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

Summary

BiggerPockets Real Estate Podcast: Scaling from 0 to 30 Deals (While Working 9-5) and Starting with $0

Host: Dave Meyer
Guest: Tim Yu
Release Date: March 3, 2025

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Introduction and Background

In this episode of the BiggerPockets Real Estate Podcast, host Dave Meyer welcomes Tim Yu, a U.S. Army officer from Maryland, who has impressively scaled his real estate portfolio from zero to over 30 deals within just two years—all while managing a full-time 9-5 job and starting with minimal capital. Tim's journey is a testament to resilience, strategic diversification, and innovative financing in the real estate market.

Notable Quote:

• “This investor has made more than 30 deals work in just his first two years in the real estate game. And he started with almost no money.” — Brandon Turner [00:00]

Initial Foray into Real Estate

Tim Yu's entry into real estate began in 2022 with his first investment—a fix and flip in Louisville, Kentucky. Despite numerous setbacks, including unreliable contractors and local disturbances, Tim managed to turn a modest profit of $2,500 on his first deal. This initial experience, though challenging, provided him with invaluable lessons and fueled his determination to continue investing.

Notable Quotes:

• “Even $2,500 on your first deal is pretty good. You're a braver man than I being able to go for a fix and flip on your first deal.” — Dave Meyer [02:28]
• “You don't learn as much until you actually take some action, you know, obviously with some controlled risk.” — Tim Yu [02:51]

Pivoting Strategies: From Flips to Direct Seller Investments

After his first flip, which left him contemplating exiting the real estate game, Tim received encouragement from a peer to persevere. This led him to explore more stable and less labor-intensive strategies, such as house hacking and direct-to-seller investments. Utilizing his VA loan benefits, Tim purchased a primary residence and converted part of it into a midterm rental, generating an additional $800 monthly income.

Notable Quote:

• “I have a loan that allows me to buy a house with zero down. So I ended up buying a rental property technically.” — Tim Yu [07:00]

Scaling Through Creative Financing

Tim's ability to leverage creative financing methods was pivotal in rapidly expanding his portfolio. By utilizing seller financing and lease options, he minimized out-of-pocket expenses while maximizing cash flow. One standout deal involved negotiating a $150,000 purchase price via seller financing for a property with significant renovation potential, ultimately leading to a successful cash-out refinance.

Notable Quote:

• “We ended up pulling the cash out and paying them back and yeah, it was pretty crazy. It's probably one of my best deals that I've ever got, actually.” — Tim Yu [13:39]

Direct-to-Seller Approach and Overcoming Rejections

Tim emphasized the importance of persistence in his direct-to-seller approach, which involved intensive networking and outreach. Despite facing numerous rejections and hostile responses, his consistent effort eventually led to securing lucrative deals. Tim also highlighted the effectiveness of personalized communication, such as handwritten letters, in differentiating himself from other investors.

Notable Quote:

• “I always said, do you need any help with your situation? I would love to have a conversation with you if you want to keep the house or not.” — Tim Yu [19:03]

Expanding to New Markets: Transition to Iowa City

Recognizing the limitations of his initial market, Tim expanded his investments to Iowa City, influenced by his cousin's success there. Partnering with a more numerically adept colleague, Tim focused on purchasing a six-property portfolio, enhancing his strategic approach. This move underscored the significance of market research and local connections in scaling real estate investments effectively.

Notable Quote:

• “We picked Iowa City specifically because it's got a lot of life there. It's got tons of travel nurses there, and it's got the big university.” — Tim Yu [30:39]

Challenges in Property Management and Team Building

Entering a new market brought challenges, particularly in property management. Tim recounted his initial struggles with a large property management company that was unresponsive due to their extensive portfolio. His solution was to collaborate with a smaller, more responsive management firm, highlighting the importance of selecting the right partners aligned with his business goals.

Notable Quote:

• “Have a really good screening process for your property management company and kind of see if their visions align with what you're trying to do.” — Tim Yu [33:13]

Strategic Shifts: From Single-Family to Co-Living Models

As Tim's portfolio grew, he sought more impactful and higher-yielding investments. This led him to explore co-living and assisted living models, focusing on providing housing solutions to specific demographics, including veterans. This shift not only aimed at increasing monthly cash flow but also at fulfilling a personal mission to support underserved communities.

Notable Quote:

• “We're trying to do the co-living model with assisted livings. So we're actually looking for our first one right now in Tampa.” — Tim Yu [35:00]

Advice for Aspiring Real Estate Investors

Tim shared several key insights for those starting in real estate:

1. Start Small and Learn: Begin with manageable projects to gain hands-on experience without overwhelming risk.
2. Leverage Creative Financing: Use methods like seller financing and lease options to acquire properties with minimal upfront capital.
3. Persistence Pays Off: Consistent networking and outreach, despite rejections, can lead to successful deals.
4. Build the Right Team: Partner with property managers and real estate professionals who are responsive and aligned with your investment goals.
5. Adapt and Evolve: Be open to shifting strategies based on market conditions and personal growth.

Notable Quote:

• “If you're first starting out, I don't recommend people doing the direct mail or paying for leads because it gets super expensive.” — Tim Yu [10:35]

Future Aspirations and Long-Term Vision

Looking ahead, Tim envisions focusing on co-living properties that serve specific communities, particularly veterans. His goal is to create sustainable housing solutions that not only provide financial returns but also offer meaningful support to his target demographics. This visionary approach underscores the potential of real estate investing to effect positive social change while achieving financial freedom.

Notable Quote:

• “What I really want to focus on is trying to find an asset that provides housing to a certain population or demographic.” — Tim Yu [38:26]

Conclusion

Tim Yu's journey from a novice investor to a seasoned real estate entrepreneur exemplifies the blend of strategic planning, creative financing, and relentless perseverance. His story offers valuable lessons for aspiring investors on navigating the complexities of the real estate market, building a robust portfolio, and aligning investments with personal values and community needs.

Final Quote:

• “The service that you're able to provide to your community and being a good provider of housing and residences is I think extremely fulfilling.” — Dave Meyer [39:19]

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Note: This summary captures the essence of Tim Yu's experiences and insights as discussed in the podcast episode. For a more detailed exploration, listeners are encouraged to tune into the full episode on BiggerPockets.

Transcript

[Brandon Turner]

This investor has made more than 30 deals work in just his first two years in the real estate game. And he started with almost no money.

[Dave Meyer]

In his bank account.

[Brandon Turner]

Today, we'll find out how he did it. Hey, everyone. Welcome Back to the BiggerPockets podcast, where you'll learn how to achieve financial freedom through real estate.

[Dave Meyer]

I'm Dave Meyer, the head of real estate investing here at BiggerPockets, and today's.

[Brandon Turner]

Guest on the show is Tim Yu.

[Dave Meyer]

A US army officer living in Maryland. Tim was on the real Estate Rookie podcast, episode 335, back in November of.

[Brandon Turner]

2023, and at that time, he'd accumulated eight rental properties only one year after.

[Dave Meyer]

Dipping into his 401k to make his first deal work.

[Brandon Turner]

And Tim's story really stuck with me because he tried so many different business models.

[Dave Meyer]

He did long term rentals, midterm rentals, he did flips, wholesaling, and more.

[Brandon Turner]

He operated in several different markets and.

[Dave Meyer]

He took on different partners.

[Brandon Turner]

And this level of diversification can get.

[Dave Meyer]

Out of control if you don't do it wisely.

[Brandon Turner]

But Tim was an example of how you can do this well. He understood the risks he was taking and was still able to deploy his limited capital and time very effectively. Today we're going to hear how Tim.

[Dave Meyer]

Doubled his rental portfolio in his second.

[Brandon Turner]

Year of investing, how he uses creative financing and basically just pure hustle to.

[Dave Meyer]

Make up for a lack of liquid.

[Brandon Turner]

Cash and much more. Tim, welcome to the Bigger Pockets podcast, man.

[Tim Yu]

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

[Dave Meyer]

It's our pleasure.

[Brandon Turner]

Tim, we're happy to have you here. You were recently on the BiggerPockets rookie.

[Dave Meyer]

Show, but your stories, super cool and inspiring, and so we wanted to dig a little bit more into your story, but maybe if people don't listen to the Rookie podcast, you could just give us a brief background on how you got into investing in the first place.

[Tim Yu]

Yeah, back in 2022, I actually bought my first investment property and it was a fix and flip. And that fix and flip was everything bad that you can imagine happened to me. You know, bad contractors, crazy drug deal across the street, the whole nine yards. And, you know, I thought that project was going to take 30 days and ended up being like six months. And I think. I think we made like $2,500 on it, so it was even really worth the money.

[Dave Meyer]

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

[Tim Yu]

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

[Dave Meyer]

So. Good for you. But hopefully you at least learned something.

[Tim Yu]

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

[Dave Meyer]

Wow.

[Tim Yu]

And it was all, you know, financed differently. You know, I had to do seller finance or doing like a lease option. And then obviously I use my VA loan as well because I'm a veteran. And I did the old house hack trick in late 2023.

[Dave Meyer]

Okay.

[Tim Yu]

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

[Dave Meyer]

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

[Tim Yu]

So I used to live in Louisville, Kentucky, and that's where I started my entire investing journey. And for all you army folks out there, I was stationed at Fort Knox, Kentucky, and that's about an hour long commute each way, so I was driving like two hours a day. So I would just, you know, destroy the podcast. Right. Just listen to episodes every single day. And the idea of fixing and flipping a property and making 30, $40,000 just sounded really cool to me. So that was ultimately like the path I chose. But how I ended up on the property that I purchased, which is really crazy, which I used to look on Zillow every single day. And there was a property that went from like a hundred grand listing and it dropped down to like 50 grand overnight. So I immediately called my agent. I was like, hey, we should go see it. And we find out that there was some squatters that broke in. And the owners of the property lived in California, so they Wanted nothing to do with the property. And now looking back, I probably could have got it way cheaper here.

[Dave Meyer]

Cheaper than 50 grand.

[Tim Yu]

So I ended up getting under contract for 40 grand.

[Dave Meyer]

Oh, my God.

[Tim Yu]

Yeah. But I probably could have got like 25, like 30 out of it, but I rushed.

[Dave Meyer]

What kind of house is this?

[Tim Yu]

Oh, my gosh. It was like a. In Louisville, Kentucky, there's tons of shotgun houses, so single floor, just single layout. And looking at all the comps and stuff. And even my hard money lender was like, oh, I think the ARV is about 120. The problem is nobody want to buy in that neighborhood because. Because it was like a super high crime rate. But I didn't know anything. I just wanted to buy a property and see how it went.

[Dave Meyer]

I mean, I imagine that, you know, you said you thought it was going to get done in 30 days. I'm sure getting the squatters out took longer than that.

[Tim Yu]

Yeah, we. That was. That. That was an ordeal that I, you know, I did not learn about until we were kind of in the. In the brush of it. But, you know, after like 30 days or so, I actually did the cash for keys method.

[Dave Meyer]

Yeah.

[Tim Yu]

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

[Dave Meyer]

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

[Tim Yu]

Yeah.

[Dave Meyer]

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

[Tim Yu]

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

[Dave Meyer]

Yeah, I don't play me out.

[Tim Yu]

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

[Dave Meyer]

Oh, cool.

[Tim Yu]

So that one was doing pretty well. So it made about $800 a month while I was living there. And that's when I was like, oh, my gosh, like, real estate's kind of cool, and I think I'm going to try to double down on it. Right.

[Dave Meyer]

I want to go back to something you said about it not getting easier, because it's true, there's still going to be so many challenges, but I think your. Your tolerance for it just goes up. Like, you've seen and you've seen some of the bad stuff that can happen in the industry, and you still were okay.

[Tim Yu]

Right.

[Dave Meyer]

Like, you learn that the worst case scenario, you usually, if you're smart about it, you can mitigate really bad losses and are able to at least learn a lot, at least come out close to even and live to see another day and go on to another deal. And it's great that you did that. How do you find that House hack?

[Tim Yu]

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

[Dave Meyer]

Okay.

[Tim Yu]

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

[Dave Meyer]

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

[Tim Yu]

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

[Dave Meyer]

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

[Tim Yu]

Absolutely.

[Dave Meyer]

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

[Tim Yu]

Then I started to really take it more seriously. And, you know, I did like all the boot camps, all the mentorships to kind of like learn different skills and tool sets. And what really caught my eye was trying to negotiate with the seller directly to do like something with terms. Right. So a lot of the ways that I started buying properties in that first year was I would buy on creative finance and then I would actually sell it on a lease option. So if I would negotiate a down payment with the seller, they'd say, hey, you know, I want a $10,000 down pay. I would then do a lease option where I would rent the property out but also give an option deposit. So someone would have the option to buy it, you know, three to five years. And, you know, I wouldn't get the total entry fee all the time. But the math was, you know, three to 5,000 out of my pocket to buy a rental property. That cash flowed about 4 or 500amonth. And doing that strategy kind of stacked up my portfolio for the single family side. And I just kept doing it like over and over again. And then eventually I was like, wow, I have like a decent sized portfolio and I didn't really spend that much money out of my pocket.

[Dave Meyer]

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

[Tim Yu]

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

[Dave Meyer]

Because you have to just do a ton of volume. Right. So you're fronting all that money.

[Tim Yu]

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

[Dave Meyer]

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

[Tim Yu]

100%. So what I was doing in the very beginning was I was actually creeping on like Facebook Marketplace and I would work full time and then I would get home around like 5, 6pm and I would message like 30, 40 people on Facebook Marketplace who were selling their properties and I would ask them like, hey, I'm an investor and I would love to like just hop on the phone with you. And I got a ton of no's and a ton of screaming at my face. Eventually, you know, I had that one person that I was actually interested in selling their property to me on creative Finance. And I remember the first time I booked a call with somebody that was interested and he's like, I got an offer from somebody else and they kind of ghosted me. And it was another wholesaler that was dealing with that guy. And I said, ultimately, what's that price that's going to push you forward? And he said 150,000. Now this house was a dump, like it needed some work in there. And I said, I can't give you 150 right now because it just doesn't make sense. But would you allow me to give you 150 over a course of a set amount of years if I paid you every single month? And he literally just said if the contract's right. Huh.

[Dave Meyer]

Amazing.

[Tim Yu]

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

[Dave Meyer]

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

[Tim Yu]

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

[Dave Meyer]

Okay.

[Tim Yu]

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

[Dave Meyer]

And then there was a balloon at the end.

[Tim Yu]

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

[Dave Meyer]

Oh, wow. Amazing.

[Tim Yu]

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

[Dave Meyer]

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

[Tim Yu]

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

[Dave Meyer]

Yeah.

[Tim Yu]

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

[Dave Meyer]

Totally.

[Tim Yu]

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

[Dave Meyer]

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

[Tim Yu]

Thank you.

[Dave Meyer]

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

[Brandon Turner]

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[Dave Meyer]

Tough first deal to a home run on his third deal. And it Sounds like, Tim, you've been scaling a ton since then. So how did you move forward after that first direct to seller deal went so well for you?

[Tim Yu]

So I'm a pretty simple guy. I just kept doing a lot of the same thing. But eventually the Facebook marketplace stuff obviously started to dry up, so. So we started doing county record. So I would go to my county website and see all the different foreclosure deals. And actually a bulk of my single family deals came from the foreclosure list. And being able to reach the seller and end up negotiating, try to figure out, like a win win situation. But I know a lot of investors do the same thing and they do a lot of cold calling. And from my experience of talking to sellers trying to reach them, a lot of people going through a foreclosure don't really like to pick up their phone. And I didn't have time to do the door knocking thing. So what I started to do was I would just write handwritten letters and I would drive by the property and just leave it on their doorstep. And having that handwritten letter, I think really helped because who doesn't want to open a letter that's handwritten, that's written to you?

[Dave Meyer]

Oh, I love it. Yeah, they trick me every time. Even those fake ones that, like, has a machine.

[Tim Yu]

Right.

[Dave Meyer]

Them I still open up.

[Tim Yu]

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

[Dave Meyer]

Interesting.

[Tim Yu]

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

[Dave Meyer]

Huh.

[Tim Yu]

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

[Dave Meyer]

Yeah.

[Tim Yu]

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

[Dave Meyer]

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

[Tim Yu]

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

[Dave Meyer]

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

[Tim Yu]

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

[Dave Meyer]

They were high.

[Tim Yu]

Right. Like, they were like getting up like 6, 7%.

[Dave Meyer]

Oh, at least.

[Tim Yu]

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

[Dave Meyer]

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

[Tim Yu]

No. You should have heard my first 60 calls.

[Dave Meyer]

Oh, man, I wish we could play.

[Tim Yu]

It, you know, Stuttering Tim. And. And I remember when people would pick up the phone, my heart would be racing out of my chest. Oh, I'd be like, hey, Mr. Seller, do you want to sell your house? And they'd be like, no. Right. And I'm not going to say any bad words, but it was just a lot of profanity.

[Dave Meyer]

Oh, I bet.

[Tim Yu]

Never call me again type thing.

[Dave Meyer]

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

[Tim Yu]

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

[Dave Meyer]

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

[Tim Yu]

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

[Dave Meyer]

Are you married?

[Tim Yu]

I am.

[Dave Meyer]

Okay. Okay. I didn't know if that was the white lie. Yeah, no, no, no.

[Tim Yu]

The white lie was like, hey, I have a house around the corner.

[Dave Meyer]

Yeah, around the corner. Yeah.

[Tim Yu]

Yeah.

[Dave Meyer]

This was still Louisville, Right, though you're still in your market, your local market?

[Tim Yu]

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

[Dave Meyer]

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

[Tim Yu]

Yeah, for me was it was just single family properties. 60 days on market and no house is older than 1950s. And the reason why I had the 1950s thing was my first flip. The house was like 100 years old. So I had a lot of nightmares with everything regarding the plumbing, the foundation, all that stuff. Even electrical.

[Dave Meyer]

Oh, yeah.

[Tim Yu]

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

[Dave Meyer]

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

[Tim Yu]

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

[Dave Meyer]

Okay.

[Tim Yu]

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

[Brandon Turner]

That's awesome.

[Dave Meyer]

And so how many did you wind up doing in Kentucky before you moved to Iowa City?

[Tim Yu]

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

[Dave Meyer]

Awesome.

[Tim Yu]

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

[Dave Meyer]

Amazing.

[Tim Yu]

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

[Dave Meyer]

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

[Tim Yu]

You know, obviously, you know, New York is very expensive. And when I moved to Kentucky and I saw houses were like 100 grand or 120 grand, I was like, whoa, this is crazy. Like, the same house that I'm looking at would be like half a million at home.

[Dave Meyer]

Yep.

[Tim Yu]

And then with that in the combination of really wanting to get into real estate, because I think after like 2020, there was so much content about real estate and everybody was starting to talk about it and I kind of started to get fomo. So I was like, you know what, I gotta do something now or else I feel like I'm never gonna do it. And I don't know if a lot of guests that you've had had the same experiences I've had, but when I first started looking at buying my first property, I had a ton of people telling me not to do it. It was in the beginning of 2022, when interest rates were still in the 3,4% range, but prices were going up. And everyone told me the market's going to crash any day now. And I'm glad I did not listen to, you know, my parents. I'm glad I didn't listen to a lot of people and just ultimately tried it.

[Dave Meyer]

So, yeah, it's. It's hard when people are telling you not to do it. I started in 2010. People are like, oh, it's amazing how lucky. It's like everyone thought that real estate was over forever at that point. And regardless of what market you invest into, there's going to be a challenge. Whether it's getting credit or expensive homes or lower cash flow, there's just always things that you're going to have to navigate. And like you said, once you get into it, you'll learn how to make money off of the deals in the current market. Clearly there are ways to make it work in pretty much any market conditions.

[Brandon Turner]

Tim I want to get into what.

[Dave Meyer]

Changed and why you started investing in Iowa, but first we have to take a quick break. Do you want to invest in cash.

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[Dave Meyer]

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[Brandon Turner]

I'm back with investor Tim Yu on the Biggerpockets podcast.

[Dave Meyer]

Why'd you move to Iowa City? What. What changed?

[Tim Yu]

So Iowa was really interesting for us because one of my cousins, he lives out in Iowa and he bought a house out there, and he kind of, you know, saw me on Instagram, was like, oh, I didn't know you did real estate. I think you should look into my backyard. So at this time, I have a partner now. So it's been, you know, a couple years. And my partner is more of like the underwriter, so he's a stronger with the numbers and stuff. And after looking into Iowa, like, we love the Midwest. A lot of people will say Louisville, Kentucky does not count as the Midwest, but I do personally, and Iowa is like, truly Midwest. And we picked Iowa City specifically because it's got a Lot of life there. It's got tons of travel, nurses there, and it's got the big university. And actually the six properties we bought is like a five minute drive from the campus, so it's in a really nice neighborhood. The seller was dissolving his portfolio and we ended up getting that deal from a broker connection. So we negotiated with the seller directly and paid the broker a fee. That deal was really complicated. It took us like three months to close, but we ended up closing it in July of 2024.

[Dave Meyer]

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

[Tim Yu]

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

[Dave Meyer]

So, I mean, that is one of the challenges of going to a new market.

[Brandon Turner]

Right.

[Dave Meyer]

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

[Tim Yu]

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

[Dave Meyer]

100%.

[Tim Yu]

Like, especially if you only have six doors in their portfolio, they don't care about you. Takes them a week to like respond to our emails. And it was just a mess. So we ended up taking a chance with a smaller property management company that only managed 100 properties at the time.

[Dave Meyer]

Yeah.

[Tim Yu]

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

[Dave Meyer]

That's right.

[Tim Yu]

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

[Dave Meyer]

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

[Tim Yu]

Yeah.

[Dave Meyer]

And it's just so much of this business, we talk about it a lot on this show is about incentive, alignment and finding, whether it's a partner or a tenant or a property manager, finding someone to work with to put on your team who is in the same sort of spot as you and wants the same thing as you. It can work in other situations, but everything goes so much smoother if you're trying to grow together, like Tim said, place with a hundred units, they're going to be stoked every time you add a duplex. That's going to be a big boost to their business. And they're going to want to show you that they can scale with you so that you, when you buy that third or your fourth or your fifth property, that you could grow together. And I've unfortunately had to fire some property managers, too. And again, most of them are good people. It's just like they're just not the right person for my portfolio at that time. And so I think Tim is absolutely right. You need to not just find someone who's reputable, but find someone who really is going to provide the level of service that you're looking for at your stage of your portfolio. So now, Tim, what are you doing? Are you looking for deals in both places in Louisville and Iowa City?

[Tim Yu]

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

[Dave Meyer]

Okay.

[Tim Yu]

And we've kind of slowed down single family as a whole. We kind of feel like the market is still pretty tight in terms of rentals. And for me personally, you know, I started buying rental properties on the pursuit of financial freedom. Right, sure. And, you know, what I started to realize was having a property that cash flows 400amonth really wasn't changing my life. And, you know, it's really nice and it's really good to build wealth, but my strategy was like, hey, let's focus on properties that generate more cash flow per month and also provide a service, because having single families and having people rented is great, but it really wasn't fulfilling for me. So what we're looking for to do now is we're actually trying to do the co living model with assisted livings. So you know, people that are older. So we're actually looking for our first one right now in Tampa. And you know, there's some intricacies to that, dealing with the fire marshals and the licensing and all that stuff. But we're kind of shifting towards the co living model because we can find these properties on the market that's been sitting there for a while and we can even purchase them conventionally with the today's rates, today's financing and still be able to cash flow $3,000 a month. Right. And that's being kind of conservative too.

[Dave Meyer]

You know Tim, I'm curious because you've only been doing this for what, three years Ish now, which is good. I mean, you've done a lot in three years, don't get me wrong. But you've done a lot of different stuff. You've flipped, you've done, you know, a lot of creative finance. You've done direct to seller, you've done buy and hold. Now you're moving to assisted living. Is this just kind of your personality that you like to try different things or do you. Is it kind of market driven where you're just like weren't seeing the returns that you wanted or why take on so many different things?

[Tim Yu]

I guess I think, I think it is kind of like part personality that, you know, I'm a try it at least one time a guy. Yeah, I don't like flipping, so I don't flip anymore.

[Dave Meyer]

You learn that?

[Tim Yu]

Yeah, I learned that. Right. And you know, you tried a couple times. First one didn't go well. Second one didn't really go well. So I think flipping is really stressful for me. And some people love it. Right. Some people are super good at flipping. But for me the second part is market driven. I think that how the markets that I look at now, it's super hard to find a deal that just makes sense. And as you grow as a business or grow as an investor, you know, I don't have time to call sellers 247 anymore like I used to. So my marketing has changed drastically. So I have to target certain lists, certain people and try to maximize my time because I still do work nine to five every day. So it's been really hard to do the same lead generation that I was when I first started. But yeah, I think it is a fusion between the two. I do like to try everything at least once. And if it doesn't work, then hey, we can mark it off to the. The bingo Card and kind of move on.

[Dave Meyer]

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

[Tim Yu]

Yeah, you know, it's, it's funny that question because when I was asked this a year ago on the rookie show, it's changed drastically. Right. I think when I was first talking about, I was like, I want to get into multifamily and you know, after, you know, dealing with so much real estate and talking to different investors, having 100 door unit like thing didn't really excite me. Raising tons of capital or doing syndications didn't really excite me. So what I really want to focus on is trying to find an asset that provides housing to a certain population or demographic. I think, you know, in the next five years definitely want to do sis livings but you know, since I'm a veteran, I do want to move towards more co living properties that actually end up supporting veterans because there's a ton of displaced veterans out there that need housing and need a sort of community. So I think that's like what I want to envision in the next five years is focus on that.

[Dave Meyer]

Good for you, Tim. I, I really think that of course most people get into real estate investing to improve their own financial position, but the service that you're able to provide to your community and being a good provider of housing and residences is I think extremely fulfilling. And I love hearing you say that and that you have your own personal mission, whether it's elderly folks or serving the veteran community. It's such a big benefit to real estate investing and at least for me, and I'm sure for you, like it provides motivation when things do get tough and you're remembering like, you know, yeah, you're in it to, to grow a successful business, but there are other people who are benefiting from your work as well. Well, Tim, thank you so much for joining us today. Super cool story. Really inspiring to hear everything that you've been up to. Hopefully we'll have you back on the show again in a year or two to hear what you're up to.

[Tim Yu]

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

[Brandon Turner]

And thank you all so much for.

[Dave Meyer]

Listening to this episode.

[Brandon Turner]

As a reminder, if you want a chance to be on this show just.

[Dave Meyer]

Like Tim as one of our guests, you can [e-mail] Guest There's a form that you fill out there. Tell us a little bit about your story and we'll consider you for a.

[Brandon Turner]

Spot on the podcast.

[Dave Meyer]

Thanks again for listening. We'll see you next time.

[Brandon Turner]

Thank you all for listening to the Biggerpockets Real Estate Podcast. Make sure you get all our new episodes by subscribing on YouTube, Apple, Spotify or any other podcast platform. Our new episodes come out Monday, Wednesday and Friday. I'm the host and executive producer of the show, Dave Meyer. The show is produced by Ian K, Copywriting is by Calico, content and editing is by X Exodus Media. If you'd like to learn more about real estate investing or to sign up for our free newsletter, please visit www.biggerpockets.com. the content of this podcast is for informational purposes only. All host and participant opinions are their own. Investment in any asset, real estate included, involves risk, so use your best judgment and consult with qualified advisors before investing. You should only risk capital you can afford to lose, and remember, past performance is not indicative of future results. Biggerpockets LLC disclaims all liability for direct, indirect, consequential or other damages arising from a reliance on information presented in this podcast.