Finance
A former stockbroker explains how real estate became his 10-year path to financial freedom after falling behind on retirement savings
- Brannon Potts shifted to real estate investing to achieve financial freedom in his 50s.
- He does ‘build-to-rent’ projects in Fort Worth, Texas, and has scaled up to 10 doors.
- Once he gets to 20 doors, he expects to have enough cash flow to retire early.
After years of working in banking and finance, Brannon Potts found himself behind on long-term savings.
“I was in my 40s and I hadn’t really gotten, in earnest, to saving for retirement,” he told Business Insider. “And I knew that the power of time was now a liability for me.”
Potts, 53, began his career as a stockbroker before transitioning to commercial lending. In 2006, his dad asked him to join the family business and take on the role of CFO, which he did until the business sold in 2010.
At that point, “the market was rough and I was trying to decide what I was going to do,” said Potts. It occurred to him that a pivot to real estate could be a smart career move — and help him hit a lofty financial goal: achieving financial freedom in his 50s.
When he was working on loan products for a bank earlier in his career, “I got to sit down with some people that were multimillionaires,” he said. “I would ask them, ‘How did you make your money?’ And what I found was most of them either made their money in real estate or kept their money in a lot of real estate.”
Rather than jumping straight into the investment side of real estate, he decided to learn as much about the industry by first working in sales and, eventually, starting a property management company.
“I knew I wanted to eventually own properties,” said Potts. “Why not stay in the same industry and have a company that manages my properties for me and manages properties for others?”
By 2020, with about a decade of industry experience under his belt, Potts felt prepared to invest in his first property.
The investment strategy that’s catapulting him to financial freedom: Build-to-rent
Rather than search his market, Fort Worth, Texas, for deals, Potts decided to build his own rental properties. He grew up in a home built by his parents and followed in their footsteps, constructing each of the homes that he and his wife Mindy have resided in.
“I noticed a pattern when I was building my houses: Every time we built, it had equity over and above the cost of the build,” he said. “I’m like, well, then why don’t I do it with rentals?”
Courtesy of Brannon Potts
He started two “build-to-rent” projects simultaneously in 2020: a beach house in Port Aransas that he and Mindy converted into a short-term rental and a fourplex that they filled with long-term tenants. Both projects wrapped in 2021.
Over the next couple of years, the couple expanded to 10 doors. As of March 2025, they have two more under construction and expect to have a total of 12 completed doors by mid-2025. They’re all long-term rentals except the beach house. BI viewed owner statements to verify his property ownership.
The short-term rental is “just about break even,” he said. “So, in a sense, the cash flow is paying the mortgage down. And, it’s appreciated. It’s doubled in value.”
Cash flow wasn’t the primary objective of this project, he added: “It came down to, we wanted to have a beach house, and really the only way we could do it was if we made it a rental and stayed in it a couple of weeks a year.”
The long-term rentals have each produced positive cash flow from the get-go — “I wouldn’t do them unless they did,” he said — and, as of 2025, are profiting, on average, $330 a month per door. That’s about $40,000 a year of relatively passive income, as his properties are new builds and don’t require much maintenance or attention.
He doesn’t think he’d get close to those numbers if he bought pre-existing properties: “The resale market is a little bit harder to pencil out and work financially.” Plus, he’ll be able to pass on newer properties to his family. “If I’m building brand new and I’m leaving that legacy for the family, by the time I’m gone, these properties are only 25 to 30 years old. They’re still in great condition, versus 70- or 80-year-old properties, so that’s another factor. This is a long-term plan for my heirs.”
Investing in real estate vs. the stock market
For Potts, who set a lofty goal and was working with a relatively tight timeline, investing in real estate rather than the stock market made more sense.
“I had a goal to get to financial freedom in my 50s, and I knew I couldn’t do it any other way but through real estate,” he said. “If you do this well, it’ll take about 10 years. You can get to financial freedom much quicker versus using a 401(k), which is 30-plus years.”
Courtest of Brannon Potts
He’s also seeing much higher returns than he would if his money was in a fund tracking the S&P 500, for example.
“I was wanting at least 10% cash-on-cash return,” he said. Once he finishes doors 11 and 12, “my average cash-on-cash return is 27%.”
He expects to hit financial independence and have the option to retire — he still runs his property management company — once he gets to 20 doors, which he plans to do in the next five years.
“It’s a much quicker path,” he said. “Plus, the asset produces cash flow to pay the bills so you don’t have to sell the thing that you own as equity to pay the bills — it’s producing the cash flow, versus, with stocks and bonds and a 401(k), you’re going to have to sell the stock to create the cash. And, the cash flow is usually tax-free. The IRS tax code is written for owning rental properties.”
Once he retires, Potts envisions himself spending more time at the beach and with his kids while growing his YouTube channel, Build2Rent Investing and Financial Talk, and helping others use real estate investing as a wealth-building tool. Part of the reason he fell behind on retirement savings in the first place was a lack of financial literacy, he said: “I just got it together probably in my 40s, and I feel like I really got it together well, but we didn’t do well because we weren’t taught.”
He’s learned the importance of holding his money “accountable,” he said. “That’s what people that reach financial freedom do. If you treat your money well, it’ll come back with friends. If you treat your money poorly, it’ll leave and go to somebody else who treats it better. So, I want to treat my money well. I want to hold it accountable to making good returns.”
Banks have had a stellar first quarter. The major U.S. banks raked in nearly $50 billion in profits in the first three months of the year, The Guardian reported.
That was largely due to Wall Street bank traders, who profited from a volatile stock exchange, Reuters showed.
But even without the extra bump from stock trading, banks are doing well when it comes to interest, the same Reuters article found. And some banks could stand to benefit even more from this one potential rule change.
Morgan Stanley thinks it could have a major impact on Citi in particular.
Upcoming changes for banks
To understand why Morgan Stanley thinks things are going to change at Citi, you need to understand some recent bank rule changes.
Banks make money by lending out money, which usually comes from depositors. But people need access to their money and the right to withdraw whenever they want.
So, banks keep a percentage of all money deposited to make sure they can cover what the average person needs.
But what happens if there is a major demand for withdrawals, as we saw during the financial crisis of 2008?
That’s where capital requirements come in. After the financial crisis, major banks like Citi were required by law to hold a higher percentage of money in order to avoid major bank failures.
For years, banks had to put aside billions of dollars. Money that couldn’t be lent out or even returned to shareholders.
Now, that’s all about to change.
Capital change requirements for major banks
Banks that are considered globally systemically important banking organizations (G-SIBs) have a higher capital buffer than community banks as they usually engage in banking activity that is far more complicated than your average market loan.
The list depends on the size of the bank and its underlying activity, according to the Federal Reserve.
Current global systemically important banks
A proposal from U.S. federal banking regulators could drastically reduce the amount that these large banks have to hold in reserve.
Changes would result in the largest U.S. banks holding an average 4.8% less. While that might seem like a small percentage number, for banks of this size, it equates to billions of dollars, according to a Federal Reserve memo.
The proposed changes were a long time coming, Robert Sarama, a financial services leader at PwC, told TheStreet.
“It’s a bit of a recognition that perhaps the pendulum swung a little too far in the higher capital requirement following the financial crisis, making it harder for banks to participate in some markets,” he said.
Natasha Luscri and Luke Miller consider themselves among the lucky ones. The couple recently bought their first home in the northwest suburbs of Melbourne.
It wasn’t something they necessarily expected to be able to do, but some good fortune with an investment in silver bullion and making use of government schemes meant “the stars aligned” to get into the market. Luke used the federal government’s super saver scheme to help build a deposit, and the couple then jumped on the 5 per cent deposit scheme, which they say made all the difference.
“We only started looking because of the government deposit scheme. Basically, we didn’t really think it was possible that we could buy something,” Natasha told Yahoo Finance.
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Last month they settled on their two bedroom unit, which the pair were able to purchase in an off-market sale – something that is becoming increasingly common in the market at the moment.
Rather perfectly, they got it for about $20-30,000 below market rate, Natasha estimated, which meant they were under the $600,000 limit to avoid paying stamp duty under Victoria’s suite of support measures for first home buyers.
“They wanted to sell it quickly. They had no other offers. So we got it for less than what it would have gone for if it had been on market,” Natasha said.
“We didn’t have a lot of cash sitting in an account … I think we just got lucky and made some smart investment decisions which helped.”
It’s a far cry from when the couple couldn’t find a home due to the rental crisis when they were previously living in Adelaide and had to turn to sub-standard options.
“We’ve managed to go from living in a caravan because we were living in Adelaide and we couldn’t find a rental with our dogs … So we’ve gone from living in a caravan, being kind of tertiary homeless essentially because we couldn’t get a rental, to now having been able to purchase our first home,” Natasha explained.
Rate rises beginning to bite for new homeowners
Natasha, 34, and Luke, 45, are among more than 300,000 Australians who have used the 5 per cent deposit scheme to get into the housing market with a much smaller than usual deposit, according to data from Housing Australia at the end of March. However that’s dating back to 2020 when the program first launched, before it was rebranded and significantly expanded in October last year to scrap income or placement caps, along with allowing for higher property price caps.
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