Seth Teagle : Build To Rent, Urban Infill, and More

Seth Teagle joins First Responder Financial Freedom to share his remarkable journey from firefighter paramedic to successful real estate entrepreneur. After 22 years in the fire service and multiple career-ending back injuries, Seth transformed his side hustle into a thriving business that now manages 2,000 units across multiple states.

The conversation takes a fascinating turn as Seth unpacks his innovative approach to Build-To-Rent (BTR) developments. Unlike traditional apartment investing, this strategy involves constructing single-family homes, duplexes, and small multi-unit buildings specifically designed to be held as rentals, with the ultimate goal of selling entire neighborhoods to institutional investors. Seth explains why these large equity groups are aggressively seeking this product type and how his team has positioned themselves to capitalize on this growing market trend.

What truly sets Seth's strategy apart is his use of modular construction - a method far removed from what many imagine when they hear the term. Seth dispels common misconceptions, detailing how today's factory-built homes rival or exceed the quality of traditional construction while cutting build times in half. Listeners will gain valuable insights into the practical advantages this approach offers in addressing labor shortages, weather delays, and quality control challenges that plague conventional building methods.

The episode also delivers a masterclass in real estate financing mindset. Seth shares how paying 16% interest on his first apartment deal - a rate that initially seemed terrifying - ultimately led to a $1.2 million refinance that changed his life trajectory. His philosophy of focusing on the deal's fundamentals rather than fixating on interest rates provides a powerful framework for evaluating opportunities in any market condition.

Ready to expand your real estate investing horizons beyond traditional approaches? This conversation will challenge your assumptions about construction methods, financing strategies, and what's possible for first responders looking to build wealth through innovative real estate approaches.

Episode Transcript

Speaker 1 (00:01):
All right guys.
Welcome back to First Responder, financial Freedom.
We got Tyler, myself and ourbuddy from Columbus, seth Teagle
, today, who is a retiredfireman, and he's going to kind
of bring us up to speed withwhat he's been doing over in
Ohio, how they've been pivotingwith the market and what they
have going on.
So welcome back, seth.
How are you doing?

Speaker 2 (00:20):
Hey, thanks Mike and Tyler for having me back.
Great to see you guys again.

Speaker 1 (00:29):
Yeah, absolutely so.
We were trying to look up thelast episode.
We'll get that in the shownotes, but for those that have
not heard those episodes, couldyou give us the one-minute
summary of who Seth Teagle isand how you ended up here?

Speaker 2 (00:38):
Yeah, so I was a firefighter paramedic for 22
years.
I did seven to eight years inFlorida and the rest of my time
in Ohio.
I ultimately retired due tomultiple back injuries and
surgeries.
Luckily, I had my real estatecompany was on the rise during
all of that going on as well.
So I kind of got into realestate in 2014 and was looking

(01:02):
for a way to create passiveincome, was looking for a way to
not have to work so muchovertime and kind of stumbled
into real estate.
Looked at like it would besomething I'd be interested in.
I worked for a guy for about ayear and a half doing kind of
managing his flips and Irealized that that was going to
be another job and I wasn't.
That's not what I was lookingfor and I opted to, after lots

(01:23):
of research, lots of listening,opted to go into some larger
commercial stuff and I bought myfirst apartment building in
2015 2016.

Speaker 1 (01:31):
That was like 70 units, right that was 50.
50 okay yeah, yeah, that'sstill a pretty, pretty big one
right out the gate from yeah.

Speaker 2 (01:40):
so I still own it today, actually just didn't
refinance on it and uh.
But that that kind of opened myeyes up to what you could do in
commercial real estate as longas the market holds and things
go your way.
That deal led to a second dealwhich then led to me starting to
syndicate and do some thingswith bringing in other people.
And then just the growth fromthat led to our company and now

(02:03):
we're doing ground updevelopment BTR multifamily
doing a bunch of different stuff.

Speaker 1 (02:09):
So what?
So, first off, that's awesome.
I mean, I always say I wish Iwould have went bigger sooner
and you know, coming out thegate with 50, honestly, I just
didn't have the mindset for itat that point.
I don't think so, Knowing whatare like backup, what's your

(02:29):
team look like now?
So I mean, like when you firstgot started, you were, I know,
swinging the hammer, replacingwindows, doing the whole nine
yards.
What does your team look liketoday?

Speaker 2 (02:37):
So now there's three partners that are within our
company.
We're vertically integrated, sowe do all of our own property
management.
We do all of our own propertymanagement.
We do all of our ownconstruction, renovation,
oversight.
We have a cfo, we have a pp ofoperations, we have property
management staff and maintenancestaff and all that kind of
stuff within that entity andthen we have an analyst.

(02:58):
You know, I, I guess theinvestment company has a vp of
operations, a cfo, um, ananalyst, and then the partners,
and then we're basicallyscouring deals, putting them
together, and then we use a lotof folks kind of as 1099.
We have a civil engineer thatworks with us regularly for some
of the ground up stuff thatwe're doing, or the VTR.

Speaker 1 (03:20):
What's.

Speaker 2 (03:20):
VTR Build to rent.
There you go, we're buildingsingle family homes or duplexes
or three unit buildings orwhatever the size is, and then
we're just holding them asrentals and then the ultimate
exit would be to sell the entireportfolio to one buyer in the
end.
But it's a way to get you know.
It's kind of multifamily in thefact that you're buying.

(03:41):
You know you might be buyingland, or maybe you're buying a
whole street of duplexes orwhatever it is, and you know
you're owning all of that.
Traditionally, you see peoplebuy or I'm sort of excuse me
build, uh like basically build asub division or build an entire
neighborhood, and then it's allheld by the same owner and then
they rent everything out uh.
But it's really a hot kind ofmarket right now.

(04:02):
A lot the equity, big equitygroups are looking for that kind
of stuff at scale.
So we had kind of stumbled intothat and gotten into that.
But that's you know.
Overall, those are the mainplayers in our team.
I mean, I think we have what 20, probably 20 people that we
employ from varying levels.

Speaker 3 (04:19):
So when you guys started doing that and I know
you mentioned private equity, Ithink I always get the two mixed
up BlackRock or BlackstoneInvitation Home stuff like that,
is your intention to model that, I guess kind of like not copy,

(04:40):
but basically use that modeland then sell it to somebody in
the private equity space at somepoint, or at least that portion
of the business, the build orrent portion.

Speaker 2 (04:48):
So we're not doing it right now as a separate entity.
You know to where, like youcould build that portfolio up
and then sell it.
But what we're doing is we'refinding it.
Um, you know, we're our civilengineer that we brought on is
great because he can look at asite, he can do all the site
planning, he can look at theutilities, he can look like is
the site buildable?
You know what is it, what's thecost going to be for
infrastructure and those kindsof things?
And then we look at, okay, well, what's the capital raise look
like, what's the, the exitstrategy, look like, what's the

(05:08):
return look like.
And then, yeah, the goal wouldbe to build, build a big enough
um portfolio that you could inturn sell the portfolio to, like
a family officer or a orinstitutional equity group.
So we, the way that we designit is, we look at what are they
buying?
And then we design what we'regoing to build or what we're
going to buy to that model.

(05:31):
So I mean, like I saidtraditionally, you have to build
it because they're just not outthere.
I mean we've bought someapartment communities that were
an entire street, like we haveone, for instance.
It's 113 units, it's, I thinkit's 14 different buildings.
It's 113 units, it's, I thinkit's 14 different buildings, but
it's all on the same street.
So you could, in theory, sellthat to someone like that.

(05:52):
But ideally what we're doing iswe're looking at anything
between 20 to 60 units.
A lot of it's going to beduplexes or three unit, because
once you get above four unitbuildings the zoning changes and
so like.
In ohio, if your, if yourproperty is zoned r3, then we
can build anything up to afour-unit building there and we
just, you know, we'll look atthe sites and, okay, how many
units do we have to have forthis to financially make sense

(06:12):
at a 30% return, and then we'llbuild.
You know you have to go throughthe approval process and
entitling and all that kind ofstuff.
But once you can get it done,then we're building that out and
then we would hold it for youknow however long and then we
would look to exit.
But the equity groups, they'relooking at a certain door count,
you know.
So some of the big players, youknow you could come in and

(06:34):
build, you know, have 200 unitsbut as single family homes or
duplexes or whatever, likethey'd come in and buy something
like that, and that's where wesee a lot of.
There's a lot of equity and alot of capital on the sidelines
looking for that kind of stuff.
It's like one of the hottest.
It's been hot for a while butlike right now, with everything
going on, it's you know, I thinkit's nice because there's
multiple exit strategies.

(06:55):
If they bought it and then youknow they needed to free up
capital, you could sell off twoor three duplexes or 10 or
whatever.
You know.
Know there's exit strategieswhere, where, like if you're
buying an apartment building,you know those those exits take
three to six months usually todo it, and so it's harder to,
kind of like, if you need tolook, you need to have a
liquidity event.

(07:15):
It's hard to do it when you'reyou know you own a big apartment
complex.

Speaker 1 (07:20):
So how many and I was just trying to go back to the
team for one second is roughlyhow many units under management
are you guys?

Speaker 2 (07:29):
I understand you're building, but to give some
context to the size of team youhave, yeah, so like assets under
management, we have around 2000units in total between multiple
different states.
What we actually propertymanage here locally is about 700
units and it's only becausethey're local to central Ohio.
The stuff that's in Illinois orOklahoma or in Utah like we

(07:52):
don't manage it.
We asset manage those but wedon't manage them because it
wouldn't make sense for us to.
You know, every state has theirown rules for property managing
and how that all plays out inthe court systems and evictions
and we just't really.
You know it's the it can be themost time consuming part of the
business with the lowest yieldon time and on cost.

(08:13):
So we, you know we've opted tomanage everything locally here
in central ohio because that'swhere we're based out of.
But then some of this otherstuff we just work with really
good, you know we're buying orwe've bought in stuff that um
are in locations where we knowwe can get good property
managers.
So you know I used to have amindset of like, like, there's
no, no good property managermanager like we do.

(08:34):
But I think it's just the typeof asset you're buying.
If you're buying a rougherc-class asset or a d-class asset
or something like that, you'reright, there's few good managers
that will manage inneighborhoods like that or
assets like that.
But if you're buying somethingthat's a, you know, a nice b
class or in a good area, youhave a, a great group to pick
from.
And I think you know.
Getting started, I didn't knowmuch about property management

(08:56):
so I really didn't really knowhow to vet the right managers.
And now we have, you know,because we do it so much, we
know what to, we know how tokind of control the conversation
and if the people don't want toplay ball with us the way that
we want to do it, then we justmove on to the next manager.

Speaker 1 (09:10):
Yeah, so most of these.
So your main focus at thispoint is pretty much the build
to rent or infill strategy, notnecessarily picking up larger
apartment deals, or is it kindof whatever comes across your
desk type situation?

Speaker 2 (09:25):
yeah, I mean we still underwrite all of it.
I mean we like we let's see, webought.
We bought one in 2024 but wehadn't bought anything in almost
a year and a half before that,just because we couldn't make
any pencil.
You know, and if we can find anapartment community that will,
that makes sense to buy, thatwe'll buy.
But I would say we're probablyunderwriting 35 to 45 deals a

(09:46):
week in multiple markets andnone of them I mean just we
can't.
You know the pricing expectationof sellers hasn't come down yet
enough to match the currentlending terms and the cost of
money.
Uh, so you know you're there'sdiscrepancies there.
But also you have a lot ofinvestors that are sitting on
the sidelines because they'restill getting three and a half
to five percent money marketaccounts and other alternative

(10:08):
investments and there's zerorisk with those.
So they're kind of like well,you know, we have a lot of
people that used to be gung ho.
Investors are kind of sittingon the sidelines waiting to see
what happens, especially with,you know, with the new
administration and the thingsthat they're doing.
People are kind of like ratherthan you know where they may

(10:29):
have jumped in before.
They're kind of pausing andwaiting.
So not that we wouldn't buy them, but it's just trying to find
something that makes sense intoday's market with the rates
the interest rates, the way theyare, the cost of money.
And you know a lot of people,like you know, we have investors
that like the transactionalside of things too, so they want
to put their money in and knowthey can get it out in six
months.
Or you know that we can haveenough liquidity that doing some

(10:51):
of these BTR or these infillhousing projects, where you know
we might take your money andhave it back to you in three
months or six months, or youknow you could be in it for six
months and, hey, I need to pullout half my investment.
Well, as long as we can do it,we'll give you the money back.
Where you know they get into asyndication and they're locked
in.
For you know, traditionally twoto five years.

Speaker 1 (11:11):
So what is I guess?
So I know several of us are insyndications and that's been a
pretty uh tough road over thelast couple years.
Most of them have pauseddistributions or have done
capital calls or um.
You know some of them evenworse.
So not that we're in, but um,can you just in a nutshell

(11:32):
explain the difference betweenwhen somebody is investing in,
like a build to rent, versus asyndication?
How are they able to get theirmoney out so, so to speak, in
those timeframes, versussyndication, where you're locked
in?

Speaker 2 (11:47):
So if it's builder rent and we're doing well, I
guess I'll kind of back up.
If we're doing an infillproject, maybe we're buying five
lots that don't have houses onthem, we come in and we build
the houses.
We're using two modularbuilders right now.
So modular sounds when we firststarted looking at it it's.

(12:07):
You know, I've always been kindof like in my mind was modular,
was the same as the trailer.

Speaker 1 (12:12):
Right, yeah, and it's , and it's just very nice now
it's not that at all.

Speaker 2 (12:16):
And we, you know we we went through about 10
different modular builders, uh,toured their factories, did all
that kind of stuff to see youknow what, what?
We wanted the quality to be aspecific level, especially if
you're gonna you know you'rebuilding it, you're gonna sell
it for half a million or moreyou know they have to be a
certain quality.

Speaker 1 (12:32):
So we went through yeah, I can't see the wheels.
You know there can't beskirting and wheels sticking out
for half.
Yeah, and so I mean the stuffthat we're doing.

Speaker 2 (12:38):
You know, it's all, it's all legacy style
construction, it's all you.
You know the four joists aresolid, two by sixes or or or
bigger.
You know like it's it's,they're super beefy.
I mean we're.
You know the, the houses thatwe're doing are better built
than my stick bill house thatI've.
You know I've built four housesI've lived in over my lifetime
and I would say the ones thatwe're building are better than
those, just because everythingis plum level square when it

(12:59):
leaves the factory.
You factory, you know, we theone, the two that we're using,
ones here in Ohio, ones inMichigan.
You know we can go tour that.
We've toured the facilities.
But I mean we can go see thethe process through from start
to finish.
The way that they constructthem.
Is is much better than, like Isaid, doing site stick built um
and you'd never know it.
I mean, if I, if I walked youthrough it and I and you didn't

(13:21):
know it was a modular buildproject, which just means it's
built, it's pre-built in afactory, it's brought to our
site in boxes is what they callit um, and then it's, it's put
together on site.
You know, on average they can dotwo houses a day.
So when it comes you can have.
You can opt to have likeflooring put in, cabinets put in
, tile put in.
You know all these things donedoors are in, trims done, all

(13:46):
that stuff is done in thefactory.
So then it's really more of atime savings.
You know the price per squarefoot is a little bit cheaper,
but what you, you know, on atraditional stick built home,
you're looking at 12 to 14months of construction.
We can do these in six or lessand it's what?

Speaker 1 (14:02):
just to clarify for anybody that is having a hard
time wrapping their head around,this modular basically shows up
for lack of a better way todescribe it as like a Lego kit.
Right, where a trailer or amobile home shows up on wheels
Right.
These are two different assets.
People to confuse, like mobilehome, trailer, courthouse, with

(14:26):
what you're saying, becausethey're not the same, even
though the names and terminologysometimes get tossed around,
correct?

Speaker 2 (14:32):
Correct.
I mean we set these on either acrawl space or a full basement
and all the electrics.
I mean it's like in Ohio, thestate ohio approves the plans
prior to it ever being built andit goes under just as much
scrutiny as it would if you'rebuilding a single family home to
live in or, you know, if youlive in like a national builder

(14:52):
that we work with is dr horton.
So they have, you know, someplaces.
They have great.
You know that people love them,people hate them here or there,
but we are under the samescrutiny that a builder like
that is or any other custombuilder.
It's the same.
The plans are scrutinized, thesame.
The quality of the materials isscrutinized, the same.
The quality of the electric,the plumbing, you know all of it
still has to pass the samehousing code or building code

(15:15):
that any other home builder hasto, has to do.
So it's not.
It's not a.
You're not losing quality, atleast with the ones that we're
using you.
What you're doing is you're,from our perspective, you're
gaining time.
Yeah, I can you know, and we'relooking, like I said, we're
looking for sites where we canput 10 of these, 20 of these, 30
of these in one area and thatgives us economies of scale.

(15:36):
So we can, you know, we'rerunning utilities or foundations
, or you know, excavating, we'redoing it.
We're doing it over 30different sites all in one
neighborhood or on one street,versus cherry picking them all
over Columbus.
Now we have done that and we dothat.
And back to your originalquestion was somebody would
invest in that we have a landdevelopment fund.

(15:59):
They would invest in the fundand then the fund goes out and
buys 10 of these infill sitesand then we, you know we do the
houses, we put them on, wefinish and we put them on the
mls and we sell them.
So if we're doing infill, we'redoing kind of like these
one-off lots.
That's the goal is is we lookat what the what our all-in
costs are for the land,utilities and the build, and
then we look at the reversion onsale and there has to be a

(16:23):
certain percent difference.
So, like you know, we looked atone this morning if we build a
house, we're all in for 320,000.
We would have to sell the housefor 520,000 in order for it to
be worth it to us, and so thatyou know.
So you have a $200,000 spreadthere and that's where the
investors make their money andtoo, like you mentioned a couple
things.

Speaker 3 (16:41):
so, like you, not only are you saving money per
square foot with these homes,your capital costs go way down
because you go from 12 to 14months to six months.
And then it's more appealing onthe investor side because they
usually have a 12 to 14 monthhold, depending on what you guys
tell them, and now conceivably,I guess, they could be in and
out within six months.
So their money is a little bitmore liquid.

Speaker 2 (17:03):
Yeah, and that's, and that's.
The thing is, as we've done,syndications now, for goodness I
don't even know, eight years,nine years, you know, that's
always kind of been the drawbackwhere we'll have people that
you know, we have investors.
They look at those more now aslike long-term investments and
then they still want to do somethings shorter term and so, like

(17:26):
I said, just kind ofunderstanding what the investors
we work with want, uh, we'vekind of pivoted to do some of
this other stuff where we werealways we were kind of
anti-transactional before, butnow it's like well, people don't
want their money.
You know, not everybody wantstheir money tied up for five
years.
Not everybody wants their moneytied up on something that is
you know, hey, I have a, I'mhaving a crisis at home, I need
to get some capital back.
Well, you know, in a syndication, another way that you can do
that is you have to sell yourposition, or the general

(17:47):
partnerships have to buy you out, or you know you like, if mike
invested 50 grand with us, he'dhave to go find somebody else to
replace him.
We'd have to approve them.
If that happens, then they puttheir money in.
Mike gets cashed out.
He's on his way, you know, inthese scenarios we have people
that like it better.
Just because and maybe they'redoing both scenarios, but they
like it the option to be in andout, get their money, you know,

(18:08):
put their money and get moneyback out.
They can kind of see the return.
People seem to like that,especially in today's
environment.
So, um, that was kind of why wewe went that route.
And what really turned us on toit was an equity group out of
new york approached us and said,hey, we want to look, we're
looking at doing this at scale.
You know, we've been doing iton the east coast, we want to
look at doing the midwest.
They got our names fromsomebody because they were

(18:29):
trying to come into columbus andyou know, we really kind of
looked at what their modelingwas.
It was like, well, shoot, wecould do this, you know, so we
don't have the backing that theydo.
I mean, they have 60 milliondollars of backing to do
something like this.
We don don't have that backing.
But this, you know, thestrategy that they're
implementing is we were lookingat it.
We're like, well, I mean, thisis a no brainer for us, we could

(18:51):
easily do this.
And so we started doing.
I think we've done what maybeeight of them here locally and
you know, and it's worked out.
And with the humongous housingshortage that we have in
columbus, you know, if you tryto build a development, it takes
years.
So I always tell people whenyou, when you start seeing
apartments get built or asubdivision get built, if it's a

(19:11):
track builder and they'rebuilding.
You know they have a 200 unitsubdivision that they're going
to build.
The work on that subdivisionstarted years ago.
Like you might start seeing thedirt move in the, in the
shovels in the ground and housesbeing erected, but they've been
working on that deal for years,in most cases prior to ever
seeing that.
So it's just they're.

(19:32):
The development side of thingsis like the greatest upside.
It's there's a lot of risk thatgoes along with it, but it just
it's.
It's very slow money.
So you know, again, it's that'swhy we look to start doing
infill and we have a whole weyou know whole criteria of what
lots we have to be certain with.

Speaker 1 (19:49):
They can't what they have had a house on them before,
kind of like that kind of stuffso for somebody that is
interested or that's like, hey,I might be interested in doing
that, can you, in a ballpark orroundabout way, describe like,
hey, what is the average costper square foot?
And and I know that can dependlargely on your site work and
lot price, but what are somethings to look out for.

(20:12):
How big of a lot should youkind of have identified for one
of these three or four units?
Again, and I understand in LosAngeles County it's going to be
much different than unrestrictedland in West Virginia, but just
as a if you had to, hey, theseare the things you absolutely
want to do and these are thethings, uh, don't worry about

(20:33):
yeah.

Speaker 2 (20:33):
So I mean, if you're doing infill I mean the builders
that we're working with theminimum lot width is 30 feet, so
you have to have something.
They have to have at least 30feet in order to be able to dig
the foundations and and put inthe footers and excavate the way
that they need to.
If there was a house that wasalready on site at one point in
time so, like Columbus has lotsthat are vacant but the house
burned down 20 years ago andthey tore the house down but

(20:56):
didn't remove the foundation,they just covered it up If you
come across a lot like that, ithas to be even wider, because
the city of Columbus wouldrequire you to dig out the
footers like down all the way tothe footers then dig them out.
Well, in order to do thatcorrectly, you have to have so
many feet of like around this,of that.
So if you start, you know ifyou go any less than 30 feet,
like the builders say, minimumlot width is 30 feet.

(21:18):
We would say on a lot that hadan existing house and you
discover that the foundation isstill there, you're probably
talking 40 foot width minimumjust to have enough room,
because what ends up happeningis you can't.
You know if you're, if you'reexcavating, you have to get the
equipment around to the backside of the house, or you know,
to be able to move around thelot and you end up running out.
You can't get the excavator tothe back side.
So if you don't have enoughwidth, um, you know, so bare

(21:43):
minimum is 30.
If it had a previous house on itin our area it's 40.
But on average we're looking atstuff that's 50 feet width, so
it just kind of depends.
And then the depth obviously inColumbus most of the stuff that
we see is 100 feet deep.
That's like kind of old, maybethe stuff that was parceled 50
years ago.
I mean, that's kind of thestandard for us 50 by 100.

(22:04):
If we're looking at doing newstuff, like we're looking at a
couple sites where we're fullyentitling it, you know, then
we'll, we'll design it, we'llmake it whatever the
municipality requires.
But you know, good rule of thumbfor us is a minimum of 40.
Uh, gets us on any lot, youknow.
It gives us what we need, um,and then the other thing you
want to look for is like arethere utilities there?

(22:26):
Already?
You know utilities drivedevelopment.
So if you are looking at apiece of land and the water and
sewer taps are at the sidewalk,that's perfect because you don't
have to spend a ton of moneyrunning water and sewer there.
But if you look at somethingthat you know water and sewer
stubbed out and stopped twoblocks away, I mean, then you
have to look at running thewater and sewer to your site and
then and then tapping into itand that it just is all added

(22:49):
cost.
So it wouldn't make any senseto do that.
If it was like a, you knowyou're building a single house,
but if you could get you knowyou could pick up land that you
could put 100 duplexes on it or50 duplexes or something like
that, then it might make senseto do that.
Like we just turned the sitedown, uh, where we could have
put 40 duplexes, but because ofthe terrain, because of the

(23:09):
utilities uh, you know thedifferent the site work that
would have to go into it.
It didn't pencil out for us tomove forward.
So that I think is a lot of thea lot of the things you have to
understand, uh, before you ever.
You know a lot of that getscovered in your due diligence.
So, just like multi-family orbigger apartments, you know you
want I mean development, youwant it.
You know 90, 120 days of duediligence before any kind of

(23:32):
like money would be hard orwhatever and you would have to
go.
You know we always kind of saywe won't close until we have
full plan approval.
So that would be.
You know that could be sixmonths, nine months, I mean on
some stuff.
It's a year of due diligencebecause you have to go through,
especially if you get rezoned.
It can take longer, but that's,you know, for at least for lot
sizes.
Where are the utilities at?
What do they look like?

(23:53):
What's around you?
So again, the area that you'rebuying in, or what the
neighbor's houses look like, youknow you don't want to go put a
brand new house on a C-classneighborhood.

Speaker 1 (24:02):
They just did that in this.
So where I live there's a, afamily, um, I think they're
persian and they, I mean, theyown a ton of stuff and they just
built these, like build to renthouses that stick out like a
sore thumb and I'm just likethose don't look bad, but for
the area they look horrible.
Um, no, I shouldn't sayhorrible, they just look very

(24:24):
different.
But and then I got to thinking,so it was just kind of
coincidental that I cause Ididn't really realize you were
doing the build to rent stuff,and I immediately started
thinking like what the price persquare foot probably was to
build these.
And, uh, is there a?
I know again, this is extremelydependent on the area but like
what is a rough number?

(24:45):
Like when I built this housethat I'm again, this is
extremely dependent on the area,but like what is a rough number
?
Like when I built this housethat I'm sitting in, I say built
, it was one of those track typebuilder homes Like it was like
a little under 90 bucks a squarefoot.
Granted, this was 14, 15 yearsago, but like what is reasonable
for these types.

Speaker 2 (25:02):
Well, that number is definitely no longer accurate.

Speaker 1 (25:04):
Yeah, yeah, these types, well, that number is
definitely no longer accurate.

Speaker 2 (25:07):
Yeah, yeah, I would say we were probably like at 120
a square foot.
You know 130 square footsomewhere in there.
You know, if we're buildingmulti-family, we're probably
like at 175 a square foot andthat's without land.
Yeah, that's without lands.
I mean, you know, we, thebuilders that we're working with
, you know they have differentlevels of finish so like, let's
say we we were going to do aworkforce housing project.

(25:28):
Um, you know, they have stuffwhere you could get a 1200, 1300
square foot house out the doorfor 120 grand.
You know, but your, your wallthicknesses are different.
Your, you know the the frame ofthe house, like the bones of it,
are the same, but then the youknow they might be using like
two by threes for the yeah, itstarts to get noticeably chintzy
on the inside yeah and it, butit like in columbus they have a

(25:51):
lot of um, they've got a couplelike tiny home developments,
they've got a couple of like youknow it's something that
they're doing with the city orthe county where they're trying
to use it for, like to househomeless people.
So it's, you know, like not anencampment per se, but like, hey
, we got all these homeless, wegot to put them somewhere.
So, like, in a situation likethat, you would, you, you could,
you could build that productand save as much as you count

(26:13):
the front end you know wherewe're at is it would, our stuff
would look no different than thehouse that you built.
You know it would look no likeif we put it up next to a, an mi
home.
Or in my area, in my homes,rockford homes, pulte's a
national builder that's aroundhere like DR.
Horton, like you would drivethrough the neighborhood and
you'd look at something likethat, like you wouldn't be able
to tell the difference from theoutside between what we've done

(26:34):
and what they've done.
The only thing on the inside,if you know what you're looking
for is what's called a marriagewall.
And on these modular buildersthey come in boxes, so like.
And on these modular buildersthey come in boxes so like,
let's say you're doing you knowit's all site or it's all plan

(26:54):
specific, but let's just sayyou're building a two-story
duplex or or just a two-story umhouse or a cape cod.
You know it might come in liketwo, like a cape cod, for
instance, would come in twoboxes and then the roofs, the,
the roofs.
It's interesting the roofs arehinged so they are shingled and
done in the factory, but theirgusset roofs are hinged, so they
are shingled and done in thefactory, but their gusset plates
are hinged.
So when they come to the sitethey're like laying on top of
each other and then they put,they put the boxes in place with
a crane, they bolt themtogether so they're very secure.

(27:16):
The level, like I said,everything's great.
And then they, the crane, willtake the roofs and they'll pitch
them to the pitch they'resupposed to be at and they have
almost like I would kind ofjokingly say it looks like a
kickstand.
But they'll have, uh likealmost like a two by four, kind
of like a um, like a knee wallthat will pop down and it will
hold it in place and they secureit when you tilt the cab.

Speaker 1 (27:36):
You know yeah, yes, yeah, so if you think about that
.

Speaker 2 (27:38):
So it comes in flat.
They pitch the roof there towhatever pitch it's supposed to
be and then usually there's likethe last three feet that they
haven't finished.
They'll finish it on site andthey have set crews that come in
from the factory to do all thisstuff.
But I mean it's it's.
You know, like I said, if wehave a site like that, they can
the crane those groups can setto these houses per day.
So, like I said it, speed andefficiency is where you come,

(28:00):
like, where it ends up coming inwhere the value is.
So, even if it's the same priceper square foot, if we can do,
you know we can do two to fourof these a day and it's only
taking us six months to buildthem.
I mean, you know that was alwaysour thing, getting into it like
I didn't want to be like mosttrack builders in our area.
I mean I wouldn't say theirhomes are garbage, but they're,

(28:20):
flashing is bad, drywall's bad.
I mean there's just a lot ofthings that go along with it
that we don't like and so we hadto.
We wanted to ensure, like, theutmost quality.
I would want to live in it orown it and if I would do that,
then you know I was willing todo it and so that the two
builders that we found that'skind of the quality that we're
getting with them.
So you know, but I said, andthe cost to carry, the carry

(28:42):
costs are a good thing too, likeyou know.
Let's say I I do a hard moneyloan through tyler or somebody
else and they're charging me 12interest on our money.
Well, if my holding time periodis cut from 12 months to six
months, I have to factor thatinto my overall value, right, is
it?
The speed becomes, um, you haveto, you have to kind of
calculate what that value is.

(29:03):
And you know, when you're doingone or two houses maybe it's
not that big of a deal, but ifyou're doing 20 of them, or 30
of them, or 50 of them, itreally begins to add up.
And that can be the value thatyou're looking at.
Is, even if it was a straightcost, the exact same price per
square foot.
The time value is there.
You have to factor that in too.

Speaker 1 (29:21):
So that's Did you start paying on these?
Do you put a deposit downBecause you're not buying real
property at the time of sale,you're literally building it?
Do you put a deposit down andthen, when it's at 50%, you put
more down and then, when youtake delivery, you pay the final
, or how does that work?

Speaker 2 (29:39):
Yeah, so normally we'll pay cash for the land and
then we'll put a percentagedeposit down with the builder
and then we don't pay them againuntil it's ready for delivery,
and then a delivery will paythem the full, whatever the
remainder is so the way thatwe've.
Kind of the way that we workedout the first few was we'd use a
hard money lender that we knewwe would put.
We would, we would pay cash tothe land, we would give them

(30:01):
first position on the land.
We would then put down adeposit on the house.
So, you know, it could be 10,could be 20, you know whatever
the specifics are with thatbuilder.
And then they, the builder,carries the cost of the house
until you close, and then thehard money lender comes in and
he he'll pay off the house.
We'll put it on.
You know, if they ship it to us, um, it gets put on the

(30:21):
foundation.
You know, the day they come wekind of say it's usually like 90
done at that point.
And then we have kind of um,quote, unquote, last mile tasks
that we have to get done.
So from the time they set ittill the time we can go on the
market is like two weeks.
And then we just throw it onthe mls.
If we're not, you know, if it'snot a btr community, we're just
doing infill housing.
The goal is to to get the housethere, get it built, get it

(30:42):
finished and then put it on themarket and sell it and the last
mile stuff for us.
You know, I think I saidearlier, you know you could have
them do backsplashes, cabinets,appliances can be in place, all
those kinds of things.
Um, but they don't do garagesand they don't do front porches.
So, like if the house that youdesign has, like a side by, you
know, a side side load garage orrear load garage or whatever it

(31:05):
is, that's getting built onsite, and then if it has a front
porch, we're building thatonsite as well, it will come
prepped and ready for you toattach it and build it.
But then we'll use localframers and trades folks to do
that work once it gets here.
So again, that has to get addedinto the price of the house.
But that's it comes otherwise.
Otherwise, like I said,everything it can be done as

(31:27):
much as you want.
You know to where the timesavings for us.
You know, because what we'recombating in columbus is labor
shortages, cost overruns.
You know all these things thatyou know as guys kind of getting
into that space.
You know how do you competewith the track builders, right,
if we're saying, hey, we want tobuild 50 of these houses, well,
the minute you have a reallygood subcontractor and he get

(31:47):
you know you stop, you're not,you're not building seven days a
week, but the the track builderdown the road is and they'll
give them 50 cents more an hour.
They're out of there, yeah.
And so it's like how do you,how do we ensure that we can
start and be done within thetime frame that we said we could
?
This was the solution that wefound, because all of it's being
handled in the warehouse andthey're I mean they're, they're,

(32:08):
uh, uh.
The two groups that we'reworking with you know they're um
.

Speaker 1 (32:13):
Do they use any amish or mennonite builders for that?

Speaker 2 (32:16):
uh I only asked because I know ohio is a hotbed
it is yeah, but I used to buyall my cabinets from a company
there that finished them.

Speaker 1 (32:22):
I used to buy all my cabinets from a company there
that finished them basically ina factory like that, with some
final construction for lack of abetter way to describe it was
done by some Amish crews.

Speaker 2 (32:44):
And they were good quality at a relatively cheap
price.
No, I mean I've not seen anyAmish guys when we've toured the
factories and stuff.
I mean these companies havebeen around for 50 years, I mean
, so they've got a long trackrecord and I've never seen them.
But I mean they have.
You know, you walk in there andit's interesting to see like I
could hear about it, like I'mtalking to you and the listeners
and like and you think in yourmind you know what it is and you
even go, look at their websites, but walking into their factory

(33:06):
, understanding that they'recutting the lumber in-house,
specific to your project, andeverything's under control, it's
all in a controlled environment.
They have jigs that they set upfor your floor plan, for your
walls, for the drywall, like theway that they do all this stuff
, and then they just pick it upwith chains and they move it
around, they put it together,kind of like an erector set, and
once the house, you know oncethat that that box is built,

(33:29):
then you have all your plumbing,electric hvac, all that stuff
is ran and done right there inthe factory, you know.
And so, like I said, the nicething is is if you're stick
building on site.
You know, come winter in ohioyou're done.
I mean, you're not.
You better have a roof on thatthing and windows in place.

Speaker 1 (33:43):
It's a lot easier to make sure the workforce is sober
when they have to show up atthe same building every day.
You know, like all these littlethings.

Speaker 2 (33:51):
Yeah, it would.
You know that's those are thethings that we that were the
kind of the unpredictable itemsthat if we were going to get
into this we're trying to like.
You know, how do you, how doyou predict those things or how
do you you kind of combat someof that stuff?
And that was, you know, thishas been a good solution for us
thus far, so you, know, will itwork five years from now?
I don't know.

(34:11):
But I know we met with a guythat has built over 1500 of
these type houses in Ohio beforewe did this and walked some of
his model homes and if you wentto his site you would think he's
a real custom builder.
But all he does is works on ablueprint with you and then he
takes it to the, the thesemodular builders, and they say,
okay, we can do this, but weneed to tweak the plan this way

(34:31):
for it to be a mod build.
And then they do, you know, andhe does exactly what we do, but
his business is custom homebuilding.
So I mean, it's just a, it'sjust a different way to do it
and I think it gives us a littlebit of an edge, because there's
a lot of people, a lot of thebig builders want to do stick
build.
A lot of, you know, and there'ssome, there's some uh, mindset
shift, you know, mindset kind ofeducating.

(34:52):
You have to do with people,because most people, you know
they hear modular build andthey're kind of like, oh, I
think that's low quality.
But you know even lenders wemet with multiple lenders in
ohio to ensure that these arelendable because, god forbid,
you build a house and then knowyou can get a loan on it.
I mean, who wants that right?
We, we had to ensure that thatthese things could get an fha
loan, that they could get aconventional loan.

(35:12):
That, like you know, and evensome of the lenders, we had to
educate with material, we had toeducate with videos, we had to
educate them with, you know,like this is what we're talking
about.
And as soon as they see theproduct, um, they're like oh my
gosh, great yeah, but if you can, because we ran into that.

Speaker 1 (35:27):
You have to tie down an older style modular mobile
home.
You have to tie it down to thefoundation so it can get a title
and not have, so it can get adeed and not be treated as
basically an RV.
But if you can be the one-stopshop where you're like, hey, we
got this build, you can pickthese finishes, we have the

(35:50):
lender, you're a one-stop shop.
I guess back to your verticallyintegrated part at the
beginning, I would think thatwhat you're describing, tyler, I
mean what, from yourperspective, financing wise,
would be an issue on any of thisstuff.

Speaker 3 (36:06):
Nothing and it's just kind of like to that point
right, like they they categorizemanufactured, then modular, and
then they'll have stick built.
Yeah, so I don't.
I mean, usually when you'redealing with, like the older
manufacturer, do you havesomething called?
I think it's a 433A and that'slike maybe that's California
specific, but that's when the itgoes from mobile to permanent

(36:27):
foundation and now it'sconsidered real property.
But no, I mean, I think it'sbecoming more common and I think
, like anything right.
So like, if private equity isdoing it, it's building the
scale.
All the lenders see this is howthings are being built.
They want a piece of the action.
They want to they they lenderswant to lend, contrary to
everybody's belief when they'relooking at underwriters and hate
on underwriters.
They're in this to lend andmake money, but they just want

(36:49):
to make sure it's good assets.
So I think, as it becomes morepopular, I think there's going
to be less and less.
But there's really not a bigdifference.
And I have a buddy out here incalifornia who does um on a
smaller scale, but he's hestarted by doing this as a
specialty as far as rehabbingthem, and then now he's doing
the same thing.
He's getting the lots and thenhe's going through the whole
process.

(37:09):
I think I just had him on thatpodcast.
I shot at that studio Mike, andhe's crushing it.
And I think once the stigma ispermanently gone and you see the
quality there, I don't think onthe lender side, on the
consumer side, on the investorside, there's really not going
to be that big of a difference.
And to Seth's point, if you canrepeat this over and over, I

(37:30):
think it's going to become a lotmore common.
I was just thinking now well, Iwant to buy some property in
Central California that we canhunt on and stuff like that.
I mean, this is way more viablethan finding somebody to build,
like a custom home builder outin the middle of the country.
What a pain in the butt.
But if you can do this, I meanI think there's a lot of
benefits to it.
Yeah, but on the lending sidethere's really not too much that

(37:53):
I see.
Excuse me, that would be a thatwould pose a problem yeah, and
these are, I mean, like I said,the foundations.

Speaker 2 (38:00):
You know, we basically have the foundation in
the ground, the sill plates on,ready to down.
It's done just like a scene.
You know, just like the housethat I just recently built, last
year, it's done exactly thesame thing.
You know, the same people thatare pouring my walls are pouring
the walls for these things.
So, in the end, like I said,the only thing that you would
notice if you walk through oneis the marriage wall, because,
instead of it being like, let'ssay, the, the doorway between,

(38:24):
like, the living room and thekitchen, if that, if you walk
through that, that opening, itmight be a two by six opening or
two by eight opening, so it'dbe thicker because you're going
to have the, the two boxes meet,and rather than be like a two
by four opening.
So, like you would, the wherethey, the wall that they meet on
all the way down, is going tohave like a thicker opening.
But it's not.
I mean, it's really notnoticeable, even if there's

(38:46):
doors on those openings, the waythat we finish the jams out and
stuff.
I mean you, you, you'd nevernotice it if I didn't tell you
and you don't, and and again infull transparency, like you
don't have to disclose it either, like nobody cares.
It's not like lenders are, likeyou know at least we haven't
ran into that where our lendercared or the buyer cared.
You know we put on the mls,we're giving you a warranty.

(39:07):
You know we're treating it justlike you know any other home
builder would.
Nobody has ever cared, becauseit gets fully inspected by us.
But even by a buyer, we, youknow there'd be no, there's
nothing to fail it.
Or, like you know, there's nosurprises.
I mean the the inspector mighthave some questions about things
.
You know they really aredigging into what's what, but I
mean we've done them withfinished basements, you know.

(39:27):
I mean you just never, youwould never know.
I mean, like I said, that wasthe thing.
There are modular builders outthere that don't do it to that
quality.
Um champion is a big one.
They're one of the biggestnational modular builders in the
country and their, their mottoor their mentality is speed.
So they're, you know, likegiving.
For instance, when we werelooking at doing this, we went

(39:48):
up to northern ohio, kind of bylake erie and there's a builder
up there that's doing 120.
It was a subdivision of kind oflike summer cottages for people
that wanted a summer home up bylake erie and you know he was
doing like shotgun kind ofsummer cottages.
You know 1200 square feet thenmaybe they're they might have
been 30 feet wide.
Well, he used you know he wasdoing 120, he used champion for

(40:11):
60 of those.
And then he started using thiscompany, one of the companies
that we're using, and we wereable to walk some of the
champion ones and then walk,though we were there when they
were setting uh, some of his.
He set six in two days andmultiple cranes going.
It was pretty neat to watch.
But then we get to walk theproduct and see it and you can
see a total difference ofquality.
So there are poor qualitymodular builders out there but

(40:33):
the ones, like I said, thatwe've specifically vetted are
not that and we wouldn't do itany other way because, again,
you know you're kind of puttingyour brand on it and you know
columbus is a big city but it'snot that big.
You'll get a pretty bad namequickly and you know it's no
different than rehabbing aproperty or if you have rentals,
you know there's a right way todo it and then there's a way to
cut corners and do it cheaperup front, but then it ends up
costing you more in the endbecause the callbacks for her

(40:55):
warranties, the callback forfamily windows, the callback for
, you know, bad roof jobs, Imean any of that stuff is we
want to.
We want to sell you the houseand not have to come back to it.
Or, you know, if we're doingVTR, we want to own it with
almost zero maintenance andrepair, because it was built
right from the start.

Speaker 1 (41:12):
So whenever you basically refi these, how are
you the ones you're keeping?
So you pay cash for the land?
You put a deposit down, thenyou, I guess, pay cash whenever
it's delivered and then like,where does how does that work?

Speaker 2 (41:32):
Like, do you go ahead and just refinance it out like
a traditional rental property orWell, if we're going to do a

(41:56):
bunch of them, like I said, wehad a site, we were doing 25 of
these we would get an actualdevelopment loan and then you
might do like three or four at atime.
The lender would set it up andsay, okay, you guys bought the
land and then we're going, yourdraws would be spelled out of
that loan.
So it's very similar to that.
I mean, it's kind of easier tofinance.
Where it's a little differentis if we're buying let's say
we're doing five houses on fivedifferent sites, then yeah, then
we would be using, we could useour own money or, let's say, a
hard money lender, and in thosescenarios we're paying cash for

(42:20):
land and we might pay cash forthe um, the site work, you know.
So any kind of tap fees, uh,foundations, excavation, you
know all that kind of stuffmight be part of our initial um
cash investment.
And then the hard money letters, simply financing.
You know, let's say we maybewe're all in for 400k, they're
going to finance that end loan.

(42:42):
And you know, our main guy,that we use these two points and
12.
So you know we'll know, goingin, hey, our commitment to the
deal is buying the land andpaying for the infrastructure.
Your commitment to the deal isfunding the actual purchase of
the of the house and we givethem first position on the land.
So if we fail, you know, or wedon't perform they have, have

(43:04):
land with, you know, they canbasically step in and take over,
the house can get delivered andthey can finish out the plan.
So that's kind of the way thatwe've done it with those guys.
I mean, it's just you could goget a development loan or a
construction loan, probably on asingle-family house.
But you know, we had, you know,our track record was
predominantly multi-family.

(43:24):
We were just like let's, let'stry to do it this way and see,
you know, let's do two or threeand then we can go to like a
lender and say, hey, we want to,you know, do an actual
construction because obviouslythat would be much cheaper.
Right, the interest on aconstruction loan right now, you
know it could be anywherebetween five and a half to seven
percent, depending on how, whatbank you're going with, what
the terms look like, all thatkind of stuff.
So, but it's getting lenders onboard with what we're doing, the

(43:48):
type of house, like I said, we,it just took us some time to
kind of get that, and so we kindof felt like let's just do it
with people we know they can dothe lending.
The return at the end had to beworth it.
So that's, like I said, ouraverage.
If we can't get a 30% return,we're not touching it.

(44:11):
So that's kind of our benchmark.

Speaker 3 (44:14):
Well, and the rate?
I mean the rate is not theproblem and, like you mentioned,
it's underwriting at the ratethat you know that you're able
to get, and then if you can getthat 30% return, then it's still
a deal.
And I think sometimes peopleget so hung up on that that
they're passing on a deal.
Let's say like, oh, I'm notgoing to do this deal because
it's 12%.
Well, is it because you can'tget over the fact that it says

(44:36):
12%?
Or is your return right there?
But like, let's say it's 13%and you have a 35% return, then
the money makes sense.
And I think that's whatobviously, like, as all of us
have grown, you start to realize, okay, like, is this a deal
based off of these things andbased off of 12 and two the
whole time, all the costs?
You start to become not, Iguess, well sophisticated is a

(44:59):
good way to put it right.
Like you understand things.

Speaker 2 (45:01):
And that's the big thing.
But yes, yeah.

Speaker 3 (45:04):
And it's like the same thing too, like you're
looking at how from your reverseengineering stuff too, which I
like to do, especially withinstitutional money, not to that
level, but when, like 21 and 22, when Opendoor was buying
everything, we started lookinghow is Opendoor buying, what are
they doing?
And then the funny part was youcould literally go on

(45:26):
realtorcom, put in any address,see what they were willing to
pay, and I'm like, okay, I'mgoing to go talk to the
homeowner now who wants to selltheir property to me.
I'm going to sell it for morethan I ever could if I flipped
it.
And then we're just we're justmaking that spread and then it
was okay, rinse and repeat.
And then if the ball gets moved, then you have to change it.
But yeah, I'm sorry, just itwas funny because I'm thinking a

(45:46):
lot of people would say I don'twant to.
I know it's going to happen.
It's like the yeah, butters,I'm not paying 12 and 2.
That's crazy.
Well, meanwhile seth is doingthis over and over and over and
turn on that money.
It's just.
It just shows like there'sthere's different ways to look
at it and you guys haveobviously made it work and
you're doing, I like, all theamount of due diligence that

(46:07):
you're going through and, likeyou said, you're creating a
product, you're creating a nameand even I'm sure people have
gone into enough of mike'shouses or my houses.
Wherever you're flipping, youstart to use the same stuff.
You're like oh, we probablyknow who flipped this house.

Speaker 1 (46:20):
I always say if you've seen one of my flips,
you've seen them all.
Yes, exactly there might be,very during COVID, whenever,
like, certain things were hardto get, I would mix it up just
because I had to.
But just to your point aboutthe money, and you know that,
honestly, 2 and 12 is very, Iwould say, normal hard money

(46:40):
rates.
Whenever I was just gettingstarted, I was quoted five
points and 15% and that was thegoing rate and I was just
flabbergasted and I basicallywas a penny wise, pound foolish.
If I would have bought thedeals that I could have bought
at those rates because you'renot in it for like 12 years,

(47:01):
like you're talking six to 12months, and if I would have
bought stuff and just realizedthat that was temporary money,
that stuff would have paid sowell at this point.
Right, and it's easy to lookback and say that.
But that's why whenever folksare like two and 12, oh my Lord.
Or three and 12, like here'sthe deal, man, then if it, if

(47:23):
that like thousand bucks isgoing to make it or break it,
it's not a deal to begin with,right, yeah.

Speaker 2 (47:30):
I can give you a great example for me when the
first apartment complex I everbought, the week that we were
going to close, the bank changedthe terms and they said, hey,
initially it was supposed to be20 down, which we had they came
back and said we need 25 down,which was another like 80 or 90
grand, I don't remember thenumber and I got connected to a

(47:50):
hard money lender here inColumbus.
His rate was two points and 16and I, like you guys you know
firefighter mindset like, savemoney, cut costs.
I'm always looking for thestuff on clearance.
Or I'm going to the grocerystore what's on sale, like?
And I mean I thought I wasgonna die thinking of paying
that.
But then I thought about, I'malways looking for the stuff on
clearance or one of the grocerystore what's on sale, like.
And I mean I thought I wasgoing to die thinking of paying
that.
But then I thought about it.
I'm like, well, if I don't dothat, you know, if I do this
deal, I might pay that guy$20,000 in interest Cause I had

(48:12):
his money for a year.
Right, I mean, so I might payhim.
You know, I can't remember.
The thing is, is that that?
But when we refinanced the dealwe pulled out 1.2 million
dollars.
So, like I said, if I'd havebeen afraid of the interest I
wouldn't have done that deal,but if I did do that deal I
would have missed out on theopportunity.

(48:32):
That really like, changed thetrajectory of my life and what
we're doing.
And then to your point, is stoplooking at the cost of the money
and look at the deal.
Like if the deal pencils, ifI'm going to make a 30% return
and hold a thing for six monthsand I'm going to pay Tyler 12%,
I'll pay.
I don't even care what yourrate is Like.
You tell me 12%, two points.
Like here you go.
Like because I know I've donemy due diligence enough to know

(48:55):
that this deal you know I thinkwe use.
We have private investors allthe time that don't want to be
in deals but they want to lendus money.
We pay them two points and 12%because I know I can go to the
market and get it.
It helps my other firemanbuddies or other guys that we're
around that.
We know that.
You know they don't, forwhatever reason, they don't want
to get into real estate.
Like they want to be in a dealbut they'll lend Right.

(49:19):
So I give them that%.
You know they they think it'sgreat.

Speaker 1 (49:22):
Easy.
There Seth, I got a bunch offiremen.
I can only count two now.

Speaker 2 (49:26):
Well, I'm just saying this is Columbus right, it's
all market driven.
But I'm just saying that youknow that those guys are making.
You know, like I made aninterest payment to a buddy of
mine who's been a fireman foryears.
I paid him 20 grand but I wentout and made 400 grand.

(49:46):
You know what I mean?
Like that's the thing that youhave to look at is is what is
what?
What do I you know?
What?
Do you really believe in thedeal you're doing and do you
really think the upside is thereand can you execute?
because yeah, if you go take outa loan like that and then you
you fumble the ball or you losethe deal or whatever.
Like yeah, it can get bad,right, it can really suck.
But I always tell people, likepeople get so focused on the
negative and the bad side ofthings like what, like there's

(50:07):
equally good things yeah and ifyou can't, if you can't see that
, then don't do the deal right,I mean there has to be enough
potential upside and you had tohave vetted it enough to say,
look, there's gonna.
You know, crap's gonna happen.
Right, things are gonna gowrong.
I mean that happens.
I mean that happens in a flip.

Speaker 1 (50:23):
That happens in a regular rental, like it doesn't
matter.
You talked about that lastweek's episode, absolutely.

Speaker 2 (50:27):
Plan for that stuff.
Try to eliminate as much ofthat as you can up front.
But there's always just nogoing into it.
There's always going to be thatkind of stuff that comes up.
But if your upside is highenough, then it doesn't matter
what the you know, it doesn'tmatter what you're paying that
person and I think that's theyou know like that asset.
I told you the apartmentcomplex, like we still own it
today and it's worth.

(50:47):
I just had an appraise and it'sworth 3.6 million is what it
appraised for.
Well, I mean, I mean it's crazy, but had I never done that deal
, you know I'd have been HomeDepot, lowe's, whatever you know
, the, the, wherever I couldfind probably be a fire
instructor, but not necessarilywhere I want to retire.

(51:10):
No, it's not life changing.
It's not changing you know thetrajectory of my life and my
kids, so yeah, it's easy to.

Speaker 1 (51:19):
It's totally, and I'm guilty of it myself Still to
this day at times of it myself,still to this day at times.
I'll catch myself worryingabout everything that could go
wrong versus asking what couldgo right, like what, what, what
could positive could come out ofthis.
Like you said, you had to pay16 interest, you had to come up
with an extra 80 or 90 grand,which at the time probably, you
probably couldn't stop staringat that number and now you now

(51:40):
you can't even remember exactlywhat it was.
You know, like, just for contexthere, and it's like, think
about all the things that wentright and how that was like the
lead domino that got you to this, that got you to that.
That you know it.
You didn't go from like, uh,you know, working on the floor
today to building thesesubdivisions overnight, but that

(52:02):
was the first step.
And I don't know, man, it's.
It all comes down to mindset,whether you're talking about
money, the size of the deal, etcetera.
Like it all starts, in myopinion, up here.
So I know we're coming up ontime.
I didn't realize we were goingto go so hard on build to rent.
So, thank you, that's somethingwe haven't really talked about,
but definitely something that'sof interest.

(52:22):
Something we haven't reallytalked about, but definitely
something that's of interest.
One of my buddies he's goingthrough a divorce and, um, he
just moved out of his house andmoved into a rental and he's
like, yeah, I looked at three ofthem, they were on the same
street.
I was like, oh, that's cool.
And he goes yeah, this one, uh,guy, they bought the whole
street.
You know like, I, they, theywent in.
I think it's a Dan RyanCommunity went in and bought

(52:43):
literally the whole row oftownhouses.
I was like that's one way tocontrol the rent comps, you know
.

Speaker 2 (52:49):
Yeah, yeah, yeah, and that's what you're seeing.
A lot of places are coming inand they're you know, you see
these track builders buildingsubdivisions nowadays, but
they're not selling them,they're renting them and that's.
I should tell you something tellyou something yeah, and that's
what the big equity groups arelooking for.
The big equity groups wantsingle family, but they want a
big portfolio and they want themrented.
You know, and that's the.
You know, that's what you see,like black rock and some other

(53:09):
groups that you mentioned,that's what they're doing.
I mean, they're coming in andbuying, you know, hundreds and
hundreds of homes in a specificmarket and they're just renting
them all out and that's yeah,it's the same.
It might be scattered site, butbut it's the same premise is
what they're doing.

Speaker 1 (53:23):
Yeah, and then that gets into a whole nother podcast
episode about a renter nationand you know big equity
controlling the housing stock toa large degree.
But I know that's been acontentious issue, especially
with the politicians.
But is there anything else youwant to touch on?
Anything we can do for you?

Speaker 2 (53:43):
No, I don't think so.
I mean, like I said, I'm always, you know, anybody listening
and you know they can get with,you know they can get my
information, reach out.
I mean, you know, I think thatventuring is a big part of what
I like to do, just like I taughtyou know medical school and
taught part of the fire academyhere locally.
Like you know, if there'speople listening or that you
guys know that want to chatabout that kind of stuff, I mean

(54:04):
I'm totally open to it.
You know, any way I can providevalue to folks because, like I
said, real estate investingchanged my life both.
You know, getting through thegood stuff and the bad stuff,
but in the end it's been greatand you know I think it's.
I don't know.
I've always told people like Ilife around the firehouse table
was great until I started doingreal estate and getting into

(54:25):
something else, and the minutethat I wasn't a contractor you
know I didn't have a lawn carebusiness, a roofing business, a
concrete business, a framingbusiness.
You know I was doing somethingelse.
I became a black sheep prettyquickly and you know I just know
that there's I don't want tosay like you need a support
group, but you know there'speople that are listening, that
are facing that Like there.
There's other guys out therethat are crushing it.

(54:45):
You know you guys don't need.
I mean, I know there's, there'sa ton of people in your, in
your Facebook group and eventhat listen to this, that are
the same way.
So you know, just make sureyou're getting with the right
people and and you know, askingadvice from anybody that you
don't want to be like put itthat way or isn't doing what you
want to be doing.

Speaker 1 (55:05):
Yeah, exactly, if they're not.
You know, not that it's allabout money, but using the money
is the easiest example.
If they're not at the incomelevel you want to be at,
probably don't take advice fromthem when it, at least when it
comes to finances, right, likeI'm not going to take parenting
advice from elon musk, but Iwould probably take financial
advice, right you know, so justbe careful what you're asking

(55:26):
for, yeah absolutely all right.
Well, tower, you have anything?

Speaker 3 (55:34):
no, sorry I've been on mute because my house is a
little loud.
No, that was super interesting.
Uh, thank you, seth.
Yeah, like mike said, I don'tthink we planned for it to go
this way.
But that's the fun part youjust kind of go where it takes
you, and I think it was superinteresting.
So we appreciate your time.

Speaker 2 (55:48):
Yeah, absolutely.
Thank you for having me.

Speaker 1 (55:50):
Seth.
Where should people follow youor reach out on social media?
Any particular place?

Speaker 2 (55:56):
They can.
I mean, I'm on social media onall platforms.
Just, seth Teagle, you canprobably look me up.
Uh, our website is, uh, wwwthestream groupscom.
They can uh communicate with methere or, um, you know, my
email is seth streamgroupscom.
They can reach out that way andwe can connect, and you know.
And then obviously you're, asfacebook group, I'm in that,

(56:17):
trying to provide value when Ican and and they can connect
with me there as well awesome.

Speaker 1 (56:22):
Well, we appreciate it and uh look forward to seeing
what you're up to next time wetouch base.

Speaker 2 (56:27):
Yeah, thank you very much.

Speaker 1 (56:29):
All right guys.