Tyler Vinsand is formerly a CPA dedicated to the traditional path. However, everything changed when he discovered the world of real estate investing. Within three years, he transformed his life, building a 7-figure business and a portfolio of 70+ units.
Tyler Vinsand is formerly a CPA dedicated to the traditional path. However, everything changed when he discovered the world of real estate investing. Within three years, he transformed his life, building a 7-figure business and a portfolio of 70+ units.
All right, everyone. Welcome to the Real Estate Game Changers show. I'm your host, Mike McKay, based in the Jacksonville, Florida market. And each and every week we do this show with people who are changing the game of real estate all over the country. If anyone is in the Jacksonville market or thinking about getting into it, feel free to reach out to us. Always happy to help. And we are still a very active buyer in the Jacksonville market. If anyone has any deals that they are looking to sell this week on the show, I've got Tyler Vinsand. Tyler, welcome to the show.
Tyler:Thank you. Happy to be here.
Mike:Awesome, man. So for people who don't know you, can you just share a little bit about how you got into real estate and how that led you to where you are today?
Tyler:Yeah. Yeah. I came from like as traditional of a background as you could possibly come from where I was just taught to get good grades all throughout elementary school, middle school, high school. Then, eventually get into a good college, get a good job and entrepreneurship never even crossed my mind ever. So I followed that path. I got good grades. I got into a pretty good college. And I majored in accounting. Then I went into a grad program where I got my master's of accounting. I decided I was going to pursue the path of being a CPA when I got to grad school. I had one of my best friends was like, Hey man, have you looked into buying a house? And I was like considering I'm not 40 years old with kids no, I haven't even considered buying a house. I didn't realize people did that before, like having a family. And he was like, man, you got to check this like bigger pocket thing out. I was like, okay. So I checked it out and the rest was history. I just became like completely obsessed with the idea of real estate investing. I think in grad school, I probably spent more time studying real estate investing than I did accounting, which is like funny. I did graduate. I got my CPA license. I went and worked at one of the big four accounting firms as a auditor of a large public company. And my intention was to continue to work that job because it was a great career and just invest in real estate on the side. What I found was that, man, I was getting up at 4. 30 in the morning to read, listen to podcasts, listen to audiobooks, like anything I could do. Lunch break, same thing. And then after work, it was all the same thing. What I found was I became so obsessed. With real estate investing, I couldn't continue at my accounting job. So I gave him six month notice cause I wanted to get through what we call busy season. It's like the hardest time of the year. So I gave him like a six month notice that, Hey, I'm out on April 30th. And I wouldn't work for somebody for a year as an acquisitions manager, started up my own company. And here,
Mike:Cool. That's an interesting start. A lot of people don't talk about that. Going to work for someone else to learn the business. How do you feel that kind of helped you I guess break into things.
Tyler:Oh, it made all the difference in the world. And he's a very smart guy. He's extremely aggressive and tenacious. He wasn't the greatest at running a business. But what I learned from him is like level of effort. He was so aggressive with followup with marketing. He just threw so much at it. And it taught me that in order to get the results that you're looking for, you need to do more than you think is really necessary. I also learned sales from him, which is really important. So throughout that first year, I didn't learn anything about running a business, to be honest with you. I didn't even learn much about how to market to sellers or anything. What I learned is how to do sales and how to do acquisition. So I. Locked up a lot of deals for him. I did a really good job. So when I started my business up at that point, I knew how to talk to people. I think that's the hardest part of the game. So for me starting working for somebody else was I don't know if I'd be here today still running the business. If I was trying to start it on my own from the beginning,
Mike:Yeah, so you work for him for a year and then you made jump off to start on your own. What did that look like the first few months of going out on your own?
Tyler:terrifying. I started it in March of 2020, the same week that the NBA was shut down for COVID. That's when everything hit the fan. That was the week that my company was founded and like up to that point, I've never gone more than it was literally like 11 days without getting a contract signed. We went the first two months without getting a contract signed that I got my, when I started my business. So yeah, I was sweating bullets. I couldn't believe it. I couldn't believe it. And then finally like after those first eight weeks, I got this hot lead come in and we ended up making 28 grand on that deal. And that was like the one deal I needed to propel us to move forward. And I haven't really looked back since
Mike:Cool. And then over time you've done a lot of different things. I know you have a pretty large rental portfolio. At what point did you transition the wholesaling business into more than just a wholesaling business.
Tyler:It actually took a while and it's interesting because the reason I got into the real estate world was the idea of financial freedom and buying properties and accumulating enough passive cashflow to have the option, but not the obligation to work. But what I learned was the beauty of the wholesale business is that you have the opportunity to source the best deals in your market and see what people are buying them for. See who they're using for contractors, see who they're using for lenders. You get all the tricks of the trade. You learn what a good deal looks like. To be honest with you, I think I probably wholesale my first 60 deals before I kept one, just because I wanted a crystal clear picture of exactly what a good deal looks like. And when I find one, how do I take this thing all the way to the finish line without making any kind of mistakes or bumps and bruises that could lead me to pressing the financial reset button?
Mike:Sure, and then I guess when you did decide to start building that rental portfolio, how'd you go about doing that? Cause a lot of guys in the wholesale business. They get trapped in the feeding the beast is what they sometimes call it, and they don't actually end up buying the rentals that they always said they wanted to buy.
Tyler:Yeah, it's tough. I think it just depends what your goals are. If you're more obsessed with the idea of building this big wholesaling operation that spits off a lot of, active income every single month then maybe feeding the beast is the best answer. I was very aligned on my goals from the get go. My goal was financial freedom. My goal is not to accumulate all the wealth in the world. I don't care about being the richest man. I want to accumulate as many as experiences as I can. I want to live the life that I dreamed of. I set a goal of buying at least one rental property per month. That just says certain parameters. Like I'll never buy a property built before 1950. I try to only buy properties that are three and four bedrooms. I own a couple, two bedrooms, but those are just, if it was a great deal, I'll take it. I won't buy anything that requires more than$50,000 worth of work and rehab, mostly cause I don't like rehabs. I'm not very good at them. The ones below 50 grand are pretty simple. So as long as it meets that buy box and it's not in a D class area, that's the other thing I don't buy in bad areas. As long as it means I buy a box, then I was trying to keep at least one of those each month.
Mike:Gotcha. And is that still the goal to today, even with changing rates and everything, or has that shifted for you?
Tyler:I still try to keep one every single month and it's gotten a lot harder. I'd say like the last three rentals I bought, the cashflow is a lot slimmer, but for me, I'm okay with that because these are properties that I love in areas that I love and I just don't see myself ever really selling them. So if I have to tell myself you cashflow during a high interest rate environment but longterm, this is something I'll keep where I see rents continuing to appreciate. And hopefully at some point rates come back down and I'll have the option to refinance. That's a position I'm still willing to take, 10 times out of 10.
Mike:Gotcha, and I know you we were talking a little bit offline and you were saying that pre foreclosures have really been a game changer for you guys. You want to talk a little bit about that?
Tyler:Yeah, let's do it. I would say I'd be open to a discussion with anybody, but I feel like pre foreclosures is the single hottest list of prospects you can possibly target regardless of what market you're in. These people, realistically, they're facing one of the most difficult times of their life. You do have an ethical and moral obligation to make sure you look out for them. But at the end of the day, they can catch up the overdue balance, they can try to get a loan modification, they can file bankruptcy, they can go to auction or they can sell the property. That's usually what they're looking at as their primary options. And a lot of times what these people do is they kick the can down the road. They get really close to that often. They pick up the phone and they call and they just say, my auction is in X number of days. I owe this much. I need help. So for me, I reached a point where I feel like transacting in normal I say normal, like your typical absentee or owner occupied properties, non preforeclosure properties. But at a certain point, I started to miss the fulfillment piece. Whereas I feel like pre foreclosures, once we got into those. Really brought it back for us. We were able to really make a huge difference for these people. That's one piece of it that I really liked. The other piece of it is that it costs next to nothing to market to them. We get the data totally free from the attorney websites. We skip trace them, which it's probably 300 a month. It's not very much. I have drip sequences within my CRM that does all the texting. We spend, it's 54 cents per mailer. And we only send those out once a week. We have one full time caller. He gets paid 5 an hour. It's just, it's very cheap. And then out of that, we get we're averaging two and a half deals a month and average profit of 24 grand per deal. So when you look at the return on that it's been huge for us.
Mike:Yeah. And then is there like a different approach that you take, from a sales perspective, when talking to these pre foreclosure leads than you would find someone else.
Tyler:Yeah. So we're not necessarily coming out as. We buy houses. We're not doing that. It's more like when we get in touch with these people, whether they call us from a piece of mail or we do some door knocking or a text or a phone call, whatever. The approach is more of, Hey Mike, my name is Tyler. I noticed that your property is up for auction on X date. Look, I don't think their process is very fair to homeowners. I'm here to help. I'm a pre foreclosure prevention specialist here in our market. And I just wanted to see what kind of plan we had in place to avoid the auction. And so at that point, they tell you like, Oh, I've got it handled. And that we just say something to the effect of, Hey, just for my peace of mind, when you say you've got it handled what do you mean by that specifically? I just try to come right. I've seen a lot of people think they've got it handled, but then they end up losing it to auction and, I don't want that to happen. So let me talk through what they've got planned and talk about potential backup plans and all that. We don't really take what I call like the mask off. The we buy and reveal that we buy houses until that's an option that's really viable for them. We just try to figure out what is your picture perfect scenario? How do you plan to get there and what happens if you don't? And how can we help make sure that this option doesn't happen. When we do reach these people, when we're cold calling, it's our conversation. It's pretty simple. It's what I call like a three pronged framework. Very first one is figure out what their picture perfect scenario is. If they are dead set on keeping this house and they don't want to sell it, then we're not going to come out and try to convince them to sell their house. They want to sell it. That's step number one, figure out the picture perfect scenario. Step number two is to figure out like what's your plan to get there. I want to keep my house. I'm going to apply for a loan modification. I'm working with the bank. Okay, great. Step number three is what happens if that plan doesn't work out. So it looks like your auction date is scheduled for November 1st. What happens if you apply for that loan modification and they don't call you back until October 27th and they tell you that it wasn't approved? What would you do? I don't know. I guess I didn't really think about that. Okay. What I'd love to do is I do not want to see that happen and I don't want to see more people go to foreclosure than Then needs to be so I'd love to come meet you in person and discuss all the options discuss backup plans that hopefully never come Into play but just for your peace of mind and mine I want to make sure we're taking care of no matter what happens So that's usually how our conversations go like that of a consultant that truly and genuinely cares about this homeowner finding, eventually reaching their picture perfect scenario.
Mike:Yeah, and do you even go out and meet with people who are dead set on keeping the house? I'm just wondering if a lot of that does change as the auction date gets closer. So you figure those are viable or you pass on those ones.
Tyler:No, we still go and meet with them a lot of times. If someone is dead set on trying to keep the house, we'll still try to set the appointment. We'll teach them on how to go apply for the loan modification. For one, we're helping a lot of people and odds are like, if we go and we meet with somebody, there's some other doors that we can go knock in the area. So it's not like it's like a complete waste of time or anything like that, but we're helping them achieve what they want to do. And then God forbid, like the loan modification doesn't work out or the money that they think they have coming, that they can use to catch up the mortgage doesn't come. You're their first call, you're the consultant that they trust, that they establish a relationship with. That happens a lot of times where people, they've got it covered and then they call us at the last hour and saying, if we can help, and we've gotten a couple of deals doing it that way.
Mike:Gotcha. So you say you're pulling the this pre foreclosure list from various attorney sites. I know it's different in every market, but for people who maybe don't know where to find that information, how would they go about finding that for free possibly in their area?
Tyler:This was crazy. A colleague of mine told me this So most of the markets operate this way, but lenders don't really conduct the foreclosures themselves. Like they hire an attorney to do it. And so that's what I'm talking about with the attorney sites. So if you want to figure out how to get all the attorney sites within your market, it's pretty simple. Gotoauction.com filter for the ones that are in foreclosure, and then there's this little button that you can hit that says I think it says like foreclosure contact information. When you click that button, it gives you the name of the law firm. So we copy and paste the law firm, you open up a tab, copy and paste it. And then let's say it's like Johnson and Johnson law firm. Just put Johnson and Johnson law firm pre foreclosure search. And then it has the website with all the properties that go up for auction. And it's updated in real time. In the state of Virginia, and I'm telling you, I think most markets are this way. The attorneys are required to update their website the moment a notice of default goes out.
Mike:Interesting. So, does their website get updated before the pre foreclosure I can't remember the name of it gets filed. That document gets filed with the county recorder's office or.
Tyler:To be honest with you, I don't know the answer to that one. I don't know which one hits first, but I know a lot of times we've set up some automation so when a property hits the website, it ultimately trickles into our CRM and our drip sequence starts almost instantly in real time. Most of these people find out about their auction from us.
Mike:Wow. So you guys are getting to them before anyone else
Tyler:Yeah. My brother's an extremely smart guy. He's a, like a programmer, software engineer. He built like a web scraper that can scrape a lot of his attorney websites, build the data in real time. We set up a, basically an automation. So it skip traces as soon as it hits our database. Once it gets skip trace information goes into our CRM and that's when our drips start.
Mike:Wow, and do you find that there's an advantage of being that 1st person to reach out to them.
Tyler:Oh, absolutely. You'll reach some people that they're like, yeah, I want to sell it. I have one that we're closing on the back end of it on next week. We hit her like right away. She lived in Georgia. This property is in Virginia. And she was like, Yeah, I owe 115. I just want to sell it. I was like, okay. So I called her. I said, Hey, I got your text. So tell me what are we trying to accomplish here? And she's like I said, I owe 115. I just want to sell it. I was like, okay, so you just want 115. She's I don't know, just like a little something. I was like, okay, what's a little something? She was like, like 118. I was like, ah, okay. And yeah, it is. And that was it. We signed the docusign on that call.
Mike:Interesting. And then, I'm just curious, you also direct mail these people you said like once a week, is that automatic for your system as well?
Tyler:No I tried to automate that as much as I probably can automate it, to be honest with you, but no, I have a VA that does it. So basically within our database, this might get a little complex. So I'm going to try to simplify it within our database. We have a few different columns and those columns are classified based on when their auction date is scheduled for. So if you can picture like four different columns with the farthest column out being auction dates that are more than eight weeks away from today All those people receive, it's like a very friendly letter that like tells them who we are, in that case, we do reveal like we buy houses, but we just say Hey, look, like we're a local investor. And if you need us as a backup plan, call us, but what we really specialize in is helping homeowners navigate the pre foreclosure situation. We don't think the bank's process is very fair to homeowners. So we're passionate about what we do. And a lot of times. A homeowner's best option doesn't involve us, but we still help them anyway. Just give us a call to help figure out your plan. It's free of charge. We're not looking for anything. We're just trying to help. That's what like the first letter says. It's very friendly, very forthcoming and offering help as much as we can. That's if their auction date is like more than eight weeks away.
Mike:is that going out on the 8 week marker? Is that when it 1st? It's your system. It goes out that week.
Tyler:We send the mail every single Wednesday. And so if their auction date is more than eight weeks away from today. Then they received that letter. So if they, does that make sense?
Mike:I think so. As soon as they hit the system, they get that letter as long as it's more than eight weeks away. So they could be 12 weeks away.
Tyler:They could be 12 weeks away and they would receive that letter every Wednesday for the next four weeks, until they get to the six to eight week period. Then we send a postcard that's like slightly more urgent. It says like their property address and it says Hey, this is an urgent matter. We need to speak immediately. It's still vague. In that case we don't really say like we're home buyers. It's pretty big. And then we do the four to six week mark, which is a little more pressing, say Hey this is your last chance. You need to call us right now. We don't have a lot of time to work. And then the final one is the two to four week bucket. And that one is consider this your final chance. If you want to save this property, you need to call us right when you get this. And so it just increases in aggression, the closer that the auction gets.
Mike:And so they're basically getting a letter every week since they enter your system
Tyler:Exactly. Unless they remediate the pre foreclosure, meaning like they catch up the mortgage or they get their loan modification or we convert them to a lead or something like that, then, it updates in our system so they don't receive our marketing anymore.
Mike:got it. Super interesting. And is this like the only marketing you guys do or is this just one of your core focuses?
Tyler:It's one of the core focuses. We're in an interesting spot to be totally transparent. So, since I started the business back in March, 2020, we've been like diehard SMS. I'm a huge believer in it. I think the cost per lead and the cost per deal. Has been phenomenal. I think the hidden benefit behind SMS and cold call marketing, like you get a lot of leads and a lot of them can be bad leads. The beauty of it though, is you get to refine your sales process by having that many leads, if you don't have a good sales process, you're just going to crash and burn. So we refined and created a really good sales process by having this mass amount of SMS leads. So that's been great. The downside to it is you've got restrictions and regulations that are getting tighter and tighter. So we're at like a really awkward spot right now where we're starting to shift away from it into more sustainable sources, like direct mail. We're going harder into pre foreclosures. Starting to dabble into some PPL, just stuff like that. Trying to find a good backbone to build us on.
Mike:Yeah. Talk about your sales process, because you say that really helped you refine it. I'm curious what your guys sales process is now that it's dialed in.
Tyler:Yeah. The way that we determined how we needed to refine it was by figuring out which KPIs we needed to track, which are pretty simple, it's leads, net leads. So we need to convert our leads to net leads at least 90 percent or better. Then we have appointment set. So we need to convert at least 12 percent of our net leads into appointment set. Then we have appointments attended, which we need to convert at least 80 percent of our appointments set into appointments attended. Then we have offers made. We better be making an offer every single time we go on an appointment. So that needs to be at a hundred percent. And then we have contracts signed, which needs to be at 20 percent of the offers that we make, meaning we close one out of every five offers we make. And so as long as those KPIs, like those ratios that I just went over are hitting for us on the acquisition side of the business, we're doing pretty well. We're doing pretty well. If one of those goes out of whack, I know where to dive in and, we tweak a few things test some independent variables and just try to correct the process from there. And then the other piece of the sales process is I'll focus more on acquisitions, like on the appointment. We've got our entire in person appointment scripted out. We probably have a four or five page document that has all of it scripted out. I'm talking about like the conversation you have after you get out of the car and before you walk into the front door. Then once you get into the front door, what that conversation looks like, we're setting expectations all the way. We're creating upfront agreements with escalating agreements throughout the appointment. We even talk about when we get to the negotiation side of things, at what point we step out of the house to give some space and then come back in. We go pretty in depth, but I found, and I know it sounds probably ridiculous. Like you're like, man, just go on the appointment, build some rapport and get the contract locked up. That's what we used to do. But it was just inconsistent and sales. You have a lot of ebbs and flows. We found that by having. An extremely detailed sales process, we've gotten a lot more consistent.
Mike:Yeah, no, I'm a big believer in having a real sales process. So I think that's awesome. I'm just curious what does that, let's say you walk out of the car person's there. What does that look like? What should it look like in your sales process?
Tyler:So, we have a list of all the expectations that we need to set. We walk up, maybe create a little bit of small talk, joke about how, it's nice to not just be a voice behind the phone or anything like that, but then we explain to them exactly what this appointment looks like, Hey, I know I told you this over the phone, but his appointments typically last somewhere between 45 minutes. To an hour. I'm going to get to know you. I'm not a funny guy, but I'm going to try to crack jokes. I'll try to make you laugh and stuff. I just have fun on these things, to be honest with you along the way. I'll be asking some questions both about the property, about the history of the property, about the condition about your situations. Try to get to know you better. Ultimately, my job here is to do on this appointment is to figure out what you are trying to accomplish. I want to figure out what is your pick for perfect scenario in the sale of this house. And to be honest with you, it might not involve me and that's okay. I shoot myself in the foot all the time. But what I'm going to try to do by the end of this appointment is present you with what I believe are the best options to achieve what you're trying to get to. That's usually how we start that off and then we go in and do the rest of it.
Mike:Sure, and that's for your non pre foreclosures. The pre foreclosure ones are handled a little bit differently because you take that more consultant approach.
Tyler:Exactly. Yup. Yeah. Pre foreclosure is totally different.
Mike:Gotcha. Interesting. And then I guess back to the pre foreclosure. So I think that's really interesting. It's what what other hiccups do you run into with those kind of deals?
Tyler:Oh man. I'd say waiting until the last minute is a huge one. We get a lot of calls like the day before the auction. We have some where we've succeeded and we've had some where we failed and the ones where we failed, like they hurt. It's tough, but we give our best swing. But we get a lot where they'll call us. Literally four or 5 p. m. the day before and say my auctions at 10 a. m. tomorrow. Is there anything at all that can be done? Oh, we can try. Believe it or not, we've been successful before. We had one lady call us at 6 p.m the night before her 10 a. m. auction. And we did get it successfully canceled. It is possible and we can't do it. Just can't guarantee it. What I'm not the lender. I don't hold the final decision. I do my very best at knowing what I know. Trying to get it canceled.
Mike:How do you go about getting it, or at least attempting to get it canceled.
Tyler:So what we need is we need a purchase agreement signed. So this is tricky, man. Because if you get that purchase agreement signed and it is 10 short of the payoff, the lender is going to tell you to get lost. They just won't even look at it. So that purchase agreement has to be higher than the payoff. The trick is you don't know what the payoff is. You have to order the payoff from the lender. So you don't know what the payoff is. I came up with a formula based on looking at mortgage statements and how far they're behind and whatnot. So we can calculate a rough payoff estimate. It's still not perfect. So we know we need to get the contract signed for higher than that for the bank to take a look at it. We get the purchase agreement sign. That's the first thing. Then we get the mortgage third party account authorization form sign, which basically just whoever's on the mortgage, it's them giving you permission to speak on their behalf with the lender pertaining to matters that for the mortgage. The tricky part about that is that has to be a wet signature that cannot be a digital signature. So if you're doing this virtually, like we sometimes do, that means that in order to be able to speak with the lender and the attorney regarding this mortgage and this property, you have to have the seller on the line with you for a three way call. So that's one other hiccup. And then the third thing that we need, so we've got purchase agreement, we've got the mortgage third party account authorization form, and then the third one is proof of funds. So you need a proof of funds that shows that you can buy it. And then I usually, when I send that stuff over, I include a little blurb, like a bio about who the seller is. I don't air out their personal business and what they're going through, but I just say that please understand that this individual is going through one of the hardest times in their entire life. And I know this may seem like a pretty small decision, but you do have an opportunity here with this in these next, 15, 20 minutes, whatever it is to make a life changing impact on this individual. We're ready to buy this thing. All we need is time for clear title. They came to us yesterday. We've got the funds. We've seen the property. We're good to go. We just need time for clear title. We're just asking for more time. And that's what we do to try to get it postponed. And so most of the time it's successful, but sometimes it's not.
Mike:Yeah, so I guess in that scenario, you're really at the mercy of the lender at a certain point when it's that late.
Tyler:Yeah. Yeah. You are at the mercy of the lender. Yep. One other thing I will say I probably should have touched on this earlier. When we pull the data and we determine who we're going to market to. We put a 40 percent or higher equity filter on it. What we have found is that, and we determined 40 percent equity by the estimated value in batch leads compared to the estimated balance and batch leads. What you need to understand, I think everybody knows this, that estimated value in batch leads is not perfect. That estimated mortgage balance and batch leads is wrong because it's assuming that they're current on their mortgage, which we know they're not. That's why we stay at 40 percent or north. What we found is when we went south of 40%, a lot of these people just couldn't help. Like they, the property was, it needed too much work. Their arrears were way too much. We come across people that are a hundred, 110, 120, 000 behind on their mortgage. You can't really take that sub two unless you're going to flip it. And if you don't have enough equity there, then we're not going to flip it. So it just gets a little tricky when you try to go less than 40%, at least that's what we've found.
Mike:Yeah, and is that a common strategy? Are you taking a lot of these subject to.
Tyler:Yeah. I mentioned I buy one property a month. Those usually come in the form of sub two pre foreclosure. Yeah.
Mike:Is the subject to part on that purchase agreement that you send over to the lender?
Tyler:No, we just send over a cash agreement to the lender. Usually we can make that cash purchase work. So if we had to, we'll still go through with it, but then we'll try to get like a sub two agreement sign subsequently.
Mike:Yeah, I would imagine a lender wouldn't be a fantasy in that right before the auction date.
Tyler:Yeah.
Mike:got it. Okay. And then what other tips do you have for people who are considering going after pre foreclosures.
Tyler:Biggest thing is if you're going to look at this for financial gain and selfish reasons, you're not going to succeed. And I know that sounds crazy. It probably sounds kind of cliche, but these people will not trust you. They can sniff that out. They have debt collectors calling them$30,000 times a day. They have debt collectors sending them mail, knocking on their door, the same thing that we're doing. So if you are not going there with a pure heart of trying to help and trying to serve, then I would say just don't do it. For one, you won't have success. I can guarantee it for two. That's not what these people deserve, these people really do need the help. So I would just say, go on with the purist of intentions and it will come back to you tenfold.
Mike:Yeah, no, that's a really good point. And then I think we were talking earlier. You also own some mobile home parks. You were saying,
Tyler:Yeah.
Mike:how did you, how'd you get into that?
Tyler:That's another crazy story, man. I've got a lot of these things. So back when I first got into real estate, when I was still working for the other guy, this was in 2019, I saw Brandon Turner post an ad on his Instagram account looking for Essentially cold callers for his like off market mobile home park acquisition team. And I was like such a Brandon Turner fan boy. I still am no shame in my game. I still am. So, the moment I saw it, I applied and then lo and behold, I got it, which was super cool. So I was like one of 24 cold callers. Just cold calling mobile home parks. But what was awesome is I learned like what Brandon's team would go after. What makes a good mobile home park? What criteria do we not consider? If it has, for example, like they don't touch anything with a well in septic that's just like a big unpredictable expense. They don't like to deal with it. They only do public water, public sewer. They like to deal with tenant owned homes rather than park owned homes. Just little things like that. But ultimately I figured out like what the perfect mobile home criteria is. So I worked for Brandon and they ended up letting us go. Like they decided to just go through brokers. They did a lot better that way. So then fast forward to, this was 2021. Yeah. So two years ago, I decided man, I'm going to try to buy my own mobile home park. So I hired a virtual assistant to go virtually driving for dollars. And the way that it did that is you go on Google maps, go on the aerial view and mobile home parks break out very distinctly because if you can picture them, like they're situated, like the houses are situated in rows and they're long, skinny, and they like. Silver and shiny. It's pretty easy to identify them on Google maps. Once you do identify one, you grab the little yellow guy on the bottom right of the screen, drop them down to the street view. And this is like the craziest thing ever is like these mobile home park owners put their phone, like their primary cell phone numbers, like on the front of these parks, like it's crazy. There's no tip tracing. Just call the number on the sign. It's so crazy. If it's a big park you'll probably receive the park manager. But these ones that I was going after, I was going after 20 to 60 pads. Like those, it was always just the park owner. And then I ended up landing two of them that way. That's not true. I landed three of them, but I wholesale the third and I kept the other two.
Mike:So were you like looking up in some database, the addresses for these places first so that the VA could do that, or they were just like scouring areas that tend to have a lot of mobile home parks or how are they go about doing that?
Tyler:They scoured zip code by zip code.
Mike:Wow.
Tyler:Now you'd be surprised. If you hop on Google maps, go to the aerial view, you'd be surprised how easy it is to identify the mobile home parks. It doesn't take as long as you would think to cover a zip code. It actually doesn't. I was surprised.
Mike:And then is that also in Virginia or is that different areas of the country that you were looking at?
Tyler:two are in Little Rock, Arkansas. So I was targeting the central Arkansas MSA. I think it was just a little less competitive. The price to rent ratio has made a lot more sense. For me, the price entry was a lot more attractive. I was not and still quite frankly, I'm not in a position to syndicate millions of dollars to take down a big asset like my first park I negotiated seller financing. I only had to put 16 grand down on it and that's because he had a note on his remaining. Just paid him the 16 grand and then we had the mobile home park. The other one, we bought that one using bank financing, but for the down payment, we got that at 85 percent LTV, which is unheard of usually with mobile home park, like a lot of times you'll see lenders give 60 percent LTV on a purchase. We got 85%, the remaining 15% we were able to get a line of credit from a bank. So we were into that one with no money down, which is like insane.
Mike:How do you go about managing these midsize mobile home parks?
Tyler:On my first park that I bought, I have a phenomenal partner. That's boots on the ground. We're 50 50 on that one. He's like exceptional at managing the park. The other one, he manages that too. Not that he doesn't work hard or anything, but the second one that I'm talking about, they're all tenant owned homes. So you own the land and then they pay you a lot rent every single month just to live on your land. You're not responsible for any maintenance of any houses. I don't get leaky toilet calls, anything like that at all. All we do is we cut the grass, we pay taxes, we have liability insurance. We don't insure the homes because we don't own them. We have two big lights in the park that we have a very small utility bill on, and that's about it. Other than that, it's just collecting the rents from the tenants.
Mike:And are you still going after mobile homes or are you a little bit more focused on the single family at the moment?
Tyler:More focused on the single family at the moment, for sure. Honestly, I probably got into the mobile home parks a little preemptively. We haven't had to pay any kind of price or anything like that, but I've just realized that I think the best way to a strong passive income is by building a strong active income. And at the time that I was buying mobile home parks, I don't think I was as financially strong as I should have been. So I've just focused on building a very predictive or predictable single family business that generates the active income I think I need to be able to get more aggressive with the mobile home part. So it'll come back. It might come back soon. We'll see. But for now I'm definitely laser focused on the single family game.
Mike:Gotcha. And what is your single family business look like today?
Tyler:We're still almost exclusively SMS marketing with pre foreclosures as well. But we're, literally like I'm saying as we speak, like between this week and next week, we'll continue to do SMS I think I'll be at the SMS funeral whenever that day comes. But we're using this week as the opportunity to build out those other more sustainable lead sources. So I've got one texter that manages our texting accounts. He sends, roughly 5,000 texts a day. We've got three lead managers. We've got a couple of administrative VAs. We've got two acquisition managers. And then actually just today I hired, I think she's going to be an absolute rockstar badass transaction coordinator slash Dispo that I can't be more excited to get on board. And that's our team
Mike:Nice, and then what are those more sustainable channels that you're looking at?
Tyler:looking at direct mail. That's going to be a big one that I envisioned as being the backbone. And then also really interested in paper lead as well. I've heard mixed reviews on paper lead. I've heard really good things. I've heard not so great things, but I love the concept of it. I love the idea. And we're going to give it a go and see what happens.
Mike:Sure, cool. And then we were talking a little bit offline before, too. About, title companies versus closing with an attorney and I think it's like an interesting topic that people don't talk about much. So you want to share your viewpoint on that.
Tyler:Yeah. I would tie it back to a more overarching idea. And I think like a lot of people get so obsessed with the idea of pinching pennies in every opportunity that they can get, as opposed to focusing on building relationships that will, squander the pennies that you save a million times over. And I think attorneys and title companies are this way. I used to use a title company and I still love them to death. Like I'm saying I'm genuinely friends with everybody in that office. I moved from Virginia to Denver and I still keep in touch with them even though I don't transact with them anymore. The problem that I ran into is just as you do more deals, you come across really weird situations where you legitimately need legal advice. And they would try to help me as best they could, but at the end of the day we're not attorneys I can't help you with this. So then we started looking for a good law firm to use and our closing costs, they did go up less than you would think, like on average, like I think we pay, it's right around 700 more per transaction on average. But what we did is I built very similar relationships with all the people in this office. Now I've got like the head attorney cell phone number. So when stuff comes up, I don't know. It's really nice to be able to text this attorney and get some legal advice just for being able to bring all the transactions their way for me, that provides peace of mind that I have a hard time putting a price tag on.
Mike:I think that's a really awesome point. We close with an attorney too. So it's interesting to hear someone else that has a similar opinion in a state that is not required.
Tyler:Yeah. Just curious, what made you decide to switch?
Mike:My real estate background is like New York City where you have to use an attorney. So I was always used to having that ability to ask for legal advice on a transaction. And it just was weird to me when I came to Florida as a title state. And I was like, I can't ask them for legal advice. I guess it isn't that what I'm really seeking a lot of times. We also end up in, weird transactions like there's a contract for deed and there's a probate and there's this and there's that. And I'd rather just be able to get that advice all in one place. I do have an outside probate attorney we use, but everything else it's I just, the attorneys also handle evictions when we need them and all that. So just like having everything under one roof and being able to just get the answer to those questions without having to go seek outside help every time. That's how I looked at it, and Florida, it's really comparable, frankly, the pricing, maybe it's a little cheaper to close the title company. I don't know, but I don't think much. So at least Northeast Florida. I guess for you what's your vision for call it the next 3, 4, 5 years with your company?
Tyler:I'm gonna be honest man. It's changed so much. I still think about it every day. I don't have as of right to be fully transparent as right this moment I don't have the clearest vision on what the next three to five years look like I have an extremely clear vision on what the next year looks like and what the next year looks like, it's a shame this was a failure in leadership on my part that i'm even ashamed to admit to but We have a phenomenal brand. We have a phenomenal online presence. We have phenomenal referrals from sellers. We've worked with buyers. We've worked with agents, everyone you can think of. We always try to make sure we do the right thing and that's shown in our reputation, haven't leveraged it in our marketing at all. We hide behind texting and calling, which is just silly in my opinion. So this switch to a more sustainable lead source where we leverage that brand, I think is going to be huge for us as far as the team goes and what the operation is going to look like. I love what our operation looks like currently. I think we're going to continue to go after pre foreclosures. Our team loves it. It's really fulfilling. It's financially, it makes a lot of sense. And I think I still don't think we're very good at it to be honest with you. I think we have a really long way to go. Team wise, our acquisition guys are good. I couldn't be more stoked about this lady that I'm bringing on for TC and Dispo. And I love having a small team. I really do. And to each their own. I know a lot of people that have a lot of success with a really big team. It's just, it's not necessarily what I want. I don't love the idea of having all these different departments with department heads and people that report to people that report to people that report to me. I like the smaller team feel for sure. As far as our team goes, I don't see a whole lot changing, hopefully. And then operationally we're going to continue to do what we've been doing. I just think we're just gonna get better and better with it at what we're already doing.
Mike:Cool. And then one other thing that I think we should hit on, so you talked a little bit about it offline that you guys have been taking down some more properties as well as doing some novations as well. What made you guys shift to that strategy versus just the normal wholesale model?
Tyler:You want the ugly truth? I tell you what, if we were still just doing like normal, like off market assignment, but don't know that, we'd probably barely be breaking even, honestly. We went from an average deal size of about$10,000 per deal to now we're up at$24,000 per deal and that's by leveraging the MLS. I have a phenomenal contractor that I have a, just a fantastic relationship with this guy, but he's the most incredible dude. He immigrated from Guatemala. He runs an incredibly successful contracting business. Did extremely well his first year here in the U S bought a house cash for his family. He still hasn't gotten to the point where he can qualify for financing yet. I'm working on that with him. But man, if we get the house, that's like cheap enough that he can flip that he can buy cash and fund the rehab and everything. He gets those, he gets some of the Some of the sub twos that we decide that aren't a fit for us for one reason or another so I was blessed with a really good contractor that, that helps us out. So having him open the door to doing a lot more flips and wholetails.
Mike:Yeah, so in that scenario you're taking the property down. And then you mentioned you have some criteria, you don't want to go above a certain renovation amount.
Tyler:Yeah, the house has to be built after 1950. The rehab has to be less than 50, 000. I just don't like rehabbing houses. I don't like designing them. It's literally a shame to even call them flips because they're not flips. I literally just try to bring the house to par, like whatever par is in the neighborhood. That's what we do. And it's not putting crap in there. It's like putting solid stuff. Just, I don't get a whole lot of excitement out of putting in like the beautiful accent walls with, the special courts countertops. It's just not, it's just not of my interest. So the repairs have to be South of 50 grand has to be built after 1950. We try to keep our ARVs below three 50 to stay in that first time home buyer range in our market. We find that days on market are a lot shorter when we do that. Three and four bedroom properties, as long as it meets those, then we're good to go.
Mike:Yeah, and then you do sometimes do novations as well, though, I think you were mentioning.
Tyler:Yeah, we do. So if it doesn't meet that box. And the seller doesn't take our cash offer. We still give a cash offer, but sometimes that won't work for them. Maybe they have a higher number that we just can't come to and we can't give them a certainty. That's when we'll shift to a novation where we tell them like, Mr. seller, I understand that, our hundred thousand dollar offer doesn't make sense for you. I know you're stuck at this one 30. Look, I know this sounds crazy, but we just rolled out this program just a few months ago, we call it our equity protection program. And by doing that equity protection program, like we're usually offer able to offer a lot more. I just don't even know that your property or your situation went totally qualify for it. And like they inevitably ask what needs to be done to qualify for it? Now that I think about it, it's actually pretty simple. We just need two things. You need reasonable access and then your permission to bring it to the open market. And so what we do is we've been operating in this market for an extremely long time, and we have a more robust network than anybody else you're going to speak to. So if you're looking for,$130,000 while still having the convenience of not having to deal with anything, we're going to be your best chance of connecting you with a buyer that's going to be able to deliver on that. And if any kind of repairs pop up or, agent commissions and all that kind of stuff, like we take care of all of it. You get to just. Sit back and let us do all the work while we try to get you the one 30. And that's what that looks like. And we do at least a couple of those every single month.
Mike:Gotcha, and for people who don't understand novations, would you not hotel it or do the light flip on it versus doing that strategy? Why are you able to offer a little bit more?
Tyler:Novations are nice, cause you don't have to close on the property. The property remains a seller's name, so we don't have to pay any closing costs. We don't have to pay any financing costs to borrow any kind of money. The repairs are predictable in the sense that, we don't really make repairs until we get a buyer on the hook that submitted an earnest money deposit, and then they submit their, list of inspection required repairs. Now, we know what we're getting into. It's a lot simpler.
Mike:Will you only do this? I know some people are like, we'll only do it with the kind of, they're just dated, but they're still in pretty good shape homes, or will you just do it with any home?
Tyler:We've been shocked. First ever novation we did was this absolutely beater of a house and house. I don't know why we're putting this thing on MLS. I have no idea why we're doing this, but. Let's just do it. We had three full price offers on the very first day we listed it, all of which were from owner occupants. It was crazy, all of them surprisingly it did qualify for a conventional loan. We had to repair like part of a roof and we had to do some foundation work. But at that point that already submitted, we got them up to$15,000 worth of EMD. So yeah, we went and we fixed the roof. We've hit, we fixed the foundation on that deal. Let me back up real quick before we listed it on the MLS. We blasted it out to our buyers list of 700 people for an off market assignment, we had it under contract for 60 grand. And we told the seller we think it's too high. It, I, if you want to take a swing, we can basically is what we told them the highest offer we got from our off market buyers list was 48 grand. When we listed it, we went under contract at one 10 on the first day. It was insane. So, everything that we can put on the MLS. We'll put in on the MLS cause you never know.
Mike:Are you doing like the true novation where it's actually like you're replacing the A to B with the A to C or are you doing the double close
Tyler:No, we do a true novation just because in my market, they do add up, we pay$3,500 per transaction and closing costs, give or take. If you extrapolate that over, six to eight deals a month, you can see how that math gets high really quickly. So no, we don't do any double closing if we don't have to.
Mike:Gotcha. What percentage of your business is novation versus, either fix and flips or wholetails or wholesales.
Tyler:It's right around like 25 percent is novations.
Mike:Okay, cool. We're getting close to the end here, man, but I always have two questions I like to ask people. First one's a little fun, which is what is the craziest or most uncomfortable situation you've ever experienced in a real estate deal?
Tyler:This was on my first year of real estate. It was one of my first few months I was taught by a guy I was working for. You have to get all the decision makers on the appointment in order to go on the appointment. So I had this man, this house was built in like 1895, which is ancient in my market. There aren't many of those that exist. And I was talking with the seller and I did what I could to get all the decision makers there. So this was on a Saturday morning and I get to the house and the seller meets me outside and opens up the front door. And in the room is filled with 14 people. And this house was torn to shreds. This thing, Oh my gosh, this was probably almost a$200,000 rehab on a, it was like a 2,800 square foot house, it needed everything, but the lot was too narrow to be a teardown. So it was like, Oh gosh, it was so crazy. So then it comes time to, I'm like trying to crack jokes. Cause I see where this thing is going. I'm sitting here thinking as I'm walking in the house, I'm like. Oh my gosh, I'm going to have to make a real low offer here in front of 15 people. It was 14 and then the seller that let me in is 15. So I was like, I built a really good relationship. I felt like I had the room laughing and all that. And they were, one of them was like, all right, man, come on. Let's get down to the numbers. Okay. So I tried to do what I could to pull a number out of them. And they're like, look, man, you're the expert here. We're just trying to find out. And I'm like, this is going to sound insane. And you guys are probably going to want to beat me up before I get out of this house. But I'm not kidding, I have to buy this house for$40,000 and the seller that I've been talking to pipes up and goes, my mom owes 210 on it. I was like, Oh, okay. I'm just going to go. For me that was easily like the most uncomfortable appointment I'd ever been on before. There were a couple of them that were visibly upset. Some of them like threw up their hands and, are you kidding me? That kind of stuff. Thankfully, like two of them it was just, it was no secret, like this house was like hardly livable. A couple of them were pretty reasonable, but man, yeah, I thought I was going to be burned at the stake that day.
Mike:It's like holding court man for 15 people.
Tyler:I'm serious. That was the other thing is like when I walked into the living room, like I couldn't sit because all the chairs were taken and everything. So they were all like seated or like leaning against the wall. And it was me like in the middle of the living room, like literally giving a presentation and then presenting this 40, 000 offer. That's 170 grand below what they owe. Yeah, that was wild, man. But it was like looking back on it I did everything I was supposed to, I got all the decision makers there. And honestly wasn't giving a low ball number 40 was it. And I think it would have been a hard sell. I'm serious. I think even had I gotten it at 50, I don't think it would have been a big, or I mean at 40, I don't think it would have been a big fee at all. That was just a tough situation.
Mike:Yeah, geez. Second question for the people who are a little bit newer to the business is if you could go back in time let's say, like, when you first went out on your own and if you give yourself one piece of advice, knowing what know would you tell yourself?
Tyler:Oh, invest in yourself, without a doubt, no brainer. I, for whatever reason, the first probably two years in the business I believed in the stigma that most mentors were scams like these like masterminds. A lot of them were scams. All these courses were scams. I didn't invest in any kind of education at all just cause I thought they would just take the money or whatever. So I went like the first two years in the business without ever doing that. And then finally, like I started investing myself, investing in a course here or a coach there. And that's when I started to see some serious growth. That's when I started to get my time back. hesitate to even call it a high paying job, man. I was truly like a victim of the business. It's like actually building a business. Once I like paid for that mentorship. The coaches that I hired and the courses that I've paid for, those have been my highest ROI higher than any flip higher than any rental property, higher than any other marketing source. Like the, just no, no brainer at all. I just can't believe I burned two years of my business without doing that. I look back and it hurts, at least I know now moving forward.
Mike:Yeah. I think the key is like the right coach or the right mentor. Any advice to someone who's which way should I go here?
Tyler:Shameless plug to Chandler. I know you and I are both friends with Chandler and it's easy to say that as a friend of his, but I didn't know Chandler when I first reached out to him. I business used to average about 40 grand a month. Top line when I first met Chandler and that was just September of last year. Now we're averaging 127 grand a month. And that's all a result of joining level up, which is a Chandler's education program. I don't get paid for any referrals or anything like that at all. It just truly for my business was like everything, truly everything.
Mike:Yeah. Yeah. Chandler sharp, man. A good dude. Cool man. If people wanna reach out to you after the show, if they have questions or maybe they have some deals they wanna sell you in your market how could they go about doing that?
Tyler:Instagram definitely is going to be the best. I'm on Instagram at home buyer, Tyler, that'll be the best place to find me.
Mike:Sweet. Awesome, man. This is great. Thanks for being on today.
Tyler:Of course. Yeah. Thanks for having me, Mike. This was fun.