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

Summary

Real Estate Rookie Podcast Summary: From Zero to $8,000/Month Cash Flow in Just 2 Years (While Working a W2)

Release Date: April 28, 2025
Hosts: Ashley Kehr and Tony J. Robinson
Guest: Luke Tatro

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Introduction

In this compelling episode of the Real Estate Rookie podcast, hosts Ashley Kehr and Tony J. Robinson welcome Luke Tatro, a remarkable real estate investor who has constructed an impressive portfolio of 35 rental units and completed 13 property flips within just two years—all while maintaining a full-time job as a welder. Luke's journey from zero real estate experience to generating $8,000 in monthly cash flow highlights the power of consistent action, strategic networking, and creative financing.

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Luke’s Background and Motivation

Luke's entry into real estate was fueled by a deep dissatisfaction with his W2 job and a yearning for financial freedom. At 25 years old, after working straight out of high school as a welder, Luke found himself miserable and unfulfilled, prompting him to seek alternative pathways to build a more substantial and rewarding career.

“I always felt like I should be doing something a lot bigger, a lot more,” Luke shares (01:18). His initial inspiration came from his best friend’s father, a custom home builder with a few single-family rentals. Although real estate conversations were common in his youth, it wasn't until Luke reached a breaking point that he contacted his mentor to embark on his real estate journey.

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The First Investment Deal

Luke's debut in real estate was unconventional yet highly successful. He discovered his first deal on Facebook Marketplace, sending his fiancée to inspect the property due to his demanding work schedule. Despite minimal investment experience, Luke negotiated solely through Facebook Messenger, eventually purchasing the property sight unseen.

“I bought it sight unseen to kind of make things a little more interesting,” Luke explains (04:04). With guidance from his mentor’s attorney, Luke acquired the property for approximately $85,000, invested $20,000 in renovations, and estimated the after-repair value (ARV) to be around $120,000 to $130,000. The property was then rented out for $1,350/month, generating a cash flow of $400/month.

Tony J. Robinson highlights the success of this first deal: “This might be one of the best first deals... that we're hearing on the podcast.” (08:50).

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Scaling the Portfolio

Building on the success of his initial investment, Luke rapidly scaled his portfolio by consistently sourcing deals from Facebook Marketplace in smaller markets near Rochester and Syracuse, New York. His second property was acquired for $40,000, with an additional $40,000 invested in renovations, boosting the property's value and rental income.

A pivotal moment in Luke's journey was learning to delegate and collaborate with contractors, moving away from the time-consuming DIY approach. This shift was crucial in managing multiple properties effectively.

A significant breakthrough came when Luke transitioned one of his long-term rentals into an Airbnb, increasing its cash flow from a mere $40/month to approximately $1,000/month. Tony emphasizes the astonishing return on investment: “That’s an extra $960 per month in profits... a 230% return.” (16:13).

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Networking and Funding Strategies

A cornerstone of Luke's accelerated growth was his strategic networking, particularly through memberships at local country clubs. By joining a country club with a $3,500/year membership fee, Luke leveraged his golf skills to build relationships with potential private money lenders and other influential individuals.

“I can’t even wrap my head around that level of activity in such a short time frame,” Tony remarks (18:09). Luke’s proactive approach included participating in leagues and tournaments, which facilitated organic connections leading to his current funding sources.

Luke underscores the importance of honesty and reliability: “I wouldn’t ask for any money that I couldn’t pay you back...” (22:10). This integrity has been pivotal in establishing trust with his lenders, ensuring ongoing support for his ventures.

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Challenges and Lessons Learned

As Luke ventured into larger multi-family properties, he encountered complex legal challenges, especially in New York's stringent tenant laws. Managing an 18-unit mobile home park introduced him to the intricacies of eviction processes and handling condemned buildings.

“...there's just so much that goes into them. So many more tenants... and tenant laws,” Luke reflects (24:48). These experiences taught him the necessity of thorough due diligence and the value of professional assistance in navigating legal and operational hurdles.

Additionally, Luke's operational structure evolved to include his fiancée and mother, who manage tenant relations and project oversight, respectively. This delegation allowed Luke to focus on deal sourcing and business development.

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Current Projects and Future Plans

Luke's most recent acquisition is an 18-unit mobile home park in New York, acquired through creative financing by assuming the existing debt and negotiating deferred payments. This deal was secured without any out-of-pocket investment, demonstrating Luke's adeptness in deal structuring.

“We ended up agreeing on him not getting a dollar. So at closing, I came out of pocket no money...” (29:00). This strategic maneuver not only minimized upfront costs but also secured an additional $50,000 for renovations, showcasing his ability to maximize financial leverage.

Looking ahead, Luke is eyeing larger apartment complexes, although he acknowledges the steep learning curve associated with managing more extensive portfolios.

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Transitioning from W2 Employment

A critical aspect of Luke's journey is his plan to eventually leave his W2 job to focus entirely on real estate. However, he grapples with the challenge of ensuring his business can sustain his personal finances before making the leap.

“I'm afraid to take money from the business. I don't like the thought of it,” Luke shares (35:10). Hosts advice him to establish personal financial reserves and ensure his cash flow can cover living expenses, facilitating a smoother transition to full-time entrepreneurship.

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Conclusion

Luke Tatro's story is a testament to the impact of determination, strategic networking, and financial ingenuity in real estate investing. From a single Facebook Marketplace deal to a robust portfolio generating substantial cash flow, Luke exemplifies the potential for growth with the right mindset and resources.

“I think it was a mixture of just my mindset mentality and kind of really reflecting on the deals we've done and kind of looking at those, how we did them, and how can we kind of do them again,” Luke concludes (18:27).

For aspiring real estate investors, Luke’s journey underscores the importance of building a solid network, maintaining integrity with financial partners, and continuously adapting strategies to scale effectively.

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Connect with Luke Tatro

• Instagram: @Luke_Tatro
• Facebook: Luke Tatro

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Note: All timestamps correspond to the podcast transcript sections.

Transcript

[Ashley Kerr]

Hey, rookies. We often talk about the importance of consistent action for real estate investing, but there are some investors that take this to an extraordinary level. Today's guest has built a portfolio of 35 rental units and completed 13 flips in just two years, all while working full time as a welder.

[Tony J. Robinson]

And honestly, what makes this story even more remarkable is how he's leveraged networking and private money to really accelerate his growth. Starting with literally zero investing experience and no formal business background, Lucas created nearly a million dollars in equity and $8,000 in monthly cash flow. So today he's going to break down how he went from his first Facebook marketplace deal to recently acquiring an 18 unit mobile home park through creative financing.

[Ashley Kerr]

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

[Tony J. Robinson]

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

[Luke Tatro]

Thank you guys. I appreciate it.

[Ashley Kerr]

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

[Luke Tatro]

Well, I think it kind of started with, it was a little bit more than a dislike of my job. I found myself pretty, pretty miserable, just kind of disappointed in myself how I kind of ended up where I was at in life. I always felt like I should be doing something a lot bigger, a lot more. And I just never felt like I quite fit in with the guys I was working with, you know, the long 60, 80 hours a week we were working. And you know, before I knew it, I was 25 years old and I'm like, I started welding straight out of high school. I didn't go to college, just went kind of straight to work. And I just felt like my life just kind of, I snapped. And all of a sudden all of my younger years are over and I'm just not really getting anywhere. So that's kind of how I kind of started thinking outside of the box, getting out, you know, what am I going to do? And real estate kind of fell into my lap because it was, I had one mentor in my life and it was my best friend growing up's father. He was a custom home builder. He had a few single family rentals and it was just kind of always topic of conversation. I can remember when we were younger just, you know, he was going to pick up rent or he was going to fix a house. I don't think I really took much to it. You know, when we were in high school. I was 18. You know, our mind was on some other things, and. But I think that kind of ingrained somewhere in my mind, you know, I always kind of knew I could fall back on that. So I think once I got to almost a breaking point of where I needed to make a change, you know, I kind of. I called him up. I. We had a quick phone call, and I was like, yeah, let's. Now or never. Let's just try it. I'll find a deal. And I kind of made an agreement with him where he'd essentially be my first private money guy. And I ended up finding the first deal. It kind of all just snowballed from there.

[Tony J. Robinson]

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

[Luke Tatro]

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

[Ashley Kerr]

Even talk to the person either, that they won't take a phone call.

[Tony J. Robinson]

So I guess. Let me just ask, right? Like. Like, Luke, how did. Did you not at any point feel that this might have been a scam?

[Luke Tatro]

You.

[Tony J. Robinson]

Given that Facebook Marketplace didn't want to talk on the phone, were you worried at all about that?

[Luke Tatro]

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

[Ashley Kerr]

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

[Luke Tatro]

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

[Tony J. Robinson]

And you know, Luke, obviously you're. You're in a unique position because you had this, this mentor, right? Someone who. Lot of experience in real estate. And for a lot of the rookies that are listening, you may not have someone like Luke Cat that can kind of hold your hand and guide you this process in real life right next to you. But there is a way to. To kind of create your own board of mentors. And I think a lot of it starts with building the right team to support you. So for me, the folks that really helped me early on were my agents and my lender, and they were kind of my conduit to introduce me to the other people that I needed to meet. So for the Rickies that are listening, use the bigger pockets agent finder. Use the bigger pockets lender finder to get connected with folks in your specific markets that are already working with real estate investors and can hold your hand to say, hey, you found this amazing deal, Luke. Here's who you need to go talk to next. So just trying to make sure that for the Rickies that are listening, you understand what those. Those options are for you as well. So, Luke, you. You find a. You find this deal, I guess give us the. Give us the numbers on it. What. What did you end up buying it for? And how did you know that it was actually a good deal?

[Luke Tatro]

So they had it listed for like 85 grand, I think. And after, I mean, I really just kind of took it upon myself to comp a property. So I went on Redfin and all the solds and I was kind of doing the whole shebang. And I figured it'd probably be worth right around 120, 130. And it didn't need much work for what it was. I mean, from the pictures I saw. So I figured my original plan was I was going. I was going to be the one to fix it up, along with my mom does. She helps us do stuff and my fiance. So I figured we could fix it up pretty cheap. I budgeted for 20 grand and I was like, you know, after kind of listening to your guys's podcast and to some other people, I was like, you know, we could refi out and then move on to the next one. And that's kind of how it went. We ended up putting a little over 20 grand into it, and we got it rented. I took it to the bank and they appraised it at like 135, 133 somewhere in there. And I pulled out as much as I could. I paid him off, we profited a little, took home a little less than 20 grand and we were off to the races, I guess you'd say.

[Ashley Kerr]

That's awesome.

[Tony J. Robinson]

What a killer first deal.

[Luke Tatro]

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

[Ashley Kerr]

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

[Luke Tatro]

Yeah, so we ended up. Now it's rented for like 1350 and it cash flows about 400 bucks a month.

[Ashley Kerr]

That's awesome.

[Luke Tatro]

Yeah. Yep.

[Ashley Kerr]

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

[Luke Tatro]

Yeah. Yep. It worked out great.

[Tony J. Robinson]

This might be one of the best first deals, Luke, that we've heard on the podcast. You found it in a very unconventional way, messaging someone on Facebook. You had a private money lender line up the whole thing. You estimated 20k in rehab. You actually spent 20k in rehab, which isn't normal. You refinance, pull cash out, and you're still cash flowing. Several hundred dollars per month. That is amazing.

[Luke Tatro]

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

[Ashley Kerr]

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

[Luke Tatro]

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

[Ashley Kerr]

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

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[Ashley Kerr]

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

[Luke Tatro]

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

[Tony J. Robinson]

What market are you in, Luke? We didn't mention that. What market are you in?

[Luke Tatro]

I'm in a small market outside like Rochester, Syracuse area of New York, kind of in a bunch of. We've kind of stuck to smaller towns and I don't know if that plays a difference, but I've bought quite a few deals off Facebook Marketplace. We kind of went walked it, same deal. It was disgusting. So this was a lot different where we were going to be getting into some real rehab on this one and I bought it for 40 grand. We put another 40 into it and at the end of it ended up appraising for like 145. So that was another great one. But it was a lot of learning lessons along starting to work with contractors because after that first deal I didn't really mention but halfway through it is when I started kind of building some relationships with contractors with guys that do stuff because you know, I got about a month in to me doing the work after I work and usually I don't get out. We Usually start working around 5am I work till 5, 6 o'clock at night, so by the time I get over there, it's seven. And actually, productivity wise, you're probably only getting an hour and a half of work done a night. And after about a month of that, I sat down with my fiance and I'm like, this is, this isn't going to work. This isn't scalable. This isn't repeatable. I mean, it's just. And I'm miserable. It sucks. And so we started finding people. So then they kind of finished up that first one for us. Then we kind of rolled them into this next one and immediately that didn't work out. So I was on the hunt for contractors. I found some more. They came in and we ended up doing the property pretty decent. They weren't the best to work with, but it was kind of one of those things where I couldn't be too picky because we had the, we had the house, we had to get it done. And so, but yeah, we ended up getting, getting it done. We rented it out to an attorney and that come to find out, cash flow, a good $40 a month. When I ran my numbers, those are not the numbers I budgeted for. I thought I was going to be like the other one, around three, 400 bucks a month. And I had made some mistakes. I missed a couple. This was a different town and taxes were way higher for whatever reason and I just, I skipped it. Honestly, it was just me not kind of doing my due diligence. So that was kind of an eye opener to where we, we got it running. I was pumped. It was an attorney, she was great. And then we started kind of paying everything. And after like a few months, I'm like, this thing is, we ended up turning that one into an Airbnb now actually.

[Tony J. Robinson]

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

[Luke Tatro]

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

[Tony J. Robinson]

Yeah, that's amazing. All right, so to take it from forty to a thousand, what a drastic.

[Ashley Kerr]

Change in cash flow. By make transitioning that strategy, how much more did you have to put into the property to furnish it and things like that?

[Luke Tatro]

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

[Tony J. Robinson]

You Said something that was like, pretty amazing. So we got a pause in this lucret because you. You said that you were netting 40 bucks per month as a long term, you transitioned to short term, and it went from 40 to 1,000. Right. So that's an additional $960. I'm breaking up my calculator here. That's an extra $960 per month in profits. Right. So 960 over 12 months is $11,520. You said the investment to get that additional revenue is only 5,000. Right. So if we take our. Our profit of 11,520, divide that by our investment of 5,000, we get a cash on cash return of 230%. The reason why I point that out is because there are a lot of people who are listening that already have properties that much like yours aren't meeting their initial projections. But instead of focusing on buying the next deal, sometimes you can get a much better return by reinvesting into the properties that you already own. And that is an amazing proof of concept because you invested 5,000 bucks and got a 230% return. Could you have put that money into a different deal and gotten a 230% return? Probably not. But going back to your story loop, because I think it's amazing. I just want to make sure I have your stats right. 35 rentals, 13 flips, aka monthly cash flow in two years.

[Luke Tatro]

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

[Tony J. Robinson]

Generally speaking, right?

[Luke Tatro]

Yeah. Yeah.

[Tony J. Robinson]

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

[Luke Tatro]

I think it was a mixture of just my mindset mentality and kind of really reflecting on the deals we've done and kind of looking at those, how we did them, and how can we kind of do them again. So I was just kind of going back to where we originally talked and where I was in life. I just, you know, I was ready to get out of it. And I'm the type of person that, you know, once I kind of reach that point, like, I'm just. I don't care. Like, I will go and I'll make it work. And so I kind of had that mentality. And then once I did the first deal with my buddy's dad. There I learned that that was an option. And then obviously, exploring all the forums and YouTube and, you know, podcasts and stuff, learning about private money, different ways to get money. I actually went out and joined our local country club to try and network, and that's where I found a couple of guys that I do all my deals with now.

[Ashley Kerr]

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

[Luke Tatro]

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

[Tony J. Robinson]

Look, let me ask. Right, so you joined the country club first. What was the cost?

[Luke Tatro]

It's like 3500 bucks a year.

[Tony J. Robinson]

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

[Ashley Kerr]

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

[Luke Tatro]

Yeah, exactly.

[Tony J. Robinson]

Or even more than that in a lot of situations. Right. So 3500 bucks for the year you join. You're. You're a member now. How do you go from I signed up to getting to the point where the folks who are in this country club are actually lending you money? Because, like, are. Are you just going in there handing out your business cards? And I'm Luke, give me your money. I'm Luke, give me your money. Like, what is the. What are the actual conversations look like?

[Luke Tatro]

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

[Ashley Kerr]

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

[Luke Tatro]

Just the reality of it. Yeah.

[Tony J. Robinson]

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

[Luke Tatro]

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

[Ashley Kerr]

Tony's literally looking up golf lessons right now.

[Tony J. Robinson]

Not golf lessons, but I am looking up our local country club right now. Like, I've never even looked into it before.

[Ashley Kerr]

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

[Luke Tatro]

That's just kind of what I did. Whenever we play, I just would make a point of talking about what I had going on. And I've learned that guys with money, you know, they. Everyone kind of thinks the same. Like, everyone's trying to make money with money, so they hear of a young kid who's hungry, who's doing deals. They're not afraid to throw them 100 grand.

[Ashley Kerr]

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

[Luke Tatro]

Yeah, of course.

[Tony J. Robinson]

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

[Luke Tatro]

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

[Tony J. Robinson]

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

[Luke Tatro]

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

[Ashley Kerr]

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

[Luke Tatro]

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

[Ashley Kerr]

Congratulations.

[Luke Tatro]

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

[Ashley Kerr]

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

[Luke Tatro]

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

[Ashley Kerr]

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

[Luke Tatro]

Oh, it's leaps and bounds different. I'm learning now that you know. So I don't want to sit here and act like I know what I'm talking about because I don't feel like I do. But yeah, there's just so much that goes into them. So many more tenants. And I'm in New York so there's so many tenant laws and like I'm learning for this mobile home park, I the bill, there's a seven. There's also a seven unit apartment building on the mobile home park that's com. That's condemned that we're starting with. And one of the apartments, I was like, I. We're kind of doing our walk through and all of their stuff was still in there, but they were gone and supposedly moved out. Well, I'll come to find out they did move out, but all their stuff's there. But in New York, technically I still have to go through an eviction process. If I don't, they can sue me for getting rid of their stuff. So it's kind of like one of those things where I wouldn't have thought that'd be a big deal. I wasn't told about the tenant. It just. I was told it was a condemned building by everyone. I talked to co the previous owner and now come to find out we might have to go through this process. So which.

[Ashley Kerr]

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

[Luke Tatro]

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

[Tony J. Robinson]

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

[Luke Tatro]

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

[Ashley Kerr]

So we go from Facebook marketplace to craigslist even worse.

[Luke Tatro]

So I talked to the guy. I talked to him for a few months, and it was always odd conversations with him. It was just. He was super squirrely. We, you know, there'd be one week where he's like, I need the money, I need the money, let's sell it. And then I wouldn't hear from him again for a couple weeks and same kind of cycle. And eventually I just kind of gave up on it, Moved on. And then, you know, a couple months ago, I saw it listed on the mls and oh, my gosh, you know, they wanted a ton for it. So I didn't even bother. Kind of moved on again. And then I was talking to one of the guys I do deals with, and he was kind of talking about how he's foreclosing on a property up in Addison. I'm like, is that. And I asked, and sure enough, it was the same deal. He was actually holding the note for this mobile home park. So I started kind of talking to him. He gave me the whole rundown. It was not the best situation. A bunch of back taxes, bunch of back utilities, nobody's gotten paid in years, and the whole town wanted them out. So I kind of talked with the seller, I kind of talked with the. The lender, and I kind of was the middleman trying to wheel and deal and kind of whizzle my way in there. And so the agreement I came up with the lender was, you know, if I could get him to just sign the property over me, can I just assume the debt and you'll start getting paid and we can all move on. You don't have to worry about going through a foreclosure process. And, you know, and he already knows I'm good for it, so he's like, if you could talk him into it, that's fine by me. So then, like, the next couple months were just me and the seller kind of going back and forth for basically what extra he was going to pocket on top of a suit of the debt. We ended up agreeing on him not getting a dollar. So at closing, I came out of pocket no money, and I completely assumed the debt. We're going to defer payments for a year while I fix the whole property up so I don't have to worry about mortgage payments. The trailer park cash flow is quite a bit of money on its own without the seven unit building in the front. So by the time I'm actually gonna have to start making mortgage payments, everything should be up and running, and it should be a really, really good deal.

[Tony J. Robinson]

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

[Luke Tatro]

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

[Tony J. Robinson]

Look, you might be the best real estate investor we've ever interviewed. Finding deals off of craigslist and Facebook marketplace. And I love the story, man.

[Ashley Kerr]

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

[Tony J. Robinson]

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

[Luke Tatro]

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

[Tony J. Robinson]

Luke, I got to take you with me in my. My negotiations moving forward, man, because you. You got. You got like the. The gift of gab or something going on there, man.

[Luke Tatro]

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

[Tony J. Robinson]

Well, we've got to take our final ab break, but we. We've got a little bit more to get into here with Luke. But while we're going, make sure you guys are subscribed to the real estate rookie YouTube channel. You guys can find us at Real Estate Rookie and we'll be right back.

[D]

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[Ashley Kerr]

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

[Luke Tatro]

I want to preface that none of this would have been possible without her. And I also, my mom used to work for ups. She would load boxes on the trucks and she quit and she now works as well. So those two are kind of. Yeah, those two are kind of full time during the day, which allows me to still kind of work and pay the bills. And like, I've yet to take $1 from anything we've made. It just all goes right back in. And the only thing we've paid is just my mom and her. And the Airbnb has covered that, so it kind of works out great. And they're able to kind of. So we kind of split the roles where my mom kind of handles project management, I guess you'd say. And then Mal takes care of all the tenant issues, all the legal documents. She's extremely, extremely type. So it works out amazing for emails, calls. I don't have to worry about a thing. If I need something, there's an Excel spreadsheet that is updated by the hour. And it just, you know, I'm not like that at all. And I think without her, we really would be in a mess because our numbers would be kind of. I'm just the, you know, I like to be in the front kind of pushing forward, finding deals. And then luckily she's able to kind of keep everyone organized. And my mom's really got good at talking the contractor jargon, so it's kind of worked out well.

[Ashley Kerr]

And then what about yourself? What's the plan for you to eventually move out of your W2 job?

[Luke Tatro]

That's kind of where my biggest I guess hurdle would be right now. It's just. It's obviously a scary thought leaving, you know, a good job that pays all the bills and allows us to kind of do this. You know, I kind of have. I have worries if I do it too soon, it might really hinder us being able to continue to grow. But also I know how productive I can be. So I could only imagine if my two, three hours a day working was 15, you know, so it's kind of one of those things where, like, I'm nervous on. I don't really know how I should pay myself. I don't. I'm afraid to take money from the business. I don't like the thought of it. And so I guess it's. That's just kind of where I'm at currently, is trying to figure out exactly all the logistics. Do I want to up my flipping? Do I want to just pay myself off of flipping? Should I worry about growing cash flow to kind of get to the point where all my bills are covered and then I can just not worry from that? And so it's kind of currently where I'm at with everything.

[Tony J. Robinson]

Yeah. If I can kind of give you my recommendation. Luke, I think there's. There's a couple of things. You've built an expertise in a few areas already. The flipping to generate large chunks of cash, which is great. Obviously you're really good at finding deals in your market that are undervalued and then stabilizing those properties to generate cash flow. And your ability to raise money to fund these deals. You've got three massive skill sets. Flipping for big chunks of cash. Flip, buying, renovating for the cash flow, raising money to fund all of your deals. So you've got all of the pieces in place. I think to lay that foundation to get you to step away. I think if I were you, the two things I would focus on are one, getting your personal reserves to a point where you're comfortable. And what that comfortable is, you know what that number is going to vary from person to person. Maybe for you it's six months of your living expenses. Maybe it's two years of your living expenses. Whatever the number is, just decide for yourself. What number do I want to have in the bank? Not business reserves, but like for Luke personally, right. To cover my mortgage, my groceries, my bills, my fun, just my life. How much do I want to have set aside? Then get your cash flow to a number to say, okay, well, if I know my living expenses are X, maybe you want 2x in cash flow. Right. Because there's going to be ups and downs. You want to make sure you have money set aside. So I think if you can tackle those two things, getting your personal reserves in place and getting your cash flow to a point again, whatever threshold you feel makes the most sense. But if you can check both of those boxes, then it's like, okay, well, I'm almost losing money at this point by not going into the business full time.

[Luke Tatro]

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

[Tony J. Robinson]

There you go, man.

[Ashley Kerr]

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

[Luke Tatro]

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

[Tony J. Robinson]

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

[Luke Tatro]

It's T E T R E A.

[Ashley Kerr]

U L T. I'm Ashley and he's Tony. Thank you so much for joining us on this episode of Real Estate Rookie. And we'll see you guys soon for another episode.

[D]

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