How A 25 Year Old Built A Multi-Million Real Estate Business

the first moment that was kind of a Tipping Point in my childhood where I said I wanted to be a millionaire was when my dad wouldn't buy me an ice cream from McDonald's I was very driven to provide for myself andove yourself I made $36,000 on that sale and then my next sale was a million doll Mansion a very nice neighborhood in Scottdale which now is probably $8 million and then I made another 36,000 and I used those funds to purchase my first investment property I mean I've built 28 businesses and you get this delution of focus and everything suffers but if you're bringing in Partners to help with that then that's the way to do it welcome back to Lifetime cash flow through real estate investing I'm Rod Clee and I am thrilled that you're here and I know you're going to get tremendous value from the young lady I'm interviewing today her name is Hannah Hammond and she's from Phoenix and she's got a very interesting story she is multi-millionaire in her early 20s um uh probably worth a lot more than that now and um just done done more than most people have done in their 60s so very excited to get into this interview I know you're going to get value welcome to the show thank you so much I'm so happy to be here Ron well I'm happy that you're here and um I'm excited to hear your story because you've accomplished so much um already and gez the sky's the limit for you so to where you're at so I know you already own a real estate brokerage you already have a uh you do private lending you've established a debt fund I mean you've got all these different different things happening and very successful real estate brokerage so you know I want to I want to talk about or have you talk about how you got to that place and and why you're so driven and maybe talk a little bit about your background absolutely so I'm actually third generation native to Arizona my great grandmother was a cotton picker in the cotton fields that are now car dealerships and uh we had very little money growing up my dad worked and still works at a pawn shop making minimum wage and my mom tried to take care of the kid cuz babysitting is expensive uh I was a third child my brothers were much older than me just kind of an accident down the line somewhere and uh she was a bagger at bashes to try to support the family so that was the uh environment that I was raised in my dad would keep the AC at 90° in the summer in Phoenix so I remember you know crying and pouring sweat and having nowhere to to get air conditioning really and then he would try to he was interesting character for sure so I knew really young that that was not a fun environment and it wasn't a fun life and it wasn't something that I wanted to be a part of and fortunately for me I think I'm really blessed to uh have been exposed to a family that had a lot of money and from a very young age and she was a friend that I met in school and she had horses and they had a big house and they had a happy marriage and they had just everything that was not what I was experiencing right and it really motivated me uh to go towards that and I fell in love with horses and I for those who who may not know horses are very expensive to purchase and take care of like multip multiple six figures a year and um I just loved the nice cars and the nice houses and and the joy that was in the household versus the fighting and the uh the pain that I was experiencing in my household so so you're able to see it and that's a huge piece you I remember uh just as a sidebar I remember you know growing up the same way and and and I had a girlfriend who had a house like that they had a three-car garage I've never seen a three-car before a pool you know and all the jet skis and and and snowmobiles and motorcycles and all the stuff that I couldn't believe they had so that's very interesting I had the same experience please continue yeah I think it's important cuz some people grow up on a farm in Ohio and they don't see it you know and so I'm I'm happy I was in an area close by to a lot of wealth in Scottsdale Paradise Valley the school I went to was out of my district but so you know half the school was pretty low income and half the school was very high income and uh so I definitely had that opport but I the first moment that was kind of a Tipping Point in my childhood where I said I wanted to be a millionaire was when my dad wouldn't buy me an ice cream from McDonald's and I was so upset by it and I wanted a mcf flurry and he wouldn't buy it for me and I was crying and I said that you know I'm going to be a millionaire so I could buy myself McFlurries and I was you said that out loud yep good for you I said that out loud and and uh uh you know and then my my brother threatened to kill me and went to jail and uh he said I would never amount to anything and so I was very driven to provide for myself and prove yourself probably too yeah very low self-esteem very low self-worth you know suffered with feelings of Abandonment and rejection and hopelessness and just fear of uh not having not being taken care of or loved and uh I you know that fear drove me in the beginning for many years and I felt like a achieving in school was the one thing I could control and so I was always the best in my class from kindergarten I I have a stack of principal list I graduated engineering school and college in three years with 4. 0 GPA W um it was something that I really pushed myself to be good at cuz I just it was like the only place I could find my identity and selfworth and it was just a really deep coping mechanism for me and uh if I wasn't di a positive one because some people pick negative ones drugs alcohol all sorts of things yeah good for you which I experimented with all that but fortunately business was my one like my true addiction and um and just uh not business but accomplishment yeah so I would fill Balloons with flour it's like what I found in my house and I would sell them as stress balls to my neighbors I would uh Balloons with flour yeah I'm not sure I follow that how is that a stress ball oh got it oh you squeeze it got it okay I was see seeing an explosion with flower everywhere got it okay all right yeah so just creative things like that and I was babysitting when I was young like I should have had my own babysitter um and then I really loved horses so I studied how to train horses and became good at training horses and convinced the person at the barn to let me work there to keep my slaughterhouse rescue there so I just had a very entrepreneurial Spirit nice and uh I read Rich Dad Poor Dad and I was probably I don't know seventh grade middle school somewhere around there and it just clicked in my head when I read that book by Robert kosaki and assets versus liabilities and he said to build up your ass in your passive income so you can make money in your sleep and then ultimately allow your assets to pay for your liabilities and so I was very adamant about that fortunately I knew how to stretch a dollar because of the family that I was raised in and I decided I'm going to stay in Arizona I'm going to get my real estate license as soon as I can when I turn 18 I'm going to get a full ride scholarship to college based on Merit so I can have that on my resume I knew being a young female in commercial real estate I need some sort of something to help inome oh respect interesting okay so you thought the the degrees would help you yeah okay yeah just to have you know um a dual engineering degree and uh that that's what you got mhm good for you so uh that was my my path so I got signed up for real estate school at 18 years old I held an open house in my neighborhood before College started I got a full ride scholarship to college I picked engineering cuz I wouldn't have to go into debt it was just a quick degree that would pay a lot of money and uh I wanted to check the corporate America thing off the Box even though I knew I was going to be an entrepreneur but I wanted to not ever regret trying that path and also see how a large organization was run so I could learn how to run you realize that it's not what you wanted probably right okay um so yeah I bought uh my very first sale was Moon Valley Nursery actually uh like a like a tree nursery or plant nursery no kidding they're a really large nursery on the west coast okay and um this person walked in the open house is the only person that showed up it was the midle middle summer I was an 18-year-old broken little kid and uh he ended up listing a $1. 1 million property with me that was 10 years ago wow that's when 1.

1 million was a lot of money yeah yeah wow and I made $36,000 on that sale and then my next sale was a million doll mansion in in a very nice neighborhood in Scottsdale which now is probably 8 million um and then I made another 36,000 and I used those funds to purchase my first investment property which I had to live in because of course I had to support myself so you bought a house and you moved into it and that was your but you considered an investment property good for you yeah so by the way that's a clue guys you buy a house look at it like an investment property all right good yeah and that was my intent with it is it's going to serve me a purpose to live here I'm going to get a better interest rate um because I'm owner occupied what year was that 2014 okay okay and it was $76,900 wow and I put about 20,000 into doing a full rehab on it well I lived there which was fun and then I furnished it then I bought another one that was bigger for couple hundred thousand something around there and then I rented that one out fully furnished and I did really good in the fully furnished rental industry for many years in Phoenix in Phoenix yeah I it long-term rental I would do whatever worked for the tenant so I self-managed everything and started my own property management you know entity to manage my portfolio and if it was uh if they wanted short-term the price would go up but I would allow it if they wanted midterm price was middle I'd allow it if they wanted long-term i' drop by the way guys that that's um you know shortterm would be like well probably not Airbnb shortterm but maybe a couple of months midterm maybe six months then longterm of course a year and yeah I've got students that are killing it with midterm Airbnb is getting crushed right now but uh okay well wow awesome yeah so that that was kind of what started the real estate and then I read um that I found out about you cuz I was I was super like my favorite asset class was multif family and I wanted to be a multif family broker and invest in multif family and all of those things um and so I went to work for cat uh the construction company okay and uh as an engineer and I got into a management position there right out of college wow and I learned about construction and just they were a billion- dooll organization so I learned how they operated their company and really got some good experience there and then I quit and started my own construction companies really yeah have you built anything uh I had three yeah we we built them pretty good size I was only involved in three what homes or three construction companies oh you built three construction companies okay what sort of construction did you do did you do new build or remodel or what sorts of things did you did or did you just use it for your own turns or what were you so we were doing um I brought a business partner in that's why I say we was me and him and we did a general Construction Company where we did mostly remodels uh primarily commercial though so like Top Golf was our client what burer was our client Fant we were doing those project and then we had a high-end home division uh cuz I was big in the real estate market cuz I was an agent a broker and so we would do glass we had a glass company a roofing company and a general Construction Company holy cow so we had about 75 employees a bunch of trucks on the road shop and everything um but for multiple reasons I did not like the construction industry yeah and it was through that was during Co that I was running those so supply chain labor oh my God I remember seeing the I remember seeing the memes of of a pile of wood saying this is my retirement fund you know went up so high right okay oh it was a nightmare and then you know employees would be like oh I have covid every two weeks and so nobody was showing up to work and we had to pay them and it was really difficult and uh and I didn't know I'm I had like me trying to tell contractors what to do right I didn't really have a place in that in that business it's tough cuz that that's that old good old boy you know yeah you know I I could totally see where you'd have a struggle with that yeah and I didn't like the feeling of not being able to step in and do what my staff was doing I couldn't go install a piece of glass at Top Golf and I hated feeling uh like I wasn't it was imposter syndrome a little bit Goa gotcha no I totally get it yeah okay so I uh exited those gave ownership fully to my partner and uh he and uh then at that point I opened the real estate brokerage and focused fully on Commercial Real Estate and uh the The Brokerage is called the firm and we do something unique about us is that we allow agents to do Residential or commercial and so most brokerages it's either you know one or the other yeah and so I had built both businesses pretty big and I didn't want to give up one or the other and so I just had to create my own solution and that was starting my own firm The Firm The Firm it's name of a movie I think um yeah I'm pretty sure it's a movie right I haven't seen it but everyone asked me yeah yeah yeah it's a movie for sure it's a yeah but anyway so so so you have some agents do Residential some of they do commercial that is very unusual okay yeah and how long have you been doing that now uh I launched that company January of 2022 so 2 and 1 half years and about the same time I had started a 1031 exchange company and a uh hard money lending company and serial entrepreneur one of the things I'm focusing on is do you do you bring in Partners on these different businesses yeah I usually do I usually always bring in one partner um because there's like there's Visionary there's operations there's so much and in order to in my opinion in order to scale rapidly it's you're the Visionary yeah yeah and and guys in any business um Tony Robbins has these different Arc types um and there's the there's the the Visionary um there's the manager leader which is the operations person um oh God what's the other one I'm drawing a blank the integrator yeah there's an in well that's in the Eos but Tony's got different archetypes for these but bottom line is there are several different personality types that you need for every business and you'll see you know like in silicon value you'll see the Creator the innovator will be the software nerds that created something but then they've got to bring in VC money and they bring in their whole sea Lev Suite to really operate the business and you were smart enough to realize that because I was a little concerned when you're talking about all these different businesses I mean I've built 28 businesses and you get this dilution of focus and everything suffers but but if you're bringing in Partners to help with that then that's the way to do it good for you yeah and that's really the strategy is uh be the Visionary be the leader and then someone else is the integrator and I can and they're all vertically integrated businesses yeah they all they all feed off each other as well basically which is really smart too yeah good for you but I'm a big follower of Alex harosi and he talks about the woman in the red dress like all these opportunities and as you become more successful you get presented with better opportunities and I'm sure you get presented with opportunities every day shiny penny syndrome boom boom boom you just got to be careful you know cuz you want to do it all and uh and um you know but but if if you if you Main maintain that focus and you don't dilute that focus and and you bring in people like you like you're doing um you you you you got it much earlier than I did good for you thank you it's yeah who not how I read that book and it changed everything that's a great book it's downstairs in my library yep talk about the mechanics of your debt fund because my understanding is you'll have investors invest their money and then you loan it out at a high and they get a return on their money and then you loan out at a higher rate and you and and you're you're making the spread correct is that how it works or I've got it wrong I don't yeah so there's two different structures that you could have your debt fund one is that which is basically Arbitrage so I would say I'm paying you 8% as an investor and then if I charge 12 I keep the difference or whoever the GPS are keep the difference and that's one model to do it uh I've gone with the other model which is a straight profit share yeah that now that's that's really smart because you know I was going to ask you on the previous model then you're paying money whether money's out or not in most cases I would or in some cases but but yeah in a profit share that's perfect because you're loaning the money and splitting the profit yeah and then that way the investors which I will be at LP as well it's a true partnership and they actually have all the upside of the business and like in in this fund we pay an 80% profit to the LPS which is a huge amount so you're doing an 8020 split good for you yeah and that way we we would never be like my team would never be motivated to do anything that wouldn't benefit the investors it's a win-win right if we we win together we make more money like that too because yeah I could see on the other relationship that you might be more aggressive in your underwriting than you want to be because you're trying to get the money out there just a very valid point I think your model is much safer for an investor for sure thank you and and as uh as the economy changes I wouldn't want to tell an investor hey I'm paying you 8% with rates in this environment and then next year rates are down back to 3% and then I have to go back to everyone and say okay now it's 6% that I'm paying you or rates go up and then they're still only getting 8% and then now we're making 18% so I really wanted for the longevity of the relationships and the longevity of the fund is we are in this together as partners and if the fund if something happens to the economy where we are have more defaults or our interest rates have to drop or any situation like that where the whole fund's not going to implode because we have this 10% or 8% rate that we're you have these expectations you have to meet as well yeah no I I makes complet sense uh no I I really like that model a lot um and did you just start it or is this something that's been going for a little bit Yeah so I've been doing Fix and Flip loans and uh hard money loans for a few years now but the HB Capital fund just launched and so it's HB Capital re. com correct right okay good and uh that's going to be the The Profit share and the nice thing you know because the traditional commercial real estate funds are amazing and I love them and the depreciation and all the reasons we're in commercial real estate right um but those are generally 3 to 5 to 7 to 10 year funds they're longer term investments correct and you do have some more advantages such as the depreciation and things like that um where you don't get the depreciation on the on a debt fund f but you get the money back quicker you can do a Redemption at any point and because there's always these are very short-term Bridge loans uh you know 6 months to 24 months so as these loans refill you can put in a Redemption and most people will have a redemption in 30 days and can just it's more I don't understand what you I don't understand what you mean by Redemption uh like a Redemption for their money so they just say they say they want to take their money back or if they want so you can you can you can basically allow them to take their money out M at any time just replace it with somebody else or whatever or okay it's an evergreen fund gotcha gotta got they could just put it in take it out is it is it is it um governed by the SEC is it like a regd thing so is it is it um uh uh for credited only or it's for credited only it has to be otherwise we couldn't have said it on the show here right yeah okay so you have to be accredited so it's a 506c got it okay wow love it Hannah that's that's awesome so you're going to you're you're you're put you're working this debt fund you're going to be looking for bridge loan opportunities um keeping the loan to value at a safe rate right um and um yeah and we're specializing in asset classes that yeah what asset classes so Storage storage facilities small Bay industrial mobile home parks and multif family are our specialty and our bread and butter is about like the $1 to $20 million range so there's some large institutional commercial lenders like you're doing1 to $20 million loans wow those are significant loans okay yeah in generally they're about 12% interest in a couple points we're pretty on par with Market uh stay competitive with Market you know tertiary markets or higher risk Investments might be a little bit higher uh but we really try to work with the investors on a loan that is structured to where their deal can be successful so are you geographically uh do do you try to stay in this particular geographic region or area uh we're National you're National yeah we're National and we try to stay in states that are friendlier on foreclosures uh such as deed of trust States versus mortgage States because mortgage States it's a Judicial foreclosure process it I know all about it I had a litigation support company and we we fought foreclosures uh I I built law firms in five states this is a lifetime ago yeah but but now there's structures and we have the best attorney out there in in the private money space but there are structures you could uh create the debt to where you're a partner on the asset and if they default the asset becomes yours and so you bypass the whole foreclosure process wow it's like a strict foreclosure process now that's very interesting I may I may talk to you about that after we stop recording that's very interesting okay yeah it's awesome yeah yeah and and U yeah we when I when I did what I did with the litigation support we we built law firms in five judicial States because we could stop the Foreclosure with with litigation and then then I had 60 employees doing loan mods this is that's what I built out of the ashes of losing $50 million in 2008 yeah nobody had ever done it before it wasn't a fun business because nobody's happy when they're losing their house but I sold it a few years ago and they're killing it now because they had a backlog of foreclosures friend of mine owns it now but uh yeah no so I I you want the opposite you want the daa trust where it's where it's locked right for the foreclosures get them out correct yeah or Mees Mez debts where we have ownership on the entity but the the difference here is like most uh so you call it mes so it's MES debt so that when you're saying you get an ownership interest so that's classified as mes debt in that case interesting okay okay yeah and uh I know multiple people that have large uh debt funds mostly in the residential space Fix and Flip which is a red ocean in my opinion cuz everybody's in that space and they're doing 90% L TV and lower rates and it's just just wait they're going to get their asses handed to them I was telling you before we started recording that that that market got killed first in 08 and9 I remember the private lending Market because people have been loaning 90 100% they thought the gravy train was going to last forever and we still got a little bit of that sentiment now but uh definitely in the single family be interesting you know what are your thoughts economically uh with the election coming and where we are in this country country um do you have any trepidation are you are you are you a bull are you a bear where what are your thoughts on where we are you're a bear uh I've been I've been I don't want to say this incorrectly but it's a market cycle right the market has to go up the market has to come down that's how finances reset things get res scooped up at a lower price and then the whole thing starts over again if you look at history it's always happened and I believe it always will happen because nothing just goes up forever ultimately the government will continue to print and inflation will continue to happen and that's why I believe real estate is such a great investment cuz over time it'll continue to go up but we need opportunity to re be able to Reby assets and add value to them and actually make money because real estate is supposed to be an investment that provides you cash flow and right now it's freaking impossible to find anything that is an investment that provides you cash flow like the only real advantages you have right now is the TA the cost segregation and tax advantages that you have but you know it's like when already paying for all the value ad potential in it at the buy that doesn't work and then with all I I think that we have to be having a pretty large correction especially in the commercial space the last crash I think the residential Market took the commercial down with it for sure this time well not as bad I mean I remember when I lost everything it was the houses for sure that pulled me down I had some apartment complexes they only pulled back about 11% but I lost them cuz I'd cross collateralized them with packages of houses but but it's the other way around this time you know uh office uh you know is is very low occupancy right now there they're dying a lot of multif family operators and trouble with with Bridge debt uh myself include I got a couple of deals that I'm dealing with uh and uh so we're going to see a reckoning um uh for sure but uh it' be interesting to see if it's if it's more Global if it's more National versus just specific to commercial real estate I'm going interesting to see what happens and it'd be interesting to see of course what happens with whoever gets elected but yeah and yeah I that's a big determining factor I think um obviously if God help us if there isn't a change that's all I can say you know so if you don't like that stop watching me because that's how I feel God help us from this current Administration but I mean the the thing with the like the rate caps and I know so many people that bought value ad Assets in multi family and all these different Investments that are you know all the rate caps have expired and they're going from a 2% rate to a 7% rate which you you just can't stay afloat in that they can't they can't you can't do it and I'll tell you the cost of a rate cap I I tell this story in 2020 you could get a100 million 3% three-year rate cap for $23,000 100 million 3 years rate's not going to go up more 3% that same rate cap for one year like I checked this like eight nine months ago for one year not three years was 2.