From Zero to $8,000/Month Cash Flow in Just 2 Years (While Working a W2)

Growing to $8,000 in monthly cash flow and 35 rental units—all while working a W2 job?! Just two years ago, today’s guest knew nothing about real estate investing. But he found a deal and brought it to someone with money, and this single move launched his investing journey. Want to do the same, starting from zero? Then you don’t want to miss this one! Luke Tetreault was miserable at his W2 job. When he had finally reached his breaking point, he decided to take a swing at real estate—and at first, it wasn’t pretty. Without any investing knowledge or experience, Luke found his first property on Facebook Marketplace and didn’t even have the money to close it himself. So, he reached out to an old contact, who ended up funding the deal. Over time, he grew his network until he had contractors and private money lenders for all his deals! He started with a single-family home, but his most recent deal? An 18-unit mobile home park he bought with creative financing. Stick around as Luke teaches you how to find off-market deals no one’s looking for, use your everyday hobbies to build out your investing team, and scale your portfolio starting with little to no cash! In This Episode We Cover How Luke scaled to $8,000 in monthly cash flow and 35 units (in TWO years) Boosting your cash flow by pivoting to another investing strategy Buying an 18-unit mobile home park with zero money out of pocket Creative ways to find off-market real estate deals at a deep discount Two signs you’re ready to leave your W2 job for real estate investing Leveraging your own hobbies and passions to build your investing team And So Much More! Check out more resources from this show on ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠BiggerPockets.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ and ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://www.biggerpockets.com/blog/real-estate-1219 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?

  Hey everyone, Dave here. Happy holidays from all of us here at BiggerPockets. To wrap up 2025, we're sharing a few of our favorite episodes from across the BiggerPockets network this year. Today, it's an investor story from Real Estate Rookie that was originally published back in April. So you can enjoy this episode. It's Ashley Kerr and Tony Robinson speaking with investor Luke Tatro. And I'll be back with new episodes of the BiggerPockets podcast, starting January 2.

• 0:32Speaker 01

  This is the Real Estate Rookie Podcast and I'm Ashley Kerr.

• 0:36Speaker 02

  And I'm Tony J. Robinson. And let's give a big, warm welcome to Luke. Luke, thank you for joining us today, brother.

• 0:41Speaker 03

  Thank you, guys. I appreciate it.

• 0:43Speaker 01

  So Luke, you work as a welder for your full-time job, but you've told us you don't love your job, per se. So how did you land on real estate for your next steps for financial freedom?

• 0:56Speaker 03

  Well, I think it kind of started with, it was a little bit more than a dislike of my job. I found myself pretty miserable, just kind of disappointed in myself how I kind of ended up where I was at in life. I always felt like I should be doing something a lot bigger, a lot more. And I just never felt like I quite fit in with the guys I was working with, you know, the long 60, 80 hours a week we were working. And, you know, before I knew it, I was 25 years old. And I'm like, I started welding straight out of high school. I didn't go to college, just went kind of straight to work. And I just felt like my life just kind of, I snapped and all of a sudden, all of my younger years

• 1:37Speaker 03

  are over and I'm just not really getting anywhere. So that's kind of how I kind of started thinking outside of the box, getting out, you know, what am I going to do? And real estate kind of fell into my lap because it was, I had one mentor in my life and it was my best friend growing up's father. He was a custom home builder. He had a few single family rentals and it was just kind of always topic of conversation. I can remember when we were younger, just, you know, he was going to pick up rent or he was going to fix a house. I don't think I really took much to it, you know, when we were in high school. I was 18, you know, our mind was on some other things. And, but I think that kind of ingrained.

• 2:18Speaker 03

  Somewhere in my mind, you know, I always kind of knew I could fall back on that. So I think once I got to almost a breaking point of where I needed to make a change, you know, I kind of, I called him up. I, we had a quick phone call and um, I was like, yeah, let's now or never, let's just try it. I'll find a deal. And I kind of made an agreement with him where he'd essentially be my first private money guy. And um, I ended up finding the first deal. It kind of all just snowballed from there.

• 2:49Speaker 02

  I, I want you to take us through your first deal, Luke, because I'm told that you found your first real estate deal on Facebook Marketplace, which is almost the quote of like finding a good deal on Craigslist, right? So uh, walk us through how you found this deal.

• 3:04Speaker 03

  It gets even better than that because the top off, the fact that it was off Facebook Marketplace, I sent my now fiancee to go walk it because I, I work a lot, so it's hard for me to be free during the day. And she's never done one construction job. She's never bought a house before. She has zero real estate experience. So she walked it. She's like, oh, I guess it looks all right. And uh, I negotiated with them over Facebook Messenger because they didn't want to take a phone call. And I bought it sight unseen to kind of make things a little more interesting.

• 3:37Speaker 01

  And to not even talk to the person either that you want to take a phone call. My God.

• 3:41Speaker 02

  So I guess, let me just ask, right? Like Luke, how did, did you not at any point feel that this might have been a scam, given that Facebook Marketplace didn't want to talk on the phone? Were, were you worried at all about that?

• 3:52Speaker 03

  Honestly, I had like 20 mutual friends with them. So to me, that was a, a real person. So um, I didn't know him personally, but I was like, you know, it's gotta be, it's gotta be legit. And she showed up. They were there when she was there and they walked through it. There was a tenant in there. So she was like, her first experience of tenants, she's walking over all their stuff. They're kind of like walking them through the homeowner. She said it was just wild and uh, Yeah, we decided to go through with it.

• 4:21Speaker 01

  So let me ask you this for like your first steps as okay, you guys negotiate through Messenger. You have a deal. What's the next thing that happened? Did you hire an attorney? What are those next crucial steps to actually close on the property?

• 4:39Speaker 03

  Luckily, I kind of really leaned on my mentor there because you know, he's been, he's been doing, he's been in real estate for 30 years. And so as soon as we agreed on a price, I just kind of went to him and you know, he sent me to his attorney. They drew up all the paperwork. I didn't know, I didn't know what I was looking at. I barely even read the contract if I'm being totally honest. And we just, just bought it. That was kind of how, I don't know if it was ignorant, me being naive or just ready to go. I don't know, but luckily it worked out.

• 5:14Speaker 02

  And you know, Luke, obviously you're, you're in a unique position because you have this, this mentor, right? Someone who had a lot of experience in real estate. And for a lot of the rookies that are listening, you may not have someone like Luke had that can kind of hold your hand and guide you through this process in real life right next to you, but there is a way to, to kind of create your own board of mentors. And I think a lot of it starts with building the right team to support you. So for me, the folks that really helped me early on were my agents and my lender. And they were kind of my conduit to introduce me to the other people that I needed to meet. So for the rookies that are listening, use the bigger pockets agent finder, use the bigger pockets lender finder to get connected with folks in your specific markets

• 5:57Speaker 02

  that are already working with real estate investors and can hold your hand to say, hey, you found this amazing deal, Luke. Here's who you need to go talk to next. So just trying to make sure that for the rookies that are listening, you understand what those, those options are for you as well. So Luke, you, you find, you find this deal. I guess, give us, give us the numbers on it. What, what did you end up buying it for? And how did you know that it was actually a good deal?

• 6:19Speaker 03

  So they had it listed for like 85 grand, I think. And.

• 6:25Speaker 03

  After, I mean, I really just kind of took it upon myself to comp a property. So I went on Redfin and all the solds and I was kind of doing the whole da-bang and um I figured it'd probably be worth right around one twenty, one thirty and it didn't need much work for what it was, I mean, from the pictures I saw. So uh, I figured my original plan was I was going, I was going to be the one to fix it up along with my mom. Does she helps us do stuff and my fiance. So um, I figured we could fix it up pretty cheap. I budgeted for twenty grand and um, I was like, you know, after kind of listening to your guys' podcasts and to some other people, I was like,

• 7:06Speaker 03

  you know, we could refi out um, and then move on to the next one. And that's kind of how it went. We ended up putting a little over twenty grand into it and um, we got it rented. I took it to the bank and they appraised it at like one thirty-five, one thirty-three, somewhere in there. And um, I pulled out as much as I could. I paid him off. We profited a little, took home a little less than twenty grand and um, we were off to the races, I guess you'd say.

• 7:33Speaker 01

  That's awesome.

• 7:34Speaker 02

  What a killer first deal.

• 7:36Speaker 03

  Yeah. It was, I, at the time, I didn't know that because I had done so little research and stuff, but now kind of where I'm at now, it's, yeah, it was a pretty good one.

• 7:47Speaker 01

  So with that property, you ended up renting it out. What was the rents? What was the cash flow?

• 7:51Speaker 03

  Yeah. So we ended up, now it's rented for like thirteen fifty and it cash flows about four hundred bucks a month.

• 7:57Speaker 01

  That's awesome.

• 7:58Speaker 03

  Yeah, yep.

• 7:59Speaker 01

  With no money into the deal. You pulled all your money back out.

• 8:02Speaker 03

  Yeah, yep. It worked out great.

• 8:04Speaker 02

  This might be one of the best first deals, Luke, that we've heard on the podcast. You founded in a very unconventional way, messaging someone on Facebook. You had a private money lender line up the whole thing. You estimated twenty K in rehab. You actually spent twenty K in rehab, which isn't normal. You refinanced, pulled cash out, and you're still cash flowing several hundred dollars per month. That is amazing.

• 8:27Speaker 03

  Uh, looking back now, it is pretty funny that it all worked out that way.

• 8:30Speaker 01

  Luke, I, I have a question about your friend's dad being the private money lender. Does your friend at all invest at all too? Or is this, is this just something that you've done? And I guess why, if your friend has it, why hasn't he with his dad's help?

• 8:47Speaker 03

  No, he, he does not actually. And um,

• 8:51Speaker 03

  I don't know why he's me and him kinda as you know, once high school hit me and him kinda went two different ways. He was a great lacrosse player. He went out. He actually won a couple of national championships. Unfortunately, came from a little different family and I went right to work after high school. So I think we just kinda had different mindsets. I think he's he's kinda back in town now and I'm sure he'll eventually get into it. But I also kind of um, his dad helped me. I mean, to this day, I love him and um, he's he's he's I call my dad and um, but he he built his portfolio brick by brick, cash, save up cash for the next house, like no banks involved, no nothing. So when I started kinda going this route, it quickly turned into

• 9:35Speaker 03

  him calling me crazy. So that was the one and only deal we've ever done together.

• 9:41Speaker 01

  I I just find it interesting because my story started out very similar where I started working for my childhood friend's father as a do helping him with his real estate as a property manager and I, you know, he was my first mentor, but my first deal, I actually partnered with his son. So my friend growing up and we did our first deal together and kinda my pitch was like, look what your dad is doing. We should do. We're gonna take a real quick break, but when we come back, Luke, I want to hear more about your journey and how you were able to scale so quickly to 35 units in two years. We'll be right back.

• 10:20Dave Meyer?

  As a real estate investor, the last thing I want to do or have time for is play accountant, banker and debt collector. But that's what I was doing every weekend, flipping between a bunch of apps, bank statements and receipts, trying to sort it all out by property and figure out who's late on rent. Then I found Baseline and it takes all of that off my plate. It's BiggerPockets official banking platform that automatically sorts my transactions, matches receipts and collects rent for every property. My tax prep is done and my weekends are mine again. Plus, I'm saving a ton of money on banking fees and apps that I don't need anymore. Get a hundred dollar bonus when you sign up. Today at baselane.com/bp.

• 11:04Dave Meyer?

  The Cash Flow Roadshow is back. Me, Henry, and other BiggerPockets personalities are coming to the Texas area from January 13th to 16th. We're going to be in Dallas, we're going to be in Austin, we're going to Houston, and we have a whole slate of events. We're definitely going to have meetups. We're doing our first ever live podcast recording of the BiggerPockets podcast, and we're also doing our first ever one-day workshop where Henry and I and other experts are going to be giving you hands-on advice on your personalized strategy. So if you want to join us, which I hope you will, go to biggerpockets.com/texas. You can get all the information and tickets there.

• 11:41Henry Washington?

  Quick word about a new pro perk you'll want to know about. Aven. If you're a homeowner, there's a good chance you're sitting on equity that you're not using. The problem is tapping into that usually means a cash-out refi, a traditional second mortgage, or weeks of paperwork just to get approved. Aven built something different. It's a credit card, but it's backed by your home equity, so you get a lot of the rate benefits of a HELOC with the flexibility of a card you can use anywhere. Rates are typically well below a standard credit card, approval is fast and mostly online, and you can use it for anything: a renovation, paying down high-interest debt, or just have more breathing room in your budget. And if you're a BiggerPockets Pro member, there's an extra reason to check it out. Get approved for the

• 12:22Henry Washington?

  Aven card, and you'll get a $400 statement credit after spending $400 on your Aven card, enough to cover your entire annual Pro membership. Head over to aven.com/biggerpockets to see if you qualify. Aven Financial, MLS #2042345. Cards issued per 20-day license from Visa USA, Inc. by Coastal Community Bank, MLS #462289. Member FDIC. Equal housing lender. Subject to approval. Terms apply. Visit aven.com for details.

• 12:44Dave Meyer?

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• 13:28Dave Meyer?

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• 14:13Dave Meyer?

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• 14:58Dave Meyer?

  expenses, and local market insights. It's all in one dashboard, making it easier to compare opportunities and move when the right deal shows up. Go to biggerpockets.com/lenar to create a free account and take a look. That's biggerpockets.com/lenar. Sign up for free and start exploring this smart investing opportunity today. Please consult your own legal and tax advisors to help evaluate the risks of any real estate transaction. Lennar is an equal housing opportunity builder.

• 15:28Speaker 01

  Okay, let's get back into the show with Luke. So Luke, you've had your first successful burr that you completed. What is the next move for you? What did the next couple of deals look like?

• 15:40Speaker 03

  We kind of just kept the ball rolling with the next one. I found, I'm honest to God, another house off Facebook Marketplace.

• 15:48Speaker 02

  What market are you in, Luke? I wouldn't have mentioned that. What market are you in?

• 15:51Speaker 03

  I'm in a small market outside like Rochester, Syracuse area of New York. Kind of in a bunch of, we've kind of stuck to the smaller towns and I don't know if that plays a difference, but I've bought quite a few deals off Facebook Marketplace. We kind of went, walked it, same deal. It was disgusting. So this was a lot different where we were going to be getting into some real rehab on this one. And I bought it for 40 grand. We put another 40 into it. And at the end of it, ended up appraising for like 145. So that was another great one. But it was a lot of learning lessons along starting to work with contractors because after that first deal, I didn't really mention, but halfway through it is when I started kind

• 16:35Speaker 03

  of building some relationships with contractors, with guys that do stuff because, you know, I got about a month in to me doing the work after I work and usually I don't get out. We usually start working around 5:00 AM. I work till 5, 6 o'clock at night. So by the time I get over there, it's 7 and actually productivity wise, you're probably only getting an hour and a half of work done a night. And after about a month of that, I sat down with my fiance and I'm like, this is, this isn't going to work. This isn't scalable. This isn't repeatable. I mean, it's just, and I'm miserable. This sucks. And so we started finding people. So then they kind of finished up that first one for us and then we kind of rolled them

• 17:19Speaker 03

  into this next one. And immediately that didn't work out. So I was on the hunt for contractors. I found some more. They came in and we ended up. Doing the property pretty decent. Um, they weren't the best to work with, but it was kind of one of those things where I couldn't be too picky because we had the, we had the house and we had to get it done. And so, but yeah, we ended up getting, getting it done. We rented it out, uh, to an attorney and that come to find out cash flow a good $40 a month. When I read my numbers, those are not the numbers I budgeted for. I thought I was going to be like the other one around three, 400 bucks a month and I had made some mistakes.

• 18:00Speaker 03

  I missed a couple. This was a different town and taxes were way higher for whatever reason. And I just, I skipped it. Honestly, it was just me not look, kind of doing my due diligence. So that was kind of an eye opener to where it, we, we got it rented. I was pumped. It was an attorney. She was great. And then we started kind of paying everything. And after like a few months, I'm like, this thing is, we ended up turning that one into an Airbnb now, actually.

• 18:29Speaker 02

  Interesting. So you guys pivoted the strategy a little bit. And since you made that transition, what has the cash flow looked like on that one?

• 18:36Speaker 03

  That one on average does like a thousand bucks a month.

• 18:38Speaker 02

  Yeah, that's amazing. All right. So to take it from 40 to a thousand.

• 18:42Speaker 01

  What a drastic change in cash flow by make transitioning that said strategy. How much more did you have to put into the property to furnish it and things like that?

• 18:52Speaker 03

  Not much. I mean, we spent, we, we only spent like five grand on getting, it's a small little two bedroom. So we kind of, we definitely went the cheap route, but I mean, it looks great and, um, it does really well in the area. It's the number one Airbnb.

• 19:05Speaker 02

  You said something that was like pretty amazing. So we got to pause on this, Luke Grant, because you, you said that you were netting 40 bucks per month as a long-term. You transitioned to short-term and it went from 40 to 1,000, right? So that's an additional $960. I'm breaking up my calculator here. That's an extra $960 per month in profits, right? So 960.

• 19:32Speaker 02

  Over 12 months is $11,520. You said the investment to get that additional revenue was only 5,000, right? So if we take our, our profit of 11,520, divide that by our investment of 5,000, we get a cash on cash return of 230%. The reason why I point that out is because there are a lot of people who are listening that already have properties that much like yours, aren't meeting their initial projections. But instead of focusing on buying the next deal, sometimes you can get a much better return by reinvesting into the properties that you already own. And that is an amazing proof of concept because you invested 5,000 bucks and got a 230% return.

• 20:15Speaker 02

  Could you have put that money into a different deal and gotten a 230% return? Probably not. But going back to your story loop, because I think it's amazing. I just want to make sure I have your stats right. 35 rentals, 13 flips, 8K monthly cash flow in two years.

• 20:32Speaker 03

  It's not entirely correct because we have a few things that are under contract to sell and buying, but it's right in there. Yeah.

• 20:38Speaker 02

  Generally speaking, right?

• 20:40Speaker 03

  Yeah.

• 20:40Speaker 02

  Yeah. So I think the biggest thing is I can't even wrap my head around that level of activity in such a short timeframe. So what like, how were you able to scale so quickly? What was kind of like the, the secret sauce that allowed you to move at such a rapid pace?

• 20:57Speaker 03

  I think it was a mixture of just my mindset mentality and um, kind of really reflecting on the deals we've done and kind of looking at those, how we did them and how can we kind of do them again? So I was just kind of going back to where we've originally talked and where I was in life, I just, you know, I was ready to get out of it. And um, I'm the type of person that, you know, once I kind of reached that point, like I'm just, I don't care. Like I will go and I'll make it work and um, So I kinda had that mentality and then once I did the first deal with my buddy's dad there, I learned that that was an option and then obviously exploring all the forums and YouTube and,

• 21:39Speaker 03

  you know, podcasts and stuff, learning about private money, different ways to get money. I actually went out and joined our local country club to try and network and that's where I found a couple of the guys that I do all my deals with now.

• 21:55Speaker 01

  What a great idea. Like, I know, are you like local country club? I mean, it's on the sticks, but that's like, it's like a hundred dollars a year for a social membership. If you don't play golf and you just wanna go and be a social member, like what a great investment.

• 22:10Speaker 03

  That was kinda where our head was and that was why we joined. I, I like to golf, so, but we, I didn't need to, you know, necessarily join the nicest place in town, but me and my fiance kinda talked about it and we figured it'd be, it would probably be good for business and it, it definitely has been.

• 22:27Speaker 02

  Luke, let me ask, right? So you, you joined the country club. First, what was the cost?

• 22:30Speaker 03

  It's like thirty-five hundred bucks a year.

• 22:32Speaker 02

  Okay, so not a small expense, but definitely not a major expense either.

• 22:37Speaker 01

  But that's what somebody would pay on a mastermind.

• 22:40Speaker 03

  Yeah, exactly.

• 22:41Speaker 02

  Or even more than that in a lot of situations, right? So thirty-five hundred bucks for the year, you join, you're, you're a member now. How do you go from, I signed up to getting to the point where the folks who are in this country club are actually lending you money? Because like, are you, are you just going in there handing out your business cards and I'm Luke, give me your money, I'm Luke, give me your money? Like, what is, what are the actual conversations look like?

• 23:03Speaker 03

  Well, so luckily for me, I kinda have a foot in the door because I'm very good at golf. So when I go and sign up for like leagues or tournaments, everybody wants to be on my team. And that's not cocky at all, it's just.

• 23:18Speaker 01

  No, no, no, no. I love the honesty of it.

• 23:21Speaker 03

  Just the, the reality of it, yeah.

• 23:24Speaker 02

  It would be the literal opposite for me, like no one would want me on their team if we were golfing because I am terrible. So I'm glad you had that working for you.

• 23:30Speaker 03

  Yeah, so, and that's kinda how, um, I've met so many people, cause I, I would just get, I started to get random text messages like, hey, you know, there's a tournament going on next Friday, would you wanna go? So because of that, I've just met. Like the biggest roofer in our town. I know him. I have a cell phone number now. So he does all of our roofs. Um, I met a guy who owns a couple of big fence companies. So they do our fence. I mean, like just all these relationships that have come of it. It's just, it's, it's worked out great.

• 23:58Speaker 01

  Tony is literally looking up golf lessons right now.

• 24:01Speaker 02

  Uh, not golf lessons, but I'm looking up our local country club right now to see like, I've never even looked into it before.

• 24:06Speaker 01

  But how cool to take something that you enjoy doing, that you love doing and turning it in a way to network and to make those connections.

• 24:17Speaker 03

  And that's just kind of what I did. Whenever we play, I just would make a point of talking about what I had going on. And I've learned that guys with money, you know, they, we, everyone kind of thinks the same. Like everyone's trying to make money with money. So they hear of a young kid who's hungry, who's doing deals. They're not afraid to throw them a hundred grand.

• 24:37Speaker 01

  And you're good at golf, so you must be trustworthy.

• 24:40Speaker 03

  Yeah, of course.

• 24:41Speaker 02

  I guess Luke, one, one final question on that piece. Was it, was it a very direct ask on your part after you had built these relationships to go to some of these folks and say, hey, you know, I'm in real estate. I've got this deal. Let me know if you're interested. Or was it more, I guess, kind of the inverse where they were like, hey, Luke, if you ever have anything, let us know.

• 24:59Speaker 03

  I work with three main guys now and two of them came to me. And then my very, the first guy, I actually printed out the entire deal. I brought it to his office where he works. And we kind of sat down and went over all the numbers and I kind of sold them on the deal. And, um, since then, now that I have, it's, it's been a lot easier now that I have stuff going on and kind of people know what I'm doing. And that was like the biggest thing I preached to anybody I talked to was I wouldn't ask for any money that I couldn't pay you back, whether this house burned up in flames. And I truly meant that. And I truly would never borrow money unless I had a

• 25:38Speaker 03

  way of getting them paid off in other deals or in other equity lines I have. So being very open and honest about the numbers and kind of where I'm at.

• 25:47Speaker 02

  And then in, in terms of structuring these deals with the various partners, was it all private money? Were there equity partnerships? Like, and how are you, how are you actually structuring the, the relationships on these different deals?

• 25:58Speaker 03

  So we do a very basic, depending on who I work with, it's either 10 to 12%. And it's just a flat 10 to 12% interest, whether I have the money out for a month or a year. And it's a year, I always cap it at a year. So that's how I've done every deal. I haven't done any equity positions yet. I'm looking at some bigger deals that we're trying to possibly talk about that. But um, as far as everything I've done with them, it's kind of been smaller stuff where we buy it, we go in, we fix it up. Either sell it or refi them out and um, get them out of it pretty quick.

• 26:32Speaker 01

  Now you mentioned some bigger deals and you've got your, your rentals, you've got the flips that you've done. So what are these bigger deals that you're looking at?

• 26:41Speaker 03

  Obviously I just closed on a 18 unit mobile home park.

• 26:45Speaker 01

  Congratulations.

• 26:47Speaker 03

  Thank you. Thank you. That's been a pretty big learning curve.

• 26:50Speaker 01

  Is that in New York? You did close on it in New York?

• 26:52Speaker 03

  Yeah. Yeah. It's, it's like 45 minutes away. So pretty local. Then we have a couple of larger apartment complexes that we're looking at as well, but nothing official on those.

• 27:02Speaker 01

  So let me ask, when you're looking at these bigger deals, what has been the difference between looking at, you know, the single family properties you're buying to rent or flip compared to like the due diligence per se on a larger multifamily property?

• 27:18Speaker 03

  Oh, it's leaps and bounds different. I'm learning now that, you know, so I don't want to sit here and act like I know what I'm talking about because I don't feel like I do. Well, yeah, there's just so much that goes into them. So many more tenants and I'm in New York. So there's so many tenant laws. And like I'm learning for this mobile home park, I, the bill, there's a seven, there's also a seven unit apartment building on the mobile home park. That's, that's condemned that we're starting with. And one of the apartments, I was like, I, we're kind of doing our walkthrough and um, all of their stuff was still in there, but they were gone and supposedly moved out. Well, I'll come to find out they did move out, but all their stuff's there. But in New York, technically I still have to go through an eviction process if I.

• 28:03Speaker 03

  Don't, they can sue me for getting rid of their stuff. So it's kind of like one of those things where I wouldn't have thought that'd be a big deal. I wasn't told about the tenant. It just, I was told it was a condemned building by everyone I talked to, co the previous owner. And now come to find out, we might have to go through this process, so.

• 28:21Speaker 01

  Which do you even know where to find the tenant to serve them or anything?

• 28:26Speaker 03

  I got a number, so I gotta make a few phone calls and hopefully I can offer them a little money and get out of there.

• 28:32Speaker 02

  So I look super excited to hear about this 18 mobile home park property that you just purchased. I think the biggest thing for Ricky's that are listening is probably the thought of like, how do you actually put the funds together to buy something this big? So what approach did you take to buy this mobile home park? Was it creative financing, seller financing, private money? What did you do to take this deal down?

• 28:56Speaker 03

  Yeah, so this deal was very odd situation how the whole thing happened. It was actually, I saw it for sale on Craigslist about a year ago, actually.

• 29:04Speaker 01

  So we go from Facebook Marketplace to Craigslist.

• 29:08Speaker 03

  It's even worse. So I talked to the guy, I talked to him for a few months and it was always odd conversations with him. It was just, he was super squirrely. We, you know, there'd be one week where he's like, I need the money, I need the money, let's sell it. And then I wouldn't hear from him again for a couple of weeks and same kind of cycle. And eventually I just kind of gave up on it, moved on. And then, you know, a couple of months ago, I saw it listed on the MLS. And I'm like, oh, you know, and they wanted a ton for it, so I didn't even bother. Kind of moved on again, and then I was talking to one of the guys I do deals with. And he was kind of talking about how he's foreclosing on a property up in Addison. I'm like, is that, and I asked, and sure enough, it was the same deal.

• 29:52Speaker 03

  He was actually holding the note for this mobile home park.

• 29:57Speaker 03

  So I started kind of talking to him. He gave me the whole rundown. It was not the best situation. A bunch of back taxes, a bunch of back utilities. Nobody's gotten paid in years. And the whole town wanted him out. So I kind of talked with the seller. I kind of talked with the lender. And I kind of was the middle man trying to wheel and deal it kind of whizzing my way in there. And so the agreement I came up with the lender was, you know, if I could get him to just sign the property over me, can I just assume the debt? And you'll start getting paid and we can all move on. You don't have to worry about going through foreclosure process and, you know,

• 30:38Speaker 03

  and he already knows I'm good for it. So he's like, if you could talk him into it, that's fine by me. So then like the next couple of months were just me and the seller kind of going back and forth. For basically what extra he was going to pocket on top of assume of the debt. We ended up agreeing on him not getting a dollar. So at closing, I came out of pocket, no money. And I completely assumed the debt. We're going to defer payments for a year while I fix the whole property up. So I don't have to worry about mortgage payments. The trailer park cash flow is quite a bit of money on its own without the seven unit building in the front. So by the time I'm actually going to have to start making mortgage payments, everything should be up and running and it should be a really, really good deal.

• 31:21Speaker 02

  So Luke, you, you don't have any partners on this deal. You didn't even necessarily raise any private money for this deal. You just assumed the note and came with $0 out of pocket?

• 31:30Speaker 03

  Yeah, exactly. I actually got paid 50 grand at closing because I had him bump the note up an extra 50 grand. So I could start rolling some of that into renovations.

• 31:39Speaker 02

  Luke, you might be the best real estate investor we've ever interviewed, finding deals off of Craigslist and Facebook Marketplace. And I love the story, man.

• 31:47Speaker 01

  This guy just got burned for years from this other person and he's willing to give you an extra $50,000.

• 31:56Speaker 01

  And take this property.

• 31:58Speaker 02

  Imagine going to a bank and saying, hey, bank, give me $50,000 to take over this, uh, this note. So.

• 32:03Speaker 03

  Oh, yeah. And if they saw, if they saw a picture of the property, they would have laughed in my face, too.

• 32:08Speaker 02

  Luke, I gotta take you with me in my, my negotiations moving forward, man. Cause you, you got, you got like the, the gift of gab or something going on there, man.

• 32:14Speaker 03

  Oh, no, no, I think I'm just lucky.

• 32:17Speaker 02

  Well, we've got to take our final ad break, but, uh, we've, we've got a little bit more to get into here with Luke. But while we're gone, make sure you guys are subscribed to the Real Estate Ricky YouTube channel. You guys can find us at Real Estate Ricky and we'll be right back after the short break.

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• 36:37Speaker 01

  Okay, welcome back from our break. We are here with Luke. So Luke, before we wrap things up, I want to touch on your W2 job. So you were able to actually move your fiance out of her normal W2 to run the business with you. So maybe touch on what she's, you know, helping you do in the business and then also what your plan is to be able to quit your W2 job.

• 37:01Speaker 03

  I want to preface that none of this would have been possible without her. And I also, my mom used to work for UPS. She would load boxes on the trucks and she quit and she now works as well. So those two are kind of, those two are kind of full time during the day, which allows me to still kind of work and pay the bills. And like I've yet to take $1 from anything we've made. It just all goes right back in and the only thing we've paid is just my mom and her and the Airbnb has covered that. So it kind of works out great and they're able to kind of, so we kind of split the roles

• 37:45Speaker 03

  where my mom kind of handles project management, I guess you'd say. And then Mal takes care of all the tenant issues, all the legal documents. She's extremely, extremely type A. So it works out amazing for emails, calls. I don't have to worry about a thing. If I need something, there's an Excel spreadsheet that is updated by the hour and it just, you know, I'm not like that at all. And I think without her, we really would be in a mess because our numbers would be kind of, I'm just the, you know, I like to be in the front, kind of pushing forward, finding deals and then luckily she's able to kind of keep everyone organized and.

• 38:26Speaker 03

  My mom's really, uh, got good at talking the contractor jargon. So, uh, it's kind of worked out well.

• 38:33Speaker 01

  And then what about yourself? What's the plan for you to eventually move out of your WT job?

• 38:38Speaker 03

  That's kind of where my biggest, uh, I guess hurdle would be right now. It's just, um, it's obviously a scary thought leaving, you know, a good job that pays all the bills and allows us to kind of do this. So, you know, I kind of have, I have worries if I do it too soon, it might really hinder us being able to continue to grow. But also I know how productive I can be. So I could only imagine if my two, three hours a day working was fifteen, you know? So, um, it's kind of one of those things where like I'm, I'm nervous and I don't really know how I should pay myself. I don't, I'm afraid to take money from the business. I don't like the thought of it. And, um,

• 39:23Speaker 03

  so I guess it's, uh, that's just kind of where I'm at currently is trying to figure out exactly all the logistics. So I want to up my flipping. Do I want to just pay myself off a flipping? Should I worry about growing cash flow? To kind of get to the point where all my bills are covered and then I could just not worry from that. And so that's kind of currently where I'm at with everything.

• 39:43Speaker 02

  Yeah. If I can kind of give you my recommendation, Luca, I think there's, there's a couple of things. You, you've built in expertise in a few areas already. Uh, the flipping to generate large chunks of cash, which is great. Um, obviously you're, uh, really good at finding deals in your market, uh, that are, that are undervalued and then stabilizing those properties to generate cash flow. So you've got, and your ability to raise money to fund these deals, right? So you've got three massive skillsets. Flipping for big chunks of cash, buying, renovating for the cash flow, raising money to fund all of your deals. So you've got all of the pieces in place, I think, to to lay that foundation to get you

• 40:25Speaker 02

  to step away. I think if I were you, the two things I would focus on are, one, getting your personal reserves to a point where you're comfortable. And what that comfortable is, you know, what that number is going to vary from person to person. Maybe for you, it's six months of your living expenses. Maybe it's two years of your living expenses. Whatever the number is, just decide for yourself, what number do I want to have in the bank? Not business reserves, but like for Luke personally, right? To cover my mortgage, my groceries, my bills, my fun, just my life. How much do I want to have set aside? Then get your cash flow to a number to say, okay, well, if I know my living expenses are X, maybe you want 2X in cash flow, right? Because there's going to be ups and downs.

• 41:08Speaker 02

  You're going to want to make sure you have money set aside. So I think if you can tackle those two things, getting your personal reserves in place, and then getting your cash flow to a point, again, whatever threshold you feel makes the most sense. But if you can check both of those boxes, then it's like, okay, well, I'm almost losing money at this point by not going into the business full time.

• 41:26Speaker 03

  I guess when you put it that way, I should probably quit tomorrow.

• 41:32Speaker 02

  There you go, man.

• 41:33Speaker 01

  Well, Luke, thank you so much for joining us on this episode of Real Estate Rookie. Where can people reach out to you?

• 41:39Speaker 03

  I'm not huge on social medias, but you can look me up on, I mean, Instagram, it's Luke underscore Tetra. Facebook, it's Luke Tetra and.

• 41:49Speaker 02

  And Luke, how do you spell your last name for folks?

• 41:50Speaker 03

  It's T E T R E A U L T.

• 41:54Speaker 01

  I'm Ashley and he's Tony. Thank you so much for joining us on this episode of Real Estate Rookie, and we'll see you guys soon for another episode.

• 42:02Speaker 07

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