Tyler Sheff has seen a lot in his real estate career. He started flipping houses in his early twenties and was very successful before the housing crash. Tyler also held some properties as rentals and eventually sold his properties before the crash, which caused him to incur a huge tax bill. Tyler decided there had to be a better way to invest in real estate, so he started buying apartment buildings after the housing crash and held more of his properties instead of selling them. Tyler eventually got his real estate license and started his own podcast that discusses real estate investing. On this episode of the InvestFourMore Real Estate Podcast, I talk with Tyler about his career and what he has learned over the years.
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How did Tyler Sheff get started in real estate?
Tyler started investing in real estate during the housing boom. He was a house flipper but not in the sense that he would fix them up and sell right away. He would buy a house, rent it out for a year, and then sell the property after the market had caused values to increase. Tyler was lucky in that he ended up selling most of his properties before the housing crash. He was not lucky in that he failed to disclose all of his sales to the IRS and ended up with a huge tax bill. During the housing crash, he did a lot of traveling, started a trucking a business, and worked for the federal government doing oceanographic research. He loved the benefits of a government job but did not love paying the taxes that came with the income. He was trying to figure out how to pay less taxes when he discovered real estate agent. However, he knew flipping was not a great way to avoid taxes, so he focused on long-term rentals.
How did Tyler start to buy rentals and slowly get into real estate again full time?
While working for the federal government, Tyler accumulated 6 months of paid time off. He used that time to research single-family rentals and get his real estate license. Tyler bought some single-family houses, wholesaled some properties, and bought multifamily properties. He bought a four-unit multifamily property using his VA benefits, and he had to live in one of the units for a year. He has bought numerous single-family rentals but loves 10- to 20-unit apartment buildings.
Why does Tyler think being a real estate agent helps him as an investor?
Not only does Tyler use his real estate license to help with his own investing, but he also sells houses to make extra money. He specializes in high-end sales and loves the business. He wife is also a real estate agent and sells many houses each year. He thinks becoming a real estate agent is a great way to get into real estate full time. When you become immersed in real estate as an investor and agent, it makes both sides of the business much easier. Since Tyler is an agent, he has also networked with hundreds of people who have helped his business. In a world of shrinking real estate commissions, Tyler has no problem setting his properties apart from the competition by offering higher commissions to buyers agents. Tyler also sees no harm in being both an agent and investor. Many people are concerned about the implications of having a real estate license and buying off-market investment properties, but Tyler sees it as an advantage, and I do as well.
How can you get in touch with Tyler?
Tyler not only helps people buy houses as an agent, but he also helps investors buy multifamily investment properties. We talk about how difficult buying multifamily properties can be when you have never done it before, and Tyler will even become an equity partner on some deals. Tyler also has his own podcast, and you can find him at Cashflowguys.com.
Thank you for all your help with hurricane relief!
Texas was devastated by Hurricane Harvey, and now much of the Southeast and the Caribbean have been devastated by Irma. My wife and I honeymooned in Saint Martin, which is in complete chaos right now. I wrote an article a few weeks ago about how to help people in Texas. I also ran a book sale over Labor Day Weekend to raise money for Texas. I donated all the profits from my book sales that weekend to East Texas Food Bank. The profit was around $800, but I rounded up to $1,000. I had already donated to the Houston Food Bank before that sale. The dumpster company we used sent a loan of supplies to the Houston Food Bank as well, which Nikki on my team helped fill up. The sad thing was that when the company got to Houston, the food bank made them wait over 8 hours to drop off supplies, so they went to another town that seemed to need it more! That is why I wanted to donate a second time to the smaller towns who are not getting as much attention as Houston.
[0:00:13.9] MF: Welcome to the InvestFourMore Real Estate Podcast. My name is Mark Ferguson and I am your host. I am a house flipper. I flip 10 to 15 houses a year, I own 13 rental properties, with a goal to buy 100 by 2023. I’m also a real estate agent. I’ve been licensed since ’01, I run a team of nine and we sell close to 200 houses a year.
So on this show, we like to interview house flippers, landlords and the best real estate agents in the business. So stay tuned for some great shows, if you want more information on my rentals, on the numbers, how I buy properties, check out investfourmore.com.
[0:00:58.6] MF: Hey everyone, it’s Mark Ferguson with InvestFourMore and welcome to another episode on the InvestFourMore Real Estate Podcast. Today, I’ve got a great guest, Tyler Sheff who is an agent, investor, loves buy and hold, also invests in notes and he’s also a podcaster. He’s got a great podcast, The Cash Flow Guys.
Tyler’s going to come on, talk to us about what he’s doing, how he helps people invest in real estate in the Florida Market and we’ll learn how he got started as well. Tyler, thank you so much for being on the show, how are you?
[0:01:28.5] TS: Mark, I am tickled to be here, thank you so much for having me.
[0:01:32.5] MF: No, I appreciate you coming on and taking the time. Firstly, I always ask all my guest is to give us a little bit of background. How did you first get started in real estate, what drew you in to the business?
[0:01:43.3] TS: For me, the first go around was, I was in my early 20’s and it was that lure of easy riches so to speak, you know? I’m going to get rich overnight, I’m going to f lip houses, this will be great. Look mom, look at me! That was my initial throw at a real estate, quickly realized that doesn’t make sense.
[0:02:00.6] MF: How did that work out then? Did you actually flip any houses or is it just kind of a pipe dream?
[0:02:06.8] TS: Yeah, I would go ahead and say I flipped it too many houses to be honest with you. I was – I took flipping like a drug, I used to tell people that if it was in the city in Saint Petersburg Florida and it’s yellow with white trim, I’d probably owned it at one time or another.
We flipped a ton of properties back in the day and we made a lot of money and that was back before flipping was sexy so to speak. That was before home and garden television and all these other publicity things. But what I didn’t allow for Mark is the capital gains text.
[0:02:35.6] MF: Right, yup. I do a lot of flips myself and it’s definitely – can eat away at a lot of the profits. What did you – obviously you transitioned away from flipping. What kind of triggered that or how long did that take to get away from the flipping business?
[0:02:50.6] TS: Well, I got, I was greedy at the time, I was in my – when I was flipping, I was in my late 20’s and now I’m 46, so how long ago that was. I was making ridiculous money and I got greedy and I knew that the market was improving at the time, it was probably appreciating 25% per year if you did nothing. I would buy a property and fix it up and flip it but instead of flipping it right away, I would put a tenant in there and let them pay the rent.
They would cover my holding cost for 12 months and then I would flip the property, make 25% more upside. I really got used to making that extra money. I found that to be highly attractive doing that, going that route. That worked out quite well of course and right before the market crashed.
Surely based on greed, I am not smart enough to predict the market, fluctuation or market crash. I made the mistake of selling all the properties, I say mistake and I’ll explain it in a second.
I sold them all pre-crash, I made a killing. I’m selling them all no doubt, I made a lot of money but I thought that my charm was enough to pass the IRS and the IRS decided that my charm wasn’t enough and I had to pay taxes, capital gains on all of that property.
Since I didn’t disclose all the sales, I had to pay interest and penalties at the same time. Needless to say, that cost like that was a little damper on my finances so to speak.
[0:04:14.7] MF: Right, I can imagine that was a pretty big hit to take selling that many properties at once. But at the same time, if you would have kept them, what do you think would have happened after, with the way the market acted in Florida?
[0:04:26.1] TS: Frankly, I think I would have been fine because I was renting them conservatively. In other words, they were more than covering my cost, I was making a monthly cashflow. The value of the properties may have gone down but people still need a place to live and people are still willing to rent.
Had I kept them and just weathered the storm so to speak, I would have been fine because rent still didn’t really go down even during the crash. Rents actually went up a little bit. Had I not got in a – you know, I’ve got nice houses now, at the time I had nice houses, they’re freshly renovated. People wanted to live there, I would have been fine if I simply did nothing.
[0:04:56.1] MF: That’s an interesting concept because I know a lot of people are super scared right now about another crash and losing a ton of money and values going down. But Florida was one of the hardest hit places in the foreclosure crisis and to hear that you think you would have been okay, I think is a really good lesson about, well, if you buy the right rental properties with cashflow, you know, getting a good deal on them.
It’s not the end of the world if values go down, right?
[0:05:19.5] TS: Right, because here’s the thing Mark. Can you write a check with your – can you pay bills with your equity? Of course not, you have to leverage it. Yes, you lose the ability to leverage it in a down market or at least leverage some of it.
But first of all, when a shift happens, it doesn’t happen overnight, it’s not an overnight thing, it takes time. There’s lots of indicators like now for example.
There’s indicators saying that things may or may not shift. That said, you’ve got time to prepare and if you buy right, this is my philosophy. If you buy right from day one and you get good, quality financing, not some 18% hard money or something rather.
But a good, long term buy and hold style financing, you’ll be fine in a crash. Just don’t sell when it’s down. People do this in the stock market, it drives me crazy. It’s like, “I lost all my money in the stock market.” My first question is, “Why did you sell?”
The answer comes down to, “My broker told me to.”
[0:06:09.4] MF: Right. Yeah, you know, I started flipping houses in 2002, 2001. The market, I’m in Colorado, the market definitely had a down turn here but there’s so many people who are just fine because like you said, they had cashflow. Some of them had loans, some did not but if you had a loan and it wasn’t 120%, 100% leverage with like you said, high interest rates.
Those people made it through just fine if they’re smart about it. I think it’s kind of misconception that every investor went bankrupt during the crash and that it was this horrible scene for everybody. But no, it’s good to hear from someone who is in that area, this is one of the hardest hit.
It may not have been quite as bad as people make it out to be.
[0:06:50.8] TS: No, media sensationalize things and they get people hyped up and get people get excited and they make decisions that are not based on logic, they’re based on emotions. If you’re an investor and you’re making your decisions based on emotion. You really need to rethink your place in the investor space so to speak.
[0:07:11.1] MF: Yes, for sure. Moving on, during the crash, did you keep flipping, did you change strategy, what happened at that point?
[0:07:19.4] TS: I sold off all my property and I was out of property, I stopped flipping, mainly because I didn’t need to. I had plenty of money sitting in the bank and I did a lot of traveling. I would go down to the Florida Keys and hang out and just a ton of traveling. I had a lot of fun.
I was at that age where it made a lot of sense to me. I wasn’t necessarily saving money, I was spending money, hindsight’s 20/20. I started a business at the time doing some consulting work in the trucking industry and I did that for a while and I went to go work for the federal government.
Because basically, my wife said, I needed to go get a real job. Now, with that, here’s the best part Mark. That was all great, I got a job but I also got the payroll tax to go with it.
[0:08:02.8] MF: Right, what did you do for the federal government?
[0:08:06.0] TS: I worked as what they call a Chief Boss Mate on a government ship. It was a research ship for the National Oceanic Atmospheric Administration and we travelled around the world on these ships.
Basically doing oceanographic research. I was your typical extremely overpaid government employee. Making just under 200 grand a year at the time with overtime and benefits and all of that which created, which was great. I mean, don’t get me wrong, I love to travel and that’s outstanding but the taxes I was paying as a W2 employee were killing me.
That’s what led me back into real estate the second around. I call it my second act, my second time around.
[0:08:42.2] MF: How did that work out? How did that get you into the business again?
[0:08:46.4] TS: Well, for me, I was Google searching how to legally reduce my taxes because I tried it the other way and that didn’t work out so good for me. After I got a six figure tax lien against me that I had to pay off which was very difficult. I was successful to pay that off, I had decided that I wanted to do things the right way.
Every Google search I came up, came back with, all led to the same path, everybody, all the experts were saying, “If you really want to eliminate or reduce your tax bill, you’ve got to invest in real estate.” So that’s what I did.
This time, everybody kept, the Robert Kiyosaki’s of the world, were educating me and saying, “Listen guy, here’s the deal, don’t sell it this time, just hang on to it, right? Hold on to it for the long term and that in itself will greatly reduce your tax liability.” And it absolutely did.
[0:09:30.9] MF: What kind of properties did you start buying? Were they the same kind of houses you were flipping or was it more multi family. What properties did you hold?
[0:09:39.8] TS: For me, I came up as a single-family guy so initially that was my knee jerk reaction was to go with a single family option. But as I kept learning more and more about it, I learned that I could scale a lot faster if I focused on multi family. I hunkered down and at the time, I was working at customs, still working for the government back then. I was making so much money, one of my immediate tax strategies was to take some of my overtime pay as compulsory time.
In other words, paid time off. I had six months of paid time off saved up. My wife and I decided that if I could come home for six months and collect a paycheck and we had a good feeling that I could duplicate my income, not being on the ship, not working for the government that I would go ahead and pull the trigger and quit the government job and come back home and go into real estate full time.
That led to, for me, wholesaling. I got my real estate license renewed. I had letter expired, I renewed my real estate license, was doing a lot of whole selling, some listing and selling of other people’s properties.
But then I started buying multi family and how I did that, the short answer is, I learned how to raise private capital. Other words, how to leverage other people’s resources and make up for those that I didn’t have. I’m sorry, go ahead.
[0:10:54.6] MF: I was just going to say, kind of take it in tangent real quick, with your real estate license, there’s a lot of people who say it’s kind of a detriment to actually have it if you’re an investor. I have my license too and I think it’s an amazing benefit to have it as an investor but what is your thoughts on having your license as an investor?
[0:11:10.0] TS: I don’t think, let me say this, I don’t believe it’s necessary to have it but I believe it’s a huge benefit. Number one, referrals alone, I made almost $70,000 in referral fees in one year having a podcast.
People go around the country call me and say, “Do you know a realtor in Seattle?” I don’t but I’ll make some calls and find out and you know, Seattle property sells for hundreds of thousands of dollars of which I get a referral fee. There’s that benefit, the MLS access doesn’t really matter to me so much but I believe…
I don’t have anything to hide, I’m a very open book when I do business. For me, I don’t have any disclosure issues. I tell people joking in a serious way. “Hey guys, the state of Florida tells me that I have to disclose to you that I’m a realtor.” Some people may think that makes me smarter than you but we both know that’s not the case. Anyway, moving on. That’s the end of it and I think it’s a huge benefit.
[0:12:03.0] MF: Yeah, I feel the same way. I think – I don’t understand the disclosure issues for people because like you said, if you’re open, you’re telling the truth, there’s really no downfall to being an agent. Sometimes I think it gives you more credibility with some people too because you’re licensed with a state, they can look you up, they can see you’ve been in business.
Yeah, I completely agree with you on that side of it.
[0:12:23.0] TS: Well Mark, you and I have something to lose see? That’s the difference is that it doesn’t make us better people because we’re licensed by any means, that’s ridiculous but it does make it – we’re held to a higher standard and I think that people really don’t understand the disclosure requirements. You have to disclose that you’re a realtor, you really don’t have to go on beyond that. Now, can you take advantage of people? No, but here’s the news.
You can’t take advantage of people as a none realtor either. That’s called fraud.
[0:12:48.7] MF: Right. Yup, exactly. Alright, back to the other investing. You began buying multifamily, leveraging other people’s money, what kind of deals were you buying? Were they huge apartment buildings? Smaller ones, what did you like to purchase?
[0:13:02.6] TS: The first one I did was a four unit and I bought it with my VA mortgage benefits. Not only did I put it zero money down, I actually walked out of closing with a check for 1,700 because I got lender credits and I had a friend of mine who was licensed, he came and represented me, took the commission back into the deal.
I actually got paid to buy that for you in a building. Of course that comes with a residency requirement because it’s a VA mortgage. My wife and I moved in, we renovated the fall four units real nice and then converted two out of those four units to vacation rentals, which took our cashflow through the ceiling.
We really started making money when we did that. From there, we jumped up to the bigger buildings, 10 to 20unit buildings, that’s our sweet spot, that’s where we like to be. A two story garden style, brick concrete block, you know, anywhere form the 60’s through the 80’s. That’s generally what our criteria is focused on.
[0:13:55.8] MF: You mentioned you don’t use the MLS access that much, are these mostly off market deals? How do you find these properties?
[0:14:00.7] TS: Generally off market. I’ve done a very good job, I feel of educating people in the marketplace that if you have a problem with your property, multifamily, whatever. I can usually come up with some sort of a solution that will help you out in most cases.
If I can’t, there’s a pretty good chance I know somebody that can. That is my marketing, that’s a lot of my marketing I do a lot of teaching in the market I speak at real estate meetings and other events to teach people. I use education as a way to bring me leads, otherwise I’ll teach them for free.
I educate them on how to get a good deal which sometimes results in the people and the audience going, “I didn’t get a good deal when I bought this thing and my goodness, I’m bleeding money, maybe I should get rid of this thing.” And then they will come to me and say, “Tyler, how do I get rid of this?”
“Very simply, you sell it to me. Here’s how we can do that.” And then I give them options that suit their needs.
[0:14:53.1] MF: That’s great and yeah, with my ideals now, a lot of them are off market but we still do a lot of MLS but it’s more single family homes for the flips which is a little different than the big apartment buildings.
What do you think, what are the biggest benefits for you with going to the apartment buildings versus say single family rentals?
[0:15:12.2] TS: The ability to scale, number one. I’m in my – I’m over the hump, I’m 46 years old now so for me, to scale, I have to scale quicker than most people. I’m not 20 anymore so I have to build at a faster rate and the single family house perspective, one of the things I was doing was, number one, I’m competing with every investor in my market.
Because everybody else is single family. I’m competing with Joe Homeowner who is willing to outspend me all day long for a property so I found that the competition was fierce in single family. You know, I’ll be honest with you, I’m an only child, I don’t like to compete.
I would – I’d prefer that multifamily space, I very rarely have any competition, even on the MLS believe it or not.
[0:15:56.2] MF: Nice, I would not say the same thing here but there’s so much competition here and money, going into multifamily in Colorado that our cap rates are around five or 6% on multifamily properties. It’s tough to make money in rentals in Colorado as well because our values have gone up so high.
Now you’re an agent, you’re investing in yourself but you also help other invest in multifamily as well, right?
[0:16:21.8] TS: I do, what I found is that you know, I’ve got more to bring to the equation than just pulling something off the MLS and going, “Hey look at the pretty curtains.” Most investors that I’ve run across are newer investors, in other words, very rarely do I meet many really experienced investors who seems like, when it comes to the multifamily space, usually a guy goes and get a couple of buildings. They get confidence and then they scale pretty darn quick with multifamily.
Once they figure out especially that getting money, finding money for them is much easier, they’re just easier to buy them single family houses. Once that little secret gets out, these people scale pretty quickly.
What I found is that when I work with investors, I get them to the closing table but then what? They fail after the closing table. What I’ve done is started offering, I’ve done this about a year ago, two years ago. I said, I will help you buy the property and instead of me taking a fee, its’ closing.
I’m going to record a note against the property or I will take and equity position in the deal and I will stay in the deal as an adviser in the deal. I have repositioned apartment buildings. I understand what it takes, I have the team and the resources to get it done.
If you’re in a new area and different than mine, I can help you build that team and be your person of experience in the deal in exchange for an equity position in the deal and that’s worked out quite well.
[0:17:40.5] MF: You mentioned finding money is easier for the multifamily properties. How is that so? What kind of financing are people able to get?
[0:17:48.2] TS: Well, number one, you know, the value of multifamily is tied to the income it generates and that is what makes it very different from single family homes.
Single family homes, the value is tied to what someone’s willing to pay for it of course. But it’s also tied to comparable sales. In the multifamily space especially with larger assets. Nobody really cares what the guy down the street paid for his 10 unit building, it doesn’t matter. What does matter is, how much income does the property generate versus how much expenses does it incur. The ratio between those two things, like you said earlier, the cap rate is one metric but I’m more of a cash and cash return kind of guy.
So the net profit of building generates determine its marketability in the market place. That happens to be something that the owner has complete control over and when you have control over the profit of value of your property, well how could that go backwards? It’s only going to go up and this is what we are finding out in the market place is, it’s very difficult to lose money on apartment building unless you simply buy it wrong but outside of that, if you can do a lack cluster job of managing.
And an average job of managing it, it’s going to appreciate exponentially year by year by year even in a down market. The market can crash tomorrow and multifamily buyers and owners will make more money when it crashes.
[0:19:04.2] MF: And are you seeing banks coming into financing or is it private money? Where is the money coming from?
[0:19:09.8] TS: The banks love the financing. What’s funny about it Mark is it’s a competition between the banks and the private lenders and those with private money want to get their money moving. So you are dealing with people that the long term investors of multifamily are usually more savvy than your typical short term hard money lenders. They see the advantage of their money moving constantly earning. Through the hard money deal or the private lender, their money is only moving once in a deal.
And then it comes out of the deal and has to find another deal to get into. That end is very high risk so for us raising capital it makes it very easy because what we pitch is a very brief and practical means of investment. There’s no hype with what we do. The banks know this and the banks love to place their money in multifamily because it’s very low risk for them. Very, very low risk. The banks will stand in line to loan money on multifamily properties.
It’s like they actually fight over here the loan money jump, which when you have that type of environment that everybody wants to give you money, well that’s a beautiful thing.
[0:20:11.0] MF: So on a typical deal are you going in and getting bank financing right away or are you going in with private money trying to raise rents? Increase the value maybe refinance later? Or is it kind of a depending on the situation type of thing what you end up financing the deal with?
[0:20:29.4] TS: It’s very situational dependent and here’s why I say that. Now the banks, when I say the banks are standing in line the loan money, that’s pretty performing buildings. If you’ve got a non-performing asset that’s ugly, which is where I like to buy them then the banks generally are not excited about loaning money on those. Because the first thing they go and say is, “Well how are we going to get paid?” though in commercial real estate in a larger asset, the first thing the banks –
Anybody looks at is, “How are we going to get paid if we put money in this deal? Whereas how is our money going to come back to us.” When a building is vacant with tumble weeds rolling across it, the banks don’t like to speculate. They want more of a sure thing so the banks are not excited about those type of properties. Where private money on the other hand, they are less likely to turn their nose up at that because they can see the benefit of the returns, number one, and they trust a lot in the operator.
In other words, I have been doing this a while. I own several buildings in two states. So for me, I know what I am doing. I am what they would consider a low risk but if you are a brand new investor then, well yeah you will be high risk. But Mark, here’s the benefit of people’s messes. You can leverage the experience of your team. I did one of my first deals and I got the private money because I leveraged a really experienced property management company and the investor said:
“Hey if you are willing to sign the contract with this management company. I trust them. I know they know what they’re doing.” So basically what they’re saying is there’s very little for you to screw up Tyler because this management company is top notch. That’s exactly what I wound up doing on my first deal, my first larger deal.
[0:22:08.0] MF: No, it’s funny that you say that because I have interviewed a number of multifamily guys apartment complex owners and they all say the same thing. If you are brand new, if you’re trying to get into the business there’s a huge barrier to entry. You know the banks like you said want people who have experience and even some of the sellers or owners of this properties, may not take people serious if they have never bought multifamily before, which can make it tough.
And they’ve also said the same thing kind of, if you can partner with someone who’s been in the business in some way it makes it so much easier to buy your first property. It sounds like that’s exactly what you are saying too.
[0:22:42.9] TS: Absolutely and you know it’s funny, having my podcast has been a huge benefit because people, I go to a new area, I deal with someone I’ve never dealt with before, they always questions who we are. So the first thing they want to do is Google you. Well what better resume than a 100 episodes of a podcast where you’re teaching other people how to master the art of investing in multifamily for cash flow? Now they go, “Oh that’s a beautiful resume you’ve got.” That makes it very easy to qualify in that case so absolutely.
[0:23:15.8] MF: Very cool. Now as an agent are you still doing any kind of traditional real estate listing or helping buyers buy regular houses or just focused on the apartment building investing?
[0:23:27.9] TS: I do, my wife is a residential agent. Obviously she’s an investor because I am too but she does a lot of residential stuff. I like to do the high end. I will sell the high end flip properties. I’ve learned quite a bit of marketing and I feel like I am pretty talented when it comes to marketing. I like to get in front of the camera and act the fool and draw people to the properties. So I do, I’ve got a couple of listings right now actually in the three, four, $500,000 range. I do sell like that.
When there’s stuff I don’t necessarily like to work with “retail buyers,” unless they are a referral from a past client. I will work with them then but I don’t actively seek to buyers unless they are buy and hold investor buyers.
[0:24:06.6] MF: Good to know. A lot of our audience are agents or thinking about becoming agents. So I just like to get insight from those who are already agents about the business and what they’re doing now. Let’s say someone is an investor now, who made it flipping or have buy and hold properties, whatever it is and they’re thinking about going fulltime into real estate. Is becoming a real estate agent along with being an investor a good way to supplement your income to get into real estate fulltime?
[0:24:32.8] TS: It’s an absolutely great way to supplement your income and here’s the biggest benefit to people that’s often missed – is that it keeps you immersed in the business. In other words if you are out working at Starbucks or something while you are trying to be a real estate investor, you are focused on coffee eight hours a day, you are not focused on real estate. But if you’re a real estate agent, you are focused on real estate eight, 10, 12 hours a day.
You’re immersed in the industry and even if you’re selling single family houses, condos and mobile homes, whatever it may be, you’re still in the industry. Which means you’re spending time with lenders and buyers and sellers. I have met my capital investors Mark at bank and open houses. I went and sat with a bank in an open house walked out with seven figures in investment capital.
[0:25:11.9] MF: Yeah, I was just going to mention the network power being an agent is amazing too. I have other agents bring me deals like you said, the lenders you meet, title companies even insurance agents. I mean just the people in the business when they know you’re an investor can be such a great resource for building your business.
[0:25:30.0] TS: Absolutely and you know I think being investors it makes us better negotiators as agents. So for me, I automatically get higher commissions than most of the other agents in my market because to me those little numbers aren’t intimidating. Which means I have no problem saving seven, eight, nine, 10% or I need 35,000 to do to sell this property. That doesn’t sound like a lot of money to me because I’m used to playing with bigger deals because I am not concerned about it.
Other people around me are either people paying the bills are not concerned about either. So for me, that just makes it easier to get higher listing commissions. Which means I can pay the buyers agents more money which means my listings sell on average faster than anybody else in the market.
[0:26:10.7] MF: No that’s a really interesting strategy because as you know right now there is a huge push about lowering commissions and online companies charging less and agents getting paid too much. But you know when the market wasn’t quite as hot here, we were actually paying higher commissions to buyer agents as well to give our properties an edge. I think sometimes doing the opposite of what everyone else is doing can be a good thing. So that is good to hear that you’ve been doing that and it’s been successful.
[0:26:41.6] TS: Oh absolutely. I mean it doesn’t matter what industry you’re in if you paid people well, they will perform. That’s basic common sense and that’s exactly what we do. I’ve got listings right now where I will pay three and a half to 4% and I’ll give you a $3,000 bonus if you bring me an offer by the end of the month and guess what? People bring me offers by the end of the month.
[0:26:59.2] MF: That’s great and I have not seen the bonuses for a while. You know I was an REO broker. Actually I still am technically but there is no foreclosures in Colorado anymore and a lot of the banks would offer those bonuses to agents when the market was down. But that’s really disappeared since things have gotten better. So I am sure that sets you so far apart when you can offer a bonus on a property for other agents.
[0:27:21.3] TS: Well it absolutely does. It makes all the difference in the world and especially with condos. Another listing agent hate me at condos especially when there are several in the market. They’re like, “Oh geez, really? You’re going to pay four. We are offering two and a half or two.”
[0:27:34.1] MF: Yep, right. That’s great, that’s great information there. Tyler we’ve gone over quite a bit about your investing multifamily properties, your flipping, being an agent, what about your podcast? How did that get started and what are you mostly talking about there? How’s that going?
[0:27:49.7] TS: You know the podcast started because when I got back in the real estate investing Mark, I suddenly discovered that you can very easily spend a $150,000 learning how to buy a $50,000 house. I thought, “You know that really doesn’t make much sense and who would spend?” And the answer is a lot of people. Who would spend a $150,000 in “training” to learn how to buy a $50,000 house? Heck, I’m a realtor. I can show you how to buy a house and you don’t even have to pay me.
So the podcast became a way for me to teach other people to do what I’m doing and it was also a way for me to stay accountable. In other words, I can’t go on the show and say one thing and do another. So I teach people how to do it right, which keeps me in check because I am human and I am a lazy American like everybody else. I can fall off the wagon real quick and start doing things the wrong way, the lazy way, the easy way, therefore fail.
The podcast, that was the number one reason for me is to keep me accountable. Number two, to help people learn because I’m a big believer and it sounds cliché but this is a fact, if you give to the market place. I’ve proven this time and time again, if you give to the market place, the market place will give to you. There is no doubt in my mind about that and it has. The market has been very, very good to me. I believe that’s because I am a big believer in karma.
It’s good karma. I always take care of people, I look out for people, sometimes they don’t do the same for me but over and above, I have an abundance mentality and my show is about that. It’s not about getting you to the next guru course. The other advantage for me with my show was the fact that I needed to position myself to the market place as an expert. You know I could run an ad saying, “Hey I’m an expert” and they could either choose to believe it or not. But I am more of a “don’t tell me show me.” Does that make sense?
[0:29:30.7] MF: Yes, that’s been the same, a lot of the reasons I did my podcast as well just because my audience asked for one but no, it really does hold you accountable. The blog, I could write about all these things like you say but if I am not doing any of it, then people won’t pay attention to you. But if you are actually doing it and writing about it and showing people, it just gives you a lot more credibility. I am exactly the same way as far as your abundance mentality.
Spending time actually planning and working on yourself not just always being about business and making money, but making sure your own mental health is healthy as well. So yeah, I am a huge believer in all of that as well and I would say almost every successful person I interviewed is the same way too. It’s crazy how many people have that same attitude when they’re successful and you start to see patterns like, “Oh maybe there’s a connection between the two.”
[0:30:24.6] TS: There definitely is and I have seen the same thing, exact same thing.
[0:30:29.2] MF: Tyler that’s all I have from my side of it. Before we get out of here, if somebody wants to start investing, you said you work with a lot of beginners, maybe they’re in the market like Colorado or California where it’s so hard to buy cash flow in properties. What are some tips for them? How can they get started in another area where there might be cash flow in properties?
[0:30:49.5] TS: First thing is there is opportunity in every market. There is opportunity in LA and when people say there’s no deal, there are deals in Manhattan, in New York City. You have to spend time looking where other people are not. In other words, there are opportunities in front of everybody’s face right now as they listen to this show. They just have to yet to learn how to discover them. So take some time, find some people that are doing it, that are educating and the people that have actually done the work.
Listen very carefully to when they are selling you some sort of education, what do they have to show their track record? What proof do they have if they have actually done the work and they have done like yourself, you are an agent, you’ve done lots of deals, you’re a guy that you would want to learn, that I would want to learn from because you’ve done actually been on the field, rolled your sleeves up. You’ve do the work and that’s a huge difference between the marketing company that just pitches some course.
That they have changed the cover and it is the same tired information over and over again. So certainly educate in yourself and look in your own market. Try not to stray all over the country and get shiny objects. Focus on your market, you will discover opportunity.
[0:31:56.5] MF: Awesome, great advice. If people want to get a hold of you, what’s the best way they can reach out or listen to your podcast? How can they find you?
[0:32:04.0] TS: The best way to get me is through cashflowguys.com. That’s my main website, cashflowguys.com. There I’ve got my videos, I’ve got tutorial videos, it’s all free. I’ve got my podcast, it’s on there. You can listen to it there, you can listen to iTunes, Stitcher, you name it. I’m easy to find and the information most of what I put out there is for free. I do have some paid courses and whatnot but I have a lot of information for free. So get out there and consume some of that. That’s why I do it and I also got a YouTube channel.
[0:32:31.3] MF: Awesome and I guess one last thing before we go, what market in Florida are you focused on? Where are you buying most of your properties?
[0:32:37.8] TS: Most of focus is on Memphis, Tennessee and Tampa Bay, Florida. So I am in the Tampa area in Florida and of course Memphis, Tennessee. I’ve got properties in both areas, both markets.
[0:32:49.1] MF: Okay, that always helps. So cool, well Tyler thank you so much for being on the show. I appreciate you taking the time to do it. A lot of great information, love to hear the agent side from people who are investors as well and yeah, hopefully people can check out your podcast as well and see what you are doing over there and yeah, we’ll have to keep in touch and thank you again.
[0:33:12.1] TS: Thank you sir, have a great one.