Bill Tierney How To Automate A Real Estate Empire

Foreign.

Hey, fastlaners, this is Ryan Daniel Moran. And just recently I set a new ambitious goal. As many of you know, my life goal is to own the Cleveland Indians. And as part of that goal, I set a benchmark for myself that in 10 years, I want to own a.

Thousand pieces of real estate.

Now, in order to do that, I'm going to need some automation in place. And that's why I called up my friend Bill. I had Bill on the show because Bill runs a management company that basically makes investing in real estate automated for people like me. Now, I brought Bill on because I want all of you who invest to see that automation is possible. There is the nightmare scenario where a tenant would call you in the middle of the night and tell you that their toilet is broken. For shame. What a terrible. That would just ruin anybody's life if that happened. So it seems. So it's marketed well. Bill runs a company that takes care of those, those little details and a lot of the other details as well, including some of the deal finding. So I have used Bill extensively as a resource and I give him money to take care of a lot of details for me. So I want you to see that these types of options are available to you and it makes investing possible. So enjoy. Today's call with Bill Tierney.

Welcome to Freedom Fast Lane, everybody. Today I'm joined by Bill Tierney. Bill, thanks for hanging out with us at Freedom Fast Lane.

Thanks for inviting me.

So obviously we have a personal relationship. You also happen to be the company I go to for real estate advice for, for fixing up properties, for managing properties. And the reason I want to have you on today is to talk about some of the opportunities that currently exist in the world of real estate. You know, I think that real estate has gotten kind of a bad name in the last, the last five years or so because people assume things aren't appreciating anymore because they're comparing it to the 20056 boom. So I'd like for you to kick things off by talking about some of the opportunities you see for investors and where you see the best opportunities right now for the person who is looking for passive cash flow.

It's good stuff. So right now, you know, if I was to focus in on.

The market or region, I would really be focusing in and on for real estate, single family residential properties. You know, we're seeing some really good properties right now. And you know, I have to kind of speak to my market and I'm sure every market's, you know, different across the country, but you know, for an example, where we have assets and when we're looking at assets, we're seeing properties right now that have, you know, 30, 40, 50, 60% below market value of where they were, you know, four or five, maybe even 10 years ago. So, you know, that's, that's kind of what, you know, what we're looking at. We're looking at single family residential properties. We're looking at homes that ideally are, you know, post World War II, single family residential and at least, you know, 30% below market value.

And I like to say that if I could, if I could have a time machine and go back to 1990 and buy real estate, I would do it. And all of a sudden, it's almost like we have that because prices have pretty much matched that.

So, Ryan, go ahead. Really do. I mean, we look at values every day of the properties that, that are, that we have under management. And just so that everyone knows that in any given point in time, we got about 100 assets under management. So we kind of at all different price points and we're looking at properties and when I tell you that the values that we're looking at them right now, they're every bit of, from 15 years ago, you know, some of them are, you know, 20 years ago, values of what you, what you can buy right now.

So, you know, if the, if the person, you know, if, if the investor who's out there has the funds, like, now's the time and, you know, we might be looking at this, that in two, three, four years ago, going, why didn't we buy real estate now? Because you can get it so cheap.

Do you see that as a possibility? Because there is, there are so many different opinions about real estate. And I've said because of the hot markets of 2005, 6 and 7, of people buying and flipping and then the big crash, there's this perception now that there's no more money to be made, at least in the appreciation side of things. I buy and hold for the cash flow. Do you see it as a realistic possibility that real estate prices could go up significantly in the next, you know, five, 10 years?

Yeah, I do. I do. And we're seeing it already. So we, we do a fair amount of corporate appraisals for corporate clients when they're looking at their assets on, you know, what are we, what are we doing with these properties? What are we going to do? Are we going to hold on to them? Are we going to, you know, are we renting them? Are we just going to, you know, liquidate them. So, and when we're looking at values, we've been doing this now for about 11 years. So just over the last like two, three years, we saw the market stabilize since, since the bubble burst. And now what we're starting to see is since the market stabilized, you've seen inventory go down. So as inventory is going down, the market stabilized. What you're going to see is it's slowly going to start becoming more and more of a seller's market. When it becomes a seller's market, the values go up. So if you're an investor, you can go out and purchase some of these post World War II properties, single family residential properties, they rent very well. And as these markets have stabilized and are stabilizing in time, you know, the, the really good quality homes aren't going to be available. So the sellers will be able to ask more for their properties. And I feel right now, from what we're looking at is we're starting to see that right now.

Now, for most people, when they think about rental markets and when they think about passive cash flow in real estate, they're often thinking about being a landlord, taking calls in the middle of the night, fixing toilets, fixing things up themselves. Now I know from personal experience, because I work with you, I, I've never touched a toilet. I've never, I don't know who rents my homes. So I want you to explain a little bit about how you automate the process. For people who know that there's an opportunity but yet don't want to be involved in the process. How do you solve that problem for them?

Yeah, yeah. So, you know, the very first thing, and we joke about this a lot.

It'S about kind of like letting go. You know, a lot of investors think they need to kind of, you know, they want this to be like their next career. They want to get involved and they want to do everything themselves. And I think that, you know, if you want to maybe become just a full time real estate investor, then I think maybe your passion or your part in that should maybe be going out and acquiring the properties, not trying to acquire and manage and repair and do all the other moving parts that are involved, involved here. I think you're, you're, you're, you're trying to bite off too much. So I think it starts with understanding your role. Your role as the investor is to go out and acquire the properties. At that point in time, you need to build your team. And then, you know, your team should, you know, you should, you know, my opinion Here your team should have, you know, you should have someone like, like, like yourself that would, you know, be on the hunt for the property, to be the bird dog, to be the one that's looking for the possibility of the property for. From there you're going to want a property manager. You're going to want a property manager that it's not just themselves but then operates as a team. And the reason behind that is we're all human and things happen, people get sick, someone dies, accidents, so on and so forth, all these bad things, or the person just wants to go on vacation. So you do need a team. So again, you want a property manager. The property manager from there.

Should be able to assist you. If you don't already have like a contracting crew, have a landscaping crew. If you're from the north like I am, you're going to need a snow plowing crew.

The property manager should be able to facilitate all of that. Then you're also going to want a real estate professional who can help you not only find those properties but also help you execute the purchase agreement, execute the selling agreement when it comes time to sell these properties. So you do need to put a team together, but it does start with understanding what your real role is in this process.

Now the old school way of investing was kind of to purchase a property, to get a renter in there that would just pay the mortgage and you would live off the, not live off of, but you'd wait for the appreciation to be your, your profit. I don't believe in that model. I believe that's speculating, that is not investing. So where do you see the profits being made in real estate? Is it in the rental side, is it in the appreciation side? And what do you think the mindset of the investor should be in order to enjoy long term profits from this time in our history, which is a great opportunity.

Sure.

So there's a couple different strategies there. But you know, if I had to, you know, draw, you know, a perfect example, what I would be looking at is a medium to long term strategy for my single family residential investment properties. And when I say medium to long term, I'm talking five to 10 years. And what I'm looking for is I'm not just looking for someone to cover. And you, Brian, you'd be surprised on how many times we're brought into a situation where the property owners only making like 50 bucks a month off a property because his mindset is, well, in five or 10 years, when I sell it, that's when I'll make my money. That's not, that's not good. That's what happens when the hot water tank breaks.

Where's the money coming from?

So the strategy needs to be, and we help our clients put an investment analysis kind of together on does this property make sense where you're taking into consideration of taxes, maintenance, property management, and you're looking for what's known as a cap rate, which will help determine what type of rates or returns you're looking at. Almost like any investment would have sort of rate of return. Real estate uses cap rates. So you're looking at your returns there. And then in five to 10 years, I want to kind of know what my exit strategy is. Not saying that I have to sell the property to realize gains, but what does five or 10 years look like? Does it look like maybe in five years I'm selling this property or in 10 years I'm selling this property? Or am I going to continue to hold on to this because it's a cash cow, it generates really good, you know, monthly revenue and it's in a, you know, it's in a good neighborhood. I've got good tenants. And that's kind of part of that whole, you know, perfect, perfect example that we would like to kind of draw out for people to show them this is what this really looks like when it's done properly.

I guess what I'm asking is, is it reasonable to expect cash cow.

Real.

Estate properties now for the, for the average person and where, and where does that come from and what should they be looking for in order to have that scenario become a reality?

Yeah, yeah. So, you know, again, every market's a little bit different. Okay. Where I'm at, rental rates are very strong right now. And you're going to see properties where, you know.

That rent, you know, I'm going to use like a three bedroom, you know, one bath, you know, thousand square foot, post World War II construction home, you know, should be renting right around $1,000 a month. In my market. That property you can buy today, you know, anywhere between, you know, 35 to about, you know, 60 or 70,000, depending on the neighborhood. And so they are out there.

And.

I hope I answered your question there, we could go a little bit deeper into I guess, what the passive income looks like. But they're there. You just gotta, you can't be purchasing a $300,000 property and only getting 1200 or $1400 a month in rent. You're not gonna be able to cover all your expenses.

I'm Based in Austin, Texas. And when I talk about the numbers that I get from. From investing up north, where I'm from, people look at me like I've got seven heads. Where, you know, in. In Austin, the market's different from the sense of things are appreciating, crazy. Something that was worth $50,000 is worth 10 years ago is $500,000 today. But what. So that's what they're comparing it to. What they don't realize is that if you go 20 miles north to Round Rock, the scenario that you just painted out is possible where you can get the.

House that is a thousand square feet, three bedrooms for under a hundred thousand, and will rent very strongly and produce several hundred dollars a month in cash flow, while also being near a strongly appreciating market. It's just stepping outside of what you see as directly around you and looking for the opportunity that matches the numbers.

Yeah, yeah. You know, and then we can get into the whole psychology or the whole, you know, mindset of, you know, hey, we're looking for renters. Where. Where are renters located? You know, what's a good market? What's a good area? You know, is this area going to be changing, you know, you know, is this going to be a good rental area? There's a lot of different, you know, analysis that can kind of go into what this looks like. And.

Again, you kind of, you know, hit the nail, Ray, in the head by saying, you know, you just go outside a little bit over here or expand your search criteria and kind of really kind of look at this. They're out there. I mean, we look at properties every day. And here you're right. You and I are, you know, hundreds and thousands of miles apart from each other, and we're both talking about investment properties that are available, like in our own backyard.

We're hundreds of thousands of miles apart. One of us lives on the moon, in case you. And moon real estate is absolutely booming right now.

It's a good catch.

So. So let's talk about this from the perspective of somebody who's been sitting on the sidelines for a while, and they don't quite trust real estate markets because they saw the bust that happened a few years ago. What type. If they come to you and they're like, look, I've got cash. I don't know what to do with it. I don't know where to be, where to be putting it. Can you help me? What process do you take that person through?

Through?

Yeah.

So person's got cash, they want to put it into a property. You know, the very first thing we're having the conversation with them is, you know, what type of returns are you looking for? How long can we tie up your money? And is this something that you're going to be actively involved in, or is this something you're going to be passively involved in? Is this something that you just want to write a check and know that, you know, at the end of the month everything's taken care of? All right, so we do kind of ask some questions and then we kind of, you know, we get to know that person, we get to know their story, we get to understand, you know, what is it that you're looking for. And then we kind of help build, you know, you know, build that ideal portfolio for them. And, you know, we can get into the conversations. Do you want single family properties? Do you want doubles? Do you want quads? Do you want small apartment buildings? You know, the possibilities are guess, endless when it comes to real estate. And that's kind of the attraction is, you know, there's all different sorts of real estate that you can be investing in. And.

I love to kind of sit down with a brand new investor, especially some of the younger ones that are just really starting to get into this because, you know, that, that was me. I was, I was the young guy who got started when I was 20 years old and trying to figure this whole thing out. And.

There are people out there that are willing to help you. You do have to kind of, you know, try to find those people or try to find the experts, but they're there. And when you find a good one, don't let go of them.

So what I would really like to emphasize is that I've experienced a certain type of freedom finding the right manager, you specifically. And that is that I've always had this mental block around my investment income being truly passive.

Okay.

Meaning that I never really understood that I could enter into a transaction and my cash flow be automated for me from the perspective of I don't have to worry about fixing it up, I don't have to worry about managing it. People calling me and I want you to touch on that a little bit and alleviate any concerns that somebody might have about the fact that if they get into a deal, they're going to be stuck doing things that they don't.

Want to be doing.

Is it possible for an investor to enjoy truly passive income when they have the right partner?

Absolutely. And I think you just, you just said it right there. It's having the right Partner. And so let's start, let's start there with the conversation. So what does the right partner look like? And you know, what, you know, you know, Ryan's looking for, and I'm using you obviously is looking for someone that he can partner up with, that can manage his assets for him or manage this portfolio for him. So what is he looking for or what are you looking for? You're looking for one, you're looking for a team, a team that specializes obviously in real estate. And you'll be surprised on how many people tell me they're in the property management business and they're not licensed by the state that they're in. So number one, they're not in the business. So you need to really know that, you know, the people that you're trying to attract or the team members you're trying to attract, that, you know, there are, you know, standard, like industry standards that these people need to belong to, that they, that they, that they're actively in the business, that they're trying to promote. So, you know, again, you know, for us, you know, been in the business for 11 years. So when you're talking to, when you're a new investor and you're trying to source your partners, is this a new guy you're looking for? Is this a guy that's seasoned now? I'm not saying you need to find someone that's been in the business for 25 years. You could find someone that's only been in the business for a year or two and is fully committed to you. I just want to make sure that if you're partnering, if you're going to partner up with like a local real estate property management or real estate professional that they have not only, you know, some experience, but they maybe have a team that they belong to. Now, for myself, I have a team. I have five people behind me that were all cross trained. So if something happens to me, I go on vacation or something happens to one of my partners, the next person can step right up to fill that void.

From there, you're talking about experience with property management. Ask your real estate professional or ask your property manager that you're potentially going to hire. How many assets do they have under management? If the person tells you one or five, you might want to look somewhere else. If the person's telling you 50 or 100, that person probably understands what it takes to scale or takes to create a system so that the investors or your corporate clients can be removed from the process and be fully comfortable that their assets are being Properly taken care of.

One thing that I thought was really cool about Smart, our first interactions was I think we were driving in a car and I said, I have a rule that I have to get 1% cash flow a month on my money. So if I'm, if I'm 50,000 into something, it's gotta give me 500amonth. And you're like, okay, cool, like we could do that. We could customize that plan for just about anybody. Yeah, but you also have brought up since then some other things that have even greater potential for cash flow, specifically vacation rentals and some other kind of out of the box ways of doing things. Could you comment on some of those unique strategies that some people might not be aware of?

Yeah. So you know what I, and I, I kind of joke around with some of our investors and you know, some of, you know, my circle of influence that I believe we've kind of found the holy grail in real estate and no one's really promoting it. Everybody's talking about buying house, fixing up and flipping and that's what you'll see on TV and that's what you're hearing. But no one's really talking about the vacation rental properties right now, and they really should be. And.

It'S kind of like everything fell into place and what you got out of it was vacation rental properties. And here's why.

I'm going to share my personal experience and kind of maybe, you know, paint this picture of why this is like the perfect opportunities right now is here's, here's what we found out is four, what was it about seven years ago there was a real estate bubble. What we found is most people were buying homes based on both people, both people's incomes. And then what we also found out was a lot of these higher end homes were purchased with dual incomes and people lost their salaries, people lost their bonuses. And these larger homes took drastic price changes or price drops and they were seeing 50, 60, 70%. Because the average, you know, when you're talking where I'm at, the average sales price is 125,000. So when you have a 300,000, 400 or 500,000, the buying pool is a lot smaller. So the banks, the HUDs, the Fannie Mae's, the Freddie Mac's, they were giving these houses away. So what do you do with them? Well, if you're in a vacation destination such as Florida or Arizona or California, you got these house that were being deeply discounted, but you couldn't sell them. So let's go Rent them. And here's what's really interesting. When you're renting these properties, and this is what we found, you're not renting them for the long term. You're renting them either by the week or by the month. And what we liked about that, and we didn't know at the time, what we liked about it, is it kept, it kept. For the property manager, it kept my headaches down. The people weren't in the property long enough to destroy it. They weren't in there long enough for the hot water tank to break or the roof to leak or so on and so forth. So we were able to get the tenants in, get them out, and then get our field service team back into the property to address any issues before they became, you know, thousands of dollar issues. They were nipped in the butt right away.

And don't you have a higher quality tenant when you're doing.

Absolutely, absolutely. So, you know, a lot of our vacation rental properties rent for about $10,000 a month. So when you're talking about someone that's renting for $10,000 a month.

The clientele generally doesn't require as much hand holding. And they're usually easier to deal with because they're not going to ask you 100 different questions. Their questions are, is it okay for me to come in at this day, Is it okay for me to do this? And where do I send the check? It's not complicated. They're not, well, I've got all this, this, this, and I got this headache and that headache.

I move some money around.

Yeah, it's, where do I send the check? You know, and it's like, well, we haven't even talked about the agreement yet. But, you know, when you're dealing with a higher clientele, they've got other things on their mind and other priorities. And again, they're just, they're on to the next. Let me just get this done. And that's their mentality. It's, it's, let's, let's get this wrapped up. And I don't need to hit you with a thousand different questions.

Okay? So you just kind of blew my, a lot of people's minds with some numbers. You said that a vacation rental can rent for as much as $10,000 more.

Even more, depending on the area.

Absolutely. So that sounds great, but the immediate, the immediate thing that comes back to me is, okay, who, who the, who the hell can afford a house that is going to rent for $10,000 a month? So I want to turn it back to you and ask, is it feasible for the average investor to be able to invest in what you think is the holy grail of real estate, vacation rentals? Are there opportunities for the average investor?

Yeah, they're out there. They are out there. So it's going to take a little bit more legwork. You're going to have to research a little bit more properties and you're going to probably have to be a little bit more patient, because the properties that the average investor can purchase, they're going to get picked up pretty quickly or they're going to be in multiple offers. But if you know where to look for them and you can be patient and you can really kind of remove your emotions from this, they're out there. We do come across them.

If we had the time, I could tell you examples of people that were purchasing properties for 80% below market value.

And renting them for $7,500 a month, and already they've already appreciated 100,000 plus since they purchased them. So they're out there. But you got to kind of, you know, you got to kind of, you know, you know, look at this property, look at that property. You got to be a little bit more patient because you're not looking for a home, that you're not looking for a traditional rental property where, you know, I can go into this neighborhood and find you 10 or 20 of them. There's probably maybe one or two that kind of fits. What we would is a perfect vacation rental property based on the location of where that property is.

Now, let me ask you this. I know what to expect when I'm going into a market where I want to buy a house for $50,000, put 10 into it, it'll rent for $1,000 a month. I know exactly what to look for in that market. And it's usually numbers driven. With a vacation rental, I couldn't tell you the first thing about what I'd be looking for and what would make a great profitable property. So my first question is, what should someone be looking for when they're buying this as an investment? And second, what kind of returns could they feasibly expect in a good market if it was purchased? Right?

Yeah. So, you know, this is going to kind of depend on where that property is located. You know, again, different markets are going to pull different dollars. But you know, the very first thing I'm going to go out and do is if I'm going into an area, and here's a great example, if I'm going into an area I know nothing about as far as vacation rentals. Like I don't know any. I don't know what the properties are worth, I don't know what they rent for. I'm just a real estate professional, has some experience looking at these. What am I going to do? The very first thing is I'm going to source is what are these properties rent for either by week or by month. In an ideal world I want to rent them by the month just to kind of keep that revolving door down a little bit. Some areas rent really good, especially when you're talking like the Arizona market, rent really good weekly, but maybe don't pull in the monthly weekly. Obviously you're sending in the maid service a little bit more often. So I'm looking at different markets. Again, I'm looking for cash flow. How do I source that cash flow? Well, I'm going to go online, I'm going to go get behind several of the real popular websites are out there and I'm going to go see what's for rent and then from there I'm going to go to some of the vacation rental websites that are out there and I'm going to look to see what they rent and then I'm going to kind of take a look into, you know, some of the real estate market. What can I find out about this real estate market?

What do I know?

Well, you know, like a lot of different areas, a lot of vacation destination places were hit with, with foreclosures. So they're known as like a quiet reo neighborhood because you know, these are $500,000 or million dollar houses that you know, all of a sudden became abandoned because the, the person that owned them, it was either their primary residence or their, or their second home. So it's about, you know, what can.

I find out what that property rents for? And it starts with doing your research and then as far as the returns go. Well, I want to be, I want to, you know that, you know, people are always going to go to, you know, like a great example is saying.

To actually look at the online websites as your guide. Look at what's absolutely already renting, what is absolutely popular and those can be your, your first guide into markets that could be profitable.

Yeah, those are your clue indicators. Right. I mean, so you can't just walk right into, you don't want to just be that guy that just walks right into a real estate office and say hey, you know, I've got you know, money in the bank when I buy this property. Right now you do need to kind of do a little bit of homework because you don't want to be, you know, you don't want to be suckered. You don't want to be, you know.

That guy that bought the houses on the side of a cliff. You know, you do want to have some, you know, general knowledge so that when you're talking with the professional, you can kind of, you know, they'll know that, you know, you understand what you're getting involved into and they'll take you a little bit more serious too. So you're going to do some of your own research.

So you keep saying, you keep using this phrase. Every market's different. Every market is different.

Absolutely.

Would you give us some concrete examples from the markets that you are in from? Just tell us. I want to get what's actually possible out of you. So talk us through some examples from some market that you're actively involved in.

Okay. So a good example is we represented a client and he was an investor and he was looking for. He had heard that we were doing this vacation rental business and he was interested in. And he knew the market had crashed. And he felt that since the market crashed, he had some money laying around and where can I put some money aside? I'm getting ready to retire. For him at that time it was less than five years. Where can I put some money? So then five years, you know, I'm here. He wanted to have a little bit better portfolio. So we sat down, we looked at a couple different markets. We decided on southwest Florida. So for him, he ended up purchasing a property in the Naples market area, which is right below Tampa and basically across from Miami, about an hour and a half car ride opposite coast. He decided on a property in Naples. It was a property that was at the time, I believe it was about 6 years old. And there's like a clue right there, an indicator of already, like this is a check mark, like when you're looking for vacation rental properties. So he found a property that needed very little work because it wasn't that old. And the person who had purchased the property was right around, it was just under a million dollars.

It was a million dollar property that he got for about 350,000. Wow. And the property was on the market for about a month. And this property, it's a three bedroom ranch. It's got two full bathrooms, two car attached garage, single family. It's got a pool, it's got the lanai, and he's got a boat lift in the backyard or in the back because he's got canal access that opens up into the Imperial river that empties into the Gulf. So when I'm showing him this property and again this, this gentleman was not local to me. This gentleman lived in Virginia, so he was a couple states away. So I'm showing him this information online via email. And I'm showing him, here's what I think it's worth, here's what it's sold for, here's what these people built this property for. Here's the assessed tax value on it. Here's what they're asking for, here's what I know I can rent it for. Here's what I think we can rent it. Like, here's like, here's where, here's like the bottom line rental market. And here's where I want to get it to. Okay, here's at, you know, 40% occupancy, here's at 60% occupancy. And here's where, you know, where you know that, that key like area that I want to be is right around that 70 to 75% occupancy rate. Here's where I want to be. Here's, you know, and here's this formula and I kind of laid it all down or laid it all out for them. And the real kind of, you know, the real kind of, the really nice thing about this property or the thing that really kind of that made this a no brainer is a property came fully furnished. So it was turnkey the day we closed on that property. I was able to put a rental agreement together and a property management agreement together and start renting out that property from day one.

And what does a property like that, what did it bring in as far as that? Month to month vacation rental cash flow.

Sure.

So there's, you know, looking at that property going in, we didn't know 100%. We're like, no, we understand our market, you know, but you know, is this property and you do need some historical data to go off of per property to see am I too high, am I too low, where do I need to be? So we went in with that property at $7,500 a month to rent.

Holy Moses.

And what happened?

It rents. It rents. So it rents. So here's what's, here's what's, here's what's really, really, I mean like when you're from an area that I'm from where right now I believe it's 5 degrees outside and there's about a foot of snow. Here's what's really nice about Florida. It's always in demand at this time of year. So it is really easy for me to get 40 or 50% occupancy because six months out of the year, it's cold up here.

So I just ran some quick numbers, go for it. And what I calculated was at $7,500 a month times six, we're looking at about a 13% return on our, on our, on a $350,000 purchase, which is what I think you said the purchase price was. So basically from day one, listing it for $7,500 a month with a higher quality tenant. And my guess is it didn't need fix up work either.

Didn't need a thing.

Didn't need a thing.

And it was funny the day we closed. And here, keep in mind, this guy didn't even come see this property until we were under contract. So this was all done online photos, sending field inspectors to the property, doing inspections. This guy trusted us. He knew what our portfolio was. He knew that. He, okay, these guys check out. They passed the eye test and they've got all the kind of, the credentials. And that's kind of what's important when you're building your team. So this guy, when he came, I visited the property. I hopped on a plane, went down and visited the property. And I told the guy, I said, listen, and I'm being dead serious. All you need to do is bring a toothbrush.

Perfect.

It came with the tv, it came with the dishes, it came with the couches, it came with the outdoor grill.

Ryan, he only needed a toothbrush.

And you're looking at, in Florida, that's that six month span when it, when it's cold up north is going to be easy. Is it going to be easy to rent? So I just, I just rant numbers for if it was rented half the time. I'm guessing that you're ideally looking for properties they're going to rent for more than half the time. But even, even at half the time, it's, it's cash flowing at 13% if it was full time, which probably doesn't happen very often. But no, if it's, if it's, you know, 70% of the time, you're looking at 16, 70% return on your total purchase price, which is kind of absurd.

Bill.

So I told you it was the holy grail. And I'm shocked that no one's talking about it right now. And there are, you know, there is a group of people that are talking about it. There are some different events that you can go to. There are some pretty popular websites that are, that they're out there. You just need to go look for them. But.

It'S funny, Ryan. You and I share a mutual friend who I didn't know this and maybe you did, and I was doing this on a different coast. And then I find out that the mutual friend that we have is doing the same thing on the other side of the country and he's experiencing better results.

I don't know if he shared with you, but his occupancy blows mine out of the water.

Well, the only thing that he does differently than your approach is your approach. As far as I'm aware, you're completely hands off. Perspective of the investor comes to you, they tell you what they're looking for. You are managing the entire process. He's doing it all himself.

Correct.

Which means it's possible he and his, he and his wife partner up and do it together. His wife kind of does the online part of things. He does the finding the opportunity.

Yep.

But you do it all from the management perspective of your handling it. This is passive hands off. 13 to 18% hands off. Cash flow is nothing to sneeze at. It's very, very healthy. So let's take this from the perspective of somebody's listening. They have cash that they want to invest. What is the, what are the first few things that they should be doing or thinking about to take advantage of some of the opportunities that are either in the single family long term investment side of things or in the vacation rental side of things. What are the first things that they should be doing?

Yeah, so let me kind of go back and add on to the vacation rental because I think that will kind of help answer the one question you just asked me. When we're sourcing vacation rental properties for our investors, one of the questions we're asking them is what areas do you like? Because the bonus behind the vacation rental properties for this gentleman is in five years when he retires, he's going to go take advantage of this property. And I already know he's called me a couple times and said, hey, Bill, don't book the property for the month of April. How come? I'm coming down with my grandkids, I'm coming down with my wife. This person gets to take advantage of these properties as well. That's why this kind of works out. Because it's like, like he bought a property in the area that in five years he could see himself retiring.

And has the ability of, you know, if he wants to take his grandkids. You know, this property has water, has a canal in the backyard. He wants to take his buddies and go, you know, some business partners and go fishing for a couple days. So there's a lot of other advantages than just the monthly cash flow that comes into owning one of these properties.

And those are all business expenses.

Absolutely.

You can actually write off your vacations.

Yeah. Yeah. So like I said, I'm shocked that more people aren't talking about it, but I think the words out. I was actually at a trade event not too long ago, and it was completely sold out. And the only subject that they were discussing was vacation rentals.

Wow.

Yeah. So I think the word starting to get out, especially since these properties, you know, this guy, you know, purchased this property for 350. Had it been a million dollars. It wasn't available for him. He didn't have those type of funds. Okay. So. But because the bubble popped and because this person who owned the property kind of had to make some decisions, and it wasn't their primary property either. It was their secondary home. They couldn't afford both properties. So they would rather deeply discount this one and get it off the books than to lose their primary property. So that's kind of why you kind of need to do a little research to kind of find out what markets have seen this. And for the most part.

A lot of the country has seen real estate prices drop. I don't know any real regions that haven't seen some sort of decrease?

Of course not.

I'm sure I could probably find one. There's always that exception. But for the most part, these properties are out there in those areas now.

Bill, let me ask you this.

Yeah.

How much cash should someone expect to have to start getting active as a real estate investor? Because a lot of people leverage. They go to a bank. Some people get private funding. We just had somebody on the podcast, Josh Cantwell, who, even though he's a multimillionaire, has funds all his deals from private sources. Any of his cash? Some people.

Why tie it up?

Some people like to use their own cash. I use my own cash when I'm investing, you guys. So how much should someone expect to have before they start investing in real estate?

Yeah, you know, so, you know, it's funny, and times are always changing, I can tell you that. You know, I bought my first property. I was 20 years old. I bought it with no money out of pocket. I was able to do one of those crazy loans where it was. It was known as a nina loan. Where there's no income, no assets, all you needed to have was a pretty good credit score and a job, and they gave you a loan. Today, things have kind of changed a little bit. But if you know where to look and you're educated and you educate yourself about what's going on, you can get loans from either traditional banks or you just kind of set up from some private lending. I know a lot of investors who own 50, 60 properties. They're no longer in the business of buying properties anymore. They're now in the business of lending money to other investors. And it's funny you would think these guys are like, well, you know, you're my competition. Well, no, no, no, that's not. That's not the case anymore. These guys are more or are now to the point of their business where they're really excited about helping the next generation or the next guy get to where they're at. So they'll say, hey, I'd rather, you know, instead of me buying the properties and I could buy this, you know, the whole neighborhood, I'd rather lend the money and help this guy and teach this guy. Here's what I did, here's. And because a lot of people like to kind of be the teacher, they like to kind of give back and say, hey, if I did it. And I was just, you know, you know, barely, you know, out of high school type of guy, and at the age of 30, I retired from, you know, doing, you know, real estate investments. And you can, too, you know, so those guys are out there. You just kind of, you know, you can't go to them and say, I know nothing about real estate, but give me, you know, $100,000, they're going to get lost. But if you can educate yourself and you can say, hey, you know, I've got a team of people here, you know, here's some potential properties. Here's my, you know, here's. Here's why I think I'm a good candidate for this. Here's what, you know, here's what I bring to the table for you. Here's, you know, what I'm thinking, and you have a healthy conversation with these people, and you present yourself knowledgeable about what you're about to get into. I've seen no shortage of, like, these.

I don't want to call them a lender, but investors who invest in you and your future with investing in real estate.

And so I hate to repeat the question exactly, go for it if I didn't answer it clearly, but when does someone, when at what point could someone start to look at real estate as a viable place for their own cash? And when, how much should somebody have in reserve to the part. To the point where they can really start to see good returns from an investment?

Yeah, yeah. Every again, every market's gonna be a little bit different.

Stop saying that.

I'm sorry. You know, but, you know, I'm gonna tell you a number of, you know, 25,000 right now. And, you know, California, they. They'd be like, that ain't gonna get you anything.

Sure.

You know, but. But in my, in my neighborhood, 25,000, you buy the house, cash.

Yeah.

Not eat anything. Or you can buy that, you know, $75,000 property and, you know, maybe put, you know, 10 or 15,000 down and then you got 10,000 in reserves to repair the property. But what I find is right around, you know, 20,000 to 25 is a pretty good number. But I know guys who have started with less. You just got to kind of know where to go and how to get those funds. I know some very close friends of mine who started with just an idea. They had a portfolio, a little binder put together. No money, just they educated themselves a little bit and they went through some third party, you know, private investors and said, hey, I found a property. I've done some numbers. Here's some cap rates. Here's, you know, here's what I think will rent for. Here's some expenses. And I'm looking to borrow money for, you know, a period of time or until, you know, I can get a loan on it or whatever the exit strategy would be.

Well, Bill, thank you so much for sharing your experience with us. If somebody wanted to use your company services or to find out more about what you guys do, where would they find you?

Yeah, so the very first thing you're going to want to do is, and I love to talk to people, so I would tell you first, call me, call me first. So my phone number, my office number is 440-838-6430. Let's start there. I can also give you my email, and it's theturneyteamol.com and tyranny is spelled T I E R N E Y. And that email is monitored by several of my teammates. And, you know, you may not get me personally, but just tell them that you want to talk with Bill and they'll put you in touch with me.

Cool. Bill, thanks so much for inspiring us, educating us and empowering us to live more extraordinary lives. Keep on changing the world, buddy.

Brian. Anytime, buddy.

I invest in real estate. I invest pretty heavily in real estate. I recommend that other entrepreneurs invest in real estate. And yet the question that I get from entrepreneurs all the time is how do you automate this process? How do you make it so that you're not involved in the day to day? So that's why I wanted to have this. In fact, this morning I had an entrepreneur email me and say, hey man, I see you're investing in real estate. I want to do that too. What should I know? And I was like, automate your systems, have people in place that you trust that run everything. So you just worry about deal flow. And that's why I work with people like Bill. Now, I don't care who you use as your management company. I don't even care where you find your deals because I know a host of investors who different on their strategies, on their management principles. And guess what? They all seem to do just fine. The important thing to me is that it's all automated so that I'm not worried about any of the details so I can worry about making money in my businesses and pumping it over into my real estate deals. That's one of the ways that I'm going to build up an empire that's big enough for me to buy the Cleveland Indians one day. Once you have automation in place, it frees you up to do the things that you do best. With me, that's generate new cash so I can buy new deals. And this takes the stress and the worry out of getting into real estate in the first place out of the equation because you have somebody like Bill managing the process for you. So who's your Bill? It could be Bill. He gave his number out at the end of the call. But whoever it is, make sure it's someone that you trust and that frees up your time to be able to source more deals. Hope you enjoyed today's call. Would love to hear your thoughts over at the Show Notes at Freedom Fast Lane.

Thanks for listening to the show and.

I'll see you on the next one.