How Brandon Cobb Raised $15M in Private Money and Built a $22M Real Estate Empire

Raising Private Money with Jay Conner

Transitioning from a stable career to entrepreneurship often comes with its challenges. Brandon Cobb, who was once a medical device sales representative, experienced a significant career setback that propelled him into the world of real estate investing. Today, he manages a $22 million portfolio focused on affordable housing and has raised over $15 million in private money. In this episode of Raising Privat Money Podcast, Brandon Cobb shares his inspirational journey, strategies for success, and lessons learned along the way.

From Medical Sales to Real Estate

Brandon Cobb’s transition into real estate was far from smooth sailing. After being unexpectedly fired from his job in medical device sales, Cobb faced a series of failed online business ventures. However, he found his footing in real estate investing, initially focusing on fixes and flips. Drawing from a diverse set of experiences, Cobb pivoted into new construction, identifying a lucrative niche by addressing the affordable housing crisis.

Mastering the Art of Raising Private Money

One of the key elements behind Cobb's success has been his ability to raise private money. Instead of directly soliciting funds for deals—a strategy that can often appear desperate—Cobb recommends engaging potential investors by seeking their feedback and gauging their interest. Both Cobb and host Jay Conner emphasize the importance of appearing confident rather than desperate when raising private money.

Cobb's innovative approach involved negotiating with investors for fixed and flip projects at a 10% annual interest rate with no monthly payments. This method alleviated the financial burden of hard money loans, characterized by high upfront fees and interest rates, thereby allowing for more sustainable growth.

Syndication: A Path to Scalable Growth

Transitioning from debt positions to equity through syndication was a pivotal strategy for Cobb. Syndication, likened to crowdfunding, involves multiple investors pooling their resources to fund larger projects. This not only increases the available capital but also allows investors to become partners in deals, thus sharing higher returns. Through this method, Cobb expanded his funds from $6 million to $15 million, opening up opportunities for larger-scale projects.

Strategizing for Success in Real Estate

Cobb’s company, HBG Capital, specializes in entry-level housing in Nashville, Tennessee, a market with high demand for affordable homes. They have developed a multi-faceted approach that includes owning land outright with investors, contracting with national home builders, and building homes both to sell and to rent. This variety of exit strategies ensures stability and profitability, even in fluctuating markets.

Personal Insights and Lifestyle

Beyond the numbers and strategies, Cobb also shares personal insights into his journey. Real estate investing has afforded him the ability to travel frequently, taking six weeks off per year to explore new places. Particularly meaningful are his annual trips with his mother and a sibling trip to historic locations with his retired history teacher sister. These experiences underscore the personal fulfillment that can accompany financial success.

Learning from Mistakes and Moving Forward

Cobb’s journey from flipping houses to new construction highlights the importance of learning from mistakes and adapting strategies accordingly. Tracking key performance indicators helped him recognize the saturation in the fix and flip market, prompting a shift to new construction which offered higher profits with less competition.

Both Cobb and Conner agree on the significance of continuous learning and adaptation in the evolving landscape of real estate investing. Leveraging private money and shifting from a hard money-dependent model has been crucial for Cobb’s business scalability.