Scaling from 0 to 30 Offers and Beginning with $0

Dave:
This investor has made greater than 30 offers work in simply his first two years in the actual property sport, and he began with nearly no cash in his checking account. Right now. We’ll learn how he did it. Hey everybody. Welcome again to the BiggerPockets podcast the place you’ll discover ways to obtain monetary freedom via actual property. I’m Dave Meyer, the pinnacle of actual property investing right here at BiggerPockets, and right this moment’s visitor on the present is Tim Yu, a US military officer residing in Maryland. Tim was on the Actual Property Rookie Podcast episode 3 35 again in November of 2023, and at the moment, he’d amassed eight rental properties just one 12 months after dipping into his 401k to make his first deal work. And Tim’s story actually caught with me as a result of he tried so many various enterprise fashions. He did long-term leases, midterm leases, he did flips, wholesaling and extra.
He operated in a number of totally different markets and he took on totally different companions. And this stage of diversification can get uncontrolled should you don’t do it properly. However Tim was an instance of how you are able to do this. Properly. He understood the dangers he was taking and was nonetheless capable of deploy his restricted capital and time very successfully. Right now we’re going to listen to how Tim doubled his rental portfolio in his second 12 months of investing, how he makes use of inventive financing and principally simply pure hustle to make up for an absence of liquid money and way more. Tim, welcome to the BiggerPockets podcast,

Tim:
Man. Thanks a lot. I’m tremendous excited. I’ve been listening to the BiggerPockets for fairly a couple of years now, so it’s fairly superior to be on the present. So thanks a lot.

Dave:
It’s our pleasure, Tim. We’re completely satisfied to have you ever right here. You have been lately on the BiggerPockets Rookie Present, however your story is tremendous cool and galvanizing, and so we wished to dig a bit bit extra into your story, however perhaps if folks don’t take heed to the Rookie podcast, you could possibly simply give us a short background on how you bought into investing within the first place.

Tim:
Yeah, again in 2022, I truly purchased my first funding property and it was a repair and flip. And that repair and flip was every little thing dangerous conceivable occurred to me. Unhealthy contractors, loopy drug deal throughout the road.

Dave:
Oh no,

Tim:
The entire 9 yards. And I assumed that challenge was going to take 30 days and ended up being six months, and I feel we made $2,500 on it, so it wasn’t even actually definitely worth the cash.

Dave:
Properly, they do all of it and are available out forward. Even 2,500 bucks in your first deal, it’s fairly good. You’re a braver man than I with the ability to go for a flick and flip in your first deal.

Tim:
It was like an affordable particular investor particular. It was all boarded up and every little thing, and I used to be like, you realize what? Screw it. I’ve been listening to so many episodes, I’m simply going to tug the set off on it. So

Dave:
Good for you, however hopefully you not less than study one thing.

Tim:
Oh, 100%, proper. I feel that you just don’t study as a lot till you truly take some motion, clearly with some managed threat. After which after that first repair and flip, I truly began doing direct to vendor investing the place I might market and name sellers myself, was doing loads of lease choices and artistic finance offers. And the explanation why I used to be on the Rookie present is as a result of I used to be identified for buying eight properties in a 12 months, and it was all financed in another way. I needed to do vendor finance or doing a lease possibility. After which clearly I take advantage of my VA mortgage as nicely as a result of I’m a veteran and I did the previous home hack trick in late 2023, after which that’s how I form of ended up right here. So

Dave:
I wish to dig into the make-up and contents of your portfolio, however are you able to inform me simply extra about what motivated you to get into this? As a result of beginning with a flip and doing a bit bit extra time intensive methods, it seems like, what impressed you to go that approach, not less than at first whenever you entered the business?

Tim:
So I used to stay in Louisville, Kentucky, and that’s the place I began my whole investing journey. And for all you military of us on the market, I used to be stationed at Fort Knox, Kentucky, and that’s about an hour lengthy commute every approach. So I used to be driving two hours a day, so I might simply destroy the podcast, simply residing the episodes each single day. And the thought of fixing a flipping a property and making 30, $40,000 simply sounded actually cool to me. In order that was finally the trail I selected. However how I ended up on the property that I bought, which was actually loopy, which I used to look on Zillow each single day, and there was a property that went from 100 grand itemizing and it dropped all the way down to 50 grand in a single day. So I instantly known as my agent, I used to be like, Hey, we should always go see it. And we discover out that there was some squatters that broke in and the house owners of the property lived in California, in order that they wished nothing to do with the property. And now wanting again, I most likely may have gotten it approach cheaper, cheaper than 50 grand. So I ended up getting underneath contract for 40 grand.

Dave:
Oh my God.

Tim:
However I most likely may have gotten 25 30 out of it.

Dave:
Oh my God.

Tim:
However I rushed, what sort of home is that this? Oh my gosh. It was like a, in Louisville, Kentucky, there’s tons of shotgun homes, so single flooring, simply single format and taking a look at all of the comps and stuff. And even my onerous cash lender was like, oh, I feel the ARV is about one 20. The issue is no one wished to purchase in that neighborhood as a result of it was a brilliant excessive crime fee, however I didn’t know something. I simply wished to purchase a property and see the way it went.

Dave:
I imply, I think about that you just mentioned you thought it was going to get down in 30 days. I’m positive getting the squatters out took longer than that.

Tim:
Yeah, that was our deal that I didn’t find out about till we have been form of within the brush of it. However after 30 days or so, I truly did the money for Keys methodology Sensible. And so they truly ended up taking it, which I used to be tremendous shocked about. Didn’t must undergo an precise eviction or something like

Dave:
That. All proper, so that you caught a bit little bit of a break there. That’s good.

Tim:
Yeah.

Dave:
Alright, so you probably did this primary deal, seems like a pair complications, however you got here out principally even in your time over six months. What about that have inspired you to maintain going? I feel given among the challenges, lots of people would possibly’ve walked away. So

Tim:
When the deal was over, truly throughout the deal, I used to be like, I don’t wish to do actual property ever once more. I don’t play me. However fortunately one in all my buddies I bumped into at a neighborhood actual property meetup was like, hear, I’m not going to say it will get simpler, however you have got much more expertise and should you did do one other flip, now you realize what you don’t wish to do.
And he additionally mentioned the identical factor that you just did. I didn’t lose my butt off it, I nonetheless made a bit bit of cash, so it wasn’t prefer it was a catastrophic loss. However then the subsequent property I did was truly a home hack as a result of I purchased a major residence earlier than I even began flipping, and I didn’t even know what the VA mortgage was, so I put like 20% down, did the entire shebang. And after doing extra actual property investing, I form of realized, wow, I’ve a mortgage that enables me to purchase a home with zero down. So I ended up shopping for a rental property. Technically I lived in a single aspect after which I renovated the opposite aspect and I made it right into a midterm rental.

Speaker 3:
Cool.

Tim:
In order that one was doing fairly nicely. So it made about $800 a month whereas I used to be residing there. And that’s once I was like, oh my gosh, actual property’s form of cool. And I feel I’m going to attempt to double down on it.

Dave:
I wish to return to one thing you mentioned about it not getting simpler. True. There’s nonetheless going to be so many challenges, however I feel your tolerance for it simply goes up. You’ve seen and also you’ve seen among the dangerous stuff that may occur within the business and you continue to have been okay. You study that the worst case state of affairs, normally if you’re good about it, you’ll be able to mitigate actually dangerous losses and are capable of not less than study so much, not less than come out near even and stay to see one other day and go on to a different deal. And it’s nice that you just did that. How’d you discover that home hack?

Tim:
Yeah, so truly I like the stress, the facility of what? Networking. The primary realtor that I used once I purchased my first major residence was truly the realtor that I used for my subsequent three offers. So the home hack, she truly discovered this property as a result of I truly texted her, I used to be like, Hey, I feel I’m prepared to maneuver out of my home. And it’s been a couple of 12 months since I lived there. I feel I wish to do a home hack with my VA mortgage. And she or he truly discovered me a deal and we did a bunch of negotiations on it. And on the rookie podcast I did speak about how I ended up getting paid like $200 to purchase the home as a result of with the zero cash down, we truly negotiated some sellers concessions. So when all the maths broke out, the title firm was like, Hey, we’re going to chop you a $230 test, which was completely insane. So it’s

Dave:
Fairly onerous to say no to that. Had by no means actually identified anybody who had performed that. And I feel I’ve heard two or 3 times within the final couple of weeks individuals who have gotten reduce checks. However that’s unimaginable. I imply, at that time I might by no means inform folks to not underwrite a deal, but it surely’s like how may you presumably say no to a deal the place somebody is writing you a test to purchase a home?

Tim:
Yeah. It’s truly form of thoughts blowing. You count on to wire out cash to shut a deal, and the escrow agent’s like, right here’s a test for 200 bucks. And also you’re like, oh, that’s superior. Proper?

Dave:
Yeah, it’s superior. However you’ve additionally earned it by being lively as a result of navy and serving your nation, you’ve earned that which you deserve. Completely. However it’s cool that you just have been capable of put these issues collectively.

Tim:
Completely.

Dave:
So that you lived in that, and it sounds such as you simply went loopy from there. You probably did eight offers in a single 12 months. What occurred after the home hack

Tim:
Then I began to actually take it extra critically and I did all of the bootcamps, all of the mentorships to study totally different expertise and power units. And what actually caught my eye was making an attempt to barter with the vendor on to do one thing with phrases.
So loads of the ways in which I began shopping for properties in that first 12 months was I might purchase it on inventive finance after which I might truly promote it on a lease possibility. So if I might negotiate a down cost with the vendor, they’d say, Hey, I desire a $10,000 down cost. I might then do a lease possibility the place I might lease the property out, but additionally give an possibility deposit. So somebody would have the choice to purchase it three to 5 years, and I wouldn’t get the overall entry payment on a regular basis, however the math was three to five,000 out of my pocket to purchase a rental property. That cashflow at about 4 or 500 a month and doing that technique form of stacked up my portfolio for the only household aspect. And I simply saved doing it again and again. After which ultimately I used to be like, wow, I’ve a good sized portfolio, and I didn’t actually spend that a lot cash out of my pocket.

Dave:
Yeah, that’s tremendous spectacular. I’m curious when you have any recommendation for folks. We at all times hear these concepts of direct to vendor or doing postcards or mailers or no matter. I’ve solely performed it as soon as and it appears very onerous to me. So how did you pull this off as a relative beginner to investing?

Tim:
Yeah, should you’re first beginning out, I don’t advocate folks doing the unsolicited mail or paying for leads as a result of it will get tremendous costly.

Dave:
It’s important to simply do a ton of quantity, so that you’re fronting all that cash.

Tim:
Precisely. After which should you’re not doing one thing lively with it, should you’re not flipping the home, you’re not promoting it on a wholesale deal, you’re simply consuming loads of prices to attempt to purchase a deal, proper?

Dave:
Yeah. The time worth of cash on that isn’t an excellent return. You’re going to attend a very long time to recoup that money, and then you definately’re going to must most likely come out of pocket to purchase the deal too. So yeah, it may be powerful

Tim:
One hundred percent. So what I used to be doing within the very starting was I used to be truly creeping on Fb market and I might work, after which I might get residence round 5, 6:00 PM and I might message 30 40 folks on Fb market who have been promoting their properties. And I might ask them, Hey, I’m an investor and I might love to only hop on the telephone with you. And I received a ton of nos and a ton of screaming at my face. Oh, I wager. Finally I had that one person who I used to be truly desirous about promoting their property to me on inventive finance. And I bear in mind the primary time I booked a name with someone that was and he’s like, I received a suggestion from someone else, and so they form of ghosted me. And it was one other wholesaler that was coping with that man, and I mentioned, finally, what’s that value that’s going to push you ahead? And he mentioned, 150,000. Now this home was a dump, it wanted some work in there. And I mentioned, I can’t offer you 150 proper now as a result of it simply doesn’t make sense, however would you permit me to present you one 50 over a course of a set quantity of years if I paid you each single month? And he actually simply mentioned, if the contract’s proper. Huh, wonderful. And I simply felt like my coronary heart simply sinks. And I’m like, I don’t know what to do

Dave:
Subsequent. Yeah. I used to be like, I don’t know what to do subsequent. I’ll make the contract. In case you’re agreeing to let me do that, I’ll determine the

Tim:
Contract. Sure. It was loopy. So I known as this title firm in my metropolis that’s identified to do vendor finance offers, and the home was totally paid off. After which what we did was we did a vendor finance. We had a 3 12 months be aware on it, and it was like $250 funds was 0% curiosity.

Dave:
After which there was a balloon on the finish.

Tim:
There was a 3 12 months balloon on the finish, and it was in a very nice a part of city in Louisville. So with the one 50 buy value, with the quantity of renovations, I feel the A RV after we received it reappraised to do a money out refinance was it was like 2 55. Oh, wow. Wonderful. So we ended up pulling the money out and paying them again, and yeah, it was fairly loopy. It’s most likely one in all my greatest offers that I’ve ever received, truly.

Dave:
In order that was your third deal. You probably did the flip, you probably did the home hack, after which this was your first direct to vendor buy, and it sounds prefer it was a house run.

Tim:
I do wish to say I’m very fortunate. Not each individual will get a deal like that proper off their first direct to vendor, but additionally it did take me about six months of calling sellers each single day.

Speaker 3:
Completely.

Tim:
So it’s a giant grind at first, however clearly as you begin accumulating new expertise to barter and have conversations with sellers, it does get simpler. After which finally you begin getting cash to pay for sure advertising and marketing that will help you out.

Dave:
I imply, you’re being humble saying that you just’re fortunate, however I imply, there may be at all times a component of luck in these kind of issues, however you clearly put your self in a very good place to get fortunate by throwing your self on the market, getting yelled at, getting all these nos. It undoubtedly takes a sure sort of persona and loads of perseverance and grit to work the sort of technique. So congratulations on discovering such a superb deal in your first one.

Tim:
Thanks.

Dave:
After your first deal, I used to be questioning what saved you going, however now after this deal, I can perceive why you saved rising so aggressively. I wish to hear about the way you saved constructing your portfolio, however first we received to take a fast break. We’re again with Tim Yu speaking about how he went from a troublesome first deal to a house run on his third deal. And it seems like Tim, you’ve been scaling a ton since then. So how did you progress ahead after that first direct to vendor deal went so nicely for you?

Tim:
So I’m a reasonably easy man. I simply saved doing loads of the identical factor, however ultimately the Fb market stuff clearly began to dry up. So we began doing county information. So I might go to my county web site and see all of the totally different foreclosures offers. And really a bulk of my single household offers got here from the foreclosures record and with the ability to attain the vendor and find yourself negotiating, attempt to determine a win-win state of affairs. However I do know loads of buyers do the identical factor, and so they do loads of chilly calling. And from my expertise of speaking to sellers or making an attempt to succeed in them, lots of people going via a foreclosures don’t actually like to choose up their telephone, and I didn’t have time to do the door knocking factor. So what I began to do was I might simply write handwritten letters and I might drive by the property and simply go away it on their doorstep. And having that handwritten letter I feel actually helped as a result of who doesn’t wish to open a letter that’s handwritten, that’s written to you?

Dave:
Oh, I adore it. They trick me each time. Even these faux ones that has a machine write them, I nonetheless open them.

Tim:
Yeah, precisely. And the most important factor is I by no means mentioned that I wished to purchase their home. Fascinating. I at all times mentioned, do you want any assist together with your state of affairs? I might like to have a dialog with you if you wish to preserve the home or not. That’s once I would get telephone calls or textual content messages, no matter, after which I might have a dialog and see if me shopping for the home truly helped them or not. And clearly these are actually nice alternatives for proprietor financing or some kind of low money supply.

Dave:
I’m simply curious, what 12 months was this whenever you have been doing this?

Tim:
This was in the midst of 2023 going into 2024.

Dave:
So simply out of curiosity, should you have been to only go search for on-market offers in 2023, charges have been excessive in Louisville, have been there offers that have been engaging to you or was this the one approach you could possibly discover issues that made sense?

Tim:
I do know there’s some success in on-market stuff, but when I have been to go typical financing, I don’t bear in mind what the charges have been again then, however

Dave:
Excessive, they have been excessive,

Tim:
They have been getting as much as like six, 7%.

Dave:
Oh not less than.

Tim:
And no offers actually labored with typical financing. And each time we might attempt to attain out to an agent, we get the standard proprietor financing vendor financ to rip-off.
And I simply didn’t actually wish to take care of that anymore. And so I simply form of pivoted to sellers. And I feel my persona sort too is I get pleasure from speaking to folks on the telephone. Any such funding technique most likely wouldn’t work for those who don’t like to speak to folks. It is a absolute grind talking to totally different sellers. And in addition simply listening to loads of ache too, as a result of the sellers that do form of comply with this, more often than not, they’re not in the perfect state of affairs. So it’s worthwhile to be a bit empathetic and attempt to perceive the place they’re coming from. And I feel finally that’s what actually helped me safe some offers, having that worth pushed strategy first.

Dave:
That’s very cool. Yeah, I actually respect that strategy. I’m curious, Tim, did you have got expertise with chilly calling or any kind of customer support targeted enterprise earlier than?

Tim:
No. You must have heard my first 60 calls.

Dave:
Oh man, I want we may play it

Tim:
Stuttering, Tim. And I bear in mind when folks would choose up the telephone, my coronary heart could be racing out of my chest. Oh, I’d be like, Hey, Mr. Vendor, do you wish to promote your home? And so they’d be like, no. Proper. And I’m not going to say any dangerous phrases, but it surely was simply loads of profanity.

Dave:
Oh, I wager.

Tim:
By no means name me once more sort factor.

Dave:
I’ve performed a bit little bit of chilly calling and I do know that feeling the place you’re determined for anybody to choose up, however then the second they choose up, you’re like, oh no, what do I do now? You’re nearly like, I want they did choose up as a result of then I don’t face the rejection.

Tim:
You simply received to maintain going. However I feel that’s the massive factor with how I first began was reaching out to on the market by house owners on Zillow and likewise Fb as a result of they have been already making an attempt to promote versus you pulling a listing off an information software program and simply blindly calling someone for hours on finish. At the least they have been anticipating folks to name them. So although I received destroyed on the telephone, it was extra of like, Hey, I noticed that you just’re making an attempt to promote it and are you continue to taking presents? After which the dialog goes from there.

Dave:
Oh, that’s a superb level. That’s a superb entry stage technique to get into these conversations.

Tim:
And you’ve got your scripts that you just begin creating. And I at all times made up a bit white lie and mentioned, Hey, me and my spouse are buyers. We’ve a home across the nook and we’re in search of our subsequent one. Are you continue to taking presents? After which the reply is normally sure. After which now you’ll be able to form of proceed with the method with them.

Dave:
Are you married?

Tim:
I’m. Okay. Okay. I at all times didn’t know if that was the white lie. Yeah, no, no, no. The white lie was like, Hey, I’ve a home across the nook.

Dave:
Yeah, across the nook.

Tim:
Yeah. Yeah.

Dave:
This was nonetheless in Louisville, proper although you’re nonetheless in your market, your native market.

Tim:
Yep. I didn’t go away the market till July, 2024, after which I ended up shopping for some homes in Iowa Metropolis out in Iowa. In order that was the primary time I actually left the state of Kentucky.

Dave:
Fascinating. Okay. I wish to hear about that. However earlier than we do, I simply wish to ask, whenever you’re making these telephone calls and reaching out to folks, did you have got a purchase field that you just have been in search of or have been you simply in search of any deal and then you definately form of determine what to do with it should you have been capable of p somebody’s curiosity?

Tim:
Yeah, for me, it was simply single household properties, 60 days on market. And no home is older than Nineteen Fifties. And the explanation why I had the Nineteen Fifties factor was my first flip, the home was like 100 years previous, so I had loads of nightmares with every little thing concerning the plumbing, the inspiration, all that stuff, even electrical.

Dave:
Oh yeah.

Tim:
After which as I received extra superior, I began in search of two bed room one baths with sufficient sq. footage as a result of I did flip a couple of homes in between. And I at all times appeared for worth add alternatives. So actually specializing in if I can flip a home into a 3 bed room or simply including one other toilet, and that was my huge standards.

Dave:
And have been you principally seeking to purchase and maintain or did you flip or wholesale any of those?

Tim:
It was primarily a purchase and maintain portfolio technique. After which the secondary could be a repair and flip if I received a money deal. So if inventive finance couldn’t work, I might pivot right into a money supply after which I might find yourself making an attempt to flip it myself. I didn’t actually begin wholesaling till the tip of 2024 and this 12 months, so most of my stuff was simply making an attempt to purchase it myself.

Dave:
That’s superior. And so what number of did you wind up doing in Kentucky earlier than you moved to Iowa Metropolis?

Tim:
Yeah, so in Kentucky I had 9 properties and I feel it was 12 doorways or one thing like that. Some have been duplexes.

Dave:
Superior.

Tim:
After which in Iowa, we ended up shopping for a six property portfolio from a vendor, so that actually upped the numbers. After which we had some repair and flips in Kentucky that we truly simply offered a pair months in the past.

Dave:
Wonderful.

Tim:
Yeah, so it’s been a loopy experience within the final couple years and only a few grays that received added to the highest of my head, however we’re nonetheless right here. Oh,

Dave:
Good. Properly that’s nice. So inform me concerning the resolution to vary markets first. Once you began in Louisville, do you know that it was a superb market or was it simply kind of such as you wished to be in actual property and that’s the place you have been, so that you have been going to make it work a way domestically?

Tim:
Clearly New York could be very costly, and once I moved to Kentucky and I noticed homes have been like 100 grand or 120 grand, I used to be like, whoa, that is loopy. The identical home that I’m taking a look at could be half 1,000,000 at residence.
After which with that within the mixture of actually eager to get into actual property, as a result of I feel after 2020 there was a lot content material about actual property and all people was beginning to speak about it, and I form of began to get fomo. So I used to be like, you realize what? I received to do one thing now or else I really feel like I’m by no means going to do it. And I don’t know if loads of friends that you just’ve had had the identical experiences I’ve had, however once I first began wanting to buy my first property, I had a ton of individuals telling me to not do it. It was to start with of 2022 when rates of interest have been nonetheless within the three 4% vary, however costs have been going up and everybody informed me the market’s going to crash any day now, and I’m glad I didn’t take heed to my mother and father. I’m glad I didn’t take heed to lots of people and simply finally tried it. So

Dave:
Yeah, it’s onerous when individuals are telling you to not do it. I began in 2010, individuals are at all times like, oh, it was wonderful how fortunate. It’s like everybody thought that actual property was over ceaselessly at that time. And no matter what market you make investments into, there’s going to be a problem, whether or not it’s getting credit score or costly properties or decrease cashflow, there’s simply at all times issues that you just’re going to must navigate. And such as you mentioned, when you get into it, you’ll discover ways to earn money off of the offers within the present market. Clearly there are methods to make it work in just about any market circumstances. Tim, I wish to get into what modified and why you began investing in Iowa, however first we have now to take a fast break again with investor Tim Yu on the BiggerPockets podcast. Why’d you progress to Iowa Metropolis? What modified?

Tim:
So Iowa was actually fascinating for us as a result of one in all my cousins, he lives out in Iowa and he purchased a home on the market and he form of noticed me on Instagram and was like, oh, I didn’t know you probably did actual property. I feel it’s best to look into my yard. So right now, I’ve a associate now, so it’s been a pair years and my associate is extra of the underwriter, so he’s a stronger with the numbers and stuff. And after wanting into Iowa, we love the Midwest. Lots of people will say Louisville, Kentucky doesn’t depend because the Midwest, however I do personally.
And Iowa is actually Midwest. We picked Iowa Metropolis particularly as a result of it’s received loads of life there. It’s received tons of journey nurses there, and it’s received the massive college, truly the six properties we purchased is a 5 minute drive from the campus, so it’s in a very nice neighborhood. The vendor was resolving his portfolio and we ended up getting that deal from a dealer connection. So we negotiated with the vendor immediately and paid the dealer a payment. That deal was actually difficult. It took us three months to shut, however we ended up closing it in July of 2024.

Dave:
Good. Okay. And so is your cousin serving to you out or did you rent property managers?

Tim:
No, we employed a property supervisor on the market and we truly had a nasty expertise with our first one, so we ended up having to pivot to a different one, which is admittedly powerful. We by no means actually skilled that earlier than, and we needed to eat a pair months of loss as we have been making an attempt to show items over, however we lastly received the belongings secure alive, so we form of be ok with it now. So

Dave:
I imply that is likely one of the challenges of moving into a brand new market. One of many greatest challenges is constructing out that group. So are you able to share with us perhaps one thing you realized or something that you just suppose would possibly assist our viewers keep away from among the challenges you confronted to find a property supervisor in a brand new market?

Tim:
Yeah, I feel you guys actually must interview fairly a couple of. And for us, there have been loads of property administration firms that managed 1000’s of doorways. And the primary one we used was a really huge one, very, very huge. It’s received tons of items. And what we’ve realized was they might be respected, however you’re not their primary buyer

Dave:
One hundred percent,

Tim:
Particularly should you solely have six doorways of their portfolio, they don’t care about you. It takes ’em per week to answer our emails, and it was only a mess. So we ended up taking an opportunity with a smaller property administration firm that solely managed the 100 properties on the time. And the extent of care and motivation to deal with us was actually enormous for us. And that property administration firm that’s working with us, if we develop our portfolio, that property administration will get our enterprise ceaselessly.

Dave:
That’s proper.

Tim:
However sure, have a very good screening course of in your property administration firm and form of see if their visions align with what you’re making an attempt to do. For us was simply to be sincere with us, we all know you guys received to earn money as nicely. Simply be clear with what your charges are, how lengthy it’s going to take to get again to us. Generally we have been simply ready for per week and a half to see if a unit received rented out. It’s

Dave:
Loopy. Yeah, I’ve had nearly the identical actual expertise, and I don’t even blame the larger property supervisor. That’s simply what anybody would do. In case you had a enterprise and also you managed a thousand items and one in all your purchasers had 500 of these items, you’d choose up their telephone name first. Everybody would do

Speaker 3:
That.

Dave:
And it’s simply a lot of this enterprise, we speak about it so much on the present, is about incentive alignment and discovering whether or not it’s a associate or a tenant or a property supervisor, discovering somebody to work with to place in your group who’s in the identical kind of spot as you and needs the identical factor as it could work in different conditions, however every little thing goes a lot smoother. In case you’re making an attempt to develop collectively, like Tim mentioned, a spot with 100 items, they’re going to be stoked each time you add a duplex, that’s going to be a giant increase to their enterprise and so they’re going to wish to present you that they’ll scale with you in order that whenever you purchase that third or your fourth or your fifth property, that you could possibly develop collectively. And I’ve sadly needed to fireplace some property managers too. And once more, most of ’em are good folks. It’s similar to they’re simply not the best individual for my portfolio at the moment. And so I feel Tim is completely proper. You’ll want to not simply discover somebody who’s respected, however discover somebody who actually goes to offer the extent of service that you just’re in search of at your stage of your portfolio. Now, Tim, what are you doing? Are you in search of offers in each locations in Louisville and Iowa Metropolis?

Tim:
Yeah, truly I’m not shopping for any extra properties in Kentucky, and we’ve form of slowed down single household as a complete. We form of really feel just like the market continues to be fairly tight by way of leases. And for me personally, I began shopping for rental properties on the pursuit of monetary freedom. And once I began to appreciate was having a property that cashflow is 400 a month, actually wasn’t altering my life.
It’s very nice and it’s actually good to construct wealth, however my technique was like, Hey, let’s concentrate on properties that generate extra cashflow per thirty days and likewise present a service. As a result of having single households and having folks rented is nice, but it surely actually wasn’t fulfilling for me. So what we’re seeking to do now’s we’re truly making an attempt to do the co-living mannequin with assisted livings, so folks which might be older. So we’re truly in search of our first one proper now in Tampa, and there’s some intricacies to that coping with the hearth marshals and the licensing and all that stuff. However we’re form of shifting in direction of the co-living mannequin as a result of we will discover these properties in the marketplace that’s been sitting there for some time, and we will even buy conventionally with the right this moment’s charges, right this moment’s financing, and nonetheless be capable of cashflow $3,000 a month. And that’s being form of conservative too.

Dave:
Tim, I’m curious, since you’ve solely been doing this for what, three years-ish now, which is an efficient, I imply, you’ve performed so much in three years, don’t get me unsuitable, however you’ve performed loads of totally different stuff. You’ve flipped, you’ve performed loads of inventive finance, you’ve performed direct to vendor, you’ve performed purchase and maintain, now you’re shifting to assisted residing. Is that this simply form of your persona that you just prefer to attempt various things, or is it form of market pushed the place you’re similar to weren’t seeing the returns that you just wished or why tackle so many various issues? I suppose?

Tim:
I feel it’s form of like half persona that I’m going to attempt it not less than one time. A man I don’t like flipping, so I don’t flip anymore. You realized

Speaker 3:
That. There

Tim:
You go. I realized that, proper? And also you attempt it a pair instances. The primary one didn’t go nicely, second one didn’t actually go nicely. So I feel flipping’s actually aggravating for me, and a few folks adore it. Some individuals are tremendous good at flipping. However for me, the second half is market pushed.

Speaker 3:
I

Tim:
Assume that how the markets that I take a look at now, it’s tremendous onerous to discover a deal that simply is smart.
And as you develop as a enterprise or develop as an investor, I don’t have time to name sellers twenty 4 seven anymore. I used to. So my advertising and marketing has modified drastically. So I’ve to focus on sure lists, sure folks, and attempt to maximize my time as a result of I nonetheless do work 9 to 5 daily. So it’s been actually onerous to do the identical lead era that I used to be once I first began. However yeah, I feel it’s a fusion between the 2. I do prefer to attempt every little thing not less than as soon as, and if it doesn’t work, then hey, we will mark it off the bingo card and form of transfer on.

Dave:
Yeah. Properly, that is smart earlier in your profession, I feel. I imply, it could make sense at any time, however I do suppose that that’s an excellent rationalization. There’s so many various issues that you could possibly do in actual property. You form of must attempt not less than worth add, attempt totally different advertising and marketing methods, see what works for you, what matches and what’s going to be sustainable on that line of considering. Tim, my final query for you here’s what’s subsequent? You’ve mentioned that you just received into it for monetary freedom, however you’re not tremendous excited by rental property. So whenever you look 5 or 10 years down the street, what do you envision and what would you like your portfolio to seem like?

Tim:
Yeah, it’s humorous that query as a result of once I was requested this a 12 months in the past on the rookie present, it’s modified drastically, proper? I feel once I was first speaking about, I used to be like, nicely, I wish to get into multifamily, and after coping with a lot actual property and speaking to totally different buyers, having 100 door unit factor didn’t actually excite me. Elevating tons of capital or doing syndications didn’t actually excite me. So what I actually wish to concentrate on is looking for an asset that gives housing to a sure inhabitants or demographic. I feel within the subsequent 5 years, undoubtedly wish to do assisted livings, however since I’m a veteran, I do wish to transfer in direction of extra co-living properties that truly find yourself supporting veterans as a result of a ton of displaced veterans on the market that want housing and want a kind of group. So I feel that’s what I wish to envision within the subsequent 5 years is concentrate on that.

Dave:
Good for you, Tim. I actually suppose that, in fact, most individuals get into actual property investing to enhance their very own monetary place, however this service that you just’re capable of present to your group and being a superb supplier of housing and residences is I feel extraordinarily fulfilling. And I like listening to you say that and that you’ve your individual private mission, whether or not it’s aged of us or serving the veteran group. It’s such a giant profit to actual property investing, and not less than for me, and I’m positive for you, it offers motivation when issues do get powerful and also you’re remembering, yeah, you’re in it to develop a profitable enterprise, however there are different people who find themselves benefiting out of your work as nicely. Properly, Tim, thanks a lot for becoming a member of us right this moment. Tremendous cool story, actually inspiring to listen to every little thing that you just’ve been as much as. Hopefully we’ll have you ever again on the present once more in a 12 months or two to listen to what you’re as much as.

Tim:
Yeah, I’d love that. I respect the time and thanks for bringing me again on the present,

Dave:
And thanks all a lot for listening to this episode. As a reminder, if you need an opportunity to be on this present, similar to Tim, as one in all our friends, you’ll be able to apply at biggerpockets.com/visitor. There’s a type that you just fill on the market. Inform us a bit bit about your story and we’ll contemplate you for a spot on the podcast. Thanks once more for listening. We’ll see you subsequent time.