Known for their success in multifamily real estate, Tim Vitale and Tim Vest share their journey, strategies, and the importance of building a thriving community of investors. Discover how they balance their individual strengths, the benefits of partnerships, and insights into commercial properties.
Key Takeaways
- Maximizing Partner Strengths: Tim Vest and Tim Vitale emphasize the significance of understanding each partner's strengths and weaknesses within a real estate partnership. By leveraging complementary skills, they optimize decision-making and achieve better outcomes.
- Building a Thriving Community: The hosts discuss the power of community building, showcasing their Makin' Moves in Multifamily Facebook group. They highlight the value of mentorship and networking in real estate, emphasizing the role of collaboration in success.
- Effective Time Management: Tim Vest and Tim Vitale share insights into time management and delegation. They emphasize the importance of focusing on tasks that require critical thinking while offloading repetitive or distracting work to optimize productivity and decision-making.
Tim Vitale | Real Estate Background
- Co-Founder of Vive Equity and Makin Moves
- Portfolio:
- 1200+ apartment units
- 3 NNN locations
- Based in: Wilmington, NC
- Say hi to him at:
Tim Vest | Real Estate Background
- Founder of Harvest Properties Group and Co-Founder of Makin Moves
- Portfolio:
- 1200+ apartment units
- 3 NNN locations
- Based in: Charlotte, NC
- Say hi to him at:
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Transcript
Ash Patel (00:01.77)
Hello, Best Ever listeners. Welcome to the best real estate investing advice ever show. I'm Ash Patel and I'm with today's guests, Tim Vitale and Tim Vest. Tim Vitale is a returning guest on the best ever episode. Uh, we didn't cover everything we wanted to the last time he was on. So we invited him back and he also brought Tim Vest too. I want to do a solo podcast without being in Vitale shadows. Uh, so we'll dive into that as well.
Gentlemen, welcome to the best ever real estate investing advice show. Glad to have you here.
Tim Vitale (00:35.974)
Oh, thanks for having us back.
Ash Patel (00:37.514)
Yeah. And Tim, I want to pick up where we left off. Tim Vest, by all means, anytime you could chop Vitale's knees off, please entertain us. You guys are both awesome. We've met in person, two just top notch people, real estate investors, networkers that are out in our business right now. Tim Vitale, you are a rising star, man. You came out of nowhere and you took over the scene. Everybody knows who you are.
Tim Vitale (00:45.053)
Hahaha.
Tim Vest (00:45.971)
Oh, sure.
Ash Patel (01:07.57)
Explain to me how that happened.
Tim Vitale (01:10.013)
Well, I don't think everybody knows who I am, but I appreciate the sentiment. Honestly, social media, right? One of the guys that I originally had latched onto when I was learning about multi-family was Tim Bratz, and he had liked to say, social media was the ninth wonder of the world. And if you use social media correctly and you are a producer of content and not a consumer of content, you will always put yourself in a one to many scenario, right? That's exactly what we're doing right now.
So just by leveraging one to many as often as possible and as effectively as possible, that's how we've been able to grow our business together by getting access to more deals, more brokers, more investors, more everything, more relationships overall. That's ultimately what's been the number one key driver to us growing in this space.
Ash Patel (02:00.878)
Tim, there's a lot of information out there on how to do social media correctly. And I've read things like post at 12:01pm every single day on LinkedIn, never edit your posts, you know, all these different crazy things to manipulate algorithms of social media. What is your social media strategy?
Tim Vitale (02:19.469)
I don't do any of that crap. I think it's all, you know, a crock of it. And I'm sure there is validity to the algorithms. I know people are doing it successfully. Like look at people like Ryan Panetta. You know, he is just all over the place all the time. I can't get him out of my newsfeed, right? Those people are doing it successfully, but it's also a full-time job for them to do social media. What Tim and I have found to be effective is in our Facebook group, Making Moves in Multi-Family.
My wife is big on alliteration, so this is where this comes from. Every Tuesday, so we do Tim and Tim, Tuesdays at 10 a.m. Eastern time, right? It's easy for people to remember, and we don't really do a whole lot of social media above, or I personally don't do a whole lot of social media above and beyond that one show per week, right? What we've done is we've trained people to expect us at 10 a.m. every Tuesday.
And you have like consistent people that show up and they listen to our podcast or they listen to, you know, we do it on Streamyard, which is a live streaming podcast setup where people can kind of comment and interact. And I really enjoy that part of it, right? I love being able to sit down. Tim and I usually basically have a business meeting and record it to everybody, you know, broadcast it to everybody. And then people are able to put comments in the sections and say, hey, well, what do you mean by this?
And that level of engagement with your audience really helps build a better relationship than just force feeding information all the time that, you know, people can just scroll through and ignore, right? But if you get somebody engaged and they feel heard, if somebody feels heard, they're going to remember that. You're going to they're going to remember how you made them feel during this podcast that wasn't even directed at them, but they're going to feel heard. And that's going to gain that level of trust and just get people to continue to
because in one way or another, it's almost like free coaching or mentorship advice.
Like we just recently did a show and we were talking about taxes and somebody had commented and they're like, what kind of forms should I be expecting if I've done this? And I was like, well, I'm not a CPA, but this is what I, from my experience, this is what I think you should have. And he was like, thanks, that just saved me a ton of time and information and hassle and all that, because I didn't know, right? So like that person is gonna come back every single week they want to learn something new and if they don't know it gives them the opportunity to have their voice heard to ask a question.
Ash Patel (04:48.59)
Other than your Tuesday company meeting that you stream live, are you diligent about any other times that you're posting or certain number of posts per week or platforms?
Tim Vitale (04:59.621)
Nope, nope. I mean, if we close a deal or we sell a deal, like, I mean, if there anything kind of major like that, like we'll make a post on Facebook and LinkedIn and that kind of things. But other than that, it's just Tuesdays. It's this live stream. It's simple. Don't overcomplicate it. If you try to overwhelm yourself with like this strict regimented schedule of postings and content, you're gonna get burnt out. At least I would get burnt out. So like, this is what was achievable.
And it was consistent and repeatable for Tim and I.
Ash Patel (05:30.762)
Yeah, good. So you're not social media stars. You're just real estate investors keeping it real on social media. Yeah.
Tim Vitale (05:35.737)
That's it. Tim, correct me if I'm wrong here, but we just always love to be honest and transparent. We're talking about the wins, we're talking about the losses, we're talking about when we screwed up, what we learned, how we're fixing it. It's just keeping it real at the end of the day.
Tim Vest (05:51.177)
Yeah, no, he's not wrong. Cause we've, we've always kind of looked at it more of like we're operators first and, and you know, whatever else second. And, and I think that's the way it's always gone. You know, we, we didn't set out to do social media in order to like build a community of a million people or anything like that, you know, we, we more use social media to just, you know, anybody that looks this up or whatever, it gives some credence to the fact that we are in the space and we're doing things in the space and, and then from there it's just been, you know, yeah our performance kind of speaking for itself, if you will.
Ash Patel (07:02.474)
Tim Vest, do you ever feel like you need to reel Vitale in or wish he would do something differently when it comes to social media?
Tim Vest (07:22.865)
Um, you know, I mean, like he said, he, he's not, he's not horribly active on social media, right? Um, so I, I mean, the short answer to that's no. Um, I, I'm never going to, I'm never going to get onto anybody for just being out there and being honest and transparent. Right. And that's pretty much what he does. Um, so no, I mean, honestly.
Ash Patel (07:43.382)
You missed your opportunity to chop his knees off.
Tim Vitale (07:46.035)
Hahaha.
Tim Vest (07:46.065)
Yeah, you know, you gotta, you gotta give me a better softball than that. You know, that's.
Ash Patel (07:51.035)
All right, and look, I get what you're saying because, you know, we see those people who post every single day, like clockwork. And when you read some of their posts, you could tell it was a bit of a struggle to get this particular post out, just so they meet their deadline of getting the post out that day, right?
Tim Vitale (08:09.513)
Totally. Yeah. I mean, you can tell a lot of chat GPT getting in there and, you know, just it's a it's a lot less genuine content when you're posting that frequently, because like unless you're a writer by trade, I feel like it's not your strong suit. And like what head what Tim had said, like we're operators first, we do real estate, we make money in real estate, we just broadcast what we're doing so everybody else can see what it looks like.
Tim Vest (08:10.05)
Yeah.
Tim Vest (08:33.765)
Yeah, and.
Ash Patel (08:34.015)
Gentlemen, do you publish a newsletter?
Tim Vest (08:37.261)
No, but actually you are, you are right. That's a, that's a fair point. Cause I do post every day. I'm a little bit different than Tim. I do post every day for, you know, not, not to try to build a huge community, but to your point, you know, just being transparent. Yeah. I mean, there's times I sit down where I'm like, I don't know what I'm going to write today and then, but then I remember an article or something I've seen that I'm like, yeah, let me, let me share that for a second. Cause you know, um, yeah, there's, there's value in sharing those things out there. I think.
Ash Patel (08:38.072)
Why not?
Ash Patel (09:05.73)
How long do those posts take you? What's the range?
Tim Vest (09:10.005)
And to get them written, depends on how original they are, but, you know, original content anywhere from 15, 20 minutes to, you know, commenting on an article five to 10 minutes, something like that.
Ash Patel (09:11.903)
Yes.
Ash Patel (09:23.966)
Yeah, so you put your real thoughts into it, which is important, right? Because then your personality comes through as well. Why not do a newsletter? Sorry. Say that again.
Tim Vest (09:28.987)
Yeah
Yeah, for good and bad. That's a personality for good and bad, right?
Ash Patel (09:40.492)
Why not do a newsletter?
Tim Vitale (09:47.093)
That's a lot of work.
Ash Patel (09:48.846)
Hahaha
Tim Vitale (09:50.281)
I'm not, am I lying? No, it's a ton of work and I'm not a writer. I mean, when we covered that in our, the last podcast, right, was, I come from accounting and finance world. Like, very recently we were having a conversation with another guy that we partner with and I was like, all of this sounds great. You're saying numbers and things, but can you put it into an Excel file so I can understand what you're saying?
Ash Patel (09:52.744)
No, it's a ton of work.
Tim Vitale (10:12.637)
Like I don't really, like I'm not the best with words. I'm, you know, with word comprehension and reading comprehension, but you show me some numbers. I can figure that out pretty quickly.
Tim Vest (10:21.101)
Yeah. And, and, and just to, just to pile on that, right? So I do like to write. So I would like to do something like that. I just don't have time for it. Cause I'm, I'm focused on, you know, we, we send investor updates out. We have 20 something plus offerings going on at any given time. And then, you know, I think we tend to focus our, our time more on, you know, the, the group, right, the making moves community. And if we, if we have content to share, if we have things we want to share, you know, we, we go there with it rather than sending out just a broad newsletter.
Ash Patel (10:52.606)
Yeah, I think people take people's attention for granted. You know, I used to get a great colleague of ours who's killing it. She would send out a daily newsletter and I had to unsubscribe. I mean, that's just clogging up my inbox and you can't have that much good content to be taking up my inbox every single day. So I do a newsletter maybe a couple of times a year, but it takes me days to write and edit and rewrite because if I'm taking up thousands of people's time collectively, you know, that's hundreds of hours of people's time that I'm using, it better be good. It better be worth their time. So yeah, good for you guys. We're not just jumping on the bandwagon and doing a newsletter because everyone else is. When you see others on social media, what do you see people doing wrong?
Tim Vest (11:45.605)
Oh
Tim Vest (11:49.581)
I got one. Um only sharing the wins. Um, that's cause, cause for two reasons, right? For me, when I see folks who are only talking about the positive, right? I'm like, I don't, I don't believe it. First of all, right? Like it can't, it can't all be positive. I've been doing this too long. It can't all be positive. And then two, I'm just like, I want to hear, I think there's so much to learn about the losses, right?
Tim Vitale (11:54.996)
Oh yeah.
Tim Vest (12:16.161)
I want to, I want to learn about the losses. I want to learn from the losses. You know, I hope, I hope you learn from my losses and don't make the same mistake. Right. And so I think, I think it's community and we should be able to share the good and the bad because I think everybody benefits from both, right? Um, and then it just makes, I mean, it just makes it more believable.
Ash Patel (12:35.786)
Yeah, that drives me up a wall. Just a bunch of wins. No, you know, you're not going to, even if you don't share losses, share some lessons learned, right?
Tim Vest (12:45.953)
Yeah. Yeah, for sure.
Tim Vitale (12:46.753)
That's a good way to put that for sure.
Ash Patel (12:49.666)
What about you Tim? What's something that annoys you on social media and that's a turn off?
Tim Vitale (12:54.765)
When I see people post ads and they're like boosted ads or paid for ads and things like that it just kind of discredits it in my mind i'm like because The per and in and let me preface that with it's in my mind, right? My opinion here is that we produce and we make social media content because we love it, right? We love helping people. We love providing values to others. We love sharing our wins and our losses to help educate others when you have a boosted ad, it just screams to me that you're not in it for adding value to the community, you're in it for whatever kind of paycheck you can get out of it.
Ash Patel (13:35.338)
That's a great point. A question out of curiosity for you two. When you look in your inbox and you see a formatted newsletter, multiple fonts, colors, all types of different links that you can click on, do you pay less attention to that?
Tim Vitale (13:54.397)
Hmm, I'm more of a bullet point kind of guy. So I the one newsletter that I actually do read on a date almost a daily basis is the commercial real estate newsletter. I couldn't even tell you what it is. But I don't look at any photos. I don't look at any of the graph. I mean, I look at some of the graphs, but I go right to the bullet points. What happened? Why? And what's learned from? I don't want to sit there and read a book about what happened and what's going on. Just tell me what I need to know so I can move on with my life.
Ash Patel (14:23.778)
How about you, Tim? Do you tend to pay less attention to those neatly formatted marketing emails?
Tim Vest (14:32.013)
Um, I, I'm, I'm kind of like, I just give it to me like it is kind of guys. I don't really pay attention to like pretty pictures and colors and things like that. I'm probably saying a little bit of the same way Vitale said here. I'm, I'm just, give me the data, give me the information. Um, that's, that's what I'm mostly interested in. Um, and then, you know, the, now that I think about it, the, the couple of newsletters that I do read when they hit my inbox are typically straightened to the point, right?
Um, if I start to read one and I see there's a lot of fluff in there or things like that and I'm, you know, my ADD kicks in and I'm a tune out. So I probably don't open it the next time.
Ash Patel (15:10.142)
Yeah, in terms of underwriting, Tim, Vitale, that's your forte, man. That's your background. What do people miss when they're underwriting deals the most?
Tim Vitale (15:20.937)
Oh, the number one thing that I see people miss the most is they overestimate what their average income is gonna be for year one. So what does that mean? Right, a lot of people like to do value add strategies, they're buying properties with low income, and then they say, you know, their pro forma rents are two, $300 higher, right? And I'm not saying that you couldn't turn all of those units and get them all up to market rent in a 12 month period.
But the average over the 12 month period is not going to be what your pro forma rent is. And there's a lot of calculators out there that they like to just say, okay, well, if average rent is a thousand, I'm gonna take it multiplied by the units and multiply it by the months. And that's gonna be my year one income. That's not true because you're starting month one is gonna have your low income from when you took over the property. And month 12 is gonna have higher income from when you got all the rents up to market value. So, I mean, that's kind of an extreme example.
Most people underwrite for a two-year turnaround time on most projects, but every single time, I always see people overestimating what they can actually do in year one income because their averages are just not low enough, taking into consideration where the property was when they took it over to where it could be in 12 months.
Tim Vest (16:37.521)
Yeah, I'm glad he didn't just say this is what Tim does that frustrates the hell out of me. Like, I feel better about that response.
Tim Vitale (16:44.013)
Hard coding numbers for Tim Vest. He hard codes stuff and then I can tell something's not right and he doesn't remember what he changed and I have to sit there and go through this file and find whatever hard coding was done.
Tim Vest (16:55.121)
That's true.
Ash Patel (16:55.346)
You guys are a crazy wild dynamic team. Who explained to me the underwriting process when you find a deal, who underwrites it first?
Tim Vitale (17:06.121)
Tim underwrites it in his head in like 30 seconds because he likes to do the, okay, what's the price per door? What's the pro forma rent? What's the current rent? All right, so what's our all in cost? And then, you know, that's that, right? And it does it pass the sniff test. And then sometimes he'll get like some rough numbers in there of like, oh, you know, we're gonna operate, you know, there's one deal specifically I worked on yesterday. He was like, okay, well, here's what we can get the income to, which is great.
And then he said, for expenses, I was just gonna put like $6,000 a unit. I was like, that doesn't really work for me because I need it to be more broken down. So if a deal passes the sniff test and it's something that we think might actually go to, then I'll actually take a look at it. I'll break everything down by the individual line items and do like the spreads and the averages and capex repair. Like I go into it for a couple of hours and he'll do like an underwriting session in like five, 10 minutes.
Tim Vest (17:40.785)
Yeah.
Tim Vest (17:55.345)
Yeah. Yeah. He'll, he'll, he'll, he'll get my file and he'll go, Oh, I see taxes, insurance, and then you got this number down here. It's like 4,500 a door. And I'm like, yeah, you know, to get it up to 6,000 a door, if we can't operate for 6,000 a door, I'm not buying it. You know, that kind of thing. And he's like, I want it broken down.
Ash Patel (17:58.358)
Damn.
Tim Vitale (18:10.789)
Right. Yeah, I need more detail. I have to know what goes into that.
Ash Patel (18:16.854)
So you find a great deal, Tim, you underwrite it, and then Vitale is just the pain in the ass that blows everything up. But a necessary one, a necessary one at that. Now to dive into those dynamics, Tim, I get it, you're the realist. Are you more the realist or a little bit pessimistic in underwriting? Do you do a lot of risk assessments?
Tim Vitale (18:22.229)
That's right. He gets so annoyed.
Tim Vest (18:25.457)
I'm just sitting here like, can I go buy it please? Come on.
Tim Vitale (18:28.17)
Yeah.
Tim Vitale (18:44.605)
Which Tim is that targeted towards?
Tim Vest (18:45.105)
That's gotta be to you.
Ash Patel (18:46.102)
Vitale, the underwriter, the undertaker.
Tim Vitale (18:48.373)
Oh yeah, I wasn't sure. We go by our last names for a reason. Um, yeah. Um, so man, you're gonna have to cut this out cause I forgot what your question was.
Ash Patel (18:53.547)
I want to be respectful, so okay, we'll do last names.
Ash Patel (19:04.03)
Yeah, no, I just called you the undertaker. Is it, are you more just super realistic in underwriting or are you a little bit more pessimistic to pad the numbers a little bit in terms of being conservative?
Tim Vitale (19:07.556)
Yeah.
Tim Vitale (19:18.809)
Oh, all right. I'm glad that you said it that way because there's a difference between being accurate and being conservative. There's also a difference between being too conservative and so another you know we were talking about issues that we see before. This is something I see all the time. Somebody is like, okay, well, my pro forma rents. I got them from a manager, whatever. I took $75 off per unit in order to be conservative. I was like, no, what you did was you priced yourself out of even getting the LOI accepted because on 100 unit property, if you're not including $75 a unit in income, your pro forma numbers are going to be entirely different than somebody else's. Right?
So there is a very distinct line where I like to be accurate with my rents. For most people, if you're not buying in a market that you're an expert in, you need to become an expert in it. So markets that we're buying stuff in, we know exactly what we can get for rent.
I might back it off by like five or 10 bucks to kind of give us a little bit of a margin of error there. But for all intents and purposes, I try to be as accurate as possible with the income numbers. Where I do like to add some padding and some fluff is the expenses. Because as everybody that's listening to the show has seen, taxes and insurance over the last two years have just gone insane. And I'm not gonna lie, there's deals that I didn't underwrite that our insurance cost was gonna go up 300%, right? That's just not normal.
But now that I've been through that, I take a different look at how am I increasing my expenses on each line item year over year versus just assuming that it's just gonna be a two or three or four or 5% increase across the board.
Ash Patel (21:00.758)
Vitale, does it take you the same amount of time to underwrite a 40 unit property versus a 200 unit property?
Tim Vitale (21:07.249)
Oh yeah, the only thing that would take more time is if you have more unit splits, right? Like if it's 101 beds and 102 beds, like that's easy. It doesn't take any difference, right? But if you have a combination of, like a portfolio of properties where you gotta go through all of the different portfolios, all the income statements and rent rolls for each property individually, that takes significantly more time. But for an apples to apples comparison, if it's 40 units or 500 units and it's all on the same property, then the time is about the same.
Ash Patel (21:41.726)
And Tim Vest, how long does it take him to underwrite a deal?
Tim Vest (21:46.737)
Um, after he corrects my mistakes, um, probably an hour, I give him an hour to, yeah, to get right to where...
Tim Vitale (21:52.573)
That's probably fair, about an hour, to where I feel comfortable to have a conversation about it. Cause I know like, cause there's always gonna be questions and after about an hour of looking at the numbers, I've pretty much kind of thought about every question that somebody could throw at me and have an answer to it already.
Ash Patel (21:54.242)
Good.
Tim Vest (22:07.185)
Yeah. Yeah. I'd say within an hour he's, we're to a point where we could consider making an offer on something.
Ash Patel (22:16.354)
When you're underwriting, do you always have in the back of your mind questions that a lender would ask?
Tim Vitale (22:22.233)
Always. There's two people in my... Well, there's three people, okay. There's three people in my life that I'm constantly asking, what would they say? And that is the bank, those are the investors, and Tim Vest, right? So I know what Tim Vest is going to ask me. So I already have those things kind of canned, like, yeah, you ask the same question every single time, so I know what I'm looking for. But banks and lenders and investors, investors more specifically than anybody, they will really dive into return percentages, pro forma, how did you get those numbers? What do you own in the area? How are you backing up these numbers? Having answers to all of those questions is definitely at the forefront of my mind when I'm underwriting any deal.
Ash Patel (23:04.894)
In all of the deals that you guys have underwritten, what smoking guns have you found where a good deal turned out to be one that you had to walk away from or something that didn't look like a great deal, you found something that made it into a home run?
Tim Vitale (23:21.277)
Ooh, Tim, you wanna take that?
Tim Vest (23:23.025)
Yeah. So, but, but not just in the end of writing, you mean after we've done the underwriting and before we close on it, we found something.
Ash Patel (23:28.394)
Yeah, let's say there was a deal that you were going to walk away from. And all of a sudden, is there something that you found that made it into a great deal?
Tim Vest (23:35.921)
Yeah. So I would, I'll give you two. Um, one, one of the very first deals, Tim and I ever did together, um, was, uh, it was just us. It was a straight up apartment deal, but it came with some extra land, right? And we were like, but wait a minute, like we could do something with land. Um, and once Tim, originally we were like, I don't think this works, but then Tim kind of got his hands on it. I had this idea in my head, kind of like he talked about before, had this idea in my head, but I couldn't quite get it on paper. And Tim took it.
And like, by the time he was, done with the two things that I was talking about. He's like, oh yeah, this is a good deal. And it's turned out to be a good deal. One other place that I would say as well is when we started realizing like some of the more affordable properties where you could put section eight rents and things like that, we call them voucher overhangs. You know, when we first started looking at those they're like, man, these aren't, I don't think these were but then you start to realize the voucher overhang piece and those start to really, really add up. And then you just...
So those are some places where we were like, yeah, not sure this is a deal. By the time we got through the underwriting, we were like, oh, this is a deal. This is a good one. Let's go get it, right?
Ash Patel (24:45.026)
How about on the flip side, were there deals that you guys were full, ready to close, move forward, and then you find a smoking gun where you had to walk away?
Tim Vest (24:54.609)
So Tim, how about the one that was sliding down to the valley? Yeah. I mean, how many, how many structures with that? I mean, it was, it was like 11 or 12 buildings or yeah. Yeah. And they were, and they were sitting, so it was like a creek at the bottom and they were sitting.
Tim Vitale (24:57.821)
It's exactly what I was thinking about.
Tim Vitale (25:04.757)
It's like almost 300 units, so it was at least 10 buildings.
Tim Vest (25:13.201)
You know, on each side of the creek. And when the engineer, we were like, something's going on here. We better get an engineer out here. And an engineer came and was like, yeah, all these buildings are sliding down to the creek. And we were like, we should probably walk away from this one.
Tim Vitale (25:26.289)
Yeah, that deal we definitely walked away from.
Ash Patel (25:30.326)
What is your underwriting process at a high level? You get the deal, you have as much information as they're willing to provide. Where do you start with underwriting?
Tim Vitale (25:41.121)
Oh, this is good. I just talked about this on, you know, how to do underwriting classes and things like that. We dove into this extensively this week. There's two different answers to that. One is if you're dealing with a broker that you already have an amazing relationship with, or even a seller that you have an amazing relationship with, that conversation is gonna look a little different, right? Cause it's, you know, kind of the old handshake method, right? But if most people don't have those relations, a lot of people don't have those relationships yet.
So I'm gonna target this towards, the newer investor that's trying to establish a relationship with a new broker. The process that I would do in that instance is you have to take the deal as it's written by the broker, underwrite it, and then call the broker and have a discussion about it. What you're ultimately trying to do is the book behind me is Never Split the Difference, is you are trying to get the selling broker on your side. Convince him you're on your side.
So you approach it with logic and reason and you're ultimately trying to get the broker to say that's right or yes That's correct or some kind of level setting to let you guys know that you're like on the same page, right? So my typical process with that would be you take all of the information you review the income the expenses the cap rate the cap X You know and all of the metrics of the deal, right then call them and talk to them. Okay. Well, here are my assumptions, This is what oh and debt obviously debt, so here are my assumptions on debt, here are my assumptions on income and expenses for each one of these years. Here's what I think I can get the property to in five years. I could exit it at this cap rate and I might be able to sell it for this amount, right?
Ultimately, what you're trying to do is get the broker to say, yeah, I agree with everything that you said there. Like your income is correct, your expenses are correct, your exit cap rate is correct, your price per door on the exit is correct. And then ultimately you bring them back to, okay, well, if all of that is correct, how do I buy this deal if you're asking me today my year five sale price, right? And then you start to get them to solve your problem because you've already level-set it with them.
And if you can get them to solve your problem, they're on your side now. And I know that they work for the seller, like let's disclose that, but they are starting to realize that, hey, from a buying perspective, this doesn't really make any sense. And I always like to say that underwriting multifamily deals or real estate deals is like algebra.
Tim Vitale (28:03.773)
But in our world, instead of solving for X in algebra, we're solving for investor returns. And everything can go into this formula in order to get to your investor returns. And ultimately the last lever that you can pull is either sale price or including some kind of seller financing or things like that. So if you can get the broker on your page and on your side, you go through all the assumptions, they agree all your assumptions are correct. The only thing that's left to say, okay, well, I can offer you two prices. Here's my cash price that here are my investor expectations, this is what I need to buy it for, you agree all my assumptions are correct, well, this is what it needs to be. Or if you wanna do some level of seller financing, I can pay this with these terms and then I still can meet my investor expectations with changing the debt structure and the deal around a little bit.
Ash Patel (28:51.646)
You two have a very complimentary partnership. If you took on a third partner, what qualities should they have?
Tim Vitale (28:59.441)
Oh, we're big fans of the culture index survey. And Tim and I both know that we have, I forget what the D trait, what is the D trait? It's like the organizational completionist trait. We are very low D, which means that we will do something in order to get it done. And we'll get it 80% of the way there and it'll be good enough. But we need somebody that's gonna come in and say,
Tim Vest (29:07.217)
We need more D. It's basically.
Tim Vitale (29:26.969)
Okay, I'm going to take it from 80% to 100% because 80% of the work is in that 20% of the job. And we just are so focused on other things and it's not our natural skill sets so that we need somebody that's going to come in and fill that side of the business.
Tim Vest (29:42.705)
Yeah, we, so we would bring in a very operations heavy detail guy, right? Um, this
Ash Patel (29:50.23)
You need an integrator.
Tim Vest (29:52.465)
Yes.
Tim Vitale (29:53.669)
Yeah, if you're going off the EOS traction stuff, yeah, an integrator.
Ash Patel (29:56.53)
Yeah, you know, you're probably going to get thousands of resumes now. I want I want to join the Tim and Tim team.
Tim Vitale (30:01.158)
Ah.
Tim Vest (30:04.785)
I always.
Tim Vitale (30:05.245)
Pre-requisite, your name needs to be Tim.
Tim Vest (30:07.921)
Exactly.
Ash Patel (30:08.468)
Now, that was one of my questions I wanted to ask. When is it annoying to have a partner with the same name and when is it beneficial?
Tim Vitale (30:17.585)
Oh, well, it's beneficial because somebody like yesterday, for example, I got a call from a tax assessor were appealing the taxes on one of the properties. Well, they called and they said, hey, Tim, this is blah, blah. And I knew Tim Vest was actually the one handling it. So I said, here, you call. And he called and he said, hey, I'm Tim. He didn't know the difference between which Tim he called.
Tim Vest (30:19.665)
Uh, yeah.
Ash Patel (30:39.234)
So you get to pass the buck, that's cool. When is it annoying?
Tim Vitale (30:45.955)
I don't really know. I guess when Ash asked a question and he doesn't say Tim Vest or Tim Vitale, He just says Tim that works.
Tim Vest (30:46.097)
When I'll just. Yeah. We used to have a business partner that would be like Tim and we're both like, and then he was like, TV. And I'm like,
Ash Patel (31:02.062)
That it's just a crazy dynamic. I love it. You guys have some commercial property as well, right non-residential commercial What do you have?
Tim Vitale (31:12.157)
We've got some restaurant spaces and we have a, it's a retail office flex warehouse space as well. All of those are in Columbia.
Ash Patel (31:21.538)
Do you have the same level, same diligence of underwriting for non-residential as you do residential?
Tim Vitale (31:28.593)
Absolutely. Underwriting triple net deals is so much easier than doing multifamily deals, because I can just do it on a calculator. When I do an apartment complex, I need this whole big Excel spreadsheet, which I like to an extent, but you don't need it in the triple net world.
Ash Patel (31:43.146)
Will you only invest in triple net or will you do value add gross leases?
Tim Vitale (31:49.277)
We've done value add triple net, right? I mean, we've gotten the property and we're in the process of retenant. We did some renovations. We're in the process of retenanting. Can't say that. Putting a new tenant in. Yeah, there you go. Putting a new tenant in. So we're in that process. They're actually touring the property today. Just got off the phone with them. They actually called us from the Crexie listing. So yeah, I mean, we do value add triple net. I love it. I mean, it's super easy to underwrite the concept.
Tim Vitale (32:17.789)
If you understand the concept of how real estate deals are underwritten, you can underwrite an apartment complex, a self-storage complex, triple net. It doesn't matter. It's income and expenses and math at the end of the day.
Ash Patel (32:31.018)
As a percentage return, are your non-residential properties higher than multifamily?
Tim Vitale (32:36.841)
We haven't sold any of the triple net stuff yet, so I can't answer that.
Ash Patel (32:40.258)
How about the cash on cash returns?
Tim Vitale (32:42.902)
Well, one of the ones that we're talking about is a single tenant, so the cash on cash is non-existent. So I'd say the multifamily is probably better at this point.
Ash Patel (32:50.914)
Got it. Good, because I don't want to compete with you two. In terms of building a community, Tim Vitale, when we first met, you talked about this crazy event that you do for your mastermind, where you rent out a bunch of race cars and everyone goes down to the Porsche Speedway in Atlanta. And you host it. It's a crazy, awesome idea. Tell me about why you're building a community, how you started building it and where you're at now, please.
Tim Vitale (33:24.189)
Man, that event was the highlight of my year last year, I'd have to say, because I absolutely loved it. Like, I thrive in that environment, and I love the idea of being able to bring people together in a small room environment and allow them the opportunity to meet with each other, because Tim and Tim know a lot of people, and we know a lot of people could work really well with each other, but it's not my job to introduce all of you all the time.
But if you put yourself in a room that Tim and Tim are gonna be at, and all of Tim and Tim's friends and associates and business partners are gonna be there, I guarantee you're probably gonna come out of it with some kind of good relationship. And I can think of a handful of amazing partnerships that came out of that event. So the whole point of doing that was because I, one of the first events that I had ever gone to, Tim Brotz had put together an event at his mountain house in Asheville, and there was only like 20 of us there. And I was like, this is the best ever event, right? Because I was able to come out of that with amazing relationships and inspirational relationships.
And I wanted to be that person that put that together, put that opportunity to bring people together because I still talk to those same people, you know, two and a half years later, I still talk with them on a frequent basis. So the whole idea behind the Porsche event was, let's go do something awesome. Like let's learn cool things from amazing speakers and amazing people that are gonna be in the room. But then let's go do like a bucket list adventure.
So Tim and I are both part of GoBundance and that's kind of where I got. So I got the inspiration from Tim Brots to do the small room mastermind event. And then they got the life changing, the bucket list adventure item from GoBundance. And I did it myself, cause I was like, this is something I wanna do. And I don't see everybody else do it before. So we picked the Porsche driving experience down in Atlanta.
And for the, you know, we booked a room that was overlooking the racetrack. And then the first part of the morning we had breakfast and then we had like a couple of people come up and talk for like, I think it was only for like three hours and then it was networking during lunch. And then for four hours, we went and drove race car, like Porsche, nine 11s and GT fours and all this other kind of stuff came in. And, uh, SUVs, we drove them all on the racetrack and they taught us how to drift and how to do donuts and how to launch them and, you know, how to, you know, go around the track with the G-forces and all this other kind of stuff. And it was a life-changing event. I mean, how many times can people say that they drove 140 miles an hour down, you know, a racetrack? I got carsick while driving. And I always drive because I get carsick. And it was like, this is revolutionary to me is that I just got carsick from driving a car. Like, you know, it was like that wild.
And I can tell you, the conversations that were had at that event. And then after that event at the dinner that we did, we're just,
insane because people like the adrenaline was pumping and everyone was excited and they thought it was such a good time. When you have that level of connection with people, you're gonna make great relationships with each other because it's a memorable experience that you guys both went through together at the same time.
Tim Vest (36:17.905)
Yeah.
Ash Patel (36:34.258)
Yeah, that's incredible. Are you going to do that again or are you going to do something different this year?
Tim Vitale (36:38.141)
We wanted to do it this year, but I got a baby on the way. So that kind of put a wrench in things, but we would like to do it for hopefully maybe spring or summer of next year, because we didn't do it in 2023.
Ash Patel (36:50.91)
In terms of this community, how did you build it? How did you start it?
Tim Vitale (36:55.613)
Consistency, just showing up, right? Everyone says the first thing, the first time you do anything, it's gonna suck, right? So the first time I went on live streaming, it was awful. And I literally was like on my phone and I did this live stream and I was like, I know this is gonna be awful, but I gotta get this out of the way just so I can move forward. And then it was consistency and I showed up every single week and I was learning and I was growing and I was telling people what I was doing and I was just doing literally what we do today consistently for a long period of time.
And I think the group is just shy of 5,000 members now, which I don't care if it's 100,000 members or if it's 1,000 members. If our group in some way, shape or form can impact or change somebody's life for the better, it's a success. And that's all I look at it for.
Ash Patel (37:43.758)
And then you guys have a mastermind as well, right? Where you mentor others. Is that a structured coaching program or is it just being part of the group?
Tim Vitale (37:53.033)
So we have a structured coaching program where I like to kind of say that there's three levels of mentors, right? Like you have your coach and your mentor that's gonna teach you the basics, right? That's gonna hold your hand and kind of show you how things are done and this is that and the other thing, right? And then you have your level two mentors that are like, okay, well, now that you know the basics, let me help you implement them and teach you the theory and concept behind it. And then level three coaches are like, okay, well, now you clearly are successful in your own business, but you want to go from a $10 million business to a $100 million business. I'm gonna help you learn and think and grow that way, right?
So Tim and I like to be in that two and three coach range, and I would say our group is targeted towards the level two mentor. Like we don't teach people what the basics are, but I do want to talk about theory concept and application because those are the things that you're gonna be able to implement into your everyday conversations with brokers and investors and you're underwriting your deals and all that kind of stuff that's going to make an impact in how you're requiring deals. And I don't want to hold your hand and teach you all the things that you could learn on YouTube. Like that's not what you pay me for. You would pay me and pay Tim Vest and I, you would pay us for how are you going to use this information effectively so that you can find success and not just be spinning your wheels and getting burnt out.
Tim Vest (39:15.025)
Great.
Ash Patel (39:16.354)
Tim Vest, what is your vision for the future of your company?
Tim Vest (39:18.513)
I, that's a, I don't know. That's a great question. Yeah. Make money. No, seriously. It would actually be, it's actually to scale the business, right? Obviously to scale the business, add more properties to the portfolio, add more properties to our property management business, five property management.
Tim Vitale (39:26.577)
Make money.
Tim Vest (39:42.673)
And then at the same time, start to link more into the making moves community as well, because, you know, part of the reason Tim and I do these things is one, you know, for ourselves, for a legacy with our families, you know, Tim's, Tim's kind of expanding his family in the process now. Um, and, and being able to, to leave something there, create a certain lifestyle for our families, but then at the same time, to be able to give back to that community, to that making moves community, um, you know, I think if you talk to some of this the folks in there, what they'll tell you is when they come in, like Tim and I have been very inclusive in including them in deals, giving them deals, introducing them to people in the community that can compliment them in the same way Tim and I compliment each other.
Um, so if I was to say what my vision is in the future for that is to, it's to scale those two things, right? To scale our portfolio and then to scale the make and moves community so that we can, you know, kind of help other people kind of get to the same place where we are or where we're headed.
Ash Patel (40:42.506)
Yeah, I really wish I was able to instigate you more to pick on Vitale, but, uh, this was an awesome interview. What's a question that you wish that I asked?
Tim Vest (40:53.969)
Uh, what's the most annoying thing about me that Vitale finds, right? There you go. You want, if you're going to instigate, man, you got to ask things like that. Like.
Ash Patel (41:01.11)
Let's go.
Tim Vitale (41:01.885)
I thought you were, this is supposed to be the other way around, man. And what's the most annoying thing? All right, all right, all right. Here it goes. Here goes. The most annoying thing that Tim Vest does is answer emails on our stream yard. Because he's sitting here, you can hear him clacking away, looking over here, and I'm sitting here talking and I'm like, Tim, pay attention.
Tim Vest (41:05.105)
Yeah.
Ash Patel (41:05.805)
Oh, it will be. We'll do it both ways.
Tim Vest (41:13.233)
it on.
Oh yeah, I do that. I do that.
Ash Patel (41:24.61)
That's that ADD, right? It's just multitasking. What about Vitale? What's the most annoying thing he does?
Tim Vest (41:24.913)
What? Did you say something? Did you say something? Yeah.
Tim Vitale (41:25.885)
That's the ADD, man. Yup.
Tim Vest (41:34.577)
He gets onto me about answering emails and getting business done while we're on this stream yard thing. I mean, Tim and Tim at 10, I'm trying to do deals over here, man.
Tim Vitale (41:42.505)
Ha!
Tim Vitale (41:45.897)
Ha ha.
Ash Patel (41:46.122)
Are you guys both kind of ADD squirrels, just, you know, multiple ideas and thoughts going through your head all the time?
Tim Vest (41:55.441)
Yeah. Um, I'll go. I, yeah. Hell, hell yeah. I am. I am. And that's honestly, that's one of the reasons why having a partner like Tim is so helpful for me is I will, I will look at a shiny object. I will a hundred percent look at a shiny object. I will get something and be like, where's the next one? Where's the next one? So I'm a little bit of a combo, right? Like I'm a little ADD and then I'm also a little addictive in terms of more is never enough.
Ash Patel (41:59.594)
Well, I know you are.
Tim Vest (42:23.665)
You know, like, like Tim, Tim and I'll sit down and we're going to, we're going to do like four deals next year. And the next thing you know, I'm like eight deals in and he's like, dude, what happened to four deals next year? Um, yeah.
Tim Vitale (42:35.093)
I'm the complete opposite. I write down my goals and I know exactly what I want. And that helps me with my decision-making process is, does this action get me closer to my goal? Yes, do it. No, don't do it. And I attribute a lot of my success to being able to identify what is going to help me achieve my goals and what is not going to, because there's so many people out there that just get the shiny object syndrome and they don't stay on the straight and arrow and.
They can get lost in going down all these different avenues of opportunity. And my biggest advice to people is like, pick one thing, get amazing at it, write down exactly what you want your goals to be and what you want to accomplish that year and in the next five years, and then just do that. Don't do everything. Don't try to do everything. Just do those specific things. And clearly you can see why Tim and I are great partners because he's more of the, yeah, let's go, go. And I'm like, okay, well, here's what we said we were going to do.
Let's make sure we focus and stay in this lane first. If something comes up and it's not in this lane, we can talk about it. But my primary focus that I'm gonna say yes to 100% of the time is in this lane that gets us to where we said we want it to be.
Tim Vest (43:45.489)
Yeah.
Ash Patel (43:46.154)
Yeah, you know what's annoying about the two of you is both of your names are Tim V. So I can't even be like, Harry, Tim V. I got to say Tim Vest, Tim Vitale. That's I don't want to, I don't want to just call you Vitale or Vest. Let me try to be a little bit respectful. Well, listen, when we hang out in person, I'll have plenty of nicknames, but this is a
Tim Vitale (43:55.465)
That's why we go by our last names, man.
Tim Vest (43:56.017)
Vest, vest and vitale. There's, you're welcome to come up with some really derogatory nickname for both of us as well, that's fine.
Tim Vitale (44:05.557)
I'm out.
Tim Vest (44:10.097)
My wife has a list you can choose from.
Tim Vitale (44:14.078)
Hahaha.
Ash Patel (44:15.077)
This is a kid-friendly show. Do the two of you guys, do you guys have assistance?
Tim Vitale (44:20.668)
Tim Vest does.
Tim Vest (44:21.393)
I do.
Ash Patel (44:22.774)
Why don't you, Vitale, Tim Vitale,
Tim Vitale (44:25.809)
I don't know. Good question. I don't know. I really don't know.
Tim Vest (44:26.545)
Yeah, why don't you Tim Vitale?
Ash Patel (44:30.678)
Aren't there things that you should be offloading that you don't?
Tim Vitale (44:34.269)
Well, we brought in in-house accounting into our management company, and that's me delegating a lot of stuff. So I think when we get more accounting folks and when we get an asset manager, an operations manager, then I can delegate more stuff. But I don't have a lot of things in my personal life that I would need assistance, like transactional assistance with.
Ash Patel (44:58.238)
Let's allow me to push back for a second. Let's look at both your professional and personal life. If you did a time audit where you set a 55 minute timer on your phone, a recurring timer, and after those 55 minutes, you took the next five minutes to write down what you did those previous 55 minutes. If you did that for two days, waited a week, looked at it, do you think there's a lot of tasks that you could have offloaded?
Tim Vitale (45:26.705)
I don't know. I mean, I don't know because there's so many things that are, they're not transactional. Like they are not just repeated tasks. They are mental, like they take mental processing in decision making. And that's where I want to be is in the mental process and in the decision making. I don't want to be doing repetitive things. But you know, for one thing is like something that we have to do every year is K1s. That's a repetitive thing that I hate doing.
But I'm not going to hire an assistant to do that once a year. But when we hire an operations manager, here you do all that kind of stuff.
Tim Vest (46:01.233)
Yeah. I think I, I, I'm not going to pick on him, even though you want me to. Um, but, uh, I, what I would say is I, you're, you're a hundred percent right. Ash. Like if, if I look at like what I'm doing, if I sat down for 55 minutes and I, and I'll, I'll add one piece of that, let's say in that 55 minutes, I say, I want to accomplish this. Right. And then I do a time audit on that.
Ash Patel (46:01.902)
Tim Vest, what do you think about his answer?
Tim Vest (46:26.641)
I know that a good portion of that 55 minutes will me getting distracted and off track of what I'm actually trying to accomplish. Cause I get distracted all the time. My phone's blowing up. I get things come in. There's, there's a lot of things that I could hand off and say, you know, just email, for example, like, Hey, here you go. Here's my list of like the top 10 people, everything else put in a bucket and I'll get to it if these people contact me, let me know, right. And make sure I get back to them.
And then the one thing that I will say, like highly successful people, you know, you, you take the musks of the world and the gates and you know, you name it, those guys, you know, what you, what you'll see is what, one of the things you hear about them is those guys go from meeting to meeting the meeting. And when they walk into a meeting, they're immediately on point with whatever that topic is, they're ready to go. Right. And it's because they've tuned out all the other noise, right? Like they, they're literally maximizing their mental capacity, their brain space for those things.
And even down to the point where it's like, what, what, what's the joke about Zuckerberg, right? Or, or Steve Jobs is they always wear the same thing because they don't want to met that's a decision they won't remove from them from their lives. And, you know, down, down to that level. So I look at them and I'm like, if that's the level they're performing at, and those are the things they do to get there, then I could probably use a little bit of that myself. Um, so that's a long answer to say, yeah, you're absolutely right. I need to remove more things from my plate.
Ash Patel (47:50.11)
Yeah, it's a great example. Gentlemen, I want to thank both of you for your time. This has been an absolute pleasure for me. You guys are an amazing team. You put out great content. You're at the top of your game with multifamily investing. Please tell the best ever listeners how they can get a hold of you, how they can find out more about the making moves community.
Tim Vitale (48:11.517)
Best way is to join the Makin' Moves in Multifamily Facebook group. If you search it, you'll find us in there. You can post and message us and we're active in that group. If you need anything, let us know.
Ash Patel (48:23.902)
Yeah, again, thank you very much. Um, I know your events are very limited. Uh, I'll do my best to, uh, I'd love to just hang out with you guys and your group. What you've built is phenomenal. So again, thank you for being on the show today.
Tim Vitale (48:36.617)
Yeah, thanks for having us, Ash. Always a pleasure. Super fun to do another backup episode with you. And when we do our Porsche event again, you know we're gonna have you come talk about investing beyond multifamily.
Tim Vest (48:49.169)
Yeah.
Ash Patel (48:49.539)
Awesome Tim and Tim, thank you both again. Best ever listeners, thank you so much for joining us. If you enjoyed this episode, please leave us a five star review, share this podcast with someone you think can benefit from it. Also follow, subscribe, we'd have a best ever day. That's a wrap, man. You guys are awesome.
Tim Vitale (49:05.44)
Thanks.
