Tom, a 30-year-old home inspector turned real estate investor born and raised in Pickerington, Ohio. By the time he was 27 he was financially free and a millionaire through real estate investing, starting with $0 in his bank account! All because he learned a blue collar skill and took action to invest in real estate, specifically fix and flipping, wholesaling, and the BRRRR Method!
He's been in real estate for 7 years. After college, he jumped full time in his Dad's home inspection company. During that time he'd 5x revenue, systemized the business, and inspected over 5000 houses. Using that knowledge, he has renovated over 150 houses to flip OR to keep as rentals using the BRRRR method. He has wholesaled 200+ deals, have a 70-unit rental portfolio worth $15 million, and 25 STRs managed in house all alongside Andy. He was featured twice on Business Insider in 2022. Have coached over 300 students nationwide on how to invest in real estate.
He retired his mom from her teaching job of 30 years in 2022 to run his Airbnb company, sell all of their flips, and design all of their renovations!
During the show we discuss:
- Implementing Systems To Scale Family Business And Translating Them Into Real Estate Ventures.
- Deciding Between Flipping A Property Or Keeping It As A Rental Using The BRRRR Method.
- Managing Renovation Costs And Ensuring Profitability On A Flip.
- Finding Profitable Wholesale Deals And Building A Reliable Buyers List.
- Managing Cash Flow In A Fix-And-Flip Business, Especially With Time Gaps Between Purchase And Sale.
- Utilizing Financing Options Such As Traditional Loans, Hard Money, Or Private Investors For Flips And Rentals.
- Avoiding Common Mistakes Made By New Investors In Fix-And-Flip Or Wholesaling.
- Mitigating Risk In Fluctuating Markets And Ensuring Long-Term Profitability.
- Scaling A Wholesaling Operation Effectively.
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Transcript
Episode Transcript
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(00:02):
(Transcribed by TurboScribe.ai. Go Unlimited to remove this message.) Welcome to the Business Credit and Financing Show.
Each week, we talk about the growth strategies
that matter most to entrepreneurs.
Listen in as we discuss the secrets to
getting credit and money to start and grow
your business.
And enjoy as we talk with seasoned business
owners, coaches, and industry leaders on a variety
(00:22):
of topics from advertising and marketing to the
nuts and bolts of running a highly successful
business.
And now, to introduce the host of our
show, financial expert and award-winning author, Ty
Crandall.
Hello, and thanks for joining us today.
I'm super excited you could be here because
today we're talking about how to make a
lot of money in real estate.
(00:43):
We're actually talking about how to build a
multi-million dollar real estate empire, doing a
lot of different types of transactions from all
the way from wholesaling to flipping to other
kinds of transactions as well, and actually how
you could build a real estate empire or
start and then build and scale it to
a multi-million dollar endeavor.
So with us today is Tommy Haar.
Now, Tommy is a 30-year-old home
(01:04):
inspector turned real estate investor born and raised
in Pickerington, Ohio.
So by the time he was 27, he
was financially free and millionaire through real estate
investing, starting with zero dollars in his bank
account, all because he learned a blue-collar
skill and took action to invest into real
estate, specifically fix and flipping, wholesaling, and the
(01:25):
BRRRR method.
Now, he's been in real estate for seven
years, and after college, he jumped full-time
into his dad's home inspection company.
During that time, he 5Xed the revenue, systemized
the business, and inspected over 5,000 houses.
Using that knowledge, he has renovated over 150
homes to flip or to keep as rentals
using the BRRRR method.
(01:45):
Now, he's wholesaled 200-plus deals and has
a 70-unit rental portfolio worth $15 million
and 25 STRs managed in-house all alongside
Andy.
Now, he was featured twice in Business Insider
in 2022 and has coached over 300 students
nationwide on how to invest in real estate.
(02:06):
He retired his mom from teaching in her
job of 30 years in 2022 to run
his Airbnb company, sell all their flips, and
design all their renovations, which is pretty cool,
a real family business.
So Tommy, thanks, man.
Welcome to the show.
I appreciate it.
Thank you so much for having me.
It's an honor.
Yeah, you've done some really, really, really cool
things.
I mean, how has that been for you
(02:27):
to go into a family business that they've
done the same way for so long and
then come in and just make differences that
resulted in substantial growth?
Yes, I mean, the family business was my
dad's home inspection company.
So when I graduated college, it was kind
of, the only option in my head was
go back and help my dad.
I'm one of five kids, the oldest boy,
(02:48):
and before that, he had a property preservation
company.
So when banks were foreclosing on houses in
07, 08, 09, all the way to maybe
2015, we had a business or he started
a business that would basically trash the houses
out, board them up, winterize them, mow the
lawns for the banks.
So basically preserving their assets so they don't
lose all their money.
And that's what I grew up in.
So nobody really in my family invested in
(03:10):
real estate.
Nobody really ever talked about money.
So as I started to learn and see
the things that I know now, it completely
changed my mindset and completely changed the way
my family thinks about real estate as well.
So now most of my family invests in
real estate.
My two younger brothers flip houses for a
living.
They own some rental properties, same with my
parents now.
(03:31):
So it's been really kind of a great
transition and a lot of learning along the
way as well.
So when you went into a home inspection
business and you like 5X'd what he was
doing, what kind of systems did you implement
that were missing to be able to create
that kind of growth in such a short
period of time?
Yeah, my dad was doing it for, at
the time, since 2017, he was doing stuff
that he had started doing in 2005, right?
(03:54):
So he was taking a camera with an
SD card out to properties, taking pictures, writing
down notes on a clipboard, and coming back
to his computer.
And let's assume it's three inspections a day.
So he's doing three inspections.
You're gotta be boots on the ground.
And he had to go back home and
write these reports up, whether it was at
night or it was in the morning.
So it was a super antiquated system that
(04:14):
he was using.
So the first day I got to the
office, which was our kitchen dinner table, he
starts teaching me how to write these reports.
And I'm like, dad, what in the world
are we doing right here?
Because I'm fresh out of college.
They talk about technology, all this stuff.
I'm like, dad, this is dinosaur stuff.
What are we doing?
So very quickly got him up to speed
with iPads, softwares.
(04:35):
He was also, as we were driving, and
this was just second nature, just felt normal
to me.
As we were driving, he's a solopreneur in
this business.
So he takes all the calls.
He schedules the appointments.
He calls the showing service to schedule the
inspection.
He talks to the agents.
So a lot of just BS work that
we can systemize.
So got him signed up with a CRM
(04:55):
that would auto schedule.
Payments also would be collected online.
He was having people mail them checks.
I mean, so technically with a home inspection
company, you're supposed to pay before the report
is released.
He's a very nice guy, very trusting guy.
But with that stuff comes people taking advantage
of it.
So we had collectibles, collections out the wazoo.
I mean, he felt bad tracking them down.
(05:16):
So just completely restructured everything.
So got an iPad that we can take
pictures, got a software that we can build
the reports on site, got a CRM, got
a, learned that there was a phone service
that you can actually pay them to answer
all of your calls live.
They've got a team of five people.
They only do home inspectors.
So they know how to talk the jargon.
They schedule for you, it pops right on
(05:37):
your calendar.
And then beyond that, it was just, okay,
how can I fuel this fire with marketing?
So I would go to all the meetups.
I would sponsor events.
I would basically just go around telling everybody
what we did and word of mouth grew
and just started doing more and more and
more.
I love everything you just said.
And there's so many lessons in that that
I think our audience will learn from of
just what happens when you just kind of
(05:57):
embrace technology.
Right now, we're obviously in an AI world.
So it's still amazing how much this can
do for us.
So how do you translate it to real
estate?
Like, how do you go from this to
then start going, hmm, like this could really
make sense for us in real estate investing.
And then how are you kind of making
that transition into real estate investing from that?
Yeah, so we were doing a lot of
stuff.
(06:17):
They call them draw inspections.
So as you get a, let's call it
a hard money loan.
Let's say you wanna fix up a house,
but you don't have 100 grand.
Some sort of hard money bank will give
you 80% of the purchase, 100%
of the rehab.
But in order to get your rehab funds
or even your initial loan to pass, you
had to do feasibility inspection and a draw
inspection to draw the money out.
So what that means is a home inspector
(06:38):
needs to come boots on the ground and
provide information to the bank.
So an intermediary.
So we were doing three, four, five, 10
of those almost a day some days.
I was seeing people renovate houses.
I was seeing good work.
I was seeing bad work.
I was seeing scopes of work.
I was seeing the money people were making.
And I would just start following these people
on Instagram around town that I kept getting
(07:00):
these draw inspections for.
I'm like, what is going on here?
These people are doing a lot of business.
And I would see them jumping off yachts.
I would see them on vacation, taking care
of their families, talking about financial freedom.
And I was like, man, this is, there's
definitely something to this.
And I started thinking, I mean, I'm in
the right industry.
It's just that I'm not in the right
vehicle.
I don't think, like I could scale out
a home inspection business, have a bunch of
(07:20):
crews, but the liability is a lot higher
on that.
But I mean, you could be the best
coal miner in the world, but it's still
not gonna make you a millionaire.
So I turned that and I was like,
okay, if that can make 30 grand on
a flip, that's a whole month's worth of
busting ass as a home inspector.
Let's change the lens we're looking at and
attack it there.
So kind of just jumped in feet first
with my uncle.
(07:41):
That whole story is funny too, but I'll
kind of spare it.
But I did my first flip with him
when I was 23 years old, huge house,
me and him lost a hundred grand on
that house.
So I jumped in feet first without knowing
what I was doing.
And it kind of bit us in the
butt and then just kind of took lessons
from everything that we've learned and grew from
there.
Wow.
So you started with fix and flipping.
That's where you started.
(08:02):
Okay.
And so then from fix and flipping, when
did you move, did you make a move
into Burnex?
Did you make a move into wholesale and
start, you didn't move from one to the
other, but when did you start learning those
two vehicles?
I was learning them all at the same
time.
So I was listening as I was a
home inspector in my car because it's very
job site to job site.
So instead of listening to music, I was
(08:22):
listening to Bigger Pockets.
So if you don't know what Bigger Pockets
is, it's a podcast, a platform to where
they literally just teach you real estate investing.
So they have guests on there anywhere from
Grant Cardone to brand new real estate investors.
So I was getting exposed now every day
to these success stories.
And a lot of them were flipping, owning
rentals.
So I started learning.
I never, I studied finance in college.
(08:43):
I never knew what the idea of passive
income was.
So I kept hearing this passive income, passive
income from rentals, use debt as a vehicle.
And I'm like, this makes a lot of
sense to me.
I'm a numbers guy.
Like getting good debt that appreciates and you
get a tax write off and you get
cashflow, all that stuff, that makes a lot
of sense.
Okay, cool.
I don't have any money right now, but
this is an end goal.
(09:03):
I want to own real estate.
How do I get there?
Active income.
So I switched over to, okay, I'm making
$32,000 a year working for my dad,
not very great income.
I didn't really see an end in sight
growing that business because the property preservation business,
he grew to about 60 employees at one
time, that business shut their door.
So he was kind of against growing again
(09:25):
a business and scaling it.
So when you talk about the family in
the beginning, that was really the push of
like, I was pushing on him.
He was letting me do some things, but
it wasn't the scaling that business was not
really an option.
And I'm a young guy, I'm in different
phase of my life.
So I'm like, I'm going to go start
my own business and scale that and take
on a little more risk that's involved with
that.
So to answer your question fully, to get
(09:46):
out of my parents' basement again, after that
first flip, wholesaling was the answer.
So if you guys don't know what wholesaling
is, it's basically being a middleman in a
real estate transaction.
So we market out to owners that have
distress.
So boarded up houses, high grass, probate situations,
bankruptcy situations, to where they need to sell
this asset fast for cash.
(10:06):
Let's call it for a hundred grand.
We then button it up, sell it to
an investor for let's call it 110, and
we make 10 grand in the middle.
You can, over a couple of phone calls
and being a middleman, make hundreds of thousands,
millions of dollars.
And I can attest to it, it is
real, it's true.
And that was what got me out of
the home inspection business.
Then how did you find your way into
short-term rentals and the Berm method?
(10:27):
So as we were starting to pick off
deals, so we're seeing deals, we're making money
wholesaling, doing a couple of flips.
You start to build that construction engine, and
I'm from a home inspection background.
So construction, and I did home inspection for
probably five years.
Construction was now second nature.
I'm walking houses every single day, multiple.
I'm seeing construction sites.
So it was just my day-to-day.
So I was like, okay, flipping and construction
(10:48):
seems natural.
Let's keep leaning into that.
So as we were doing more wholesale deals,
we were seeing the deals before anybody else
was.
So if we liked it and it was
a great deal, we would just take it
down ourselves.
So we would raise money, and we still
do to this day, that's our strategy.
I raise money from private money lenders.
Let's say it's 40 cents on the dollar
because it needs another 20 cents, 30 cents
(11:08):
on the dollar of renovation, then to be
worth that dollar.
So I'm all in 70%, 70 cents on
the dollar.
And then banks will always give 25, 30
% LTV on these loans.
So they refinance out your lenders and go
that way.
So it was really just making money on
the wholesaling side and having an influx of
deals.
And then also I love the knowledge side
of it.
(11:28):
So as I was learning all these things,
I didn't just learn about wholesaling.
Now you can't do everything at once in
the beginning, but I learned about everything else
as I was taking action on the wholesaling
side.
So now that you do so many different
types of real estate, which by the way,
kudos to you.
I mean, super hard to even learn a
master one of these, let alone multiple.
How do you decide?
Like when you have a, what are you
out there looking for?
(11:48):
How do you decide which route to go?
Yeah, I get that question a lot nowadays.
And I wish it was as easy just
to like spit out an answer.
I'm still a small business.
We've got 10 employees on staff in Columbus,
Ohio between our wholesaling, flipping and rental property
company.
A lot of it's driven by cashflow.
It's like, I mean, some months we'll have
a decent amount of money in the bank.
Some days it'll get low.
(12:09):
So if we need to flip a house,
one of my mentors always said, if you
don't need it in your bank account money
-wise, put it on your balance sheet.
So meaning, if I don't need that active
income to stay afloat because businesses only go
bankrupt or out of business for cashflow, that's
the only reason.
So if we don't need the cashflow and
you can refinance out and hold it and
service debt with the rent, keep it.
(12:30):
That's great.
Long-term that's gonna pay you more than
anything else.
But during that, in that meantime, you have
to keep the doors open with cash.
So we just kind of look at it
on a P&L cashflow basis.
And then obviously there's deals that in areas
that I love, that I believe in, I'll
keep those more than anything, but it's more
of like looking at it from a month
to month standpoint.
(12:50):
Which makes a lot of sense, right?
Because wholesaling, you're making quick cash.
I don't wanna say quick, but you get
the idea.
And the same thing with fixing, fixing flip,
you're making the cash, but it's not really
setting up the residual income.
But then if you're going to short-term
rentals, long-term rentals, it makes sense.
So it kind of depends on your purpose.
When you do that and you're talking about
profitability on the flip, what have you learned?
(13:11):
Some of the best lessons you've learned to
be able to maximize that, to be able
to make the right assessment of which property
you should buy and then minimize the cost
of rehabbing that property to be able to
exit for the most amount of money.
I mean, the big thing is look at
your comparable sales.
So make sure to me, so I lost
a bunch of money with my uncle on
our first flip because it was a A
(13:31):
-class downtown neighborhood of Columbus, Ohio.
If anybody's listening from Columbus, it was in
Bexley.
Great, great area.
But it was on a double line road,
right at a stoplight, 4,000 square foot,
five beds, six baths, great old house, 100
years old.
So all the things you don't wanna look
for when you're looking to flip.
So basically you want a neighborhood that's, in
my opinion, first time home buyer price point.
(13:52):
So whatever that is in your area, because
first time price point means the most amount
of buyers.
That's gonna be your biggest buyer pool.
Look for something that is in a neighborhood
that has very, very boring, repeatable comps.
Meaning it's a three bed, one bath.
Every other house in that neighborhood is a
three bed, one bath.
You wanna make sure that you have multiple
data points to make a data driven decision
of what it's gonna be worth at the
(14:12):
end.
And then just use those finishes that they
use on those houses that sell for the
most.
Don't be putting marble in a house that
needs laminate.
Don't spend extra money on things that are
not necessary because my mom's my realtor now.
And I have to tell her this over
and over again.
It's like, mom, I am not moving into
this house.
You are not moving into this house.
It's going to be very nice, but it's
going to be nice for what the area
(14:33):
allows.
So those are the big lessons that I
learned.
And then fire your contractors as fast as
you can.
Vet slowly, hire slowly, fire very fast.
It makes a tremendous amount of sense.
Comparables, where are you getting them?
Zillow or Zillow?
We just go Zillow.
So we're in a disclosure state.
So if you're in Texas or Louisiana, I
think those are the two, maybe Oklahoma.
(14:53):
The MLS doesn't syndicate to Zillow anymore.
So it won't show, but we just use
90 days or less, six months or less.
If you can stay below six months and
that general area, don't go over highways.
Don't go over double line roads.
Try and stay in those individual pockets.
You're talking about these fix and flips.
How are you getting financing to buy?
Yeah, so now as I've grown social media
(15:15):
and I've been posting on my social stories
for almost eight years now when I was
a home inspector.
So I've had people that just follow me
for a long time.
I talk about real estate every day.
So that means that when people think about
real estate, they think about you.
And when you start talking about these different
types of investment strategies, most people think, okay,
you got the stock market.
You've got 401ks.
(15:35):
They're investing in the traditional.
And now a quick break to hear from
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(15:58):
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Asset classes and was widely talked about.
And they never think about you can lend
money on somebody's investment property.
Like you don't own the asset, but you
have a lien position.
So the cool thing about that is I'm
raising money from individual people just like you,
from family, friends, from people that just know
who we are.
(16:18):
And the upside is great, right?
Because if you go invest in a stock,
you can't go knock on the door of
Apple and be like, hey, I'm here, I'm
one of the owners, can we talk?
When you lend private money, there's multiple things
that make it more secured and a great
investment.
One, we're paying our lenders double digit returns,
10, 12, 14% sometimes.
And it's backed by the asset.
(16:39):
Meaning we write a note and a mortgage
and they get a lien position on the
house.
That means if I go belly up bankrupt
or I skip town, they now have rights
of refusal, they call it to the property.
So they then go to the judge and
they say, hey, I have this note mortgage,
I can foreclose on this house and take
back an asset that's discounted.
That's great, as long as they can do
some underwriting.
Now you can't do that with a stock.
If your stock tanks, it just is what
(17:01):
it is.
So we give those opportunities to people.
And the cool thing is you can lend
out of things that are not just money
sitting in a bank account.
Self-directed IRAs are one of the biggest
things I raise capital from.
So if somebody has an idle 401k, they
can roll that to a self-directed and
lend to someone like me at whatever interest
rate me and you decide.
(17:22):
It's an amazing, amazing strategy.
I've helped people four or five X their
401ks and that is truly helping them retire.
So it's giving someone an incredible opportunity.
So what you're doing is taking someone like
me that has money and I wanna invest
in real estate, but I don't wanna do
the work.
And I don't wanna lose my bucks.
I don't know what I'm doing.
I don't wanna take the time to learn
what I have to learn, right?
(17:43):
You lost your bet the first time because
you didn't know what you were doing, right?
So I'm gonna do the same way.
And you give me an opportunity to invest
with you and then have you do the
work and I still get really good returns
without getting the education, making the mistakes, all
the other stuff that's involved.
Is that fairly accurate?
Absolutely.
There's so many steps of the process that
nobody really thinks about.
I mean, finding the deal, finding the contractors,
(18:04):
running the job site, managing the money, managing
the headache.
So basically we tell people, I never use
the word passive in real estate because rentals
are not passive.
I don't care what anybody says.
This is the only passive way to make
income in real estate investing.
What about wholesaling?
So when it comes to wholesaling, what's your
key there for your tribe of people that
(18:24):
are investing with you, including you, to be
able to find the right properties that you
can be able to do with wholesaling?
Because you gotta find the right property and
then you're committing to buy it.
And then you gotta find a buyer to
be able to buy that paper.
Like there seems like there's not a lot
of room for error.
Yeah, so there's definitely some nuance to it.
I mean, you're pulling data out of thin
air.
So the cool thing about real estate is
(18:45):
everything's public record.
So any type of distress, I mean, everything
is public record as far as evictions, tax
delinquencies, anything that may be motivation.
So what we do is we put these
houses in contract.
And a lot of times we're doing it
over the phone.
So we may even not have walked the
house and you have a 30-day due
diligence period.
Meaning within 30 days, I am committing the
option to purchase.
(19:07):
Now, if the seller is lying about condition,
if certain things happen, you do have a
clause to back out.
Unless you have an earnest money deposit, you
may lose 500, 1,000, 1,500 bucks.
That's your risk in the deal.
If you can't sell it, as long as
you're being ethical and truthful throughout the process,
you can still back out of that contract.
So you're still usually within 30 days trying
(19:29):
to find a buyer and keeping the seller
in the loop on what's going on.
Makes sense.
You talked about raising money.
Let's call it a syndicate.
I don't know if we should or not.
So we are raising money from the tribe.
I don't even wanna say raising money.
You're giving the tribe an opportunity to invest
in these properties without doing the work.
So do you ever deal with financing options?
Like you've got a huge following of people
(19:49):
that you're teaching real estate to.
Wasn't what you started.
You just wanted to help.
And now all these people follow you and
you're teaching real estate.
Are there other kind of financing that you're
having them focus on?
Like you talked initially about hard money fix
and flip, or hard money loans that are
basically for fix and flips, right?
Not that you experimented with it.
That's how you kind of started to learn
about it.
Do you instruct your tribe or give them
instructions besides the self-directed IRAs, the 401ks,
(20:11):
on other ways that they can get money
through fix and flip loans or any other
kind of FHA, whatever it may be, DSCR?
Do you help them?
And do you ever deal with that stuff
to help yourself and help them as well?
Absolutely.
Yeah, so let's call it the front end
financing because the front end financing, when you
buy the asset, it has to be a
cash equivalent.
Sometimes you'll be able to do a DSCR,
(20:32):
but definitely not conventional financing on most of
these deals.
So we're not really talking about conventional.
Now I did house hack two houses with
FHA loans when I got started.
Amazing strategy.
One of the best in the world, in
my opinion.
But we're teaching people how to, one, to
raise the capital from private, and then also
hard money.
Hard money is an amazing strategy.
I mean, if you can leverage 80%
of bank financing for purchase, 100% of
(20:52):
rehab, you just gotta now bridge that 20%.
Whether it's your money, it could be out
of a home equity line of credit, it
could be out of savings.
You also can raise that 20% from
a private money lender too.
So we do teach that.
I highly recommend anybody listening to this.
If you're like, man, I don't know anybody
that has 250 grand for houses in my
market, leverage a hard money company like Kiavi.
Write that down, K-I-A-V-I.
(21:15):
They're a nationwide hard money company.
They're a tech company.
They're fantastic.
Now you will have to pay monthly payments.
There's a whole bunch of nuance that you
gotta learn.
But yeah, we do teach that.
And then the backend financing, yes, we teach
people DSCR loans, how to raise.
I just did a call last week on
restructuring debt into community banking loans.
So portfolio banking.
So working with their small local banks, stuff
(21:35):
like that.
So what are some of the biggest mistakes
that you've seen people make?
Because you're doing this, you've made mistakes.
And then you have a lot of students
that come to you to try to follow
your trainings and then probably make their mistakes.
What are some of the biggest mistakes you
see people make trying to get into real
estate?
I see people get, so once you get
the real estate bug, it's hard to get
out of like wanting to do a deal,
wanting like, I'm so excited.
(21:55):
And a lot of people let that excitement
make them buy a bad deal.
So you kind of fluff your numbers a
little bit.
But at the end of the day, your
numbers are not gonna lie.
But you are gonna lie to yourself.
So people will fluff their numbers.
Oh, I can get this concrete done for
half of the price.
Or I can maybe do some of the
painting.
And at the end of the day, or
they think, oh, I can sell this house
for a little bit more than what the
comps are saying.
(22:16):
At the end of the day, once you
sign on that dotted line and you own
that house, nothing else matters.
I mean, you are on the hook for
that asset and financial liability.
So you have to be very, very conservative,
especially with the time like before, like into
2023, 24.
I mean, there's still uncertainty with interest rates,
elections, stuff like that.
It's the time to be very conservative in
your underwriting.
But also as those times are coming, it
(22:38):
also is opportunity because people are on the
sidelines.
Hedge funds are on the sidelines.
There's a lot of people that are waiting
to see what happens and there's good deals
to be had.
Yeah, I love that you say that.
Yeah, I've spent the last probably two years
really diving into biases and why we make
decisions like humans.
I'm like, well, this is make.
And what I've come to the conclusion of
is we are really, really bad at making
(22:59):
decisions.
These biases that we do not understand and
completely ignore.
And they make us make really bad decisions.
And we're even worse at then justifying the
bad decisions that we've made based on these
biases.
So I love that you've talked about that
because I don't think I've had anybody touch
upon the fact that like you're doing it
to yourself.
Like you're skewing your own number.
(23:20):
You're creating these biases.
You didn't make that mistake.
What about risk?
I mean, what do you think are some
things people could do to get into real
estate with you or even those who are
trying on their own and to mitigate the
risk that they take on?
Yeah, so there's always gonna be risk.
So you gotta understand that when you go
in, you're never gonna negate all risk.
But the biggest two things that I see
(23:42):
to mitigate risk as a real estate investor
is number one, learn construction.
If you can learn houses or the way
things are built, because I see so many
real estate investors, they know how to find
deals.
Number two is finding great deals.
That's the best way to mitigate risk.
But another way, I know real estate investors
that they just rely solely on what their
(24:03):
contractors tell them.
So I'm running a business that I own
and run, but I have to talk to
this person on what it is and what
to do.
To me, that is asinine.
So learning the ins and outs of a
house, a hundred-year-old house has knob
and two, it has galvanized plumbing, it has
stone foundation.
That's different than a 70s house.
So knowing those different things will let you
mitigate your risk and make educated decisions moving
(24:25):
forward on the assets that you're buying.
So to me, that's very, very important.
What's it like to work with you?
So let's say that I wanna get into
real estate investing.
What can you do to help me?
Like, do you have trainings?
Do you have a course?
Do you have, I know, like, how does
it work?
What can you do to help me get
into the game?
Yeah, I mean, I got a whole bunch
of stuff.
I mean, number one is gonna be, I've
got so much free content out there.
(24:45):
I mean, I literally had somebody on my
YouTube yesterday say they bought their second deal
after watching months of my YouTube videos.
So if you wanna binge YouTube University and
learn from me that way, or Instagram, put
a lot of stuff out, and that's great.
I mean, that makes me feel just as
good as somebody that pays me for mentorship
to say, hey, I just want you to
be successful, whether you pay me or not,
right?
And the stuff that I've learned is amazing,
(25:07):
and I just wanna help people out.
And then the second way is, I mean,
I can help you via mentorship.
We have a nationwide community of people, so
a network of investors that I've helped.
They help me from what they've done in
the past, and we have classes, we have
courses, we have all these things to basically
help you jump the line from learning on
your own.
And where's the best place that I should
(25:28):
be able to go to be able to
access all of that?
Yeah, so my Instagram or YouTube would just
be under TommyHarr, TommyHarr05 on Instagram.
And then my community is called the Real
Side of Real Estate.
So a lot of stuff I talked about
today, the risk, the management, the construction, that's
a lot of stuff that people don't talk
about.
They're like, oh, I made so much money,
pay me.
It's like, that's not really what you should
be buying into.
So the Real Side of Real Estate came
(25:50):
from that, and that is realsidecommunity.com.
That's realsidecommunity.com.
Yep.
Can they get to your social channels from
there as well?
Yeah, absolutely.
Realsideofrealestatecommunity.com, right?
Yes, sir.
Okay, perfect.
What is something I should have asked you
that I didn't ask you that you think
could help everybody that's watching today?
That's a good question.
(26:10):
I mean, usually people, they ask, okay, about
if you were to tell yourself something in
the past, what would it be?
I mean, when you get into a new
venture, commit time to it, commit time for
errors, commit time for the stumbles.
But it is truly, real estate is truly
a snowball.
If you can learn concepts, take action, and
start doing deals, within two, three, four, five
(26:32):
years for sure, you can literally change your
entire family tree on a financial standpoint.
I mean, and I can tell you that
firsthand because I did it.
I don't come from immense amounts of money.
My parents are middle class.
My dad's a home inspector.
My mom's an algebra teacher in high school.
We never talked about investing.
Now, millions of dollars in portfolio money.
My mom doesn't work her job anymore.
(26:54):
She sells my houses.
She'll make $300,000 this year just selling
real estate that I hand her.
It can completely change everybody in your family
fast.
I love it.
Tommy, thank you so much for coming on
today.
I really appreciate you coming on and sharing.
It was an absolute blast.
I appreciate it.
All right, so listen, if you're watching this,
well, here's what's interesting.
You know, Tommy is one of the very,
very rare people that has mastered multiple different
(27:16):
paths in real estate.
I mean, and this is really hard to
accomplish.
I mean, some people specialize in fix and
flip, but that's all they do.
You know, some focus on short-term rentals.
It's all they do.
So when you have a mentor that focuses
on multiple different ways to go, it just
gives you more options.
The reality is you might do what he's
described and use all of these.
You might use wholesaling and fix and flip
to get the cash and then use that
(27:37):
to invest in a long-term or short
-term rental strategy.
But in order to do that, you have
to know multiple forms of real estate.
Well, most people specialize in one.
So if you're just gonna get the cash
through wholesaling and fix and flip, they can't
help you with long-term, short-term rental.
You gotta go find all these different mentors
and then the lessons that are being learned
are overlapping.
One thing, it's a confusing nightmare.
It's what pushes a lot of people away
(27:58):
from real estate investing.
But Tommy does it all.
Like he did that at all.
And not only does he done it all,
but he's mastered it all.
Not only with just his money, but he
has a lot of other people investing because
they see what he's doing.
So all of these is what we call
social proof that this is the guy that
knows how to do these things.
So here's what you should do next.
Make sure you go to realsidecommunity.com.
(28:20):
That's realsidecommunity.com.
And if you go to realsidecommunity.com, then
you're gonna find a lot of different stuff.
You'll be able to learn about his programs.
You'll be able to learn about his mentorship
program.
You'll be able to follow his social channels
where he's got massive following because he's teaching
you a lot of what you need to
know.
So you can take his free information by
going to realsidecommunity.com.
You can then subscribe to his social channels,
(28:42):
follow and take his free information.
Then you can come in and start looking
at his mentorship programs and the program to
take a deeper dive so he can actually
help you succeed.
Okay, there's a lot of resources there as
well, success stories, so you can actually see
what he's done in the past.
And you can even learn, see podcasts and
other things he's been featuring amongst a lot
of other stuff.
So what I want you to do right
now is go to realsidecommunity.com.
(29:04):
That's realsidecommunity.com.
If you go to realsidecommunity.com, make sure
you go to the bottom of the page.
Takes less than a minute.
And just boop, boop, boop, subscribe to his
social channels, right there.
He talks about YouTube and all the training.
He's got people literally doing multiple deals just
from what they got from his social channels.
You get all that.
Just go to realsidecommunity.com, go to the
bottom, subscribe, takes less than a minute, and
(29:25):
then look around while you're there.
There's a lot of resources and help that
you're gonna be able to see here that'll
give you more insight.
There's zero reason you shouldn't be investing in
real estate, zero reason.
It makes no sense for you to not
be investing in real estate.
So if you've been overwhelmed with what to
do and how to get there, you just
got it, there's the path.
So make sure you go right now to
realsidecommunity.com, follow on social and check it
(29:47):
out.
There's a lot of things there that will
help you get started or help you take
the next step in real estate investing to
start getting the financial freedom you deserve.
So make sure you check it out, realsidecommunity
.com.
Thanks for tuning in.
(Transcribed by TurboScribe.ai. Go Unlimited to remove this message.) Welcome to the Business Credit and Financing Show.
Each week, we talk about the growth strategies
that matter most to entrepreneurs.
Listen in as we discuss the secrets to
getting credit and money to start and grow
your business.
And enjoy as we talk with seasoned business
owners, coaches, and industry leaders on a variety
(00:22):
of topics from advertising and marketing to the
nuts and bolts of running a highly successful
business.
And now, to introduce the host of our
show, financial expert and award-winning author, Ty
Crandall.
Hello, and thanks for joining us today.
I'm super excited you could be here because
today we're talking about how to make a
lot of money in real estate.
(00:43):
We're actually talking about how to build a
multi-million dollar real estate empire, doing a
lot of different types of transactions from all
the way from wholesaling to flipping to other
kinds of transactions as well, and actually how
you could build a real estate empire or
start and then build and scale it to
a multi-million dollar endeavor.
So with us today is Tommy Haar.
Now, Tommy is a 30-year-old home
(01:04):
inspector turned real estate investor born and raised
in Pickerington, Ohio.
So by the time he was 27, he
was financially free and millionaire through real estate
investing, starting with zero dollars in his bank
account, all because he learned a blue-collar
skill and took action to invest into real
estate, specifically fix and flipping, wholesaling, and the
(01:25):
BRRRR method.
Now, he's been in real estate for seven
years, and after college, he jumped full-time
into his dad's home inspection company.
During that time, he 5Xed the revenue, systemized
the business, and inspected over 5,000 houses.
Using that knowledge, he has renovated over 150
homes to flip or to keep as rentals
using the BRRRR method.
(01:45):
Now, he's wholesaled 200-plus deals and has
a 70-unit rental portfolio worth $15 million
and 25 STRs managed in-house all alongside
Andy.
Now, he was featured twice in Business Insider
in 2022 and has coached over 300 students
nationwide on how to invest in real estate.
(02:06):
He retired his mom from teaching in her
job of 30 years in 2022 to run
his Airbnb company, sell all their flips, and
design all their renovations, which is pretty cool,
a real family business.
So Tommy, thanks, man.
Welcome to the show.
I appreciate it.
Thank you so much for having me.
It's an honor.
Yeah, you've done some really, really, really cool
things.
I mean, how has that been for you
(02:27):
to go into a family business that they've
done the same way for so long and
then come in and just make differences that
resulted in substantial growth?
Yes, I mean, the family business was my
dad's home inspection company.
So when I graduated college, it was kind
of, the only option in my head was
go back and help my dad.
I'm one of five kids, the oldest boy,
(02:48):
and before that, he had a property preservation
company.
So when banks were foreclosing on houses in
07, 08, 09, all the way to maybe
2015, we had a business or he started
a business that would basically trash the houses
out, board them up, winterize them, mow the
lawns for the banks.
So basically preserving their assets so they don't
lose all their money.
And that's what I grew up in.
So nobody really in my family invested in
(03:10):
real estate.
Nobody really ever talked about money.
So as I started to learn and see
the things that I know now, it completely
changed my mindset and completely changed the way
my family thinks about real estate as well.
So now most of my family invests in
real estate.
My two younger brothers flip houses for a
living.
They own some rental properties, same with my
parents now.
(03:31):
So it's been really kind of a great
transition and a lot of learning along the
way as well.
So when you went into a home inspection
business and you like 5X'd what he was
doing, what kind of systems did you implement
that were missing to be able to create
that kind of growth in such a short
period of time?
Yeah, my dad was doing it for, at
the time, since 2017, he was doing stuff
that he had started doing in 2005, right?
(03:54):
So he was taking a camera with an
SD card out to properties, taking pictures, writing
down notes on a clipboard, and coming back
to his computer.
And let's assume it's three inspections a day.
So he's doing three inspections.
You're gotta be boots on the ground.
And he had to go back home and
write these reports up, whether it was at
night or it was in the morning.
So it was a super antiquated system that
(04:14):
he was using.
So the first day I got to the
office, which was our kitchen dinner table, he
starts teaching me how to write these reports.
And I'm like, dad, what in the world
are we doing right here?
Because I'm fresh out of college.
They talk about technology, all this stuff.
I'm like, dad, this is dinosaur stuff.
What are we doing?
So very quickly got him up to speed
with iPads, softwares.
(04:35):
He was also, as we were driving, and
this was just second nature, just felt normal
to me.
As we were driving, he's a solopreneur in
this business.
So he takes all the calls.
He schedules the appointments.
He calls the showing service to schedule the
inspection.
He talks to the agents.
So a lot of just BS work that
we can systemize.
So got him signed up with a CRM
(04:55):
that would auto schedule.
Payments also would be collected online.
He was having people mail them checks.
I mean, so technically with a home inspection
company, you're supposed to pay before the report
is released.
He's a very nice guy, very trusting guy.
But with that stuff comes people taking advantage
of it.
So we had collectibles, collections out the wazoo.
I mean, he felt bad tracking them down.
(05:16):
So just completely restructured everything.
So got an iPad that we can take
pictures, got a software that we can build
the reports on site, got a CRM, got
a, learned that there was a phone service
that you can actually pay them to answer
all of your calls live.
They've got a team of five people.
They only do home inspectors.
So they know how to talk the jargon.
They schedule for you, it pops right on
(05:37):
your calendar.
And then beyond that, it was just, okay,
how can I fuel this fire with marketing?
So I would go to all the meetups.
I would sponsor events.
I would basically just go around telling everybody
what we did and word of mouth grew
and just started doing more and more and
more.
I love everything you just said.
And there's so many lessons in that that
I think our audience will learn from of
just what happens when you just kind of
(05:57):
embrace technology.
Right now, we're obviously in an AI world.
So it's still amazing how much this can
do for us.
So how do you translate it to real
estate?
Like, how do you go from this to
then start going, hmm, like this could really
make sense for us in real estate investing.
And then how are you kind of making
that transition into real estate investing from that?
Yeah, so we were doing a lot of
stuff.
(06:17):
They call them draw inspections.
So as you get a, let's call it
a hard money loan.
Let's say you wanna fix up a house,
but you don't have 100 grand.
Some sort of hard money bank will give
you 80% of the purchase, 100%
of the rehab.
But in order to get your rehab funds
or even your initial loan to pass, you
had to do feasibility inspection and a draw
inspection to draw the money out.
So what that means is a home inspector
(06:38):
needs to come boots on the ground and
provide information to the bank.
So an intermediary.
So we were doing three, four, five, 10
of those almost a day some days.
I was seeing people renovate houses.
I was seeing good work.
I was seeing bad work.
I was seeing scopes of work.
I was seeing the money people were making.
And I would just start following these people
on Instagram around town that I kept getting
(07:00):
these draw inspections for.
I'm like, what is going on here?
These people are doing a lot of business.
And I would see them jumping off yachts.
I would see them on vacation, taking care
of their families, talking about financial freedom.
And I was like, man, this is, there's
definitely something to this.
And I started thinking, I mean, I'm in
the right industry.
It's just that I'm not in the right
vehicle.
I don't think, like I could scale out
a home inspection business, have a bunch of
(07:20):
crews, but the liability is a lot higher
on that.
But I mean, you could be the best
coal miner in the world, but it's still
not gonna make you a millionaire.
So I turned that and I was like,
okay, if that can make 30 grand on
a flip, that's a whole month's worth of
busting ass as a home inspector.
Let's change the lens we're looking at and
attack it there.
So kind of just jumped in feet first
with my uncle.
(07:41):
That whole story is funny too, but I'll
kind of spare it.
But I did my first flip with him
when I was 23 years old, huge house,
me and him lost a hundred grand on
that house.
So I jumped in feet first without knowing
what I was doing.
And it kind of bit us in the
butt and then just kind of took lessons
from everything that we've learned and grew from
there.
Wow.
So you started with fix and flipping.
That's where you started.
(08:02):
Okay.
And so then from fix and flipping, when
did you move, did you make a move
into Burnex?
Did you make a move into wholesale and
start, you didn't move from one to the
other, but when did you start learning those
two vehicles?
I was learning them all at the same
time.
So I was listening as I was a
home inspector in my car because it's very
job site to job site.
So instead of listening to music, I was
(08:22):
listening to Bigger Pockets.
So if you don't know what Bigger Pockets
is, it's a podcast, a platform to where
they literally just teach you real estate investing.
So they have guests on there anywhere from
Grant Cardone to brand new real estate investors.
So I was getting exposed now every day
to these success stories.
And a lot of them were flipping, owning
rentals.
So I started learning.
I never, I studied finance in college.
(08:43):
I never knew what the idea of passive
income was.
So I kept hearing this passive income, passive
income from rentals, use debt as a vehicle.
And I'm like, this makes a lot of
sense to me.
I'm a numbers guy.
Like getting good debt that appreciates and you
get a tax write off and you get
cashflow, all that stuff, that makes a lot
of sense.
Okay, cool.
I don't have any money right now, but
this is an end goal.
(09:03):
I want to own real estate.
How do I get there?
Active income.
So I switched over to, okay, I'm making
$32,000 a year working for my dad,
not very great income.
I didn't really see an end in sight
growing that business because the property preservation business,
he grew to about 60 employees at one
time, that business shut their door.
So he was kind of against growing again
(09:25):
a business and scaling it.
So when you talk about the family in
the beginning, that was really the push of
like, I was pushing on him.
He was letting me do some things, but
it wasn't the scaling that business was not
really an option.
And I'm a young guy, I'm in different
phase of my life.
So I'm like, I'm going to go start
my own business and scale that and take
on a little more risk that's involved with
that.
So to answer your question fully, to get
(09:46):
out of my parents' basement again, after that
first flip, wholesaling was the answer.
So if you guys don't know what wholesaling
is, it's basically being a middleman in a
real estate transaction.
So we market out to owners that have
distress.
So boarded up houses, high grass, probate situations,
bankruptcy situations, to where they need to sell
this asset fast for cash.
(10:06):
Let's call it for a hundred grand.
We then button it up, sell it to
an investor for let's call it 110, and
we make 10 grand in the middle.
You can, over a couple of phone calls
and being a middleman, make hundreds of thousands,
millions of dollars.
And I can attest to it, it is
real, it's true.
And that was what got me out of
the home inspection business.
Then how did you find your way into
short-term rentals and the Berm method?
(10:27):
So as we were starting to pick off
deals, so we're seeing deals, we're making money
wholesaling, doing a couple of flips.
You start to build that construction engine, and
I'm from a home inspection background.
So construction, and I did home inspection for
probably five years.
Construction was now second nature.
I'm walking houses every single day, multiple.
I'm seeing construction sites.
So it was just my day-to-day.
So I was like, okay, flipping and construction
(10:48):
seems natural.
Let's keep leaning into that.
So as we were doing more wholesale deals,
we were seeing the deals before anybody else
was.
So if we liked it and it was
a great deal, we would just take it
down ourselves.
So we would raise money, and we still
do to this day, that's our strategy.
I raise money from private money lenders.
Let's say it's 40 cents on the dollar
because it needs another 20 cents, 30 cents
(11:08):
on the dollar of renovation, then to be
worth that dollar.
So I'm all in 70%, 70 cents on
the dollar.
And then banks will always give 25, 30
% LTV on these loans.
So they refinance out your lenders and go
that way.
So it was really just making money on
the wholesaling side and having an influx of
deals.
And then also I love the knowledge side
of it.
(11:28):
So as I was learning all these things,
I didn't just learn about wholesaling.
Now you can't do everything at once in
the beginning, but I learned about everything else
as I was taking action on the wholesaling
side.
So now that you do so many different
types of real estate, which by the way,
kudos to you.
I mean, super hard to even learn a
master one of these, let alone multiple.
How do you decide?
Like when you have a, what are you
out there looking for?
(11:48):
How do you decide which route to go?
Yeah, I get that question a lot nowadays.
And I wish it was as easy just
to like spit out an answer.
I'm still a small business.
We've got 10 employees on staff in Columbus,
Ohio between our wholesaling, flipping and rental property
company.
A lot of it's driven by cashflow.
It's like, I mean, some months we'll have
a decent amount of money in the bank.
Some days it'll get low.
(12:09):
So if we need to flip a house,
one of my mentors always said, if you
don't need it in your bank account money
-wise, put it on your balance sheet.
So meaning, if I don't need that active
income to stay afloat because businesses only go
bankrupt or out of business for cashflow, that's
the only reason.
So if we don't need the cashflow and
you can refinance out and hold it and
service debt with the rent, keep it.
(12:30):
That's great.
Long-term that's gonna pay you more than
anything else.
But during that, in that meantime, you have
to keep the doors open with cash.
So we just kind of look at it
on a P&L cashflow basis.
And then obviously there's deals that in areas
that I love, that I believe in, I'll
keep those more than anything, but it's more
of like looking at it from a month
to month standpoint.
(12:50):
Which makes a lot of sense, right?
Because wholesaling, you're making quick cash.
I don't wanna say quick, but you get
the idea.
And the same thing with fixing, fixing flip,
you're making the cash, but it's not really
setting up the residual income.
But then if you're going to short-term
rentals, long-term rentals, it makes sense.
So it kind of depends on your purpose.
When you do that and you're talking about
profitability on the flip, what have you learned?
(13:11):
Some of the best lessons you've learned to
be able to maximize that, to be able
to make the right assessment of which property
you should buy and then minimize the cost
of rehabbing that property to be able to
exit for the most amount of money.
I mean, the big thing is look at
your comparable sales.
So make sure to me, so I lost
a bunch of money with my uncle on
our first flip because it was a A
(13:31):
-class downtown neighborhood of Columbus, Ohio.
If anybody's listening from Columbus, it was in
Bexley.
Great, great area.
But it was on a double line road,
right at a stoplight, 4,000 square foot,
five beds, six baths, great old house, 100
years old.
So all the things you don't wanna look
for when you're looking to flip.
So basically you want a neighborhood that's, in
my opinion, first time home buyer price point.
(13:52):
So whatever that is in your area, because
first time price point means the most amount
of buyers.
That's gonna be your biggest buyer pool.
Look for something that is in a neighborhood
that has very, very boring, repeatable comps.
Meaning it's a three bed, one bath.
Every other house in that neighborhood is a
three bed, one bath.
You wanna make sure that you have multiple
data points to make a data driven decision
of what it's gonna be worth at the
(14:12):
end.
And then just use those finishes that they
use on those houses that sell for the
most.
Don't be putting marble in a house that
needs laminate.
Don't spend extra money on things that are
not necessary because my mom's my realtor now.
And I have to tell her this over
and over again.
It's like, mom, I am not moving into
this house.
You are not moving into this house.
It's going to be very nice, but it's
going to be nice for what the area
(14:33):
allows.
So those are the big lessons that I
learned.
And then fire your contractors as fast as
you can.
Vet slowly, hire slowly, fire very fast.
It makes a tremendous amount of sense.
Comparables, where are you getting them?
Zillow or Zillow?
We just go Zillow.
So we're in a disclosure state.
So if you're in Texas or Louisiana, I
think those are the two, maybe Oklahoma.
(14:53):
The MLS doesn't syndicate to Zillow anymore.
So it won't show, but we just use
90 days or less, six months or less.
If you can stay below six months and
that general area, don't go over highways.
Don't go over double line roads.
Try and stay in those individual pockets.
You're talking about these fix and flips.
How are you getting financing to buy?
Yeah, so now as I've grown social media
(15:15):
and I've been posting on my social stories
for almost eight years now when I was
a home inspector.
So I've had people that just follow me
for a long time.
I talk about real estate every day.
So that means that when people think about
real estate, they think about you.
And when you start talking about these different
types of investment strategies, most people think, okay,
you got the stock market.
You've got 401ks.
(15:35):
They're investing in the traditional.
And now a quick break to hear from
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Asset classes and was widely talked about.
And they never think about you can lend
money on somebody's investment property.
Like you don't own the asset, but you
have a lien position.
So the cool thing about that is I'm
raising money from individual people just like you,
from family, friends, from people that just know
who we are.
(16:18):
And the upside is great, right?
Because if you go invest in a stock,
you can't go knock on the door of
Apple and be like, hey, I'm here, I'm
one of the owners, can we talk?
When you lend private money, there's multiple things
that make it more secured and a great
investment.
One, we're paying our lenders double digit returns,
10, 12, 14% sometimes.
And it's backed by the asset.
(16:39):
Meaning we write a note and a mortgage
and they get a lien position on the
house.
That means if I go belly up bankrupt
or I skip town, they now have rights
of refusal, they call it to the property.
So they then go to the judge and
they say, hey, I have this note mortgage,
I can foreclose on this house and take
back an asset that's discounted.
That's great, as long as they can do
some underwriting.
Now you can't do that with a stock.
If your stock tanks, it just is what
(17:01):
it is.
So we give those opportunities to people.
And the cool thing is you can lend
out of things that are not just money
sitting in a bank account.
Self-directed IRAs are one of the biggest
things I raise capital from.
So if somebody has an idle 401k, they
can roll that to a self-directed and
lend to someone like me at whatever interest
rate me and you decide.
(17:22):
It's an amazing, amazing strategy.
I've helped people four or five X their
401ks and that is truly helping them retire.
So it's giving someone an incredible opportunity.
So what you're doing is taking someone like
me that has money and I wanna invest
in real estate, but I don't wanna do
the work.
And I don't wanna lose my bucks.
I don't know what I'm doing.
I don't wanna take the time to learn
what I have to learn, right?
(17:43):
You lost your bet the first time because
you didn't know what you were doing, right?
So I'm gonna do the same way.
And you give me an opportunity to invest
with you and then have you do the
work and I still get really good returns
without getting the education, making the mistakes, all
the other stuff that's involved.
Is that fairly accurate?
Absolutely.
There's so many steps of the process that
nobody really thinks about.
I mean, finding the deal, finding the contractors,
(18:04):
running the job site, managing the money, managing
the headache.
So basically we tell people, I never use
the word passive in real estate because rentals
are not passive.
I don't care what anybody says.
This is the only passive way to make
income in real estate investing.
What about wholesaling?
So when it comes to wholesaling, what's your
key there for your tribe of people that
(18:24):
are investing with you, including you, to be
able to find the right properties that you
can be able to do with wholesaling?
Because you gotta find the right property and
then you're committing to buy it.
And then you gotta find a buyer to
be able to buy that paper.
Like there seems like there's not a lot
of room for error.
Yeah, so there's definitely some nuance to it.
I mean, you're pulling data out of thin
air.
So the cool thing about real estate is
(18:45):
everything's public record.
So any type of distress, I mean, everything
is public record as far as evictions, tax
delinquencies, anything that may be motivation.
So what we do is we put these
houses in contract.
And a lot of times we're doing it
over the phone.
So we may even not have walked the
house and you have a 30-day due
diligence period.
Meaning within 30 days, I am committing the
option to purchase.
(19:07):
Now, if the seller is lying about condition,
if certain things happen, you do have a
clause to back out.
Unless you have an earnest money deposit, you
may lose 500, 1,000, 1,500 bucks.
That's your risk in the deal.
If you can't sell it, as long as
you're being ethical and truthful throughout the process,
you can still back out of that contract.
So you're still usually within 30 days trying
(19:29):
to find a buyer and keeping the seller
in the loop on what's going on.
Makes sense.
You talked about raising money.
Let's call it a syndicate.
I don't know if we should or not.
So we are raising money from the tribe.
I don't even wanna say raising money.
You're giving the tribe an opportunity to invest
in these properties without doing the work.
So do you ever deal with financing options?
Like you've got a huge following of people
(19:49):
that you're teaching real estate to.
Wasn't what you started.
You just wanted to help.
And now all these people follow you and
you're teaching real estate.
Are there other kind of financing that you're
having them focus on?
Like you talked initially about hard money fix
and flip, or hard money loans that are
basically for fix and flips, right?
Not that you experimented with it.
That's how you kind of started to learn
about it.
Do you instruct your tribe or give them
instructions besides the self-directed IRAs, the 401ks,
(20:11):
on other ways that they can get money
through fix and flip loans or any other
kind of FHA, whatever it may be, DSCR?
Do you help them?
And do you ever deal with that stuff
to help yourself and help them as well?
Absolutely.
Yeah, so let's call it the front end
financing because the front end financing, when you
buy the asset, it has to be a
cash equivalent.
Sometimes you'll be able to do a DSCR,
(20:32):
but definitely not conventional financing on most of
these deals.
So we're not really talking about conventional.
Now I did house hack two houses with
FHA loans when I got started.
Amazing strategy.
One of the best in the world, in
my opinion.
But we're teaching people how to, one, to
raise the capital from private, and then also
hard money.
Hard money is an amazing strategy.
I mean, if you can leverage 80%
of bank financing for purchase, 100% of
(20:52):
rehab, you just gotta now bridge that 20%.
Whether it's your money, it could be out
of a home equity line of credit, it
could be out of savings.
You also can raise that 20% from
a private money lender too.
So we do teach that.
I highly recommend anybody listening to this.
If you're like, man, I don't know anybody
that has 250 grand for houses in my
market, leverage a hard money company like Kiavi.
Write that down, K-I-A-V-I.
(21:15):
They're a nationwide hard money company.
They're a tech company.
They're fantastic.
Now you will have to pay monthly payments.
There's a whole bunch of nuance that you
gotta learn.
But yeah, we do teach that.
And then the backend financing, yes, we teach
people DSCR loans, how to raise.
I just did a call last week on
restructuring debt into community banking loans.
So portfolio banking.
So working with their small local banks, stuff
(21:35):
like that.
So what are some of the biggest mistakes
that you've seen people make?
Because you're doing this, you've made mistakes.
And then you have a lot of students
that come to you to try to follow
your trainings and then probably make their mistakes.
What are some of the biggest mistakes you
see people make trying to get into real
estate?
I see people get, so once you get
the real estate bug, it's hard to get
out of like wanting to do a deal,
wanting like, I'm so excited.
(21:55):
And a lot of people let that excitement
make them buy a bad deal.
So you kind of fluff your numbers a
little bit.
But at the end of the day, your
numbers are not gonna lie.
But you are gonna lie to yourself.
So people will fluff their numbers.
Oh, I can get this concrete done for
half of the price.
Or I can maybe do some of the
painting.
And at the end of the day, or
they think, oh, I can sell this house
for a little bit more than what the
comps are saying.
(22:16):
At the end of the day, once you
sign on that dotted line and you own
that house, nothing else matters.
I mean, you are on the hook for
that asset and financial liability.
So you have to be very, very conservative,
especially with the time like before, like into
2023, 24.
I mean, there's still uncertainty with interest rates,
elections, stuff like that.
It's the time to be very conservative in
your underwriting.
But also as those times are coming, it
(22:38):
also is opportunity because people are on the
sidelines.
Hedge funds are on the sidelines.
There's a lot of people that are waiting
to see what happens and there's good deals
to be had.
Yeah, I love that you say that.
Yeah, I've spent the last probably two years
really diving into biases and why we make
decisions like humans.
I'm like, well, this is make.
And what I've come to the conclusion of
is we are really, really bad at making
(22:59):
decisions.
These biases that we do not understand and
completely ignore.
And they make us make really bad decisions.
And we're even worse at then justifying the
bad decisions that we've made based on these
biases.
So I love that you've talked about that
because I don't think I've had anybody touch
upon the fact that like you're doing it
to yourself.
Like you're skewing your own number.
(23:20):
You're creating these biases.
You didn't make that mistake.
What about risk?
I mean, what do you think are some
things people could do to get into real
estate with you or even those who are
trying on their own and to mitigate the
risk that they take on?
Yeah, so there's always gonna be risk.
So you gotta understand that when you go
in, you're never gonna negate all risk.
But the biggest two things that I see
(23:42):
to mitigate risk as a real estate investor
is number one, learn construction.
If you can learn houses or the way
things are built, because I see so many
real estate investors, they know how to find
deals.
Number two is finding great deals.
That's the best way to mitigate risk.
But another way, I know real estate investors
that they just rely solely on what their
(24:03):
contractors tell them.
So I'm running a business that I own
and run, but I have to talk to
this person on what it is and what
to do.
To me, that is asinine.
So learning the ins and outs of a
house, a hundred-year-old house has knob
and two, it has galvanized plumbing, it has
stone foundation.
That's different than a 70s house.
So knowing those different things will let you
mitigate your risk and make educated decisions moving
(24:25):
forward on the assets that you're buying.
So to me, that's very, very important.
What's it like to work with you?
So let's say that I wanna get into
real estate investing.
What can you do to help me?
Like, do you have trainings?
Do you have a course?
Do you have, I know, like, how does
it work?
What can you do to help me get
into the game?
Yeah, I mean, I got a whole bunch
of stuff.
I mean, number one is gonna be, I've
got so much free content out there.
(24:45):
I mean, I literally had somebody on my
YouTube yesterday say they bought their second deal
after watching months of my YouTube videos.
So if you wanna binge YouTube University and
learn from me that way, or Instagram, put
a lot of stuff out, and that's great.
I mean, that makes me feel just as
good as somebody that pays me for mentorship
to say, hey, I just want you to
be successful, whether you pay me or not,
right?
And the stuff that I've learned is amazing,
(25:07):
and I just wanna help people out.
And then the second way is, I mean,
I can help you via mentorship.
We have a nationwide community of people, so
a network of investors that I've helped.
They help me from what they've done in
the past, and we have classes, we have
courses, we have all these things to basically
help you jump the line from learning on
your own.
And where's the best place that I should
(25:28):
be able to go to be able to
access all of that?
Yeah, so my Instagram or YouTube would just
be under TommyHarr, TommyHarr05 on Instagram.
And then my community is called the Real
Side of Real Estate.
So a lot of stuff I talked about
today, the risk, the management, the construction, that's
a lot of stuff that people don't talk
about.
They're like, oh, I made so much money,
pay me.
It's like, that's not really what you should
be buying into.
So the Real Side of Real Estate came
(25:50):
from that, and that is realsidecommunity.com.
That's realsidecommunity.com.
Yep.
Can they get to your social channels from
there as well?
Yeah, absolutely.
Realsideofrealestatecommunity.com, right?
Yes, sir.
Okay, perfect.
What is something I should have asked you
that I didn't ask you that you think
could help everybody that's watching today?
That's a good question.
(26:10):
I mean, usually people, they ask, okay, about
if you were to tell yourself something in
the past, what would it be?
I mean, when you get into a new
venture, commit time to it, commit time for
errors, commit time for the stumbles.
But it is truly, real estate is truly
a snowball.
If you can learn concepts, take action, and
start doing deals, within two, three, four, five
(26:32):
years for sure, you can literally change your
entire family tree on a financial standpoint.
I mean, and I can tell you that
firsthand because I did it.
I don't come from immense amounts of money.
My parents are middle class.
My dad's a home inspector.
My mom's an algebra teacher in high school.
We never talked about investing.
Now, millions of dollars in portfolio money.
My mom doesn't work her job anymore.
(26:54):
She sells my houses.
She'll make $300,000 this year just selling
real estate that I hand her.
It can completely change everybody in your family
fast.
I love it.
Tommy, thank you so much for coming on
today.
I really appreciate you coming on and sharing.
It was an absolute blast.
I appreciate it.
All right, so listen, if you're watching this,
well, here's what's interesting.
You know, Tommy is one of the very,
very rare people that has mastered multiple different
(27:16):
paths in real estate.
I mean, and this is really hard to
accomplish.
I mean, some people specialize in fix and
flip, but that's all they do.
You know, some focus on short-term rentals.
It's all they do.
So when you have a mentor that focuses
on multiple different ways to go, it just
gives you more options.
The reality is you might do what he's
described and use all of these.
You might use wholesaling and fix and flip
to get the cash and then use that
(27:37):
to invest in a long-term or short
-term rental strategy.
But in order to do that, you have
to know multiple forms of real estate.
Well, most people specialize in one.
So if you're just gonna get the cash
through wholesaling and fix and flip, they can't
help you with long-term, short-term rental.
You gotta go find all these different mentors
and then the lessons that are being learned
are overlapping.
One thing, it's a confusing nightmare.
It's what pushes a lot of people away
(27:58):
from real estate investing.
But Tommy does it all.
Like he did that at all.
And not only does he done it all,
but he's mastered it all.
Not only with just his money, but he
has a lot of other people investing because
they see what he's doing.
So all of these is what we call
social proof that this is the guy that
knows how to do these things.
So here's what you should do next.
Make sure you go to realsidecommunity.com.
(28:20):
That's realsidecommunity.com.
And if you go to realsidecommunity.com, then
you're gonna find a lot of different stuff.
You'll be able to learn about his programs.
You'll be able to learn about his mentorship
program.
You'll be able to follow his social channels
where he's got massive following because he's teaching
you a lot of what you need to
know.
So you can take his free information by
going to realsidecommunity.com.
You can then subscribe to his social channels,
(28:42):
follow and take his free information.
Then you can come in and start looking
at his mentorship programs and the program to
take a deeper dive so he can actually
help you succeed.
Okay, there's a lot of resources there as
well, success stories, so you can actually see
what he's done in the past.
And you can even learn, see podcasts and
other things he's been featuring amongst a lot
of other stuff.
So what I want you to do right
now is go to realsidecommunity.com.
(29:04):
That's realsidecommunity.com.
If you go to realsidecommunity.com, make sure
you go to the bottom of the page.
Takes less than a minute.
And just boop, boop, boop, subscribe to his
social channels, right there.
He talks about YouTube and all the training.
He's got people literally doing multiple deals just
from what they got from his social channels.
You get all that.
Just go to realsidecommunity.com, go to the
bottom, subscribe, takes less than a minute, and
(29:25):
then look around while you're there.
There's a lot of resources and help that
you're gonna be able to see here that'll
give you more insight.
There's zero reason you shouldn't be investing in
real estate, zero reason.
It makes no sense for you to not
be investing in real estate.
So if you've been overwhelmed with what to
do and how to get there, you just
got it, there's the path.
So make sure you go right now to
realsidecommunity.com, follow on social and check it
(29:47):
out.
There's a lot of things there that will
help you get started or help you take
the next step in real estate investing to
start getting the financial freedom you deserve.
So make sure you check it out, realsidecommunity
.com.
Thanks for tuning in.
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