Scaling from 0 to 30 Deals (While Working 9-5) and Starting with $0

30 real estate deals in two years, starting with very little money, AND doing it all while working a nine-to-five? After listening to Tim Yu, you’ll have no excuse NOT to invest in real estate. He’s done it all: house hacking, creative financing, seller financing, lease-to-own, single-family, multifamily, house flipping, and everything in between to find the real estate investing tactic that worked best for his goals and his lifestyle. After trying (and failing) house flipping, Tim was ready to give up on real estate entirely. It wasn’t until a house hack (renting out other units/rooms in your home) gave Tim the cash flow he needed that he decided to give real estate another shot. From there, he spent hours calling owners after work, sweating bullets on cold calls, and refining his real estate skills. He’s been able to buy a house for truly ZERO dollars down, pick up profitable rental properties for as little as $3,000, and get seller financing terms that have made him six figures in just a year or so. Tim has tried every strategy, so you don’t have to, and if one of his tactics resonates with you, be like Tim and give it your all! In This Episode We Cover: The one loan that lets you buy your first property for ZERO dollars down How to get squatters out of your property (fast) with “cash for keys” Using seller financing to pick up real estate deals for just $3,000-$5,000 Tim’s personalized strategy for finding off-market deals and motivated sellers The new type of rental property Tim is buying that makes $3,000+/month in cash flow And So Much More! Links from the Show Join BiggerPockets for FREE Let Us Know What You Thought of the Show! Ask Your Question on the BiggerPockets Forums BiggerPockets YouTube Apply to Be a BiggerPockets Podcast Guest! Get Fully Customizable Insurance Coverage for All Phases of Occupancy on One Monthly Schedule and Bill with NREIG Grab the Book on Creative Finance, “Wealth without Cash” Sign Up for the BiggerPocket Real Estate Newsletter Property Manager Finder 8 Rentals in UNDER 1 Year: A Rental Property Financing Masterclass Connect with Tim Connect with Dave (00:00) Intro (01:43) BAD First Real Estate Deal (05:51) $0 Down Cash-Flowing Rental (09:24) Seller Financing with LITTLE Money (14:49) Finding Off-Market Deals (24:08) Moving Markets (31:38) New Type of Rentals? Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/real-estate-1090 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected]. Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Dave Meyer?

  This investor has made more than 30 deals work in just his first two years in the real estate game, and he started with almost no money in his bank account. Today, we'll find out how he did it.

• 0:16Dave Meyer?

  Hey, everyone. Welcome back to the BiggerPockets Podcast, where you'll learn how to achieve financial freedom through real estate. I'm Dave Meyer, the head of real estate investing here at BiggerPockets. And today's guest on the show is Tim Yu, a US Army officer living in Maryland. Tim was on the Real Estate Rookie Podcast, episode 335, back in November of 2023. And at that time, he'd accumulated eight rental properties, only one year after dipping into his 401k to make his first deal work. And Tim's story really stuck with me because he tried so many different business models. He did long-term rentals, midterm rentals, he did flips, wholesaling, and more. He operated in several different markets,

• 0:58Dave Meyer?

  and he took on different partners. And this level of diversification can get out of control if you don't do it wisely. But Tim was an example of how you can do this well. He understood the risks he was taking and was still able to deploy his limited capital and time very effectively. Today, we're going to hear how Tim doubled his rental portfolio in his second year of investing, how he uses creative financing, and basically just pure hustle to make up for a lack of liquid cash, and much more. Tim, welcome to the BiggerPockets Podcast.

• 1:35Speaker 01

  Man, thanks so much. I'm super excited. You know, I've been listening to the BiggerPockets for, you know, quite a few years now. So it's pretty awesome to be on the show. So thank you so much.

• 1:43Dave Meyer?

  It's our pleasure, Tim. We're happy to have you here. You were recently on the BiggerPockets Rookie Show, but your story is super cool and inspiring. And so we wanted to dig a little bit more into your story. But maybe if people don't listen to the Rookie Podcast, you could just give us a brief background on how you got into investing in the first place.

• 2:01Speaker 01

  Yeah, back in 2022, I actually bought my first investment property, and it was a fix and flip. And that fix and flip was everything. Anything bad that you can imagine happened to me. You know, bad contractors, uh, crazy drug deal across the street.

• 2:17Dave Meyer?

  Oh, no.

• 2:17Speaker 01

  Um, the whole nine yards. And, you know, I thought that project was going to take 30 days and ended up being like six months. And I think, I think we made like $2,500 on it. So it wasn't even really worth the money.

• 2:28Dave Meyer?

  Well, do it all and come out ahead. Even 2,500 bucks on your first deal is pretty good. You're, you're a braver man than I being able to, uh, go for a flicks and flip on your first deal.

• 2:37Speaker 01

  Yeah, it was, uh, it was like a cheap special, investor special, you know, it was all boarded up and everything. And I was like, you know what? Screw it. I've been listening to so many episodes. I'm just gonna pull the trigger on it. So.

• 2:48Dave Meyer?

  Good for you, but hopefully you at least learned something.

• 2:51Speaker 01

  Oh, a hundred percent, right? I, I think that you don't learn as much until you actually take some action. You know, obviously with some controlled risk. And then after that first, uh, fix and flip, I actually started doing direct to seller investing where I, I would market and like call sellers myself. You know, was doing a lot of lease options and creative finance deals. And the reason why I was on the rookie show is because I was known for purchasing eight properties in a year.

• 3:13Dave Meyer?

  Wow.

• 3:13Speaker 01

  And it was all, you know, financed differently, you know, either through seller finance or doing like a lease option. Um, and then obviously I used my VA loan as well because I'm a veteran. Um, and I did the old house hack trick in, in, in late 2023.

• 3:27Dave Meyer?

  Okay.

• 3:28Speaker 01

  And then that's how I kind of ended up here. So.

• 3:30Dave Meyer?

  I want to dig into the makeup and contents of your portfolio, but can you tell me just more about what motivated you to get into this? Because starting with a flip and then doing a little bit more time intensive strategies, it sounds like, what inspired you to go that way? At least at first, when you entered the industry.

• 3:54Speaker 01

  So I used to live in Louisville, Kentucky, and that's where I started my entire investing journey. And for all you army folks out there, I was stationed at Fort Knox, Kentucky. And that's about an hour long commute each way. So I was driving like two hours a day. So I would just, you know, destroy the podcast, right? Just listen to episodes every single day. And the idea of fixing and flipping a property and, and, and making 30, $40,000 just sounded really cool to me. So that was ultimately like the path I chose, but how I ended up on the property that I purchased, which is really crazy, which I used to like look on Zillow every single day. And there was a property that went from like a hundred grand listing and it dropped down to like fifty grand overnight.

• 4:35Dave Meyer?

  Whoa.

• 4:36Speaker 01

  So I immediately called my agent. I was like, hey, we should go see it. And we find out that there was some squatters that broke in. And the owners of the property lived in California. So they wanted nothing to do with the property. And now, looking back, I probably could have got it way cheaper.

• 4:50Dave Meyer?

  Cheaper than fifty grand?

• 4:51Speaker 01

  So I ended up getting on the contract for forty grand.

• 4:54Dave Meyer?

  Oh, my God.

• 4:55Speaker 01

  Yeah, but I probably could have got like twenty-five, like thirty out of it.

• 4:58Dave Meyer?

  Oh, my God.

• 4:58Speaker 01

  But I rushed.

• 5:00Dave Meyer?

  What kind of house is this?

• 5:01Speaker 01

  Oh, my gosh. It was like a, in Louisville, Kentucky, there's tons of shotgun houses. So, single floor, just single layout. And looking at all the comps and stuff, and even my hard money lender was like, oh, I think the ARV is about one twenty. The problem is, nobody wanted to buy in that neighborhood because it was like a super high crime rate, but I didn't know anything. I just wanted to buy a property and see how it went.

• 5:23Dave Meyer?

  I mean, I imagine that, you know, you said you thought it was gonna get done in thirty days. I'm sure getting the squatters out took longer than that.

• 5:28Speaker 01

  Yeah, we, that was, that, that wasn't a deal that I, you know, I did not learn about until we were kind of in the, in the brush of it, but,

• 5:37Dave Meyer?

  Yeah.

• 5:37Speaker 01

  you know, after like thirty days or so, I actually did the cash for keys method.

• 5:41Dave Meyer?

  Yeah.

• 5:41Speaker 01

  And they actually ended up taking it, which I was super surprised about. Yeah, didn't have to go through an actual eviction or anything like that.

• 5:47Dave Meyer?

  All right. So you caught a little bit of a break there. That's nice.

• 5:50Speaker 01

  Yeah.

• 5:50Dave Meyer?

  All right. So you did this first deal. Sounds like a couple headaches, but you came out basically even for your time over six months. What about that experience encouraged you to keep going? Because I think, given some of the challenges, a lot of people might have walked away.

• 6:04Speaker 01

  So when the deal was over, actually during the deal, I was like, I don't want to do real estate ever again.

• 6:11Dave Meyer?

  I don't blame you.

• 6:12Speaker 01

  But luckily, you know, one of my friends I ran into at a, at a local real estate meetup was like, listen, I'm not gonna say it gets easier, but you have a lot more experience. And if you did do another flip, now you know what you don't want to do, right? And he also said the same thing that you did. I didn't lose my butt off it. I still made a little bit of money. So it wasn't like it was a catastrophic loss. But then the next property I did was actually a house hack because I bought a primary residence before I even started flipping. And I didn't even know what the VA loan was. So I put like 20% down, did the whole shebang. And you know, after doing more real estate investing, I kind of realized like, wow, I have a loan. That allows me to buy a house with zero down. So I ended up buying a rental property technically, right?

• 6:55Speaker 01

  I I lived in one side and then I renovated the other side and I made into a midterm rental.

• 7:00Dave Meyer?

  Oh, cool.

• 7:01Speaker 01

  So that one was doing pretty well. So it made about $800 a month while I was living there. And that's when I was like, oh my gosh, like real estate is kind of cool.

• 7:09Dave Meyer?

  Yeah.

• 7:10Speaker 01

  And I think I'm gonna try to double down on it, right?

• 7:13Dave Meyer?

  I want to go back to something you said about it not getting easier. Cause it's true. There's still gonna be so many challenges, but I think your your tolerance for it just goes up. Like you've seen and you've seen some of the bad stuff that can happen in the industry. And you still were okay, right? Like you learn that the worst case scenario. Usually if you're smart about it, you can mitigate really bad losses and are able to. At least learn a lot, at least come out close to even and live to see another day and and go on to another deal. And it's great that you did that. How'd you find that house hack?

• 7:50Speaker 01

  Yeah. So actually, you know, I I love to stress like the power of like what networking, right? Um, the first Realtor that I used when I bought my first primary residence was actually the Realtor that I used for like my next. Three deals. So the house hack, she actually found this property because I actually texted her. I was like, hey, you know, I think I'm ready to move out of my house. And it's been about a year since I lived there. I think I want to do a house hack with my VA loan and she actually found me a deal and we did a bunch of negotiations on it.

• 8:19Dave Meyer?

  Okay.

• 8:19Speaker 01

  And on the rookie podcast, I did talk about how I ended up getting paid like $200 to buy the house. Because with the zero money down, we actually negotiated some seller's concessions. So. When all the math broke out, the title company was like, hey, we're gonna cut you like a $230 check. Which was absolutely insane. So.

• 8:40Dave Meyer?

  Pretty hard to say no to that, you know, had never really known any. Anyone who had done that. And I think I've heard two or three times the last couple of weeks, people who have gotten cut checks, but that is incredible. I mean, at that point, I would never tell people not to underwrite a deal, but it's like, how could you possibly say no to a deal where someone is writing you a check to buy a house?

• 9:00Speaker 01

  Yeah, it's actually kind of mind blowing, right? You expect to wire out money to like, close a deal and the escrow agent's like, here's a check for 200 bucks, you know, and you're like, oh, that's, that's awesome, right?

• 9:11Dave Meyer?

  Yeah, it is awesome. But you've also earned it by being active duty military and serving your country. You've earned that right, which you deserve, absolutely. But it's cool that you were able to put those things together.

• 9:23Speaker 01

  Absolutely.

• 9:23Dave Meyer?

  So you lived in that and it sounds like you just went crazy from there. Like you did eight deals in one year. What happened after the house hack?

• 9:32Speaker 01

  Then I started to really take it more seriously. And, you know, I did like all the bootcamps, all the mentorships to kind of like learn different skills and toolsets. And what really caught my eye was trying to negotiate with the seller directly to do like something with terms, right? So a lot of the ways that I started buying properties in that first year was I would buy it on creative finance. And then I would actually sell it on a lease option. So if I would negotiate a down payment with the seller, they'd say, hey, you know, I want a $10,000 down payment. I would then do a lease option where I would rent the property out, but also give an option deposit. So someone would have the option to buy it, you know, three to five years. And, you know, I wouldn't get the total interest fee all the time, but the math was, you know,

• 10:15Speaker 01

  three to 5,000 out of my pocket to buy a rental property that cash flowed about four or 500 a month. And doing that strategy kind of stacked up my portfolio for the single family side. And I just kept doing it like over and over again. And then eventually I was like, wow, I have like a decent sized portfolio and I didn't really spend that much money out of my pocket.

• 10:35Dave Meyer?

  Yeah, that's super impressive. I'm curious if you have any advice for people? Cause we always hear these ideas of direct to seller or, you know, doing postcards or mailers or whatever. I've only done it once and it seems very hard to me. So how did you, how did you pull this off as a relative newbie to? Investing.

• 10:54Speaker 01

  Yeah. If you're first starting out, I don't recommend people doing the direct mail or paying for leads because it gets super expensive.

• 11:01Dave Meyer?

  Because you have to just do a ton of volume, right? Like you're, so you're, you're fronting all that money.

• 11:05Speaker 01

  Exactly. And then if you're not doing something active with it, like if you're not flipping the house, you're not like selling it on a wholesale deal, you're just eating a lot of costs to try to buy a deal, right?

• 11:16Dave Meyer?

  Yeah. The time value money on that is not a very good return because you're going to wait a long time to recoup that cash and then you're going to have to probably come out of pocket to buy the deal too. So it, yeah, it could be tough.

• 11:26Speaker 01

  A hundred percent. So what I was doing in the very beginning was I was actually creeping on like Facebook Marketplace. And I would work full time and then I would get home around like five, six PM and I would message like thirty, forty people on Facebook Marketplace who were selling their properties. And I would ask them like, hey, I'm an investor and I would love to like just hop on the phone with you. And I got a ton of no's and a ton of screaming at my face.

• 11:51Dave Meyer?

  Oh, I bet.

• 11:53Speaker 01

  You know, I had that one person that I was actually interested in selling their property to me on, on Creative Finance. And I remember the first time I, I booked a call with somebody that, that was interested. And he's like, I got an offer from somebody else and they kind of ghosted me. And it was another wholesaler that was dealing with that guy. And I said, ultimately, what's that price that's going to push you forward? And he said, a hundred and fifty thousand. Now, this house was a dump, like it needed some work in there. And I said, I can't give you a hundred and fifty right now because it just doesn't make sense. But would you allow me to give you one fifty over a course of a set amount of years if I paid you every single month? And he literally just said, if the contract's right.

• 12:37Dave Meyer?

  Huh. Amazing.

• 12:38Speaker 01

  And I, I just felt like my heart just like sinks and I'm like, I don't know what to do next.

• 12:42Dave Meyer?

  Yeah.

• 12:43Speaker 01

  Yeah. I was like, I don't know what to do next.

• 12:44Dave Meyer?

  I'll make the contract right. If you're agreeing to let me do this, I will figure out the contract.

• 12:49Speaker 01

  Yes, it was crazy. So I called this title company in my city that is known to do seller finance deals.

• 12:56Dave Meyer?

  Okay.

• 12:56Speaker 01

  And the, the house is fully paid off. And then what we did was we did a seller finance. We had a three-year note on it. And it was like $250 payments with 0% interest.

• 13:06Dave Meyer?

  And then there was a balloon at the end?

• 13:08Speaker 01

  Yep, there was a three-year balloon at the end and it was in a really nice part of town in Louisville. So with the 150 purchase price with the amount of renovations, I think the ARV, when we got it like reappraised to do a cash out refinance was, it was like 255.

• 13:23Dave Meyer?

  Oh, wow. Amazing.

• 13:24Speaker 01

  So we ended up pulling the cash out and paying them back. And yeah, it was pretty crazy. It was, it was probably one of my best deals that I've ever got, actually.

• 13:32Dave Meyer?

  So that was your third deal because you did the flip, you did the house hack and then you, this was your first direct to seller purchase and it sounds like it was a home run.

• 13:39Speaker 01

  I do want to say like, I'm very lucky. Not every person gets a deal like that right off their first direct to seller.

• 13:46Dave Meyer?

  Yeah.

• 13:46Speaker 01

  Um, but also it did take me about six months of calling sellers like every single day.

• 13:52Dave Meyer?

  Totally.

• 13:52Speaker 01

  So it's a big grind at first, but obviously like as you start accumulating like new skills to negotiate and have conversations with sellers, um, it does get easier. And then ultimately you start getting money to pay for certain marketing to help you out.

• 14:05Dave Meyer?

  I mean, you're being humble saying that you're lucky, but I mean, there is always an element of luck in these types of things, but you obviously put yourself in a really good position to get lucky by throwing yourself out there, getting yelled at, getting all those no's. Like it definitely takes a certain type of personality and a lot of perseverance and grit to, to work this type of strategy. So congratulations on, on finding such a good deal on your first one.

• 14:31Speaker 01

  Thank you.

• 14:31Dave Meyer?

  After your first deal, I was wondering, you know, what kept you going? But now after this deal, I can understand why you kept growing so aggressively. I want to hear about how you kept building your portfolio, but first we got to take a quick break.

• 14:45Dave Meyer?

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• 17:06Dave Meyer?

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• 17:50Dave Meyer?

  We're back with Tim Yu talking about how he went from a tough first deal to a home run on his third deal. And it sounds like, Tim, you've been scaling a ton since then. So how did you move forward after that first direct to seller deal went so well for you?

• 18:07Speaker 01

  So I'm a pretty simple guy. I just kept doing a lot of the same thing, but eventually the Facebook Marketplace stuff obviously started to dry up. So, so we started doing county records. So I would go to my county website and see all the different foreclosure deals. And actually, a bulk of my single family deals came from the foreclosure list and being able to reach the seller and end up negotiating, try to figure out like a win win situation. But I know a lot of investors do the same thing and they do a lot of cold calling. And from my experience of talking to sellers or trying to reach them, a lot of people going through a foreclosure don't really like to pick up their phone. And I didn't have time to do the door knocking thing. So what I started to do was I would just write handwritten letters and I would drive by the

• 18:52Speaker 01

  property and just leave it on their doorstep. And having that handwritten letter, I think, really helped because who doesn't want to open a letter that's handwritten, that's written to you?

• 19:01Dave Meyer?

  Oh, I love it.

• 19:02Speaker 01

  Yeah.

• 19:02Dave Meyer?

  They trick me every time, even those fake ones that like has a machine write them. I still open them.

• 19:07Speaker 01

  Yeah, exactly. And the biggest thing is I never said that I wanted to buy their house.

• 19:12Dave Meyer?

  Interesting.

• 19:12Speaker 01

  I always said, do you need any help with your situation? I would love to have a conversation with you if you want to keep the house or not.

• 19:19Dave Meyer?

  Huh.

• 19:19Speaker 01

  That's when I would get phone calls or text messages, whatever. And then I would have a conversation and see if me buying the house actually helped them or not.

• 19:27Dave Meyer?

  Yeah.

• 19:27Speaker 01

  Um, and obviously those are really great opportunities for owner financing or some sort of, you know, low cash offer.

• 19:33Dave Meyer?

  I'm just curious, what year was this when you were doing this?

• 19:36Speaker 01

  This was in the middle of 2023, going into 2024.

• 19:40Dave Meyer?

  So just out of curiosity, like if you were to just go look for on-market deals in 2023, rates were high in Louisville, were there deals that were attractive to you? Or was this kind of like the only way you could find things that made sense?

• 19:55Speaker 01

  I know there's some success in on-market stuff, but if I were to go like conventional financing, I don't remember what the rates were back then, but

• 20:03Dave Meyer?

  High. They were high.

• 20:04Speaker 01

  Right. Like they were like getting up to like six, seven percent.

• 20:07Dave Meyer?

  Oh, at least.

• 20:08Speaker 01

  And no deals really worked with conventional financing. And every time we would try to reach out to an agent, we get the typical like owner financing, seller finance to scam. And I just didn't really want to deal with that anymore. And so I just kind of pivoted to sellers. And I think my personality type too, is I enjoy talking to people on the phone. This type of investment strategy probably wouldn't work for people that don't like to talk to people. Like this is a absolute grind of speaking to different sellers and also just hearing a lot of pain too. Right. Cause the sellers that do kind of agree to this most of the time, they're not in the best situation. So you need to be a little empathetic, right? And try to understand where they're coming from.

• 20:50Speaker 01

  And I think ultimately that's what really helped me secure some deals, having that value-driven approach first.

• 20:56Dave Meyer?

  That's very cool. Yeah. I, I, I really respect that approach. I'm curious though, Tim, did you have experience with cold calling or any sort of like customer service focused business before?

• 21:08Speaker 01

  No, you should have heard my first 60 calls.

• 21:12Dave Meyer?

  Oh man, I wish we could play it.

• 21:13Speaker 01

  You know, stuttering Tim and, and I remember when people would pick up the phone, my heart would be racing out of my chest.

• 21:19Dave Meyer?

  Oh.

• 21:20Speaker 01

  I'd be like, hey, Mr. Seller, do you want to sell your house? And they'd be like, no, right? And I'm not going to say any bad words, but it was just a lot of profanity.

• 21:29Dave Meyer?

  Oh, I bet.

• 21:29Speaker 01

  Never call me again type thing.

• 21:31Dave Meyer?

  I've done a little bit of cold calling and I know that feeling where you're like desperate for anyone to pick up, but then the second they pick up, you're like, oh no, what do I do now? It's kind of like, you're almost like, I wish they did pick up because then I don't face the rejection.

• 21:45Speaker 01

  Yeah. You just gotta keep going, but, but I think that's the big thing with how I first started was. You know, reaching out to for sale by owners on Zillow and also Facebook because they were already trying to sell. Versus you pulling a list off a data software and just blindly calling somebody for hours on end. At least they were expecting people to call them. So even though I got destroyed on the phone, it was more of like, hey, I saw that you're trying to sell it and are you still taking offers? And then the conversation goes from there.

• 22:18Dave Meyer?

  Oh, that's a good point. That's like a good entry level way to get into these conversations.

• 22:23Speaker 01

  Yep. And you know, you have your scripts that you start creating and I always made up like a little white lie and said, hey, you know, me and my wife are investors. We have a house around the corner and we're looking for our next one. Are you still taking offers? And then the answer is usually yes. And then now you can kind of proceed with the process with them.

• 22:40Dave Meyer?

  Are you married?

• 22:41Speaker 01

  I am.

• 22:42Dave Meyer?

  Okay, okay. I was didn't know if that was the white lie.

• 22:45Speaker 01

  Yeah, no, no, no. The white lie was like, hey, I have a house around the corner.

• 22:48Dave Meyer?

  Yeah, around the corner. Yeah.

• 22:49Speaker 01

  Yeah.

• 22:50Dave Meyer?

  This was still Louisville, right? Though you're still in your market, your local market.

• 22:54Speaker 01

  Yep. I did not leave the market until July 2024 and then I ended up buying some houses in Iowa City, out in Iowa. So that was the first time I really left the state of Kentucky.

• 23:06Dave Meyer?

  Interesting. Okay. I want to hear about that. But before we do, I just want to ask, when you're making these, these phone calls and reaching out to people, did you have a buy box that you were looking for? Or were you just looking for any deal and then you kind of figure out what to do with it if you were able to pique someone's interest?

• 23:26Speaker 01

  Yeah, for me was, it was just single family properties, 60 days on market and no houses older than 1950s. And the reason why I had the 1950s thing was my first flip, the house was like a hundred years old. So I had a lot of nightmares with everything regarding the plumbing, the foundation, all that stuff, even electrical.

• 23:45Dave Meyer?

  Oh, yeah.

• 23:45Speaker 01

  And then as I got more advanced, I started looking for two bedroom, one baths with enough square footage. Because I did flip a few houses in between and I always looked for value add opportunities. So really focusing on if I can turn a house into a three bedroom or just adding another bathroom. And that was my big criteria.

• 24:02Dave Meyer?

  And were you mostly looking to buy and hold or did you flip or wholesale any of these?

• 24:08Speaker 01

  It was primarily a buy and hold portfolio strategy and then the secondary would be a fix and flip if I got a cash deal. So if creative finance couldn't work, I would pivot into a cash offer and then I would end up trying to flip it myself.

• 24:22Dave Meyer?

  Okay.

• 24:22Speaker 01

  I didn't really start wholesaling until the end of 2024 and this year. So most of my stuff was just trying to buy it myself.

• 24:31Dave Meyer?

  That's awesome. And so how many did you wind up doing in Kentucky before you moved to Iowa City?

• 24:36Speaker 01

  Yeah. So in Kentucky, I had nine properties and I think it was like 12 doors or something like that because some were duplexes.

• 24:44Dave Meyer?

  Awesome.

• 24:44Speaker 01

  And then in Iowa, we ended up buying a six property portfolio from a seller. So that really upped the numbers. And then we had some fix and flips in Kentucky that we actually just sold a couple of months ago. So.

• 24:55Dave Meyer?

  Amazing.

• 24:56Speaker 01

  Yeah. So it's been a crazy ride in the last couple of years and just a few grays that got added to the top of my head, but, but we're still here. So.

• 25:04Dave Meyer?

  Nice. Well, that's great. So tell me about the decision to, to change markets. First, when you started in Louisville, did you know that it was a good market or was it just sort of like you wanted to be in real estate and that's where you were? So you were going to make it work some way locally?

• 25:19Speaker 01

  You know, obviously, you know, New York is very expensive and when I moved to Kentucky and I saw houses were like a hundred grand or 120 grand. I was like, whoa, this is crazy. Like the same house that I'm looking at would be like half a million at home.

• 25:33Dave Meyer?

  Yep.

• 25:33Speaker 01

  And then with that and the combination of really wanting to get into real estate, because I think after like 2020, there were so much content about real estate and everybody was starting to talk about it and I kind of started to get FOMO. So I was like, you know, I, I gotta do something now or else I feel like I'm never going to do it. And I don't know if a lot of guests that you've had, had the same experiences I've had, but when I first started looking at buying my first property, I had a ton of people telling me not to do it. It was in the beginning of 2022 when interest rates were still in the three, four percent range, but prices were going up and everyone told me the market's going to crash any day now and I'm. Glad I did not listen to, you know, my parents.

• 26:15Speaker 01

  I'm glad I didn't listen to a lot of people and just ultimately tried it. So.

• 26:20Dave Meyer?

  Yeah, it's, it's hard when people are telling you not to do it. I started in 2010. People are always like, oh, it was amazing. You so how lucky is like, everyone thought that real estate was over forever at that point. And regardless of what market you invest into, there's going to be a challenge, whether it's getting credit or expensive homes or lower cash flow. There's just always things that you're going to have to navigate. And like you said, once you get into it, you'll learn how to make money off of the deals in the current market. Clearly there are ways to make it work in pretty much any, any market conditions. Tim, I want to get into what changed and why you started investing in Iowa. But first we have to take a quick break.

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• 32:21Dave Meyer?

  Back with investor Tim Yu on the BiggerPockets Podcast. Why'd you move to Iowa City? What changed?

• 32:28Speaker 01

  So Iowa was really interesting for us because one of my cousins, he lives out in Iowa and he bought a house out there and he kind of, you know, saw me on Instagram. I was like, oh, I didn't know you did real estate. I think you should look into my backyard. So at this time I have a partner now. So it's been, you know, a couple of years and my partner is more of like the underwriter. So he's a stronger with the numbers and stuff. And after looking into Iowa, like we love the Midwest. A lot of people will say Louisville, Kentucky does not count as the Midwest, but I do personally. And Iowa is like truly Midwest. And we picked Iowa City specifically because it's got a lot of life there. It's got tons of travel nurses there and it's got the big university. And actually the six properties we bought is like a five minute drive from the campus. So it's in a really nice neighborhood.

• 33:13Speaker 01

  The seller was dissolving his portfolio and we ended up getting that deal from a broker connection. So we negotiated with the seller directly and paid the broker a fee. That deal was really complicated. It took us like three months to close, but we ended up closing it in July of 2024.

• 33:29Dave Meyer?

  Nice. Okay. And so is your cousin helping you out or do you hire property managers?

• 33:33Speaker 01

  No, we hired a property manager out there and we actually had a bad experience with our first one. So we ended up having to pivot to another one, which is really tough because we never really experienced that before. And we had to eat a couple of months of loss as we were trying to turn units over, but we finally got the asset stabilized. So we kind of feel good about it now. So.

• 33:53Dave Meyer?

  I mean, that is one of the challenges of going to a new market, right? One of the biggest challenges is building out that team. So can you share with us maybe something you learned or anything that you think might help our audience avoid some of the challenges you faced in finding a property manager in a new market?

• 34:10Speaker 01

  Yeah, I think you guys really have to interview quite a few, right? And for us, there were a lot of property management companies that managed thousands of doors. And the first one we used was a very big one, like very, very big. It's got tons of units. And what we've learned was they may be reputable, but you're not their number one customer.

• 34:31Dave Meyer?

  A hundred percent.

• 34:32Speaker 01

  Like especially if you only have six. Doors in their portfolio. They don't care about you. Takes them a week to like respond to our emails and it was just a mess. So we ended up taking a chance with a smaller property management company. That only managed the hundred properties at the time.

• 34:47Dave Meyer?

  Yep.

• 34:48Speaker 01

  And the level of care and motivation to take care of us was really huge for us. And that property management company that's working with us, if we grow our portfolio, you know, that property management company will will get our business forever.

• 35:01Dave Meyer?

  That's right.

• 35:01Speaker 01

  But yes, have a really good screening process for your property management company and and kind of see if their visions align with what you're trying to do. For us was just to be honest with us, like we know you guys got to make money as well. Just be transparent with what your fees are. How long is it going to take to get back to us? Like sometimes we were just waiting for a week and a half to see if it got rented out. You know, it's crazy.

• 35:23Dave Meyer?

  Yeah, I've had this almost the same exact experience. And I don't even blame the bigger property manager. That's just what anyone would do. If you had a business and you managed a thousand units and one of your clients had 500 of those units, you would pick up their phone call first. Everyone would do that.

• 35:39Speaker 01

  Yeah.

• 35:40Dave Meyer?

  And it's just so much of this business, we talk about it a lot on this show, is about incentive alignment and finding, whether it's a partner or a tenant or a property manager, finding someone to work with to put on your team. Who is in the same sort of spot as you and wants the same thing as you. It can work in other situations, but everything goes so much smoother if you're trying to grow together. Like Tim said. Place with a hundred units, they're going to be stoked every time you add a duplex. That's going to be a big boost to their business and they're going to want to show you that they can scale with you so that you, when you buy that third or your fourth or your fifth property, that you could grow together. And I I've

• 36:22Dave Meyer?

  unfortunately had to fire some property managers too. And again, most of them are good people. It's just like, they're just not the right person for my portfolio at that time. And so I think Tim is absolutely right. You need to not just find someone who's reputable, but find someone who really is going to provide the level of service that you're looking for at your stage of your portfolio. So now, Tim. What are you doing? Are you looking for deals in both places in Louisville and Iowa City?

• 36:48Speaker 01

  Yeah, so I actually, I'm not buying any more properties in Kentucky.

• 36:52Dave Meyer?

  Okay.

• 36:52Speaker 01

  And we've kind of slowed down single family as a whole. We kind of feel like the market is is still pretty tight in terms of rentals. And for me personally, you know, I started buying rental properties on the pursuit of financial freedom, right?

• 37:08Dave Meyer?

  Sure.

• 37:08Speaker 01

  And, you know, when I started to realize was having a property that cash flows 400 a month really wasn't changing my life. And, you know, it's really nice and it's really good to build wealth, but my strategy was like, hey, let's focus on properties that generate more cash flow per month and also provide a service because having single families and having people rented is great, but it really wasn't fulfilling for me. So what we're looking for to do now is we're actually trying to do the co-living model with assisted livings. So, you know, people that are older. So we're actually looking for our first one right now in Tampa. And, you know, there's some intricacies to that dealing with the fire marshals and the licensing and all that stuff.

• 37:49Speaker 01

  But we're kind of shifting towards the co-living model because we can find these properties on the market that's been sitting there for a while. And we can even purchase them conventionally with the today's rates, today's financing and still be able to cash flow $3,000 a month, right? And that's being kind of conservative, too.

• 38:05Dave Meyer?

  You know, Tim, I'm curious because you've only been doing this for what, three years ish now, which is

• 38:10Speaker 01

  Yeah.

• 38:11Dave Meyer?

  Good. I mean, you've done a lot in three years. Don't get me wrong, but you've done a lot of different stuff. You've flipped, you've done, you know, a lot of creative finance, you've done direct to seller, you've done buy and hold. Now you're moving to assisted living. Is this just kind of your personality that you like to try different things? Or do you, is it kind of market driven where you're just like, weren't seeing the returns that you wanted? Or why take on so many different things, I guess?

• 38:35Speaker 01

  I think, I think it is kind of like part personality that, you know, I'm a try it at least one time a guy.

• 38:40Dave Meyer?

  Yeah.

• 38:41Speaker 01

  I don't like flipping, so I don't flip anymore.

• 38:43Dave Meyer?

  You learned that.

• 38:44Speaker 01

  Yeah, I learned that, right? And, you know, you tried a couple of times. The first one didn't go well. Second one didn't really go well. So I think flipping is really stressful for me and some people love it, right? People are super good at flipping, but for me, the second part is market driven. I think that how the markets that I look at now, it's super hard to find a deal that just makes sense. And as you grow as a business or grow as an investor, you know, I don't have time to call sellers 24/7 anymore like I used to. So my marketing has changed drastically. So I have to target certain lists, certain people, and try to maximize my time because I still do work nine to five every day. So it's been really hard to do the same lead generation that I was when I first started.

• 39:27Speaker 01

  But yeah, I think it is a fusion between the two. I do like to try everything at least once. And if it doesn't work, then hey, we can mark it off the bingo card and kind of move on.

• 39:38Dave Meyer?

  Yeah, well, that makes sense early in your career, I think. I mean, it can make sense at any time, but I do think that that's a very good explanation. There's so many different things that you could do in real estate. You kind of have to try at least value add, try different marketing strategies, see what works for you, what fits and what's going to be sustainable. On that line of thinking, Tim, my last question for you here is, you know, what's next? Like you've said that you got into it for financial freedom, but you know, you're not super excited by rental properties. So like when you look five or 10 years down the road, what do you envision and what do you want your portfolio to look like?

• 40:14Speaker 01

  Yeah, it, you know, it's funny that question because when I was asked this a year ago on the rookie show, it's changed drastically, right? I think when I was first talking about, I was like, I want to get into multifamily. And, you know, after, you know, dealing with so much real estate and talking to different investors, having a hundred door unit like thing didn't really excite me. Raising tons of capital or doing syndications didn't really excite me. So what I really want to focus on is trying to find an asset that provides housing to a certain population or demographic. I think, you know, in the next five years, definitely want to do assisted livings, but you know, since I'm a veteran,

• 40:53Speaker 01

  I do want to move towards more co-living properties that actually end up supporting veterans because there's a ton of displaced veterans out there that need housing and need a sort of community. So I think that's like what I want to envision in the next five years is focus on that.

• 41:07Dave Meyer?

  Good for you, Tim. I really think that. Of course, most people get into real estate investing to improve their own financial position, but the service that you're able to provide to your community and being a good provider of housing and residences is, I think, extremely fulfilling. And I love hearing you say that and that you have your own personal mission, whether it's elderly folks or serving the veteran community. It's such a big benefit to real estate investing, and at least for me, and I'm sure for you, like, it provides motivation when things do get tough and you're remembering that, like, you know, yeah, you're in it to grow a successful business, but there are other people who are benefiting from your work

• 41:49Dave Meyer?

  as well. Well, Tim, thank you so much for joining us today. Super cool story, really inspiring to hear everything that you've been up to. Hopefully, we'll have you back on the show again in a year or two to hear what you're up to.

• 42:01Speaker 01

  Yeah, I'd love that. I appreciate the time and thanks for bringing me back on the show.

• 42:05Dave Meyer?

  And thank you all so much for listening to this episode. As a reminder, if you want a chance to be on this show, just like Tim, as one of our guests, you can apply at biggerpockets.com/guest. There's a form that you fill out there. Tell us a little bit about your story and we'll consider you for a spot on the podcast. Thanks again for listening. We'll see you next time.

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