them and analyze how these deals look and to lend to them. This is an easy, easy way to get started, to get momentum, to build up and do a handful of these deals and say, man, I'm getting pretty good at this. Let's start going bigger. Let's start doing instead of $1 million, we're just gonna start doing $10 million deals. lending, right? Debt. This would be a debt fund, okay? $10 million debt, and then you slowly get bigger and bigger, have investors. Hey, I want to transition to now private equity, and we're going to get bigger and bigger and buy those big funds. You'll find partners and people that want to join up with you. This is an easy, easy way to get started. That's why I started in this realm. I went for the easy path of least resistance that I can make the quickest buck. I just dropped my pen. Quickest buck as fast as possible, okay? Now, I'm not saying this is for everybody. Not saying you should do this. I'm just giving you an example of something you could do if you're A little bit lost, don't know exactly what to do. If you guys want to subscribe or like this channel, you can get notified when we come out with new videos, new posts, when we go live, you can hear all about it. If you want to connect with me, give me questions, I would love to give you answers. Go to @bridger_pennington at Instagram. It's usually the best place to find me. Go on there and shoot me a DM, and I usually respond to most of those right now. So I would love to see you guys on there, but I will see you on the next episode. Peace. Bye.