The Brian Beers Show, Episode 274

Title: THIS is why I’ll never buy a rental property!
Date: August 22, 2025
Host: Brian Beers

Overview

In this episode, Brian Beers candidly shares why he pivoted away from investing in rental properties to building a wealth-generating franchise portfolio. Drawing on his real-life experiences, Brian contrasts the realities of rental property investing versus franchising, debunks common myths, and walks listeners through actionable numbers, examples, and advice on achieving financial freedom through scalable businesses rather than traditional real estate.

Key Discussion Points & Insights

Why Brian Left Rental Properties (00:00–05:25)

• Slow, Limited Cash Flow:
  • Brian started with the conventional approach of buying, fixing, and renting properties but realized the growth was painfully slow:

    “For years, I followed this safe, wealth building approach... But man, was it slow.” (00:33)

  • Six properties produced about $3,000/month ($500 each). Doubling that required doubling everything—more cash, more work, more risk.
• Hidden Costs and Lack of Control:
  • Unpredictable expenses killed returns:

    “There are these massive hidden costs that nobody talks about... one house I had...got hit with a $10,000 repair...That ripped away like two years of cash flow on a single property.” (02:21)

  • Rising insurance, property taxes, rent control, and other uncontrollable factors made scaling unreliable.
• Emotional and Practical Drawbacks:
  • Management headaches and emergencies made the “passive” income less passive:

    “My phone is ringing with the property manager telling me about these problems...I had a lady die in one of my homes...deal with that...deal with the family and the move out and all this stuff.” (05:00)

Discovering Franchising—A Better Business Model (05:25–13:12)

• Greater Return, Scalability, and Control:
  • Early franchise deals yielded much larger profits, faster.

    “I bought this existing business...making about $100,000 a year...We got it making even more pretty quickly.” (03:06)

  • Example: Invested $52,000 down, store made over $300,000 in its first year after debt and expenses.
• Franchising Puts You in the Driver’s Seat:
  • More levers for growth: operational improvement, marketing, expansion, and strategic acquisitions.
  • Ability to build teams and infrastructure to multiply income without multiplying hours.
• Quasi-passive Income at Scale:
  • Franchises can become passive as you grow and delegate:

    “My life today, I have a ton of freedom because I've built a business big enough to support an infrastructure below me and they're able to handle a lot of the day to day stuff.” (09:13)

• Industry Diversity:
  • It’s not just burgers and fries: auto repair, artificial turf, painting, senior care, window cleaning, spa, retail, plumbing, HVAC, roofing, B2B services, pet care, and more.

Debunking Myths About Franchising & Real Estate (13:13–17:28)

• Myth #1: Franchising Is Only Fast Food
  • Notably false; successful franchises span nearly every industry.
• Myth #2: Franchises Are “Just a Job”
  • “You have to put the work in if you want the return, but...you're building a machine that generates cash flow whether you're there or not.” (10:35)
• Myth #3: Real Estate Is True Passive Income
  • “Are you trying just to have a little bit of juice on the side, or are you trying to build a system that actually earns you that freedom?”
  • Real estate better for wealth preservation than rapid wealth-building, in Brian’s view.

Franchising by the Numbers—How It Works (17:29–24:42)

• Returns and Leverage:
  • Hypothetical: If a franchise unit costs $500,000 to launch and yields $150,000 profit (30% return), SBA loans often cover up to 80% of start-up costs, dramatically elevating the return on cash invested.

    “You’re still at 100% return on your investment. You put a hundred thousand in, and you're making $100,000 out on it.” (21:16)

• Replication and Growth:
  • Reinvest profits from one location as the down payment for the next.
  • Build teams and systems to rapidly grow to multi-location operations:

    “Franchising is supposed to be copy and paste, copy and paste. And then while it sounds simple, it's not easy. And that's where the skill comes in.” (23:18)

• Exit Value:
  • Multi-unit franchise portfolios can command significant sale prices (e.g., $500k in profit may be worth $2.5M at exit).
• Due Diligence Is Critical:
  • Not all franchises are good:

    “Many of them are terrible. They don't have good systems. Their support is like non-existent.” (26:31)

The Reality Check—Challenges and Success Factors (24:43–28:58)

• Franchising is Not a Get-Rich-Quick Scheme:
  • Start small, invest effort, and grow.

    “It's like a muscle that you build. Just like you build maybe owning real estate... It's the same thing in franchising.” (29:33)

• Not All Franchises Are Created Equal:
  • Be wary of poorly run brands and “bad apples.”
  • Importance of thorough due diligence—talking to franchisees, understanding support and economics.
• When to Buy Real Estate:
  • Once you’ve built meaningful wealth with business, then buy truly passive, low-headache commercial real estate for wealth preservation.

Notable Quotes & Memorable Moments

• “I sold almost every single door. So let's talk the numbers.” (01:12)
• “With franchises, I control my destiny.” (03:39)
• “At the end of the day, it was like, these properties, while technically it's passive income, it was such a waste of time and energy and effort versus I could buy a franchise and make so much more money without really changing my time.” (05:31)
• “A franchise is just a business system that you leverage. It's not like you're trading hours for dollars in a traditional job sense.” (10:25)
• “Franchising is supposed to be copy and paste, copy and paste...And that's where the skill comes in.” (23:18)
• “I like to think of real estate as what you do once you have money, but not necessarily how you make money.” (12:25)

Actionable Advice & Takeaways

• Evaluate your goals: Are you looking for a side hustle or to build a scalable, wealth-generating business?
• Do your due diligence: Speak with current franchisees, research support and systems, and understand the true economics.
• Be prepared for hard work: Success in franchising (and business) is earned, not bought.
• Consider timing: Build wealth with businesses first; use real estate later for capital protection.
• Explore beyond fast food: Franchises exist and succeed in nearly every business category.

Suggested Next Steps

Brian offers further resources and videos for those interested in exploring franchises, specifically mentioning his experience with Waterloo Turf.

This summary omits ad reads and introductory/outro content, focusing solely on the core concepts and detailed advice Brian shares in this impactful episode.