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Real Estate Investing School Podcast
239. Low Risk High Upside Real Estate with Tanner Huber
00:53:08
In this episode of the Real Estate Investing School podcast, host Joe Jensen sits down with investor Tanner Huber—a young professional who has built an impressive real estate portfolio alongside a thriving sales career in the solar industry. Tanner,...
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- [00:00]
Tanner Huber
There's a couple deals that come across your way that you're like, dude, I got it. I got to act. You know, you just got to do it.
- [00:09]
Joe Jensen
Welcome to the Real Estate Investing School podcast. I'm your host, Joe Jensen. Our guest today is Tanner Huber. Now, Tanner is A. Is 30 years old. He's been working in the solar industry for over a decade. He's currently the director of sales at V3 Electric. Along the way of his sales career, he built a real estate portfolio. He's got over 36 units now, and cash flows around 200,000 a year, typically, which is a lot of people's dreams. So welcome to the show, Tanner.
- [00:40]
Tanner Huber
What's up, Joe? Dude, it's good to come back and be with you again. I ran real estate investing school with you guys quite a few years ago, but, yeah, good to connect.
- [00:49]
Joe Jensen
Yeah, I was excited to have you on the show. When I saw your name, I was like, that's great, because we, yeah, we work together a little bit with your team and with you, and I think. Think we might have even had you on the show back in the day. So I'm excited to see where you're at now with it all. But, yeah, man, you. You've done quite a bit, and it's. It's kind of always been a side hustle, I guess, for you as you've been doing the sales career. How much of a focus has real estate really been throughout, you know, the last decade or so or when you first started getting into it in the last, I guess, seven years? Really?
- [01:25]
Tanner Huber
Yeah, you know, it's. It's definitely changes. My career has changed, unfortunately, in the last few years, it's kind of taken more of a back seat. Early on in my career, I genuinely thought, man, I really want to go into real estate. I think that was going to be my primary. So I kept putting more and more time into it, but I think the better that you get at it, the more that you do it, you can do it a little more passively, and it takes less and less time, you know, And I've actually kind of understood the importance of having a really good team. The more that I've gotten into it. So having the person that's helped me find the deals and remodel the deals and manage them and everything like that just made it a lot easier. But. But, yeah, it's been a blast. I love it. It's a big passion of mine. I actually teach all my guys, you know, that they need to get into real estate. It's just such a good investment. So.
- [02:11]
Joe Jensen
Yeah, that's cool that you, you helped, you've helped quite a few people get into real estate, right? Like actually get their first deals and stuff like that. Maybe speak to that a little bit.
- [02:21]
Tanner Huber
Yeah, totally. Yeah. My, my real estate agent, Utah man, she, she loves me. We're, we're, we're close. Just because I refer a ton of people, they probably, literally there's a year where it was probably 40 or 50 properties like referred to her to go buy. Because I'm not referring like, you know, just a primary residence, some, you know, couple buying the first house. Like I'm referring my buddies who are doing really well or buying four or five properties sometimes in a year, you know. Yeah, no, that's, that's been my big thing is just helping my new reps get into real estate because that first one's the hardest. You know, when you're 22, 23 and you make some money and you don't know what to do, you know, you get a little gun shy. Buying real estate seems a little daunting. Like it's something that you really don't understand. So I hope beginning stages, you know, connect them with my team who understands especially like 1099 and get people qualified and things like that. Because once you do your first one, then you get the confidence that you can go and take down a bunch more, you know. Yeah.
- [03:17]
Joe Jensen
It's interesting because for a lot of people, you know, especially starting out, you know, of real estate purchase is the most expensive purchase they'll ever make, some people in their whole lifetime. Right. But you know, especially for, you know, younger, you know, 20 something year olds, that's the most expensive thing they've ever bought in their life. And it can feel very daunting and almost irresponsible. It's funny how you get these parents who don't understand it or family or you know, mentors me, like, oh, you don't want to buy a house till like that's a big deal. That's a big, big deal. And, and it's, it almost seems irresponsible by house that young, like, what are you doing? You know, and it's like, it's actually the opposite if you understand anything about.
- [03:55]
Tanner Huber
It, you know, totally well, especially nowadays, like what people are spending their money on, you know, I mean, it's like cars are so expensive, you know, sometimes even vacation can just be like such a big cost relative to the cost of a home. Right? Especially. Yeah. Like partial down, you know, when you're doing like 3, 3 to 5%. I'm like, dude, that, that car you just bought, you could have bought a rental property that'll provide for you and your family and your kids, like one day. Now that was irresponsible. You know, like, not buying real estate for me is pretty responsible. You know, I gotta talk to my guys that are making money and I'm like, dude, if you're making over a certain amount, like, no questions asked, you should be buying real estate, you know, 100%.
- [04:33]
Joe Jensen
It's. It's so interesting. You know, I just had a friend that they're in their 30s and they're finally buying their, their first home. And they're like, they're so nervous. Like, but what if they feel like they're getting locked down? Like this is some sort of big commitment. And I always say, I'm like, you just got to think of it like it's one of a hundred. Like, this isn't a marriage. You're not tied to one deal. You can go buy 99 more. Like, you don't have to live in it forever, even if you live in it for the first year or two or six months or whatever. Like, there's really no strict commitment to these things, but people feel like it's such a heavy tie down. But what if I move? It's like, then sell it or get a property manager or whatever. Like, I don't know, there's a thousand options.
- [05:13]
Tanner Huber
Go get another one, man. Yeah, I know. I just, I literally just moved to Southern California like last week. Yeah. Old home. Into an Airbnb, you know, it's like, it's great. And I actually get to go up and use it whenever I want. I have to go up there every single month for work and I get to rent it back to my own business and works out great, you know, And a lot of people, like, I. It's funny, you know, even people I look up to, like lawyers, doctors and things like that, they talk to me sometimes because they just haven't done real estate. And I, you know, have a little bit of experience in it and they don't get why I do it sometimes. Like, for example, in this market right now, they're like, but dude, like, you're only making 250 bucks a month, like, why? You know? And I'm like, yeah, dude, there's so many other avenues to make money, right? There's so many different returns that you can get in real estate where people don't put it all together, you know, like when you just look at one, you're like, yeah, it's not the best investment if you only take one rate. You know, rate of return. Like, let's just say just cash flow. Like, I'm just focusing on cash flow. And then when these people, when my. When the people that I talk to start to understand, you know, like, the handful of different ways that you can make money, I'm like, dude, it's. It's juicy. You know, real estate's great. And actually, I almost fell out of love with real estate like, a few years ago, right, as interest rates kind of peaked back up. Like, I got into real estate, dude, when interest rates, well, they started at 4 or 5 and then they came down and. And, you know, everybody was doing great. I was killing it. I was like, making more money buying a home and selling it the next year than I did at my job, you know?
- [06:35]
Joe Jensen
Yeah.
- [06:35]
Tanner Huber
I was like, dude, this is ridiculous. Like, why aren't they doing more of this? And then when interest rates climbed up, I was like, dude, maybe I don't like real estate as much, like. And I started, like, you know, hanging on more cash and more in the stock market and stuff. But then I really put together a spreadsheet of just my properties and. And all of the potential revenue streams, right? Appreciation and tax benefits and principal pay down and cash flow and all that. And I started totaling it together and as I looked at it, you know, per property, but then cumulatively, over my whole portfolio, like, dude, I. What was I doing? You know, why did I kind of step back for 18 months? Like, it's too good. And so I've just been. Yeah. Ever since, just full real estate, man.
- [07:16]
Joe Jensen
It's.
- [07:16]
Tanner Huber
It's great, dude.
- [07:17]
Joe Jensen
I love that you mentioned that, because that happened to me too. I didn't know anything about real estate. I hadn't taken courses or classes or understood anything that you just mentioned about appreciation and depreciation and all these different aspects. I just knew real estate's good. I started dabbling in it and. And then I hit a point where I was making, you know, decent money in my sales career. And I had that same thing. And you mentioned, like, you're making 200 bucks on this property. Like, who cares? And I was like, what am I doing? And I kind of stepped back for a few years during the best time to ever buy in the history of my life, unfortunately, because I didn't get it. I was just like, yeah, it's a couple hundred bucks. Like, I make that in a day selling half a. You know, it's it doesn't matter, you know, but. But like you said, people miss the big picture of the, you know, all the other ways to. To get a return, you know, and most returns don't do that, though. Like I say, if you look at your stock portfolio, you know, you get an 8 or a 10 or whatever. That's all there is. It's just that return just, you know, but it's like you can make that just on the appreciation or you can make. When I run through my spreadsheet a lot of times, like the tax benefit alone can be like a 20% ROI just on the taxes. I'm like, well, that's huge, like a hundred percent.
- [08:32]
Tanner Huber
And then with time, it just gets better and better, you know, Like, I mean, when you're dealing with like a, you know, a fixed rate mortgage and granted, you know, taxes and insurance creep up a little bit, but I've finally gotten to a point where I got to see the benefit. You were talking about my portfolio and the cash flow and everything. It didn't always cash flow like that. You know, in the beginning I was making, you know, a couple grand a month, and I was like, okay, like, this is cool. It offsets a little bit here, a little bit there, whatever, you know. But now it's been about seven years. I still own my first property, you know, and like that one property, I think I pay like a $1200 mortgage. Like, it's so little, and I rent it for like 3200 bucks. My dude, that one property, now cash flows that my whole portfolio used to just because of time, you know. And one day that same property will cash flow me 4 grand in like 10 years, you know, or something like that. Yeah, it's just a matter of time. You just got to hang on to them. And it gets so much better and it starts spreading, you know, Like, I guess the biggest thing is like, when I look at my spreadsheets, I just look at everything from a real conservative perspective and I just assume like inflation across the board. I'm like looking like a 3 or 4% rental increase, a 3 or 4% appreciation. And even just with a real conservative kind of, hey, 3%, like, things get really good eventually. It's just a matter of hanging on to it. So.
- [09:49]
Joe Jensen
Yeah, well, it's funny because we talk about like, oh man, if you'd bought back in 2012, like, oh my gosh, you would have killed it, you know, and then it was like 2016, 2018, you know, and I remember in 2021 is when I really went hard, and people are like, what are you doing? Like, wrong time. But now we're looking back at 21. 2021. Being like, man, I wish I'd bought more then. And so anybody listening now, it's like, I believe it'll be the same thing. You're going to look back and you might not say, ooh, 2025 was the best year ever. But you'll easily be able to go, man, if I had bought more property in 2025, you know, it's. Say it's 2030, 2035. Like, if I bought property and back then, even just base hits, nothing sexy, nothing cool. If I had bought five or 10 homes in 2025, holy smokes, it would have changed my life, you know?
- [10:40]
Tanner Huber
Yeah, you're always. You're always gonna do that just because, I mean, yeah, everything's going up. It's funny, you know, my job, I do solar, right? And in solar, and a lot of what we do in our contracts, it goes up a little bit by like 2, 3% a year. And a lot of my customers, they don't get it. They're like, but, dude, you're saying my electric bill, when I sign up with you, is going to go up by 2% a year? I'm like, yeah, that's sweet. You know, and people just, like, can't understand compounding or like, you know, things that are increased. I'm like, dude, what were you paying for gas like, 20 years ago, man? He's like, you're right. You know, and so it's like the same for us. Like, we can't imagine that a $400,000 starter property today will be worth like a million bucks in, like, 20 years. But it won't. Like, like, my kids first house will probably be somewhere close to a million bucks, you know, 800 grand, 900 grand. It's just gonna happen.
- [11:30]
Joe Jensen
Yeah, Dan. And we're. It's. It's so interesting. I want to backtrack a little bit you talked about, which is really cool. You help a lot of your reps and new people get into real estate. You teach them kind of those basics, you know, about appreciation and depreciation, tax benefits, and let them see the holistic view of the full roi. It's kind of like, so they see that. But you said one thing is you. You kind of get them with your team. Now, I want you to go into what you mean by your team. Like, are you running a real estate business that people have, like, or you just have like, Explain what you mean by team and how that helps your reps plug them in with your team.
- [12:08]
Tanner Huber
Totally, yeah. I mean, like, I just believe in hiring professionals, you know? Like, I do what I do because people. Because I know more than the people that I'm selling to, you know? And so, same thing in real estate. I'm like, dude, hire a professional that you trust that's going to take care of you to do their job, because you have to pay it either way. You have to pay the fees. And actually, the person that I use, she only charges me half the fees, which is nice. And charged all my people half the fees. So I'm actually in most of my life, I'm not super biased about who I recommend in much of anything, but my agent and her husband, I recommend them. Like, I actually get really frustrated if my people use anybody else, because they come back to me and they're like, yeah, they did this or they messed this up. And I'm like, dude, I freaking told you. You should have freaking used my people, you know? So anyways, I'm really. Because they do a great job. And so, yeah, plug them in. With my agent. She's awesome, out in Utah county, and, man, it's all she does. Like, no kids, no nothing. She's just real estate 100% of the time. Half the fees kills it. Husband's a general contractor. So then they walk through a property for me, and they're like, look, this is the purchase price. This is going to be your remodel cost. I've already ran comps. This is what it's going to rent for. I know that because I've worked with them long enough. They're real conservative. And then they'll even, like, prep it for an Airbnb for me, you know, like, hey, we got the plates, we got the dishes, we got everything. Literally, I just say, cool, buy it. And then it's done. It's done from end to end. And they're like, hey, it's ready to Airbnb. Like, sweet. Thanks so much. You guys are awesome. Pay them. You know what? They totally deserve. Probably less than they deserve because they're just awesome. And then pass it to my manager at that point. And again, yeah, my manager, somebody I trust, you know, and it's. We've kind of built it. She actually didn't start as a property manager. I kind of got her into it. But it's nice because I've been able to set expectations with her and build how I want it done. Hey, I want spreadsheet. I want my Report monthly to look like this, this. Hey, I want you to come to me for certain expenses over this much. Anything under this, just handle it. You know what I'm saying? So I've built out this team where I just get texts every week, hey, what about this property? What about this property? I'm just like, no, no. And I don't buy anything, man, unless I'm like, holy crap, I have to have this house. Like, oh, gosh. You know, because I think, like, it happens because, you know, every year, dude, I'll find like four or five properties. Holy crap, I have to have that. And three of them, I don't move fast enough. But, you know, one or two of them, I'm on it. I get them, I lock them up. And I'm like, dude, sweet. I feel great about them, you know, because the. The one or two properties I've ever bought that I'm like, I don't know, I probably shouldn't do this one, but I'll do it anyways. I. I regret it still.
- [14:49]
Joe Jensen
That's interesting. You know, the funny thing that you mentioned with the team is everybody you mentioned you, and you mentioned you got your real estate agent, you got your property manager.
- [14:58]
Tanner Huber
And.
- [14:58]
Joe Jensen
And then even if, you know, you probably have like a good lender that you go to that has everything on, knows your books and everything. All these people, they work for free. Virtually. I say free, meaning you're not writing checks to these people. You're not like, hey, here's money up front. Go do this work. All of them are paid based off of performance commission. If you buy the house, if they write the loan, if the tenant pays rent, that's the property manager, the agent. Like, it's all paid for by the asset, which is so cool. So for someone starting out, it's like, oh, I don't have a ton of capital, like, pay for a big team. It's like, no, no, no. The team works for you for free because the asset covers it as you build these portfolio, which is super cool because you don't have to be forking out any money up front.
- [15:44]
Tanner Huber
Yeah. I mean, if you think about it, all of your costs on the investment are variable. They're all variable costs that, yeah. Are only incurred when a great thing happens. You're like, great. Like, I only pay when. And I don't actually even pay. You're right. Like when you're on the buy, you really don't feel like you're paying for much of any of it. Maybe the origination fee on like a Loan and things like that. But you're. You're in the driver's seat. Totally, totally.
- [16:07]
Joe Jensen
Yeah. Which is super cool, you know, for. For people trying to put a team together. But I think having a team, especially when you have, like, you want. You've curated it to how you. How you invest personally, so they know you and they know your stuff. But having a team encourages you to actually take action. I think if you don't have any of them pieces in place, you're like, oh, is this going to be a big headache? Or how am I going to get this furnace? Or get it all set up? And. And there's all these friction points. It's easier to not buy. And then that's, you know, like I said, you're paying these people to buy the furniture. Paying them to do this. You know, you are paying some money for that stuff. But if you didn't, then you probably wouldn't be buying real estate, which would be way more expensive than whatever you're spending to get these people to do it for you.
- [16:54]
Tanner Huber
Well, totally. And like, dude, because I'm an investor, people see it differently. Like, well, first of all, really quick to go back to the fees of, like, furnishing the house and stuff like that. I've negotiated my agent. I said, hey, I'm buying a ton of properties. I'm sending a ton of referrals. So she gives me a little bit of her commission on every deal to then go back towards fixes and buying furniture. So actually, a lot of times these fixes, this furniture, this stuff I don't even pay for, it just comes right out of the commission, which is great. But one thing I'd recommend.
- [17:19]
Joe Jensen
Oh, I love that.
- [17:21]
Tanner Huber
Yeah. To anybody who knew who's listening. And some of my guys, right, they don't go buy real estate in Utah, where I buy real estate, right. They're like, hey, man, I'm from. You know, I'm from Arizona. My great. Here's what I'd recommend. You know, when you're putting together your team, dude, go find the best agent in the whole place. Meaning, like, I'll go on Zillow. I'll see how many transactions people are doing. And I'm like, look, you don't want to go use your mom's friend who doesn't know what the crap she's doing, you know what I'm saying? Like, oh, yeah, she has her license maybe, or, you know, she just got into it. Like, no, you want to go find the best, and then you want to tell them you're an investor. If you are an investor, right? If you, if you're buying your first property, fine. But if you're an investor, they're going to look at you a little different because they're like, oh dude, this is reoccurring business. Like if I do well with, with on this property and he's the type of guy that has, hey, I'm going to be buying a property or two every year. Treat you a little bit differently. And you do that as well with your, your mortgage guy. You're like, you only go to the mortgage guy who's done this for 10 years and does like five loans a week. Like, I just want this guy to be pumping because he knows the ins and outs. Same with the agent. You want to be working with professionals. You don't want to go find the low hanging fruit, somebody who just got into it.
- [18:26]
Joe Jensen
Oh man, it really makes such a big difference. And the longer I'm in, the more and more I see that, you know, and like say an agent who just doesn't know something could just botch amazing deal. And agents that do not only they know how to make sure the deal comes fruition, they might even bring you a deal, right? Like the other way they call them like pocket deals. You know, when it's not listed yet but they go and they tell you about it and then they don't have to do 20 showings and the seller gets it closed way faster. And, and if they know that you're the right guy and they're a good, well trained, connected agent, they're going to have pocket listings for you. They're going to make sure the deals go through. But the, you mentioned the lender that how many deals have gone south because a lender dropped the ball on some deadline or some piece of paperwork or some issue. I've had some lenders just straight up say, oh, we can't do that. And I would have just dropped the deal altogether. And then I talked to another lender like, oh, we can make that work.
- [19:25]
Tanner Huber
It's like, yeah, I've totally gained appreciation for my lender. Like at first I was like, I don't know if he's like the most dialed and if he's listening to this like shout out to him. But like I have gained an appreciation because I've seen all my buddies and their experiences where I'm like, I never had to do that. And I'm like, a great lender isn't even somebody who like makes miracles happen. They just make deals happen though. Like they just, they just get the job done because, like there's, there's a majority of lenders who just can't even get the job done. I don't get it for like, pretty basic stuff. You're like, up front, I make this much money. This is how I'm employed. This is how much I need all these things. And they're like, yeah, I could totally do that. And then the day comes and they're like, dude, we can't even do it. You're like, what are you talking about? I've seen it happen time and time again.
- [20:08]
Joe Jensen
Yep, 100%. And there's so many pieces to that too. Yeah. Lenders, if they know how to work it, they can save you a ton of money, get you amazing deals, but they get it done. Yeah. So I love the idea of having a good team experienced, not just some random cousin or uncle. And if you're just doing a one off and you already know everything about the deal and you found deal, like, yeah, who cares? Whatever, you know. But if you want to do multiple and you're trying to be competitive, having a good team in place to act fast and act effectively can be huge with making sure it actually happens.
- [20:44]
Tanner Huber
Super key round, super key.
- [20:46]
Joe Jensen
And I like how you're, you're telling your guys, you know, you buy where. Where, you know, buy where you have a connection. You know, it's like, you don't have to buy in Utah county, like, Tanner, like, buy in Arizona, buy in Kentucky, buy in Wisconsin. I tell my students the same thing. I'm like, more important than finding the perfect market is go somewhere that you have connection. You know what I mean? And if it's your backyard because you live there, you obviously have some intimate knowledge about it and that's going to help. But if you have an uncle or an aunt or a friend or a cousin or another investor, a partner, whatever, that's already proven it. In a certain area that's going to be more valuable than some theoretical perfect area on paper that doesn't actually exist because they all have their pros and cons.
- [21:28]
Tanner Huber
Well, like you said, like, use their network, you know? Yeah, I totally, I tell my, my, my buddies the same thing. I'm like, dude, like, first of all, I live in California. I'm like, probably don't buy rentals in California. You know, I was like, I don't always encourage that, you know, because the prices and the cash flow and the laws and regulations, but I tell them, find anywhere else that you have a connection to, you know? Yeah, if you have a reason to visit there, you know, like, I'm. I don't know. Like, I think you do it a little bit differently because you're like a real estate professional. You do this all day, every day so you can get pretty spread out. But, like, I like to try to keep it kind of close. I like to have an excuse to go there every once in a while. Like, I'd love to see a property, you know, like, once in the time that I own it, you know, I like to, you know, maybe visit that state, you know, twice a year on accident, you know. So, yeah, I tell all my guys that. Then I just look for markets where it's like, look, this is a, you know, a friendly state in terms of, like, laws and stuff like that for owners. And then it's got a healthy balance of, like, you're going to find some cash flow. You know, I like Utah specifically, just because it's like, got a little bit of both, right. It's a little overpriced, but, you know, you've got good appreciation. Really strong economy, but I'm still finding cash flow. Then there's states again, like California, where it's like, that's tough. You can lose. You can not have a great deal here pretty quick, you know. But then there's all other states, you know, it's like, do you want to go to Alabama? Do you want to just get cash flow and not have it be worth much, you know, down the road? Who knows, you know? So that's my preference is kind of finding a good mix. It also depends on, like, your. Your current stream of income. You know, if you're like heavy cash flow, then go heavy cash flow markets. If you're like, dude, I make good money in my current line of business. I don't. I'm not like 100% prioritizing all cash flow. Great. And go find a good mix somewhere where you're covered on cash flow, but you're going to find good appreciation. Because ultimately, you know, in my line of business, like, yeah, I make okay money. I want to do this for an investment. So down the road it's, you know, flourished into something really big. So I'm more focused on appreciation, I'd say, in my case, but yeah, yeah.
- [23:27]
Joe Jensen
And I say the same thing. I'll tell people all the time, like, if you have an active income that you know you're going to have for the next five, 10 years, you're not walking away, you're not trying to quit your job in six months, because you hate it. You know, it's like you really need to give a lot of weight to appreciation because that's where the true wealth has grown is you look back over 5, 10, 15 years and like, holy smokes, you know that. And if you're just buying those cheap little cash flow things, you know, and again, if they're bringing in 200 here, a thousand here, but you have great active incomes, like, it won't even change your lifestyle and they're not going to be worth millions ever. So it's like, what's the point? You know, and everybody's situation's different, you know. You know, for me, I was quitting my job so I didn't have to work so I could raise my kids. And so it's like, I did focus on just cash flowing, stuff that wouldn't appreciate. Now that I'm like, kind of on the other side of that, I'm starting to buy more of the stuff that'll appreciate and go up in value, even if it's not a great return today, you know?
- [24:24]
Tanner Huber
Totally. Well, I don't know if this is the right way to take it, but my, my strategy has always been, yeah, appreciation first. And so, like, for example, these properties that I've owned for a while, that cash flow really well, I'm actually pretty well, they got great interest rates, so I probably won't sell them. But my properties, that cash flow well, but that I have a lot of equity in, I'm all about rolling those up. Like, I'm just like, okay, every five to seven years, I, I take the property. Even though it's cash flowing well, I'm gonna go roll it in something bigger. Because now, you know, let's say I put 100 grand down on this, you know, $400,000 property. Well, now if it's worth like 650, it's like, crap, I'm not leveraged. You know what I'm saying? Like, I have $350,000 of equity just sitting there. And now I'm like, I'm not leveraged four or five to one, you know, and so I always just take them, roll them up into something bigger. Because, like, I mean, yeah, you know, I wish I had a whiteboard or something, but like, for all my guys, I just whiteboarded out. And I'm like, man, if, if I'm leveraged in a deal, minimum, you know, typically it's about five times, right? But 20% down, and so I'm leveraged five times, then I always look at it as inflation. I'm like, dude, I'm. I'm 5xing inflation every year at the minimum. Like, that's like my first stream of return, you know, like, that's, that's bare minimum. And so guys, when they start seeing that, they're like, wait, that's just depreciation. You're like, yeah, dude, then your, you know, cash flow should start around at least 6 to 8%, hopefully 10, you know, and then it grows from there and they start like looking at all of it and they're like, dude, wait, this is good. This is really good. Like, yeah. And then you sell it five to seven years later, get into a bigger thing. Then you go from a duplex to a four plex to your 10 unit, a little apartment complex, and then you retire and in cash flow heavy, you know?
- [26:06]
Joe Jensen
Yeah. It's funny, you're like, oh, I'm not leveraged. And you know, you're saying it like, like it's a bad thing that you're not leveraged. Like, oh man, I'm not leveraged enough.
- [26:14]
Tanner Huber
I need to be more leveraged.
- [26:15]
Joe Jensen
A lot of people, especially when I was first learning about debt with real estate, was like, oh, you're like, I don't want to be over leveraged. Every. All leverage sound like over leverage to me. It was like, scary bad. Debt is bad. But with, with, with building a portfolio and maximizing what you can do and getting more and more property, you do want to use degree of leverage, you know. And so for you, how much leverage do you like to have on it? Like, how much do you like to like, is there a place where you're like, ooh, I feel over leveraged at this amount, but I feel underleveraged at this amount. Is there a sweet spot for you?
- [26:50]
Tanner Huber
Yeah, I mean, just because of, I guess, the investor I am, like, I've never gotten to be in a deal for any less than 20%. And I'm sure I could. Right? I'm sure there's definitely creative ways I can go do that, but I just haven't done that. And so I've always been minimum 20. Now I do have to do 25 down. And so, like, that's kind of for me, my minimum, like, I don't want to go into. Yeah, I'd be like, you know, 10% for too long. Right. I think it's fine to buy your first couple properties, especially if cash flows there. Totally fine, you know, but so when I start looking at deals, when I get like 50%, like I, I have 50 equity in this thing, I'm like, oh my gosh, like, this is not enough, you know, like for every 3 or 4% this thing's going up, I'm only doubling it, you know, So I like to try to get back to a 20% or a 1 to 5 ratio. If I can maintain that, great. I don't, because I'm not selling my properties all the time, you know, but if I could, like, comfortably be at a one to five type of leverage, that would be, you know, ideal for me, where I know some people put in 3 to 5% down, which is sweet. Again, if it can just cash flow, like just cash flow a little bit, even if it's like a couple hundred bucks, you're pretty safe, you know? Yeah.
- [28:00]
Joe Jensen
Well, and it's. Yeah, it's what I call lazy money. Right. When I look at a property on an Asset, I've got 50% debt, 50% equity, I'm like, there's a lot of lazy money just sitting there, not bringing me more assets and more tax benefits and more appreciation, you know, regardless. Even if the cash flow is the same or even a little less, but I own two or three more properties, all the other ways of making money with real estate would. Would totally outweigh it. You don't want that lazy money just sitting there.
- [28:30]
Tanner Huber
Yeah. The only hard part right now is, man, I've just got these darn loans from back in the day at like 3% and I'm like, oh, like, I. So it's definitely forcing me to, like, sit on it a little bit longer. I'm like, yeah, like, when is it going to make sense? When does it make sense to sell this thing at 3%? And maybe it won't, you know, Maybe it won't. I gotta go like, re. Just do like a HELOC or something like that. Just get a little more creative because I don't want to give that up, you know, who knows when that's coming back, if it ever will.
- [28:55]
Joe Jensen
Yeah, a hundred percent. Yeah. And I always tell people, like, we never. We never sell assets for money. We only trade them for better assets. Right. And so if you run the numbers and it works, then do it. But if you run the numbers, even if you have a ton of equity and it's sitting there, if the numbers don't work because you're losing your interest rate or you just can't find a good deal or whatever, then you're just gonna have to sit on and have the lazy money. Even though it's annoying, it's like you can't just trade it for a bad deal, you know what I mean? Or just trade it for money because there's equity in it. Like. No, no. Like go find a deal that makes more sense and then do it.
- [29:29]
Tanner Huber
Yeah, yeah, dude. It's definitely about searching, man. That's, that's one thing. You know, if I learned anything from like your guys real estate investing school, it's like, it's active, you know, it's definitely. Real estate investing is active. You need to actively be searching. If it was that easy, if deals are just laying around left and right, everybody would be killing it, you know, but you got to be out there, you got to be creative, you got to understand it, you got to get educated, you know, and as you, the more educated you are, the more creative you can be, then the better deals you can find, you know?
- [29:57]
Joe Jensen
Yeah, absolutely. So you talked about finding a couple deals a year where you're like, oh, I have to have that deal. And you talk about cash flowing in Utah now you have a. Not necessarily super unique, but you're not just renting to families all the time. You've. You've actually been doing some student housing to help really hit those cash flow numbers. Is that right?
- [30:18]
Tanner Huber
Totally, yep. Student housing. And then also a lot of remodeling, you know, typically in my properties. So like I'll find a, a C property and upgrade it to a B or an A. Typically, like buying, you know, bad properties, making them great in like a middle area. So I already always own the nicest property on the block, you know, but it was like the worst. And then another thing too is, yeah, I get creative sometimes. Like for example, I just bought a duplex. It's an eight bedroom duplex. And everything around it though was listed with 10 bedrooms. I was like, interesting. Same square footage, everything's got 10 bedrooms. But I bought this at a discount because it was listed at 8. So I went to the city, asked, hey, is that legal? They're like, yeah, you had to do a couple things on the paperwork. Yada, yada. Do you got enough parking? Like, yeah, I own the one next door too. That's also eight. And they're like, oh great. So I'm like, sweet. Changed both of them. So now these two duplexes that were eight bedrooms and I can get 10 bedrooms and yeah, I mean that's huge. If each room for me in student housing is five or six hundred bucks, you know, it cost me, I think it was like 25 grand to put in those four bedrooms across four and you know, I'm making 1200 bucks more per property. So $2400 a month. So it took me 10 months to get that return on investment. And then everything else from there is just fake, you know, so which means.
- [31:37]
Joe Jensen
To take 10 months, that's less than a year, which means he's getting a well over 100% cash on cash return that year. Like, like over 100%. You're getting 8 or 10 in the stock market. Right. But by him being creative with what with these properties, you get over 100% cash on cash return just on the cash flow, let alone that the properties are worth more now because you could probably sell them for more because now they're 10 units instead of like, like just on the cash flow, you know, over 100% cash on cash return that first year. Like, that's awesome.
- [32:09]
Tanner Huber
Because then you look at, right. Like if you're looking at a cap rate. So if you're looking at like, oh, I'm going to buy this thing based off what I can rent it for, you know. So now if I'm like reselling it to an investor, it's like, no, no, no. My rents are like 1200 bucks more. They're like, oh, well, instead of 700 grand, I think worth 800 grand. I'm like, dude, per building I got like close to 100 grand in equity off of like a 12, 12, $13,000 investment per building, you know. So no, it worked out really, really well. And you know, another big deal that I did back in the day, it was like a six unit little apartment complex. That's my first multifamily and similar, man. I went in, bought it for. They were renting it for 900 bucks a unit. And they're three bed, one bath. So 900 bucks a unit. And I was like, jesus, is terrible. And the bank wouldn't even lend to me on it because it was such a low like rent to. To cost ratio, you know. So I had to get really creative. I had to give them a ton of cash up front. Front. It was a really creative deal. And as I got leases in place, after I remodeled it, as I got the rents up, they gave me some of my cash back. It was very interesting how it worked. Every lease I submitted to them, they gave me like 25 grand back or something. They like de leveraged me or what is that called? Or maybe increased my leverage, I guess. They're like, cool. You don't have to have as much cash locked up on this property anymore. Yeah, I got These rents from like 900 to today, they're 1850 and literally went and doubled the rents, which almost doubled the value, you know, I'm saying, of the property. Bought it for 1.2, it's worth about two, you know, a little over two. And I put like 200 grand into it. So anyways, like that return on investment is huge. I put 200 grand in, made an $800,000, you know, return on that 200 grand. And in just a year when I.
- [33:54]
Joe Jensen
Got that done well, man. And you really hit an interesting point for anybody listening. Like the really interesting thing is what he's talking about is when they value commercial property, anything that's six units or more is valued as commercial. Even a four unit, even though like, you know, that's not a single family, it's four units that's still considered just residential. They rate it just like you would your normal house, where it's like, oh, if it's worth all the homes in that area worth 300,000, then your homes are 300,000. You put granite countertops in, maybe it's worth 310, whatever, you know, it's based on the actual like physical value of it. But if it's six units or more, it's based off of the book of business. How much money is this business making? And that's where you're talking about, you know, you bring in 1200 or 1800, the business is worth more. Even though maybe you didn't do gran or countertops or do anything physically that would make it better. As long as the book of business is better, now it's worth more, which is so cool. And I like how. So these loans you get, these are commercial loans, investor loans, non Q, whatever. I don't know why non Q stands for, for non conforming. There's no Q in conforming. Anyway, they call them non Q loans and it's, they, they can do whatever. Like you said, like you're like, hey, I'm going to give you. How much did you put down then when, when you did all that extra like 50 down or something.
- [35:13]
Tanner Huber
25% down was what I like what the loan was going to be for. But yeah, I had to put like 4 40% down. And then I got the 15 back as I remodeled it and showed that it was going to rent for more.
- [35:23]
Joe Jensen
And that's just so creative, right? And that, that, that's what they can do. You know, when you get with lenders doing these properties, like they don't really have a lot of set rules. You can get creative and do a 40% with a payback if you increase it. And they just need to know that they're protecting, that they're safe. And one thing I really like with lenders is they can be a really good way to like, protect yourself because they're kind of protect themselves. They want to make sure the asset's good, that it's solid. And if you follow everything they say, you're only going to be allowed to buy good, safe, solid properties that aren't over leveraged, you know, because they're covering their own, but which really covers you in a very creative way. And they, they can be very smart. They spend millions of dollars making sure they're evaluating these things safely for themselves, which you can just piggyback on if you're new to it.
- [36:13]
Tanner Huber
That's true. I never really thought about that. But you're like, yeah, they're not gonna put themselves in a bad position. So like, if it's gonna work, it's gonna work. You know, especially in these commercial. Because they get in and kind of. Yeah. Pick it apart and get creative with it, you know.
- [36:24]
Joe Jensen
Yeah, commercial is interesting. That's cool. That you've got to reap the benefit of some of those, you know, those commercial valuations of the properties just going up based on what you did just to make more money.
- [36:34]
Tanner Huber
Dude, I, I locked that property up the within a couple hours of it going on, on, you know, listing. Like, really I was in. I was actually behind somebody so like, it was like locked up like that. I was second. I was like, dang it. You know, that was one of those ones where I was like, I have to have this. And luckily it fell through. I got it. And I was like, dude. And I have not found anything like it since. It was crazy, you know, like, there's a couple deals that come across your way that you're like, dude, I got it. I got to act. You know, you just got to do it.
- [36:59]
Joe Jensen
So, so how are you finding these deals? Like you like that one or any other one. Like, how do you find. Find the deals and. And what sticks out to you to be like, oh, I have to have that as opposed to like, I don't know, totally.
- [37:11]
Tanner Huber
Like, I'm kind of handicapped because I'm just now like, probably in this. Did this to myself in my mind that I'm like, I only buy, you know, somewhere between like Spanish Fork, Utah. So like around Provo Orem, up to Salt Lake, like, that's like my only little pocket. I don't really Want to get out of that? I probably won't even buy in, like, Lehigh and like, the kind of, like, older married couple stuff, you know, I'm buying, like, housing or Salt Lake. That's it. But. But no. So I'm just looking all the time. I mean, like, whenever I look like my. My Zillow is already set, filters are in there, I just pull it up. Like, what came up? My real estate agents send me stuff all the time. One thing I would say, though, is I kind of found this ratio of what I'm looking for per bed that's helped me analyze deals just real quick, just right off the bat, just to see if it's even worth my time to think about it, right? Rather than having, like, scroll through all the pictures and stuff. And so when you're doing student housing, you're renting it per bed. And so what I've realized is, like, sub. 100 grand per bedroom is something that starts to be interesting if you're finding something at like $70,000 a bed, I gotta open that up, I've gotta dig into it and see where the flaw is, right? If there isn't any flaw, if it's kind of remodeled, looking kind of nice. At 70 grand a bed, I'm like, ooh, I gotta. I gotta get this thing, you know? So that's what I look at, because I just know my ratios, okay? I'll be able to cashflow well at 70 grand a bed. 80, 80, 90 grand, I'm still gonna be doing. Well, 100 is where it starts to not make sense. So that's like some random number. I don't know. That was me, or somebody recommended it to me that I came up with. And I was like, that's what I look for, if it's worth it.
- [38:48]
Joe Jensen
Well, and you know, because you mentioned, you know, you have your filter set on Zillow, you have agents sending you stuff, and. And this is important. Anybody listening? Like, it's because you have a clear buy box, which you were just described. Like, hey, I need this much per. This purchase price per room. And when you have a very clear buy box, then the agent can actually find you what you want instead of just sending you random stuff. And your filters can be set. Like, you. You figured out enough filters and a good enough buy box that you can kind of quiet the noise and focus on what actually has a chance of coming through the end, which is super important. And most people are just like, I want a good deal. I'm open to anything. It's like, yeah, Good luck.
- [39:31]
Tanner Huber
Like, for example, I've been looking for some multifamily. You know, I'm like, I want multifamily, but I don't love one beds, you know, I just don't love like a single studio type thing. And it's like just because, yeah, I understand the numbers, you know, it's like you're just not going to get as good returns. Like, I'm just not going to do that, you know. And so I just like have these hard yes and nos. And it totally comes with just like looking at deals for long enough and you're kind of like, no, I know what I like. I actually want, like I want as many beds per unit as I can, you know, saying like, give me like a three bed. If I can find a four bed multi family, like everyone is four beds, which doesn't exist. That would be sweet, you know, that's why the one I bought, I bought this six unit. It was three beds per unit. It's like, dude, that's 18 beds. Like, that's 18 potential people. And if I share some rooms, like, dude, that's, that's a lot of people in a six unit, you know, like, that's rare.
- [40:15]
Joe Jensen
Well, it's interesting. More and more, you know, you call it student housing, but I bet you have a lot of people living in these homes that aren't even students. They're graduated, they're working professionals. They're just single adults that, you know, they're not just young kids, you know, freshmen in college anymore. More and more that's becoming just a popular thing to do is people don't buy houses, they don't want to buy houses, they don't want the responsibility of a house. And you know, and they're working professionals. I just got this house under contract yesterday and I'm buying it a subject to. And is this traveling nurse lady that she bought this house while she was living in that state, moved out of the state and she's just like, I don't want to deal with it. She's like, I just want to rent for the rest of my life. Like, I don't want to mess with owning. And so she, I'm just buying it, you know, for like nothing. I'm basically just taking over her loan, giving her a couple grand for it because she just wanted to deal with it. And there's that, that sentiment nowadays where people are just like, I just want to rent, you know. And so you get these adults, you know, professionals that'll just rent a room, you know, and you know, the pad splits and, and rent by room. These coming very, very popular as it's, it's cheaper, it's low maintenance, it's non headache for the tenant, but it really can make things actually cash flow positive for the investor, which is awesome.
- [41:32]
Tanner Huber
Yeah, no, I. I can relate to that, man. I'm living in Southern California right now, and every ratio, every house I looked at, I was like looking on Zillow. I'm like, so I can rent this for five or six grand, and if I bought it, it'd be like 12 to 15 grand a month. I'm like, no, no thanks. I'm like, in what world does this make sense? I'm like, I'm good. I tried to run all the numbers I want to buy, you know, and I was like, no, I'm gonna hold off. Like, there's gotta be some correction or something. I don't know, something's gonna happen or I'm just not gonna buy. Whatever works.
- [42:00]
Joe Jensen
Yeah, well, especially in California, there's so much appreciation, but yet these people who've owned it for years and their mortgage is 3,000 and you're paying 5,000, they're like stoked on it. You know what I mean? And you just. Yeah, that's an interesting market where it's just. And so you're renting right now.
- [42:17]
Tanner Huber
Yeah, yeah.
- [42:18]
Joe Jensen
Which is funny to you because you're like an investor, a buyer. You understand all the sides. Like, how am I renting? But yeah, you're not gonna be. Totally double to buy.
- [42:26]
Tanner Huber
Yeah, it totally makes sense. Like, I have a 1400 little square foot rental, but it's like $1.6 million. And my mortgage would be. Yeah, like if I put 20 down, it'd be like 15 grand, you know, And I was like, even if I put like half of it down, like, it was still like 9,000, $10,000. I was like, no, I'm good. I'm okay.
- [42:46]
Joe Jensen
Yeah. Which is interesting because I always tell people, buy, don't rent. But yeah, when you're in that situation, you know, if you're paying, I'll tell people, you know, if you're paying an extra 500, an extra thousand if you count the appreciation, even if you're losing money on the cash flow. But when you count the taxes and the appreciation, you know, it's worth paying a thousand dollars more to own than to rent, I think, you know, and obviously those numbers are, you know, can sway a little bit. But when you're talking double, you know, 2000-3000-4000-5000. 6000. More to rent or to buy than to rent it. It's. Yeah, go. Go buy something else.
- [43:24]
Tanner Huber
That is exactly what I thought.
- [43:25]
Joe Jensen
Yeah.
- [43:25]
Tanner Huber
When it was getting close, you know, that's why I was like, how much do I have to put down to make it close? And then I started looking at how much I was putting down, like, but should I put all of this down? You know? I was like, I don't think so.
- [43:34]
Joe Jensen
You know, I was like, yeah, that's awesome, man. Well, I want to roll into some of our final four questions before we. We head out here and let you get going. This is super cool. It's. It's interesting to see just the journey you've made and how far you've come, and. And. And it's. It's so cool to see, you know, where you're virtually work optional now. You know what I mean? Like, you could. You know, you could live off your real estate. You know, you're making multiple six figures off that, and that's super cool. And. And that's a dream for a lot of people. And like I said, it doesn't happen overnight. It took some time to get there, but it's happening, and it'll just get bigger and bigger. By the time you actually do want to step back and not actively work, it'll just be even bigger, which is so cool. Love to see it.
- [44:18]
Tanner Huber
That's the dream.
- [44:20]
Joe Jensen
All right, I want to ask you a couple questions here. So first question, Tanner, if you could send out a text message to anybody in the world, you know, maybe an email to the old people, but, you know, you send a message out to everybody, what's that message gonna say from you?
- [44:35]
Tanner Huber
Oh, man. Impactful message. I thought you were gonna say if you could ask a question, anybody. I was like, oh, I just asked it. No, you know, like, just. Just try to figure out a way to close the gap between where you are and your potential. Try to be aware of where you are. You know, my job every day is I develop leaders, so this isn't exactly real estate advice, but it's like, understand your strengths, understand your weaknesses, you know, and work on those weaknesses and close that gap. Because I feel like we're here. We have a reason for being here. Go reach that potential every single day. You know, progress is happiness. If you're not progressing, you won't be happy. So go push yourself. Live in your stretch zone. Live in your discomfort a little bit, and ultimately, that'll lead to fulfillment.
- [45:22]
Joe Jensen
Dude, I love that. It's funny. I study A lot of stoicism I've been teaching my 6 and 8 year old on the way to school. Each day I quiz them on different stoic principles. And one of the principles we were talking about today is to review yourself honestly and regularly. Like really look at where you're at. It's what you're talking about, where are you at, where do you want to be and what are the steps to take to get there. But you got to review yourself regularly. If you're not honestly looking at that and seeing, you know, what the gap is, you know, what your strengths are, what your weaknesses are, it's, it's hard to grow. And it's funny you mentioned that because I remember when I was like 20 years old that was like this big thing for me is just like, just be honest about where you're at, where you want to be and do whatever it takes to get there. Most people just don't honestly look at that. Even though it sounds so basic to me now, at the time it like lit me on fire.
- [46:14]
Tanner Huber
Totally. Well, and I love, I'm reading this book right now and he just talks about how it's really simple, but it's not easy, right? It's actually really simple. Like I can tell you exactly what I know I need to do. It's really simple, but it's not easy. And then the last thing too I'll throw on top of that is the more I've aligned myself and my life with what is reality, like what is truth, the less friction I have and then like, the more happier I am. Like, for example, actually when I was younger, I was like, I want to work to retire. Like I want to retire as fast as I can. And the reality is there's not a lot of 30 year olds who retire. You know, there's not a lot of 40 year olds who are retired. So if, if the reality is slim, if I'm trying to shoot for this 1% thing and like I'm sold on it, my mind, I'm ultimately preparing myself for like disappointment. And so like I was always had this friction of like, also like, for example, you know, I sell solar, so I used to knock doors. And it's like I would be thinking about a beach vacation in Cabo all the time. You know, I was thinking this way, but my reality was this way I was actually knocking doors. And so it's like, why am I thinking about this all the time when I'm actually doing this? I'm just frustrated, you know, and so the more I could Align my reality with, you know, or my thoughts with reality. The better I was doing and the happier I was, actually, I'd wake up in the morning, say, I can't wait to go knock on a door, or, I can't wait to go do a real estate podcast, because that's my reality. Not like, oh, I can't wait for one day when I'm sitting drinking a margarita. You know what I'm saying?
- [47:34]
Joe Jensen
Yeah, I love that. Yeah. Accepting reality as it is doesn't mean you can't change it doesn't mean you're accepting the future for how today is. But you need to accept today for how today is, because that's how it is. And if you don't, you're living in a blur. And it's hard to get anything done. And it's really hard to just be happy if you don't accept it.
- [47:52]
Tanner Huber
Yeah, a lot of friction there, man. A lot of friction.
- [47:54]
Joe Jensen
Oh, I love that principle. We could talk about that for an hour. All right, question number two. Book or podcast recommendation?
- [48:00]
Tanner Huber
Ooh, ooh. I'm literally reading right now, and I've loved it. I'm only, like, two chapters in Legacy book. Legacy is talking about the All Blacks down in New Zealand. What makes them unique. Right. I love that. And then I also just finished the Way the Bullfrog. It's a leadership book from Navy Seals, and, man, it's good. It's got a lot of principles, like, a lot of quotes that I just want to use. So Legacy, Bullfrog. Those are actually my last two reads, but they've been fire. Dude.
- [48:30]
Joe Jensen
I've actually read Legacy, and it is so good. Like, I don't know anything about rugby, but. But that book fired me up. I loved it. I mean, it's not about rugby, but it is, you know, but, yeah, such a good one. And then the other one was the.
- [48:41]
Tanner Huber
Way of the Bullfrog, I think so. I think it's the way of the Bullfrog.
- [48:45]
Joe Jensen
Cool.
- [48:46]
Tanner Huber
And, man, it's this guy. He's, like. He was the longest ever Navy seal. He, like, consulted, like, Clinton and Bush and all this stuff, but he's, like, been a Navy SEAL forever, and he just talks about all their principles, what makes them who they are, and everything he learned. And, dude, it's good. It's so intense.
- [49:02]
Joe Jensen
Love it. All right, what's one of the most expensive or interesting mistakes you've made in real estate investing?
- [49:09]
Tanner Huber
Oh, gosh. I actually. Here, I'll try to speed this one up. Buddy of mine said, dude, do these hard money loans with me. I said, no way. He did like six or seven. Was making like 10, 20% over, like two, three, four weeks. Like, okay, fine. I was sitting on a bunch of cash. This is when I was not. This is when I was hesitant about real estate. So I was just like, kind of had some cash piled up and I was like, okay, let's do it. So finally talked to the guy who's setting him up. This guy. Anyways, talk to the guy, get it set up, wire over the money. It's a lot of money. Like, it was a big chunk of money. And turns out, literally a couple days later, my buddy had recommended to another friend of his, and his friend looked up this guy, and this guy turned out to have an SEC pans or a Ponzi scheme filing for, like, penny stocks. This guy who I just wired over, like half my nest egg too.
- [49:58]
Joe Jensen
And I was like, oh, my gosh.
- [49:59]
Tanner Huber
And so my buddy Print pulls me into an office and says, hey, dude, I. Dude, I'm sorry, but I think we're part of a Ponzi scheme. I'm like, are you freaking kidding me, dude? You've done six or seven with this. I thought I trusted you, man. So it turns out, it turns out it wasn't a Ponzi scheme. So fast forward. Like I was supposed to have 90 days. I get a couple payments, like, of, like, interest when they're late. I was like, okay, whatever. I was like, actually keep being late because I was getting like a percent a week, and I was like, being late and keep paying me. So great. Seven or eight weeks pass, I keep getting payments, then I don't. Then a year goes by. Nothing happens. I'm in contact with people. Turns out I end up actually assuming the property. I get ownership of it. I don't get ownership. I get control of it. And it turns out there's five liens on this property. Joe, I'm number two, the guy in first position. So it's only worth like 1.4 million. Guy in first position put in like 1.2. I put in like 2 50. Then there's a guy put in like 7050 and another 50 behind me. Jeez, everybody's getting shafted. The person in first position are total, total, like a holes. And, you know, I have to go negotiate with everybody. I negotiate everybody's payouts. I negotiate them all down. A couple people are getting like, nothing. And then. And we had an offer for 1.5 on the table. I counter the offer for 1.65. They accept it all. Cash. And so I got all the upside, and I almost recouped my entire investment. It was like the most wild ride of my life. And I lost with, like. I lost maybe 25 grand in the whole thing, but it sucked, dude.
- [51:28]
Joe Jensen
And then. Not to mention the time and the headache and the frustration. But imagine if you hadn't had the proper liens on the property, because I know people that do hard money lending when they're first starting, they don't understand how to put the lien on the property and actually do it right. And then they. They lose everything.
- [51:45]
Tanner Huber
Well, I. I lent. I lent the money, and I thought I was first, I was second, which really kind of screws you. I feel bad for the third, fourth, and fifth. They didn't even know there was a. They thought. Yeah. So anyways. Wow.
- [51:56]
Joe Jensen
Yeah. And I mean, I don't mean to put you on blast, but that would be in some paperwork somewhere, right? Like, the third guys, like, they should have known if they had dissected the paperwork that they were.
- [52:06]
Tanner Huber
They totally should have. Yeah, I had my lawyer look it over and everything, trying to think, like, where.
- [52:12]
Joe Jensen
How would you not. How would they not know they were second, third, fourth?
- [52:16]
Tanner Huber
Yeah, I don't know. I had no idea I was second. The guys told me. Lip service. Oh, yeah, dude, your first position lien holder. Sweet. Sounds good. Sweet sketch.
- [52:23]
Joe Jensen
That's wild.
- [52:24]
Tanner Huber
So bad. I learned a lot.
- [52:26]
Joe Jensen
All right, well, I have to go get my kids from school, but I'm going to give you one last question here, Tanner. What's a one word or short phrase to encapsulate why you love real estate investing?
- [52:37]
Tanner Huber
Oh, let's see. Low risk, high upside. I don't know, man. I just. I love that I've got something physical and that thing is going to be worth a ton of money one day. Appreciation and. Or compounding, man. It just gets bigger and bigger, so.
- [52:56]
Joe Jensen
All right, well, this is Joe Jensen signing off for the Real Estate Investing School podcast. Remember reminding you to work harder and smarter?