Ep #250 – Tim Bratz – From Real Estate Agent to $85 Million Dollar Portfolio

Here is some of what you will learn:

The value of personal development as it applies to Real Estate Investing
The value of ‘A’ rated insurance
Strategies for finding off market deals
Marketing strategies
How to play on both sides of the coin
How to remain ‘Top of Mind’ with your real estate community
How to find interested investors
The secret of finding motivated sellers
Finding your “Why”
The value of mentors and masterminds
The value of long term vision
Discover the ultimate resource
Understanding Cap Rate & Stabilized value
Book recommendation The Slight Edge by Jeff Olson

To find out more about our guest, please visit click here 

Join us at a Multifamily Bootcamp, visit: MultifamilyBootcamp.com

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Full Transcript Below:

 

Tim Bratz – From Real Estate Agent to $85 Million Dollar Portfolio (Ep #250)

Rod: Welcome to another edition of “How to Build Lifetime Cash Flow through Real Estate Investing”. I’m Rod Khleif and I’m thrilled you’re here. I know you’re gonna enjoy the gentlemen we’re interviewing today. He’s a real powerhouse and I actually sought him out because I saw social media posts that he had posted where he had to raise four million dollars over a weekend and I was like okay I gotta get this guy on the show. His name’s Tim Bratz and you know I’m gonna leave it there. Tim welcome to show buddy.

Tim: Hey I appreciate having me Rod

Rod: I know that you’ve got you know over 1,300 units, 85 million dollar portfolio and you know you just you just took down that real big portfolio in the fire drill that that I described but let’s go back if you don’t mind and just talk about how you got started in this business and how you got to you know did success that you’re at today.

Tim: Now well again thank you for having me. I know you got some real studs on this show so triple honor to be here

Rod: Thank you

Tim: Yeah I mean I was going through real estate, or I was going through college when the market was going crazy last time 2003 to 2007 and people said hey if you want to make money get involved in real estate. So it’s kind of what motivated a 20 year old kid and decided to get involved in real estate. My brother lived out in New York City so after college I moved out there and became a commercial real estate agent. So I was brokering commercial leases, office leases, and some investment sales and you know I just remember walking around New York City like on a Tuesday morning one time and there were all these people in the park it wasn’t like Central Park it was one of these like side parks or some of these smaller parks in New York City and I realized there was something more to life than going to a day job all day. I was like, how are these people just sitting in a park and hanging out and you don’t play with their kids and throw frisbee to their dog and read a book and take a nap in the middle of the week? Why aren’t they had a job? went out of business? why aren’t they you know working somehow? So I knew there’s something out there and I got into like the whole personal development phase of reading Rich Dad Poor Dad and how to do friends and influence people and they can grow rich and all these personal finance books and got introduced to the idea of residual income and passive income and doing something one time and getting paid on it over and over and over again. And then I got to see that firsthand by brokering these commercial leases. So I remember the first deal that I did was about 400 square feet in Greenwich Village of Manhattan and it was uh like a

Rod: Your first acquisition?

Tim: This is now this is my first lease.

Rod: Got you. Did you do retail office? What was yours?

Tim: Yes it was mostly retail, retail space and you know it was like all the side street kind of stuff it wasn’t like anything on Madison Avenue or Broadway, but yeah I found this 400 square foot space. The owner want me to market it. I found an art store to come in there and for 400 square feet in Greenwich Village, they signed a lease for $10,000 a month with a 4% annual escalation on a 12 year term and um I did the math and I’m like this this guy’s gonna make this owners gonna make almost two million dollars for doing something one time and over the next 12 years or something like 2 million dollars off. I’m like, I’m on the wrong side of the coin I need to stop brokering real estate I need to start owning real estate. So you know just kind of on a whim it was a bad winter and I was like I’m gonna move down south so move down to Charleston, South Carolina, beautiful town. And decided I want to be a real estate investor. So I didn’t lose money.

Rod:  When was this buddy?

Tim: 2008-2009

Rod: Oh good timing okay

Tim: Right after the market tanked.

Rod: Right

Tim: And fortunately I didn’t do anything stupid before that and go get a bunch of you know stated income loans and,

Rod: Did you did you did you have a job or was it just totally real estate investing?

Tim: Yeah so I took like a part-time job for about five or six months just to pay the bills and get to lay the land when I went down there and then I quit that and decided hey I just, if I’m gonna invest in real estate I need to do this like on a full-time basis. So I just could I burn the ships and I just went through this analysis paralysis phase though that’ll probably before they pull the trigger on the first deal and you’re like I need to know everything before I do anything and after about three or four months I’m like I’m not gonna learn all this stuff you can’t learn to swim until you’re actually in the water. If you read about it in a book that’s cool but you can’t really actually do it until you’re actually in the water. So I decided to pull the trigger. I found the cheapest house on the MLS it was more, I didn’t have any money. I did like $8,000 um which is you know something I guess at a 23 year old kid and then I had a credit card that I just opened up it had like a three thousand dollar limit on it and I went to a seminar and they’re like you can call up a credit card company and ask him to increase your limit.

Rod: So you buy their program. I hate that.

Tim: You bought the program right?

Rod: Yeah yeah yeah

Tim: And I did that and then but I was able to well I didn’t do it then but I remembered it from going to the Sun

Rod: So you started a single family and this was this were a lot of people start

Tim: I bought a duplex yeah.

Rod: And you’re still in single family right? you’re still doing that?

Tim: Not anymore. So I did everything man. I did retail flips like the stuff you see on HGTV the high-end stuff the low-end stuff we did a lot of turnkey flips. So buying, stabilizing, putting a renter in place and then selling it as like a package deal yeah. So did a lot of that and then I’ve done hundreds of those transactions and then fell into an apartment building, bought in the 8 unit, and then bought another 8 unit and then

Rod: Where?

Tim: In Cleveland, Ohio.

Rod: Oh Cleveland okay.

Tim: — from originally

Rod: okay

Tim: And uh yeah love is a many-splendored thing, brought me back to Cleveland, Ohio

Rod: Oh God I’m sorry and I mean happy for you for the love part but no I’m kidding. I’m gonna get Cleveland hate-mail I’m just kidding yeah. Cleveland is an interesting market and I mean it’s got some really great areas and it’s got some really not so great areas but yeah that’s opportunity

Tim: Just like any other city

Rod: That’s an opportunity too because you know it’s likely that areas are gentrifying. So you started in single-family, you bought a couple of eight plexes and you did the turnkey thing which let me just say I think is great for the people that are flipping the properties but not always great for the people that buy them. That’s just my personal opinion because you know you’re at the mercy of the property management company and if that sucks the whole deal sucks.

Tim: I agree 100%

Rod: Okay but, so what was your first big deal?

Tim: Probably about a 30-unit apartment building

Rod: Wow

Tim: ‘Twas probably my first one that was probably over a million bucks and I bought it, was stabilizing it you know we would buy it we want to renovate all the vacant units you know so you want to get up to a hundred percent occupancy and we get that done and then while we’re doing that we notified all the existing tenants, hey listen you’re paying like $400 a month for an apartment that should be like six or seven hundred dollars a month and we were going around and there were a lot of people me as the new owner came in who people who hadn’t paid a rent a long time

Rod: New sheriff in town?

Tim: Who’s this asshole? you know sorry

Rod: All right that’s alright

Tim: So uh they weren’t too happy and one of the guys actually we had to call the cops on him seven times in 14 days and he ended up setting a fire in the building and the whole friggin building burnt down this is my crown jewel this is like my Santa Maria, the biggest building I ever bought

Rod: Ohh wow

Tim: And some tenant, two months into owning it, likes the whole thing on fire all that all the tenants are displaying

Rod: Anybody get hurt? oh my god I hope not

Tim: No no thank you thankfully it was during the day and my construction crew was there they were able to evacuate the entire building there but I mean there were moms home with babies, there were some animals home without you know

Rod: Wow that’s such a blessing. I’ve had lots of fires over my career and you know that’s Wow okay

Tim: Yes it was scary and really learned a lot about insurance and that whole process and abatement and everything else cuz this is a hundred year old building in Cleveland, Ohio.

Rod: Did you recover your money? Yeah yep so we recovered the money and ended up selling the building it was with a partnership we, it was a headache though like we have

Rod: It a lot of work

Tim: For insurance it was like a B-rated insurance company which is like on the brink of bankruptcy

Rod: Yeah guys don’t do that okay. That’s a clue okay and I want to say something else I don’t recommend that you jump into real estate the way that the way that Tim did either. I recommend that you have a job and you get you replaced your income before you do that. Now you know unless you’ve got this kind of energy. If you’ve got this kind of energy, and but it’s a little more scary to do it the way that Tim did it here but so

Tim: I was a 24 yr old kid. I didn’t have any children. I didn’t have a wife. I didn’t have any baby.

Rod: I see that’s different

Tim: Cool that I was able to do that and make that commitment but yeah definitely if you have responsibilities, try to do it more gradual

Rod: Face it yeah okay all right. So I know that you’re really good at finding off-market deals, direct to seller deals. Can you speak to some of the strategies that use for that because right now if I ask any investor out there what’s your biggest problem? It’s finding deals. So how about adding some value maybe I can black this out in Cleveland so you don’t have any competition, no I’m kidding

Tim: I’ll tell you what, I think deal is an opportunity, it’s like sunshine. you know I think there’s plenty of them to go around I think there’s plenty of opportunity for everybody to make a lot of money in real estate and so I’m totally cool sharing a lot of my ideas. Okay so as you know Rod, everything that’s on the market, well let’s back up. Residential has a different set of rules than commercial real estate. Residential, there’s all these protections in place cuz it could be a little old lady this is her only home and they don’t want somebody to take advantage of her. Commercial real estate, you’re assumed to be a more sophisticated investor and so it’s almost like the wild wild west there’s not the regulations and everything. So that goes into the brokers and I learned this when I started getting into commercial is that if you’re a residential broker you get a listing you have to put that on the MLS within a couple of days because you have a duty to the seller. In commercial, there’s no regulation like that. So what a lot of the commercial brokers do is they’ll get the listing, they know who the top twenty or thirty buyers are in town and they’ll go shop it so that way they can earn both sides of the commission. And so typically if you see what I found anyways if you see a deal that’s on the market that hits the MLS or hits loopnet, it’s because it’s a pretty crappy deals because the top 30 people already passed on it. So it’s hard to find opportunities that are on the market otherwise you can do a bidding war and you’re you know going toe to toe people who have a lot more money hedge funds and real estate trusts and family offices and it’s hard to beat them when they just need to park their money somewhere and get a four or five percent return. So I realized that I gotta go off market. And all I did is I took the same strategies I was using in residential and started applying them to the commercial realm. So we started doing them some Direct Mail. Looked up all the commercial properties we did Direct Mail and

Rod: What size range?

Tim: So I’ll give you one specific area where my office is, where I like to buy a lot of apartment buildings, its the city called Lakewood, Ohio. It’s kind of upward trending, cool town yeah. And you know it’s a city of about 30,000 homes and there’s only 1,500 apartment buildings there so if you were to put a mail a mailing campaign together on residential you just spent some coin dropping you know Direct Mail and postcards. There’s not as much that need to go out on the commercial side because there’s only 1,500 buildings. So what we did if we spent a little bit more money and got nicer type of Direct Mail because if you go to any sellers house right now they have a stack of postcards of all these investors trying to sell them or tell them that they’ll buy their home. So I realized we need to do something that gets a little bit more attention and so one of the things that we did is we got like these little envelopes they almost look like wedding invitations it’s like on this papyrus paper and it’s handwritten on the outside and then they open it up and they say hey listen we’re a local investor I got sitting on some cash was wondering if you’re looking to buy or sell or you know, maybe there’s some projects we can invest in with you and if you come from a money perspective a lot of people will call you back. And as you know if you’re a real estate investor especially in the commercial realm, you’re always either a buyer a seller or maybe a private lender because we don’t like to have our money just sitting in account not making anything so as soon as we sell a property we’re looking to buy something else or we’re looking to lend or joint venture with someone so I’ve had a lot of  positive luck and we found some a lot of awesome deals that way

Rod: One more time because you did that real quick. So the letter says hey I’m sitting on some money you know if you have any interest in buying as well you put that word in there buying or selling you know I’d love to talk to you a little more just a little more detail

Tim: Or joint venturing. Maybe there’s some ways we can make money together you know and so I just take it from an approach of like hey let’s be pals instead of being on the opposite side

Rod: Instead of trying to sell them on one or the other I love that very unique. That’s a great tip okay

Tim: Yeah so it’s um it’s a way that we can kind of be on the same side of the table instead across the table

Rod: Yeah you know I love that, so what else? what else do you do?

Tim: And then with the other thing that I did is we actually get a lot of deals this way is we took our existing buyers list and broker list and wholesaler list from the residential realm and we just started deploying emails to them on a weekly basis maybe twice a week saying, hey we got money we’re looking to buy some apartment buildings what I found is all these residential wholesalers and investors don’t know how to underwrite an apartment building. So typically they do get apartment leads but they just discard it because they don’t know what to do with it. So being top of mind all the time in letting them know, hey I got 300 grand I need to deploy I have just sold a building a two million that I need to roll into a 1031 exchange or whatever you can make up a story whether you have money or not have the money all you want is to stay top of mind so that people are thinking of you and I’ll give you an example Rod. I just bought a 48 unit apartment building and Sheffield Lake like a block away from overlooking Lake Erie, B+ kind of a neighborhood and rents were a little bit low. I bought this thing for 1.5 million I’ll put another four hundred to five hundred thousand into it so I’ll be all-in for two million bucks and the after repair or stabilized value of the property is expected to be right around 3.4 to 3.5 million dollars

Rod: That’s nice and you gave us that example why? how’d you find that?

Tim: From a wholesaler. A wholesaler who knew nothing about apartments she talked to some woman who bought a single-family home and she said, hey you know I’m not looking to sell this house but I got this apartment building that I just inherited or I don’t even remember what the full back back story it was but she just wanted to get rid of it and this wholesaler would have just thrown discarded this lead but because we were constantly hitting her with emails of like we’re buying apartment buildings, she thought of us first, sent it over to us, we were able to close on that deal and you know

Rod: You offer a finder’s fee? Do you do anything in your communication to juice things up a little bit?

Tim: Yeah so this is a wholesaler who literally didn’t have a cell phone cuz she couldn’t make cell phone payments

Rod: Wow

Tim: She’d have, shit like we bought her a burner phone yeah and at that time of closing we paid her a one-point referral fee. So we pay her $15,000 change their life

Rod: Yeah

Tim: a lot of it and everybody wins

Rod: That’s a great story that you can replicate in your communications moving forward as well. You definitely want to utilize that and enticing people to do business with you. Know I love that, that’s fantastic and so how do you make all these relationships? how do you get all these email addresses from these wholesalers and these I mean I know you were in the business but what would you tell somebody that’s just starting out?

Tim: Yeah if you’re just starting out I would jump, I mean social media’s powerful. That’s how we had Rod and there’s all sorts of social media groups and that promote part of our building investing commercial real estate investing even residential investing. Right now would just go in there and you’ll see if somebody posts a deal you’ll see 20, 30, 50, a hundred different email addresses and so all we did we started ripping those

Rod: I love it. Scrape the email addresses from people interested. Loved it

Tim: Yeah and even if there’s not a deal posted in one of those you could just make up a phantom deal and say hey listen or find like a real deal that you have post it in there and say hey I got this awesome deal who wants to buy an apartment building for $20,000 a unit in Jacksonville, Florida and you’re gonna get a huge response of it and just say hey private message me your email address and people and you could organically build an email list network

Rod: Love it. Now let me let me warn you guys that are listening that are in my multifamily group, we will block you if you do it in there you know I hate to say it but that group is at 18 almost 18,000 people because no promotions allowed of any kind even indirectly. So just as an aside but it’s a fantastic place to learn okay

Tim: Right

Rod: So go there it’s multifamilycommunity.com and you’ll be very glad you did and since I’m putting a plug in if you guys aren’t booked for Chicago, there are still seats left August 24th, 25th and 26th and if you have any interest either as an active investor or even a passive investor, go to that bootcamp you’ll be very glad you did and it’s you know you don’t even want to invest passively in any asset class or any investment vehicle if you don’t fully understand it. So be sure that you educate yourselves because I will tell you there are a lot of sponsors out there right now that have not gone through a crash or they’re caught up in irrational exuberance and they’re buying deals they shouldn’t be buying and if you’re invested in one of those deals you’re the one that’s gonna suffer if there’s a hiccup. So get educated and you can go to multifamilybootcamp.com and check that out and tickets are very very reasonable. So I hope I get to see you in in Chicago. Alright I’ll get off my promotional soapbox. So you’ve got 1,300 units now, where is the bulk or what markets do you invest in?

Tim: Yes so we own um several hundred units in Ohio and then we own a lot of stuff that’s in Georgia, South Carolina, we own some vacation rentals in Florida that’s another one asset class that I’m involved in. I don’t do anything single family other than vacation rentals. And then we have buying a building in Texas.

Rod: Okay, you know I pushed past the marketing is there any other marketing methodology that you would recommend to somebody that’s getting started that to try to find deals?

Tim: I think you know I mean I think those ways of going about it like a way that doesn’t cost you any money or a low-cost way it’s really just building the buyers list and then getting on an email blasts and just reaching out you know go to the Rios go to the Landlord Association meetings and do stuff that way. Here’s another cool tip technique

Rod: Okay

Tim: Who are the most motivated sellers in owning rental property? Typically they’re people who are going through the whole eviction process right like there’s a bunch of tenants who aren’t performing, they got a crappy management company, and so we found that you know just like you look for motivated sellers on the residential side we just applied that to the commercial side and so we went down to the eviction court and we just hung out outside we talked to evictions and real estate attorneys who were going through all the evictions and talking to management companies and talking to owners who were there and they’re like son of a gun you know I haven’t to rent in two months I’m paying hundreds of dollars to go through this eviction process they have another 30 days or 60 days in the property without me and collecting rent and I have to go invest another three four or five thousand dollars to turn the unit like that’s the most motivated a landlord can be. And so we went down there and started talking to people and met attorneys and they know that we’re buyers so you know you got to go through those steps

Rod: Have you got a deal that way?

Tim: Yeah yeah I got

Rod: Okay

Tim: It was a small one we actually ended up wholesaling it because it was smaller than what we wanted to hold but yeah

Rod: I teach this from stage. I teach this from stage, go to eviction court and here you go. Here’s your justification

Tim: Yeah

Rod: Fantastic brother that’s fantastic. So you know I know you’re like, like me you love mindset you know I spent 20 years following Tony Robbins around the planet and part of my podcast is motivational clips I do every week. So let’s talk about mindset for a minute. What drives you? What makes you jump out of bed in the morning and keep you going because you know you’re obviously very very successful and you’ve certainly tapped into that because you know in my opinion 80 to 90 percent of your success in anything is your mindset

Tim: Yeah I agree

Rod: So talk about that for a minute yeah I think I mean obviously a big motivator for me is to – is my family you know I have a three-year-old, a one-year-old and that’s a big motivator for me but you know a lot of people say that why is that what the reason they’re building this business is because it’s for their family. I mean I don’t, like the family, my son gives a crap about apartment buildings and who wants to do anything with it so I think it’s a little bit of a cop-out to say your families your why but my main motivator to go deeper than that I think is just to set a good example for my kids and to set a good example for others. I think when you have the kind of goes back to like that I think I saw this in a spider-man movie where it’s like when you have the ability

Rod: With great, with great Oh something comes responsibility

Tim: Yeah great ability comes responsibility or something like that and I’m a big believer in that I think if we have the opportunity to change somebody’s lives I think we have the responsibility mmm to do that

Rod: And you know what that’s obvious because you know what you said, when you said that wholesaler that you gave 15 grand you said it real quick and I’m not sure everybody listening heard it you said we changed her life and you absolutely did. So I love that that’s where your heart set my friend and that is uh you know absolutely a secret to success. Those of you listening, that is a secret to success. You know wanting to make the world a better place, wanting to help other people, I love it. Absolutely love it. So let me ask you this do you have a favorite failure that sets you up for future success? because everybody thinks it’s just a straight path and it’s so simple and you know and they see the success but they don’t realize the sacrifices and the discomfort and the pushing through fear and the setbacks that happen. So do you have a favorite failure?

Tim: I mean there’s been a lot of failures. There’s been a lot of learning curves and a lot of learning experiences. I remember one rental property I bought based on there’s a single-family I bought it based on what other houses were listed for not what other houses were sold selling for or based on like a financial analysis and I got wiped out on that one. One of the things I’m going through right now is realizing that, you know Rod, you and I have been through a lot of experiences and a lot of learning curves and you know for me, this is my what my ninth year investing in real estate now and now that I’m building a team you know I five people on my investment team. I own a management company was about fifteen people in it and I have a lot of joint venture partners and some of my out-of-state projects too that manage those projects and something that I’m going through right now is realizing that they didn’t go through those same learning curves you know it took me nine ten years in order to get the mindset and the knowledge that I have today and allowing my team to fail forward even though sometimes it cost me money or it cost me time, it’s gonna it’s gonna set me up more in the long run to do that and it’s um it could be it’s gonna be very very difficult to watch some but like this is common knowledge. Well it’s common knowledge for me because I’ve been doing it for 10 years you know it’s not common knowledge it for them because only been on board for two years

Rod: You know it’s funny that you say that because I just actually came unglued on a couple of my team members today and I love that. You just added value to me actually okay. In allowing them to fail forward I love that and you absolutely just added value to me today this is a very timely conversation and you know I call them seminars. They really are no failures. They’re all learning experiences. They’re failures if you don’t learn okay bottom line but you know let me ask you this, were there any AHA, well you told me about the AHA moment, it was it was when you saw the amount of money that guy was making. You know if you were to go back, how old are you now?

Tim: 33

Rod: 33, if you go back and tell 24-year old Tim, with what you know now what might you do differently?

Tim: I would find a mentor earlier and I would join a mastermind earlier. I think that opened me and sometimes you got to pay to play usually you have to pay to play.

Rod: I’m in three masterminds right now. I pay sixty five thousand a year. Two of them I’ve made three to four million dollars a piece from and I have my own mastermind as well

Tim: I’m a 100% agree with that

Rod: Yeah yeah

Tim: I spend the same amount of money and it has paid dividends. It is the best investment you can make not only from a personal development standpoint but from the connections and the resources and the reason it costs money is to keep low level thinkers out you know. It just it’s a certain bar where you’re only gonna be hanging out with people who think at a certain level and are going places and when you start hanging out with those kinds of crowds as we all know you are the average of the five people you hang out with not only financially but relationally you know

Rod: Health, everything

Tim: Right so hanging out with those groups and then meeting people who are like and I like real estate groups but I also like entrepreneurial groups because then you’re the edified credible individual in that other entrepreneur group and you’re like the only real estate person in there and so whenever somebody has a big windfall of cash, launches a product, sells their business, they think I’m gonna go and invest with Rod because he’s the stuff that I know in real estate and I feel trusting of him and

Rod: Yeah you’ve got a relationship. You’ve added value to each other. I will tell you, any time two like minds get together a third intangible mind gets created and masterminds are fantastic, mentors are critical. I’ve had mentors now you know Tony Robbins of course was a big mentor I’ve had, real estate mentors and that’s the way to do this business guys. So you know I don’t care if you use me or who but get help, get some help you know. I’ve got my free two hundred page book which is like a textbook for this business but get out there. There’s stuff on YouTube, there’s plenty of stuff to learn. Don’t dabble. Either in, this goes for active investing and passive investing. So don’t dabble, educate yourselves. Now let me ask you this, what do you think is the number one reason people fail in this business?

Tim: Long term vision or lack of long term vision. I think we live in a society of instant rice, instant pudding, instant success. And if you don’t get rich in the next 12 months then it’s not working you know and it’s and I liken it to exercising like you can do the work exercise you putting in reps every single day, sweating, bleeding, muscles hurt, you know and go every single day for 30 days to the gym and after 30 days you don’t look any different. Nobody can see any difference on the surface

Rod: Yeah there’s a book that I gift, book of this called “The Slight Edge”

Tim: Yeah exactly

Rod: Yeah it’s just those little improvements that you make yeah I give that to my coaching students.

Tim: It’s doing it day in and day out, it’s not till day 60 that you actually see some results, not till day 90 or day 120 that other people start saying, hey Rod, man you’re trimming up man you’re looking pretty good you know. So realizing that it’s working underneath the surface you just got to stay with it. I mean real estate, it is probably the most time-tested like solid ventricle possibly get into where you know it works. There’s so many people who have made tons of money millions and billions of dollars in real estate where this works, this vehicle is actually a tangible

Rod: It a solid vehicle. I get it just really is. If you just stick with the fundamentals

Tim: Yeah stay with it

Rod: And this is not a get-rich-quick thing. This has become very-wealthy-over-time thing and you’ve got to realize that if somebody says you can get rich quick, run the other direction. This is not that vehicle. So let me ask you this, can you share one quote or saying that you love it that you mentioned?

Tim: You mentioned Tony Robbins a lot and I think one of my abilities you know when I bought that house down in my first deal down in South Carolina. I didn’t have the resources, I didn’t have the time, I didn’t have the knowledge, or I have the time not the knowledge and the money but I was resourceful and I think resourcefulness is the ultimate resource. I learned that from Tony Robbins

Rod: Yeah that’s a Tony one for sure

Tim: And that’s my favorite quote of his you know

Rod: I’ve got a paperclip by my hand you know what can you do with a paperclip? How resourceful can you be? you know MacGyver something.

Tim: MacGyver figured it out right

Rod: That’s what you want to embody. So what do you think is the most challenging part of this real estate game in your opinion?

Tim: I think there’s a lot of mental roadblocks you know. What’s happening with the economy? Where’s the interest rates going? Like listen, if you just go out and do a deal and you buy the wholesale price, it doesn’t matter you know and there’s certain things that you can do to navigate around those types of roadblocks and the sun is falling and all that kind of stuff. Like I don’t I think a lot of people get deterred and they get caught up on the what-ifs instead of just going out and doing the activity and yeah I think it’s probably mental roadblocks. I think it’s probably the biggest thing in any industry not only real estate that’s why people don’t succeed or the toughest part

Rod: Sure. 80%-90% is mindset, really is. People think it’s the real estate knowledge but it’s not and that’s why in my events I spent a good amount of time on pushing through fear, on establishing your goals and your whys, on planning your week so that you’re consistent and effective and you’re able to execute because that truly is 80% to 90% of it. People actually you know sometimes complain because you know they want to get it you know but I get it’s like drinking through a firehose period but that’s the most important piece you got to actually take action otherwise it cut an analysis-paralysis or you know or the opposite you don’t really study it enough so that you’re out there making mistakes when you’re doing it as well. But so let me ask you this. I have a lot of listeners that maybe have a couple of houses maybe they’ve got their first duplex you know they know they want to go bigger, they know they want to you know they want to be you with 1,300 units and an 85 million dollar portfolio or maybe they haven’t even started yet. What advice would you give? just the entire group what advice would you give the group about this business?

Tim: If you go hang out with brokers and people who have already been in the commercial realm, it’s very intimidating the way that they talk and the words that they use and the verbage and it makes it so complicated and it makes it feel like it’s so far out of reach but it’s not. All it is it’s I mean I just took my residential real estate investing knowledge and I just made it a commercial real estate and so return on investment is a cap rate you know like after a par value is stabilized value like don’t let that stuff get in the way and mess with you mentally because it’s not as complicated as what other people make it may be seem to be I was with one of the top Marcus and Millichap brokers, actually had a mastermind this week out of Dallas-Fort Worth, Texas and he’s looking to get into investing himself and I told, he’s like man I just, Tim how do you do it? I’m like dude you are way smarter than I am, like I just simplify I do everything at a third-grade level and if I can’t do it at a third-grade level and I don’t do it at all and so I think one of my unique abilities may be simplifying complicated things and I said man you need to unlearn some of the stuff that they told you that you need to talk about and know because that’s not the stuff that actually makes you money in building wealth and building a portfolio of assets that’s gonna create cash flow over time. All you need to know is go and buy cash flowing assets. You need no marketing on how to find them, you need to know how to raise money, if you could do those two things on how to find deals and find money, you can build a massive portfolio

Rod: That’s it. Those are the two big ones right there and you’re right you can’t absolutely dumb it down and that’s my biggest struggle from stages, is to try to dumb it down as much as I can so it’s not overwhelming you know you need to immerse yourself in it. You’ve got to understand the nomenclature so that you’re not intimidated

Tim: Right

Rod: But the bottom line is how well does the asset, what’s the property’s ability to service the debt? Bottomline and can you improve that? and what’s the net income? and did your stress test it to make sure what happens if you have a 15% vacancy and you’ve got you know some empty units or the rents come down a little bit? will it survive? what’s your breakeven for the property? It’s really not rocket science it really isn’t. And then finding money is just building relationships. The bottom line is building relationships and establishing trust. You start by building rapport and then by finding commonality and then you establish trust and you know I trained my students to create a sample deal package like say, hey you know if I find it, the new ones that haven’t done a deal yet, if I find a deal that looks like this are you interested? and getting soft commitments and you know yeah it really is much easier than people think. Well listen brother, you’ve added a tremendous amount of value. This has been a blast. I love your energy and you know I appreciate you taking the time to be on the show my friend

Tim: It’s been an honor to be here. I really appreciate the invite

Rod: Absolutely my pleasure. I definitely want to stay in touch and if you’re ever down the Sarasota way please make sure that we connect and if I’m in Cleveland again I will absolutely do the same.

Tim: Sounds awesome man. Looking forward to it.

Rod: My pleasure

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Thank you for listening to the Lifetime Cash Flow Through Real Estate Investing Podcast.

If you’ve enjoyed the show, please take a minute to visit iTunes and leave your comments. For more resources or to connect with us further, please visit our website at rodkhleif.com. Tune in next week for our next show.

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