From Hardship To Empire: The Remarkable Success Story Of A Resilient Entrepreneur With Alex Coffman

Have you ever wondered how someone can rise from humble beginnings to build a business empire? Derek Dombeck sits down with Alex Coffman, a remarkable entrepreneur whose journey from addiction to real estate success is nothing short of inspiring. Alex reveals his harrowing past as a heroin addict and how hitting rock bottom at just 21 ignited his quest for a fresh start. After achieving sobriety and initially working humble jobs, he pivoted to real estate with his partner Matt, eventually building a successful business from the ground up. Tune in to know Alex’s incredible story of transformation, the lessons he’s learned along the way, and his practical advice for aspiring real estate entrepreneurs.

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From Hardship To Empire: The Remarkable Success Story Of A Resilient Entrepreneur With Alex Coffman

Introduction

We’ve got a guest named Alex Coffman. Alex and I have been jamming before the recording. He’s running a brokerage. He’s got 250 plus units. He also runs a capital-raising operation to fund his syndications. He does some mentoring and training as well. The cool thing is he started with nothing. He came out of addiction at an early age and found his faith. This show is one of the best ones we’ve had.

Before I bring on Alex, I wanted to mention that if you’ve missed any of our previous episodes, or if you’re looking for information on my books, Next Level of Your Life or The Transformational Journey, if you’re interested in joining Circle of Trust Mastermind, or anything we can do to help you, go to TheGenerationsOfWealth.com. You can always find all of our content and information on everything we do right there at the one-stop shop. Please interact with us on the Generations of Wealth Facebook page. Get out there, like, and share this content no matter where you find it on whatever platform you’re on. With that, let’s bring on Alex Coffman.

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I am excited to bring you Alex Coffman. We were talking before the show. He’s a Texas guy. I love Texas for different reasons, including my background in the bucking bull industry. I get down there as often as I can. I’ve got another reason to go. Alex is a straight-up awesome guy. This is going to be a great show. Alex Coffman, welcome to the show. Please introduce yourself. Let the audience know a little bit about you.

Thanks, Derek. I’m happy to be here. I was born and raised here in Austin. Me and my partner Matt have been in the real estate business for about twenty years total. Matt has been for about thirteen, my self about seven. I don’t know how deep you want to get into it, but I was always a business guy. I was always running my businesses when I was younger. It was in non-productive and illegal ways. I got sober when I was 21 years old.

By the time I was 21, I was a full-blown heroin addict. When I got sober when I was 21, I turned my life around and went on a search for what was the legal business that I was going to create. I did not want to get a job. I did not want to go to college and live the life my family and everybody else did. Not that it was a bad life or anything. I knew that that wasn’t my path.

After I got sober, I started my life over from the beginning. I was 21 years old. I was making $8.25 an hour working at Firehouse Subs. I was managing a sober living house. I’m living in a house with eight other guys. I’m sleeping on the top bunk of a bunk bed in Fort Worth, Texas. I’m starting from ground zero. As we were talking about initially, the message of this episode was I had found inner peace. For the first time in my life, I was happy. I had a relationship with God. I’m living by spiritual terms. I’m helping people. That changed my life.

Even though I was sleeping on the top bunk of a bunk bed and making $8.25 an hour, I was the happiest I’d ever been in my life. I was broke at the time. When I finally got sober, I had nothing. I had to start building from scratch. From there, I was looking for what I was going to do, what business was I going to start, and where was I going to invest my money? I always knew that I was going to grow and create income for myself through investments.

For a period of a few years, when I was first getting sober, I managed to live in houses. I had different jobs. I upgraded from Firehouse Subs to dishwasher at a country club. I was making $12 an hour. I got an opportunity to start diving into some different industries. I worked for an oil and gas company, cold-calling mineral rights owners. I’m trying to get them to sell their mineral rights for our mineral fund. It’s similar to real estate.

I went and worked for a company that took all these computer parts that other people were selling in bulk. They would resell those things. That was interesting to me because it was a lot like selling drugs. You bought these computer parts in bulk at this price, and you resold them individually at higher prices. Around that time, I started getting into real estate.

My partner, Matt, I’ve known him for about 21 years. I grew up with his younger brother. That’s when Matthew started showing me all the stuff that he was doing in real estate. We connected on business. He was already a real estate broker at the time. He had investment properties and a property management company. We started looking at real estate investments that we could buy together. We bought a house here, a duplex there, and an eight-plex.

We started going all in on real estate investing. This was 2018, 2019, and 2020 when we were getting into it. We then started a real estate brokerage together. We still have the real estate brokerage. It’s TRE here in Texas. We have about 110 agents with us. We teach real estate agents how to invest in real estate and create wealth, how to wholesale deals, flip deals, buy deals, subject to, seller financing, and how to do traditional real estate stuff while being the true real estate entrepreneur.

We started a real estate fund and have been raising capital. We have about 250 doors and about a $45 million portfolio. We’re continuing to grow and build that out. It’s been a journey. When Matt and I connected, I found the path that I wanted to take, which was real estate.

You’re saying you haven’t done much in your life.

I feel like I haven’t.

Transition And Overcoming Fears

This is awesome because many people make BS excuses as to why they can’t get into any business, let alone real estate. You’re here killing it with commercials. You’re raising money and teaching other people how to do that. We’ve got some age difference between us. I started in 2003. I bought my first properties, which were advertised in a newspaper. Now comes the internet, and things are changing rapidly in our industry. How did you make that transition to get started and not have the fears? How did you overcome the fears? I’m sure you had some.

I don’t know if you’re a spiritual man or not, but with God, there is no fear. I used to be riddled with fear my entire life. I’m not saying that I don’t experience fear today. I experience fear all the time. Once I formed that relationship with God, I finally had a solution for fear. For me, fear is an experience that I’m having. It’s made up. It’s all BS that I play in my head. It’s all these made-up things that I’m in fear going to happen. They’re not reality. It’s me on my own without trusting in God. Once I do put my trust in God of what’s going to happen in the future, and put the action in place to accomplish what I’m looking to accomplish, the fear goes away.

I don’t care what anybody thinks about me. My opinion of myself and God’s opinion of me is the only opinion that matters. When I got sober and learned it over the years through experience and working on myself, was there to be in fear about? Who cares? I still experience fear all the time, but when I put that trust in God for whatever that situation is, the fear seems to dissipate.

With real estate investing, I’ve taken lots of risks in my life before getting sober that never paid off. Real estate is simple and easy. It’s easy to minimize that risk drastically by buying good deals, following the fundamentals, and holding onto these deals. We’re not flipping deals left and right. We have flipped plenty of houses, but that’s not our business plan. Buying good deals, buying them at the right prices, making sure the cashflow, and holding onto these for a long period of time minimizes all the risks that are involved.

I love a couple of things you said there. These are calculated risks. When the outside public is telling you, and this could be a family member or a close friend of yours saying, “What you’re doing is risky, Alex.” They’re coming from an uneducated space, a space of jealousy, or their own fear of what they have not accomplished themselves.

When I realized and stopped caring what other people thought, it was freeing. Stop living for everybody else. Live for yourself and your family. I’m not out to offend people or make enemies. I don’t believe I have many enemies in the world, but I don’t have to live my life based on how many likes or shares I get on social media and what everybody thinks about me.

Driving my car to the office is riskier than buying the real estate investments we buy. I could easily die hopping into my car and driving into the office from some freak accident, but I’m not going to die buying these real estate investments. When I was 21 years old, I was sleeping on that top bunk of the bunk bed, living at the sober living house, and working at Firehouse Subs, making $8.25 an hour. That was the happiest I’d ever been in my life up to that point.

Even if I lose everything, it doesn’t mean anything. Even if I lost every single real estate investment and all the businesses and I went back to working at Firehouse Subs, making $8.25 an hour, I can be happy internally through my relationship with God and spirituality. I always have that knowledge to fall back on that. If I lose everything from this risk that I’m taking, I’ll go back. I know that it’s not going to ruin me, and I can rebuild from there.

There are two things that are good news for you. You’ve already gained the knowledge. Getting it back is easier. I know that because I lost everything in the 2007 crash and had to start over. The second great thing is that because of our beloved government, you would now make more than $8.25 an hour at Firehouse Subs.

It’d be like $15 an hour.

Core Values And Helping People

It’s double. These are awesome backup plans. I know that you’re big on core values and helping people. Talk about that because that’s what The Generations of Wealth is. I love this show. I love giving back and educating people. You and I haven’t met before recording this show, but I host three national mastermind groups called the REI Circle of Trust. We put on a conference every year on a cruise ship. All these things are what give me fire and passion because real estate deals are somewhat boring when you get good at it, but giving back and helping people never gets old. Talk about your core values in helping people.

This always comes to things that I do with myself. Number one is integrity and honesty. This is where being able to help people comes into play and back to being free from other people’s opinions. When I started telling myself the truth about my situation, my life started to change. When I stopped babying myself and telling myself I didn’t need to do things or whatever delusion I was living in my head, it was when I started to be free. I talk to myself internally ruthlessly. I go through cycles. I’m not necessarily in David Goggin’s mindset 24/7. I fluctuate in cycles. I get lazy, I get unlazy, and I get a little lazy again with discipline in exercise and healthy eating.

Honesty, integrity, and doing what I say I’m going to do is important to me. Helping people through drug addiction and alcoholism are tough things because drug addicts and alcoholics are difficult to deal with. You can’t help somebody in that realm without telling them the truth about their situation. When somebody loved me enough to cut all the BS and tell me the raw uncut truth about who I was, what I was doing, how I was affecting people around me, and how I was affecting myself. He told me to stop being a victim of my situation. It was when the light came onto my head, and I started to make some improvements.

That’s the way that I like to help people. I don’t know if people like it or not, but I believe that if I’m going to help somebody, I need to love them enough to tell them the truth about their situation and what’s happening. I don’t know if I would be described as loving in that sense because it doesn’t feel like it to people, but to me, it’s the most loving thing I could do. If I love you, I’m going to tell you the truth and try and help you. If I don’t love you, I don’t care.

Helping people is something that I do enjoy doing, but it starts with that person, like with alcoholism and drug addiction. Is that person wanting to help themselves? We have a ton of people who reach out to us and want to get started investing in real estate. They want to become financially free or quit their job. Most people, unfortunately, are unwilling to do what’s required to accomplish that. Everybody has this dream. It always sounds good, but when it comes time for somebody to be raw and honest with themselves and have some discipline, put things in place, and take action to get there, most people, unfortunately, are unwilling to get there.

My favorite people to help are the people who are desperate and who are like in my shoes. They have nothing to lose. They’re willing to put everything on the line. They’re willing to listen to the accountability and the wrong-cut truth. They’re willing to do that with themselves. For anybody looking to do anything great or accomplish something big, unless you’re willing to do those things, it’s pointless for somebody to try and help you. If you’re unwilling to hear that, hold yourself accountable and do what’s required, it’s a waste of time.

I’ll be the first one to admit. You talked about the peaks and valleys of your energy. I’m the same way, and everybody is. We’re big proponents of having your vision written down and updating it all the time because it should be a living breathing document. We’ve had a transition year of exiting a ten-year business partnership, launching the Generations of Wealth movements, and trying to grow our real estate holdings.

We’re going to start talking about raising capital, but I exited a lending company. My business partner and I ran a hard money lending company for ten years, all with raised private capital. It’s the same thing. There are some days when I look at the decisions that were made last year. Am I doing it right? Am I not doing it right?

Capital Raising

I’m as blunt as you are. I like it when people tell me straight, “No fluff. Don’t BS me. What are you seeing?” That is important as we segue into capital raising to be that blunt person when raising money because I don’t tell people what they want to hear. I tell people what I feel is the truth and is going to protect them, and they get to make a decision. Talk about how you raise capital. Are you doing syndications specifically for deals as the deals come up?

They’re single-asset syndications or funds. What we do is set up the structure before identifying the deal at this point. What we’ve done previously is find the deal, set up the syndication of the paperwork, and take it down.

Those timelines are very short.

They’re very short, number one. Number two, it’s like a new job every single time that it comes up. After we did our first couple, what we said was, “Let’s streamline it. Let’s try and figure out different splits, fees, and things per deal.” Let’s say we’re 80/20 split, “Here are the fees and the projected returns for deals that we’re looking for. Let’s create the paperwork and everything.” Once we identify the deal, we have everything ready to go. We have some capital. We can raise the rest based on the deal, get it closed, and open the next one. That’s how we’re doing it.

They’re always going to be single-asset funds. Maybe it’ll be a portfolio of 2 or 3 properties that we’re buying together, but it’s not going to be an open-ended, evergreen fund. What we are doing is 506(b) Reg D. It’s a blind pool fund for that single asset that we’re about to buy. We have it all in our PPM, subscription agreements, business plan on what we’re looking for, and the deals that’ll meet these projected returns.

Can you explain 506(b) and what that means to people versus 506(c)? A lot of people don’t understand Reg D filings at all. You don’t have to go into a long dissertation. Neither one of us is an attorney. We’re not giving you any legal advice.

We’ve done a 506(c). It is a bond that’s regulated by the SEC. What the C does is it allows you to market the fund publicly. We can go on social media. We can go out here and publicly market this fund to prospective investors. With this, you can only accept accredited investors into that fund. They have to show proof that they’re accredited via a third party, such as an attorney or CPA.

With the 506(b), you cannot publicly market the fund, but what you can do is raise capital from friends and family. You’re allowed to have accredited and non-accredited investors in that fund. You can have up to 30 or something odd non-accredited investors invest with you in the fund. We’ve done B because we do have some friends and family relationships that are non-accredited. For the most part, it is accredited investors who are investing when you look at the percentages.

The reason I wanted you to go through that is we’ve done the same thing over the years. We’ve raised both types of funds. In a B, the SEC wants to make sure you have a relationship with that person. That’s why they don’t allow the advertising. Other than that, they’re similar. There is not one that’s better or worse. It depends on what your goals are for your raise.

We had a debt fund for the lending company. It was open-ended. We could raise, put people in, and take people out. As soon as that money was raised, we were lending it out and putting it on the street through the hard money company. It was a different way of raising money because we didn’t have to wait for a project.

If we find somebody ready to commit that day, we do the paperwork, and away we go. As I exited the hard money lending company and business, I still raised private capital for my own real estate deals. We’re back to the timelines. You find somebody that has money. We don’t have a deal right now, or vice versa. If we have a deal, we have to find the money.

That’s why we started doing it this way. We’ve had a couple of deals under contract for this current fund, but the fund is open. We can get the paperwork signed. We can accept capital. That capital, until it’s deployed into a deal, can go into high interest. You can get 5% interest on your money in a savings or a checking account. We can put the capital there. We will still be able to have the investors earn a return while it’s sitting and waiting to be deployed. We can deploy it all. Once we have the deal, we’re closing, and we’ll start the new one up even without the deal identified to streamline that process. Does that make sense?

I’m glad you explained that to the audience because I was going to ask you that question. What do you do with the funds? Do you take commitments from people but not collect the funds until the project is ready? You cover that perfectly.

The goal would be to be at a point where we’re doing that in the future, but we’re not maxing out the fund with capital raise before having the deal. Some people are ready to commit. Even without the deal identified, they’re ready to invest. We can put it in there. They can still earn a return. We’ll deploy it when we have the deal and close on it. It’s not that we filled it up prior. A lot of people do commit, but they’re not ready to put the capital in until the deal is there. A lot of it does come after we find the deal, and we’re ready to close.

You’re still running a real estate brokerage.

It doesn’t require a ton of work from us, but we’re running it.

I was going to ask about the babysitting aspect of realtors.

It’s not too bad. The way we run it is different than most people. We’re not running like Keller Williams or anything like that. Most of the agents with TRE, 90% of them are true real estate entrepreneurs. They’re out there doing their own thing. They’re working with their clients. They’re buying their own deals. They’re wholesaling their own deals. Most of them are out there doing their own thing. It’s not like we’re having to babysit, but we bring on new agents who want to learn this stuff and want to get into this way of life.

We have an amazing partner and friend. Her name is Doreen. She works with us. She oversees the entrepreneur success department. She runs all the classes and coaches the new agents who come in. That’s where a lot of it is. All experienced entrepreneurs are not needy. There’s not a whole lot of babysitting. The way that we’ve set it up is to provide autonomy to them to go out and do their own thing.

The traditional real estate brokerage is a revolving door of new people coming and going. I’ve carried a broker’s license for 12 to 13 years. I have zero desire to use it. I don’t list my own properties because I don’t like dealing with buyers. I’m a deal junkie. I want to be out making deals. I have no problem paying other agents to sell stuff.

We’re the same way.

A lot of people would think that we’re wrong in that decision because we’re leaving money on the table. The reality is the highest and best use of my time is to find the next deal instead of trying to save 5% or 6% commission on what’s already ready for market.

It’s not good for you. I’m the same way. I was never a traditional real estate agent. I only got my license because my partner Matt made a big deal about it when we had the brokerage. He was like, “You need your license.” It expired because I didn’t need it. I was an investor. Matt and I were investing in deals. When we flipped our first property and sold it to a traditional buyer, it drove me crazy because I was used to wholesaling deals and dealing with investors like, “Here’s the price. Take it or leave it. You want it or not, we’ll take the non-refundable earnest money deposit.”

It’s not good that I list properties because I would get annoyed with a lot of the BS that’s involved and do something that I shouldn’t do. It’s best to have somebody who’s good at that and deals with that, and you focus on the higher-paying activities. It’s the same reason why you don’t make your own clothes. You could save money by making your own clothes, but do you do it?

It took me a long time to get through that mindset of even cutting your own grass or cleaning your own house. It’s a mindset shift, but when you do get to that point, you never want to go back because that $8.25 job that’s now $15 an hour. What do you think your time is worth? You don’t have to put a number out there, but I know what I believe my time is worth, and it’s north of $15 an hour. Anything that we can hire out saves us time. One of my favorite quotes, and I don’t remember who said it, is, “The one thing that makes every human equal is we all have 24 hours in a day. What you choose to do with those 24 hours is what makes the difference between success and failure.”

I’m not perfect at it by any means. I do a lot of stuff that is not worth my time. However, I’m a control freak. I want things done my way a lot of times. I still do a lot of stuff that I shouldn’t do, but there are certain things that I don’t enjoy doing. I will practice that principle.

There are things that I like doing. Some days, I want to shut my brain off, go to a job site, and tear something apart or put something together. There’s a difference between being able to choose to do it versus having to do it. We have a job site where we had to take down a bunch of trees. I like firing up the chainsaw and cutting down trees. The good thing was after we cut them down, I didn’t have to clean them up. I had fun cutting them down and then I’m like, “Have a nice rest of the day. I’m out of here.”

I hear a lot of people try to make sense of deals by doing the work. These are like, “I’ll manage the property. The deal makes sense because I’m not paying out a management fee,” or “I’m bringing on a partner who’s a contractor, and he’s going to do the work. We’re going to save on X, Y, Z. Now the deal makes sense.” Those deals that you have to make sense of in that way, where you’re going to be working for free, are not good deals, in my opinion. That’s something that I had to learn over the headache of buying bad deals for a long time.

We made a lot of money here in Austin, but they don’t have cashflow. The house here in Austin and the duplex here in Round Rock- all these smaller deals do not cashflow even with good debt on them and at the low prices we bought them at. A lot of people try to make sense of deals by doing the work for free. Your deals should be able to support hiring good contractors, management companies, a CPA, and a bookkeeper. These are all things the deals that you want to buy should be able to support and provide you with a good return after all those things are paid for. These are also the same people who say they want passive income and they want to manage a property when they could pay somebody $80 a month to do it.

Training

Alex, I know that you do some training for people.

We put on monthly bootcamps. It’s called the One Deal Away Bootcamp. It’s virtual. It’s over a 3 to 4-day period, depending on which ticket you get. In this bootcamp, it’s me walking you through the process of finding a deal, underwriting a deal, negotiating the deal, and sending an offer on the deal in three days. Real estate is not that complicated. A lot of people make it complicated. I break it down. We join via Zoom. It’s from Tuesday through Friday.

The next one is August 13th through the 16th, 2024. Over this 3 to 4-day period, I’m going to walk you through all the steps. You’re going to have action steps that you take every single day, or you’re going to bring it back. I’m going to help you through the process and help you negotiate it. By the end of that third day, you’re going to send an offer on a deal that you found underwritten, negotiated, and made an offer on.

On the fourth day, we look at more deals and negotiate more deals. I answer questions about raising capital and how to set all that stuff up. The tickets are cheap. The general admission ticket is only $225. The VIP ticket is $497. For your audience, we’ll give them 50% off any ticket tier they want with coupon code PBR if you go to that link.

We’ll have a link at TheGenerationsOfWealth.com/money since we’re talking about capital raising. You’ll be able to go in there. If you have to enter a coupon code after you go through that link, it’s PBR. The reason it’s PBR is because we were talking about bull riding before the show started. Alex and I thought that would be a good coupon code.

It’s for those who want to take action. You’re going to learn a lot at this bootcamp. We have tremendous feedback from everybody who attends. We’re covering a ton of information, but this is for those who are serious and ready to take action and get dirty. I’m going to take you through the process in three days and show you how simple it is to go out there and find deals.

I want to be respectful of your time. I want to make sure we don’t go long here, but I wanted to go back to something you said earlier. It was, “With God, there is no fear.” I had a call from a woman from North Carolina. She’s in a bad deal. She doesn’t know how to get out of it, and she’s afraid. She doesn’t know what to do. She’s locked up with fear. She does not know her numbers. She could not tell me what her income, expenses, and cashflow were. She is looking for solutions. It’s important that whatever faith we have or believe in or don’t have, we have to internally talk to ourselves in a way that’s going to take action but don’t be afraid.

No wonder she’s riddled with fear. She has no knowledge about her situation. I’d be riddled with fear, too. If I woke up and knew nothing about any of my deals, I’d be freaking out.

Her lenders better be riddled with fear because it’s not a great situation, but there is a way out of everything if you take action and move forward. Ninety-nine percent of the time, the fear is BS anyway.

It’s all made up. Anytime I was ever fearful about anything, even if that fear came true, it never happened the way I was imagining it in my head. It was always way worse in my head in this made-up scenario.

Is there anywhere that people can follow you on socials?

Follow me on Instagram and Facebook @RealAlexCoffman. I would love to connect with anybody and help out however we can. We’re looking to grow. We know that we need more great partners like Derek and the audience here. If you ever need anything, reach out. We’d love to connect with you.

Thank you so much for giving us your time. To everybody tuning in, if you have missed previous episodes, go to TheGenerationsOfWealth.com. All of the episodes that have been released are there. We’ve got a wide variety of awesome guests on a lot of different topics. Until the next episode, go out, live your vision, and love your life. See you.

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About Alex Coffman

Alex Coffman co-founded Teifke Real Estate (the real estate brokerage based in Austin, TX), their mentorship community (The enTREpreneurTM Community), TR3 Capital (their capital raising arm), and a few other businesses. Together they own 240+ units in less than 5 years and are on a mission to help others achieve financial freedom through owning real estate.