How Smart Investors Are Winning in 2025: Cash is King

You said I would never pay full market price for a deal. Absolutely. I don't hear that from everyone. Margin of safety. The way you should get into real estate at this point in time is through sweat equity. Capital reservation is very important. Cash is king. No matter how smart you are, how experienced you are, it is an extremely risky bet. Welcome back to the Roots podcast. I am your host Tyler Lingo along with my co-host Max Moore. And today we have on CB Chic. Uh, Sib recently made a bold pivot from leading real estate development projects as VP at Helix to helping families and business owners build lasting wealth. With a deep experience in multifamily, mixed use, and affordable housing, including public private partnerships, he now focuses on exit planning, tax strategy, and generational wealth preservation. He holds an MBA from Duke. He's a CFA charter holder and brings a rare blend of street smart investing and institutional financial chops. Whether structuring deals for optimizing portfolio, he spent his career bridging development and finance. He also serves as board treasurer for hope CDC advancing affordable senior housing across Indianapolis and has a global perspective shaped by travel service and entrepreneurship. Hopefully blew enough sunshine up your shorts for one day. Mhm. Welcome to the show, Tib. Such an honor and pleasure. Thanks for having me. Thanks for coming on. Uh, if I had $50,000 in my pocket, I own no real estate, and I wanted to break in, how should I deploy that? Uh, you know what? I would suggest given the current economic environment, given the current interest rate environment, cost structure, and uncertainty, hold on to that 50,000. Uh, however, the way you should get into uh real estate at this point in time is through sweat equity. Uh it could be either managing properties on your behalf or somebody else's behalf. Shadowing other successful developers that are 10 20 years ahead of where you want to be today. Uh cuz again capital uh preservation is very important. Cash is king. So you have to be you always have to be very strategic and very thoughtful about how you're deploying that capital. uh but more so at this point in time in our economic cycle and real estate cycle and what about this current moment in the uh real estate market cycle makes you believe that it'd be better to hold that cash start up for later? What are the factors at play there? Absolutely. Uh so again like uh the way the real estate cycle works is that when interest rates are low, when there's cap rate compression going on in the real estate market, uh when the tide is in your favor, you can do no wrong. Just some basic common sense will take you a long way. Mhm. And on the flip side, when the real estate cycle has turned at a point where interest rates are high, when your input costs are high, labor costs are high, there's economic uncertainty, instead of cap rate compression, there's cap rate expansion, which is leading to valuations either be either being uncertain or going down. At that point, no matter how smart you are, how experienced you are, uh it is an extremely risky bet. You can obviously still make money in real estate. There's always going to be pockets of opportunity uh but uh to prioritize risk mitigation and uh to maintain enough buff buffer it is critical that uh at different points in time in the cycle you have a different strategy and different approach. Uh you should still always remain in the market. It's never wise to take a step back if times are tough. You just pivot and rep prioritize what your methodology and focus is. And at this point in time, I think sweat equity for somebody that has 50,000 set aside would be the best approach. Again, joining a larger team uh in any capacity, whether it's um providing informal support, whether it's becoming becoming their employee or an independent contractor or just having a mentor mentee relationship. uh shadowing people that are already established, already have uh enough of a capital buffer, enough of a financial buffer that they're being able to ride out this real estate challenging time in the real estate market and some of the storms that are brewing. Uh cuz the worst thing that you could do is um destroy that capital cuz then like then you're completely out of the game. You want to stay in the game. You want to stay in the game for the long term. Uh, so risk mitigation at any point in your investment career is critical, but even more so at this point in time. So what I'm hearing for listeners and what I'm taking away is interest rates are higher. There's been cap rate expansion, not compression. And right now 50k could get just swept away quite easily because there's a lot of like wealth stagnation decline versus wealth creation. It's interesting because it it seems to go counter to the narrative time in the market versus timing the market. Yeah. How would you No, I completely agree with the the thesis that time in the market, but again, the time in the market doesn't necessarily have to be your financial capital. It can be your personal capital, your sweat equity. You want to stay in the market. Uh but again, more in a role without putting your money at risk. again whether it's other people's money you're coming in and and because again if you're diversifying the risk uh spreading that risk out into multiple parties again putting all instead of putting all your eggs in one basket uh I would say that allocate maybe part of that capital if you do want to uh put that capital at risk but more in a partnership setting more in a syndication setting uh any approach that helps you minimize your risk exposure at this stage age uh is advisable uh cuz the reality is that whenever you're doing a business venture, whenever you're doing a real estate venture, you are taking risk and so risk minimization and risk mitigation are important tools. Uh but that risk is high at certain points in the cycle. The risk is much lower in other points in the cycle. Uh my suggestion would be that uh at this point minimizing capital exposure for somebody that uh has 50K uh to play with uh would be the best strategy. But again uh without while still stressing that there's no substitute to time in the market. When I 50K I'm excited. Sib's telling me to stay on the sidelines a bit longer and maybe manage or or shadow someone which is great advice. when would I know it's the time like when do I jump in and either get in that syndication deal or buy the duplex or whatever? Absolutely. So studying the macro environment is key in that. Uh real estate is very unique from the perspective that uh while in the broader markets or broader asset classes uh the macro environment plays a big role, real estate can also be very micro. It can be it can literally vary from block to block. you can always find those needles in the haststack even in this market. Uh so again I I do want to caveat by saying that if you do find that amazing uh too good to be true deal go for it but it has to be fully vetted fully thought through the risk has to be fully quantified and analyzed. Uh going back to your original question again since the macro environment is so important to study. Some of the things that we're seeing right now is uh valuations are pretty high. Uh banks are kicking the can down the road. Extend and pretend is what they're say calling it because there's a lot of loans that are coming due. Banks are in the short term kind of kicking that can down the road. So there's not been a lot of price discovery in the real estate market over the last year or two. So the prices that are on people's books right now, the valuations that are on people's books and on banks as balance sheets, the risk is that if we do hit a contraction, if interest rates stay higher for longer, uh eventually uh there would be some kind of reckoning. Uh that's obviously all uh conjecture at this point in time. uh but I do want to say and obviously I want to caveat with the fact that uh not giving any advice not giving any financial advice because given the role as a as a private health manager we are constrained in how what advice we can give in public settings. So with that caveat uh the just speaking in general terms uh at this point in time uh be very cognizant of basically what the macro environment is what the high interest rate impact would be if they do stay high for longer. Uh you could see where banks are starting to get distressed. Uh investors are starting to get distressed and if a lot of that happens uh valuations might come down. There might distress sales as well and those are good opportunities then to jump in the market. But once that uh situation's fully baked in, there's still obviously one-off uh situations happening where sellers are getting distressed for various reasons and wanting to sell. But a lot of investors are holding on. A lot of sellers are holding on and waiting and seeing uh and hoping that things would turn around. But eventually obviously uh they might have to basically reconsider and that's obviously reminiscent of how 2008 through 2010 was as well obviously. Well, you told me that you've never bought a deal where the seller wasn't you've never bought a deal that you didn't have a good equity position in meaning getting it at a discount. I thought that was really interesting. You said I would never pay full market price for a deal. Absolutely. I don't hear that from everyone in real estate by the way. Yeah. Margin of safety. That's the golden rule in any form of investing and especially in real estate as well. Uh that is something that obviously uh all sorts of investors ranging from Warren Buffett uh to top real estate investors as well. Uh they ensure that in any deal uh they're maintaining a big margin of safety. Uh and that can come through different ways. Uh generally you don't want to pay market price for something. you want to pay below market price for something and that's what creates that initial buffer and that that's what creates immediate equity in the deal as well. If you buy something that is worth a million and you pay a million for it, you're not really creating immediate equity in it. But if you buy something for 800,000 that is worth a million, all of a sudden you have that margin of safety and you have immediate equity in it as well. Uh so that's what like uh savvy investors are shooting for. And obviously when times do get uh stressful like uh when the markets do get distressed those opportunities increase right now we're not seeing a lot of that cuz again there's a lot of extend and pretend going on but eventually when uh realization starts to hit for lenders and for investors uh those valuations can come down temporarily and then obviously those are good opportunities to get into the market as well. Uh but but I would again caveat by saying that since real estate really is very local, uh there's always going to be opportunities that come up. Again, any kind of distress situation, a death, a divorce, um bankruptcy, all of those things create opportunities where you can pick up something for below market price. And because again, there's a lot of uncertainty in in investing, there's a lot of uncertainty in development. uh if uh your performer that you put on your Excel spreadsheet never really materializes in the form that uh you had put it on the on paper. There's going to be assumptions that uh come in in reality come in above expectation. There's going to be things that are going to come in below expectation. Uh you might think that you're going to pick up a house uh for 70,000. You're going to rehab it, put in another 70,000 in it. Well, that 70,000 might end up being 100,000. So, without having a margin of safety and buffer up front, uh you end up taking risks. So, the more you can mitigate uncertainty by creating that initial margin of safety based on the original price that you're paying, uh the assumption that you have about how much it's going to cost to fix up, how long it's going to take to fix up, um all of those things, what you're going to be able to eventually sell it for. If you uh are conservative in all those estimates, uh having the costs be estimated at more than what you think they'll be and having the revenues or the sales price, the rents, all of them, at least for your performer, be below what you truly think them to be and even even after all of that, if the performer turns out to be positive, then I think you have ample margin of safety and that's a safe bet to do. I think right now uh I saw I can't remember where I saw this but America's uh equity is just going completely by the wayside. Like wealth is being demolished in in huge waves currently. So what I hear you saying is like you're getting into the games so that you're near because if you're not near I don't think you would find one of those deals to break in. So you got the 50k in your pocket plus experience plus you're close to absolutely really good depressed deals. Uh I think uh discipline savvy investors have discipline to find those. Yeah. Yeah. Very easy to make shift in Excel, right? To make that look like you want it to. We all we all can have cash flow in our Excel. Absolutely. Excel is an important tool, but the gut instinct that you develop through experience, I think that's gold. Yeah. So, and that's that can only be gained through personal experience and learning and listening and absorbing other people's experience. So that's why these kind of podcasts I think you guys talking to people who've already gained that experience is going to develop that gut instinct for you. Yeah. I I think you need to go before you you jump in because Oh, Sib said if I run the the proformer conservative, go buy it. Yeah, that's true. Uh but but you need to analyze a 100 deals. You need to walk 50 deals with your agent. You you need to actually get in the game and become as close to a market expert as you can. You won't be an expert till you buy because you learn everything after you do your first deal. Yeah. You actually have really know you have a semblance of knowledge before. But at least pretending as if you're you're going through it and getting in properties. That that's that's the step. Um I get a we get a lot of Zillow people. They have five searches on Zillow and they uh they're watching Grant Card. They're watching whatever all these guys on they're watching us on YouTube. Yeah. Yeah. They've spent five 10 years. They're they're not ever going to do it. Yeah. Yeah. And and so there is a level of like analyze up to a certain point and when you have that gut instinct, jump off and realize that it it you will learn a lot. Every deal I've done, I've learned a substantial amount to the point where like I actually say no to 99. 5% of things I see. I would say absolutely I can't I agree with you. I don't see tons of opport and look we're realtors. Look over here. We're sell I I don't see shiny oh this is amazing deal jump in and do this cuz I know oh like there's something that that could go off about that property or like the type of tenant you're going to get or you're not seeing this. But there is that 1% that's like, "Wow, if I don't get that deal, yeah, there's this duplex on College A. If I don't, I'm that's going to bother me in 10 years. I want to see what it's worth and be like, I should have bought that." Absolutely. That's that gut feeling. Absolutely. So, just affirming that. Yeah. No, you're spot on cuz I think what happens is that uh a lot of us do struggle with analysis paralysis. Uh some people are thinkers, some people are doers. You want to be the doer. Thinking is good, analyzing is good, but up till a certain point in time, constant movement is key. And you want to avoid analysis paralysis because then you're not going to do anything. Uh what does not kill you makes you stronger. So that's the that's the key right there that you want to be doing stuff. Uh each experience is going to make you stronger as long as you don't overextend yourself so much that it kills you and gets you out of the game in in terms of you losing all your capital. So that's why uh when uh the environment is riskier than on average, you want to be highly cautious of your own capital while still ensuring that you are involved in some capacity in the market. And I think that's where uh two fields that I feel are uh just amazing for people that are just starting out, don't have a lot of capital, real estate brokerage, property management. Those two things help you be right at the tip of the spear, see exactly what the action is. Helps you rub shoulders with investors, with buyers, with sellers. You're able to develop a network, relationships, connections. You're also able to talk to a lot of people that are buying and selling and learn from them, have conversations with them. So, real estate brokerage and property management, I think that's an amazing uh entry point for a lot of people that uh want to make money in real estate but don't have the capital yet. So, and especially in times like these that helps you stay involved and active uh in the market without putting your own capital at risk and again ensuring that uh you're getting stronger with each experience without um again uh being pushed out of the game because you don't have because you've lost all your capital. Yeah. The property management piece I want to stick on that you're forced to drive for dollars. You have to be out in the streets, right? So, you got to hustle. That's where you find all the opportunity. It's funny though, what I see most do is go work for a wholesaler and they start going straight to the pawn shop, straight to the the bottom uh of the barrel, as opposed to where you could just go and be the guy changing the locks for the property management company is going to serve you better than convincing grandma to sell their house to whoever and daisy chain deals up. Yeah. How did where's the perspective for you come from? Where's your housing start? Yeah. Yeah. So uh yeah sticking with the point of uh wholesale versus something like property management uh one thing that I wanted to uh share regarding that was that out of all the different asset classes that are out there real estate is the most tax friendly asset class. But the only way you're able to achieve that is if you're not flipping. Flipping is a good learning experience, but uh long-term wealth is generated by renting by buying and owning and renting it for the long term. And again, buying properties that are cash flowing and then you're like growing their value that way over the long run. Cuz when you're wholesaling and you're flipping, you are basically paying ordinary income tax on it, which is 37% for the highest bracket. uh when you buy and hold and rent it out, there's multiple tax benefits that come with it. Uh first of all, you get depreciation deductions that basically wipe out uh if not all than most of your income. So you're getting the cash flow but not really showing any income to go with that. Also is considered passive income. So you're not paying self-employment tax, which is again 15%. Uh so not only are you're not paying the federal income tax, you're not paying the self-employment tax. uh right there that is massive massive saving. Two people could have the same gross amount in wholesaling and being u again a landlord but the net amount is going to be drastically different. The net amount is going to be 40 50% higher after taxes for the landlord. And when you sell it uh even at that time there's multiple opportunities. Obviously ideally you don't want to sell it unless although I've sold plenty in my career uh and there's strategic reasons for that. uh but uh you want to minimize selling but when you do sell 1031 exchange is a great way of doing it you basically defer capital gains on it and even if you do end up taking capital gains that's again uh staggered between 0% 10% uh 0 15 and 20% and then if it's uh really uh above a certain income level then you have the net investment income tax as well which is 3. 8% but overall you'll be paying worst case 23. 8% 28% capital gains plus the net investment income tax at a sale uh on your gains and then obviously depreciation deduction is at 25%. But like long story short, that is still a much lower interest rate uh tax rate. Great. If your tenant pays their rent check, that's that's where your experience as a property manager uh comes into play. That's where you experience that gut that you develop about uh the right asset, the right tenant. Yeah. So, uh, and that's the old adage that in, uh, real estate investing, again, as a, uh, as a landlord, the money is made and lost in property management. The only thing I want to get to Max's question on your experience cuz we're going super high level heads. Hope people are hanging on. But the only thing I'll say about rentals is for a lot of the people that we've helped start, they bought maybe a single, we're like the entry to real estate for a lot of people, educational brokerage, right? Yeah, it's the whole shake. They bought a single family, then maybe a duplex, then a quad, then a small part. It's uh in my experience, and that's been my trajectory. It's when I see the equity and what I could if I sold them, I'm like, whoa, I could take I could take possibly multiple years off work. That's that's amazing. That's awesome. At age 30, when I see the net rental amount, I get depressed. Yeah. And that's everyone. And so it's like I feel like rentals are a slow way to build wealth yet a very powerful way to build wealth in the long run. Yeah. But sometimes I look at dollar per hour when I'm calling plumbers or whatever. Now I have a property manager to help with that. But even managing the manager dollar per hour, it's hard for me to justify some of the rental work to where sitting here right now, I had a conversation with Max on should I just sell off all these and because I could go to brokerage and make dude dude just make more money quicker. Yeah. With the the the types of phone calls and work. That's a real struggle I have. Yeah. Where I am at age 30 actually is how how long to hold these rentals, how to value that cash flow versus long-term wealth. And I think a lot of our clients and listeners are in that boat where like they've been told buy rentals, buy and hold. They get into it and they're like where's the money? Yeah. Yeah. Yeah. A lot of people feel that. Yeah. And uh and that's where again uh it is a cyclical industry. uh back in 2008 2010 when I got in uh values had crashed to a point at that time uh where that differential that ROI was still very healthy where uh you were generating quite a bit of cash flow from owning uh it's all a matter of your basis what you're buying the property for and what you're being able to rent it at. So that's your ROI right there and to your point the ROI is not there right now. Uh and it's a function of the cycle. Uh so in these moments yeah you got to be obviously uh cognizant and realistic about like what the best opportunities are at the at that point in time but the reality is that you are getting a huge haircut when you do sell again even if on paper pre-sale your gross gains on it are a certain amount once you've uh basically paid uh taxes on it. you're getting a especially because there will be ordinary income tax plus self-employment tax uh on top of that because it's not considered passive income unlike with rentals. So you need to be looking at it from a after tax perspective and again if the property has enough of fair market value that you're being able to gen uh get a big paycheck by selling it you could basically get a bigger loan, get your equity out through uh refinancing. Obviously, that's not working well right now because of high interest rates as well. But uh the the good thing about uh interest rates and about loans is that uh you marry the property and date the rate. So in the sense that like you can always even if you're locking in a higher interest rate right now, you can uh refinance later when rates come down, which uh again has been a slow process and that's the big challenge of our age right now that when are rates going to come down because by all expectations they were supposed to start coming down by now. But uh buying and owning for the long term and renting does become more and more of a viable option when uh when interest rates are lower. Hey, I want to interrupt this episode. We have no sponsors on this show. It's completely free. Just Max and I trying to teach people how to build wealth through real estate. However, we do have an ask for you. The best way that you can support us in growing is by sharing this to a like-minded individual. All right, that's it. Back to the rest of the episode. the comparison of if you looked at how much your active income is in being a broker with rental without rental. I don't think you would ever second guess the reason why you own rentals. Anyone who is a real estate agent should absolutely be buying real estate for themselves for thems federal income if they know how to do it right. Exactly. Exactly. You know. Yeah. And again for the audience, uh, if you're a broker, then from the IRS's perspective, you're considered real estate professional. And what that means is that any losses you have on your rental, so the depreciation deductions once they write off the rental income, any additional depreciation that you might have left, you can actually write off your brokerage income from that as well because those losses are considered active losses instead of passive losses. And that is something that is only available to real estate professionals. that is not available to the average Joe that might be a landlord. Well, and even in I did a I did my first cost segregation study with a cool uh program. I didn't I didn't go the expensive hire the accountant. I just did a software uh but it produced like a 20k um deduct deduction and applied that against my active income. Yeah. And and and I have people are telling me I'm writing six figure checks in taxes. I'm like you need to own more real estate. This is what unlocks that savings and deductions. So many absolutely absolutely and uh this new uh big beautiful bill that got passed uh bonus depreciation had come down to around 60% in 2025. They're bringing that back up to 100%. So what that means is that if you do do a cost segregation study, the personal property you can uh uh the personal property portion of the real estate that you buy uh again the HVAC system, the windows, the carpet, you can set aside that cost and expense 100% of it the first year and again as a real estate professional you can write off your other income against that as well and basically not have to pay any taxes in that situation. So those are very powerful benefits that the tax code provides only uh to real estate investing for the long term. Uh wholesaling and flipping I think again there's opportunities and times. Again I've I've done that in the past as well. You have to be opportunistic and uh uh practical about when the opportunity when the opportunity arises uh while still staying principled and disciplined about uh what really makes wealth long term. So, it's finding that balance and kind of adjusting the balance based on the economic situations of the time. But, uh, I can see where since property prices are so inflated right now, while the consumer is getting distressed to the point that you're not seeing the rent increases, uh, on a year-to-year basis that you were seeing a couple of years ago, the ROI right now definitely is pretty compressed on on these deals where what you can buy a property for versus what you can rent it for, you're not seeing like the the but it won't matter in 10 years. Everyone's going to say, "Oh, I should have bought in 2025." Right. It's always so Yeah. So with real estate, yeah, like the fact is that over time the dollar does weaken over time. You do have inflation over time, no matter what assets you buy and especially real estate bought in good locations that are going to grow, that are going to attract uh people over time that are going to uh get gentrified over time. All of those things lead to property value increasing over time. So as long as the macro factors uh you're being cognizant of that is this area going to grow over the uh coming years versus is it going to shrink over the coming years where is uh the job situation headed population growth headed in that particular zip code or that particular block that's going to make a lot of difference on how the value is going to be in the long term. M that was just a master class on how to use capital to build wealth in real estate and I I didn't expect it to be buy and hold and leverage the tax benefits but like it makes sense. Yeah. Yeah. It's it's definitely been the formula for a lot of people that have gotten very wealthy with real estate. Uh again it is uh there's no one panacia or panacea or um or uh just golden ticket. You got to be very obviously practical about where the opportunities are. There'll always be exceptions to the rule but like generally this has been the the tried and tested method of growth over time. So what makes a good deal then? What's the cash flow number rent to price ratio? I should again it's going to be very uh asset specific. Uh again single family just single family rental will go as basic as basic gets. Uh so I'll be uh candid that uh single family rentals is something that I've not done a lot of. I've generally done uh multif family acquisition rehabs uh groundup construction. Uh also uh the assets that I've been focused on have ranged and again it's b purely based on the opportunity. Uh I've done mixed use as well. I've done purely retail as well. Uh thankfully I've stayed away from office cuz that's obviously been challenging. Industrial was uh very hot at a point in time postco but now that's obviously uh had its challenges as well. Uh but uh but yeah, you got to see within the different asset classes uh which one is providing the best ROI and then focus on that. But if you want to stick within the single family rental space, uh yeah, you have to go with the comps of what's available and uh what's uh what's producing the the money. But I would encourage you guys to have a broader perspective. Uh cuz uh based on the location, based on the point in time, uh some asset classes uh perform much better than single family rentals. Uh single family rentals obviously are a good entry point, but you always have to have an eye for the future. You don't want to become like just with uh an expert in that one space being a real estate professional. Uh you want to be learning and growing in different fields. Yeah, we had an investor on our podcast that started with single family rentals, 1% rule, did the burr. He would put capital into it, you know, put 150 into it, refinance it for 200, rinse and repeat. Yeah, eventually he got up to 60 70 rentals and he was like, "Yeah, this is some decent cash flow." He 10:31 into a wedding venue. Now he's making 100k net. Yeah. A year or more than sorry, a million I think net from the wedding venue. So the point and the moral to the story is it's not always achievable for us to go buy the apartment building day one. Yeah. It's a stepping stone. It's a stepping stone. Yeah. It's a stepping stone, right, to build to build equity. Our position is that single family home you might even buy as your own primary home will be either your number one or number two largest store of wealth likely within that that first 10 years that you own it. I mean if you just look at it the people's home is usually if it's either their retirement account or their home is their largest store of wealth. So in both of our stories we wouldn't have had capital to get into investing without our own home. Yeah. It was the way we did sweat equity, right? It was the way we had opportunity. And I still believe that with that 50k or however much someone has. I I think you're always going to have a line item for housing. Turn the the liability, the rental into an asset, buy a home, do the sweat equity into it, and then maybe it's not, hey, I'm going to go flip. I'm going to go buy this investment property. It's I needed a home anyways, so let me turn my liability into an asset, right? and and have that compounding in building equity to then jump on these more opportunistic plays as you're speaking to. Yeah. No, absolutely. Uh I would say that like the 50k once you've deployed it, it's gone. So all the future opportunities obviously like you'll they'll all be for with sweat equity in that situation. So pretty quick you'll end up being in that same place, especially if your goal is to have real estate be the catalyst uh for exponential wealth building over time. Uh so that 50k in the bigger scheme of things unless uh you're being very strategic about it will not help you achieve that goal of making uh tons of wealth in a very short span of time in real estate. Uh Swed is the one that is going to always get you there. I'll give you a few examples again that uh wedding venue that you mentioned uh obviously it is uh with most people's existing liquid assets it's not possible for that to be their first investment but what they can do is uh with sweat equity find those kind of opportunities. It doesn't even have to be a triple net lease like a wedding venue or again an industrial building or again just a a strip center or something. It could be a self- storage and all of that. Finding uh those locations, those opportunities, those those assets, bringing them to the attention of investors, getting uh ownership interest based on your sweat equity in that deal and again using other people's money. Uh come again. Bird dog. That's what being the deal finder. Absolutely. Absolutely. So I think that uh uh if you are investing in that uh growth and that learning let me ask you this because I think everyone agrees we want to find really good deals. Where would you give me one ABCs one two where do I go find new deals? Yeah. Hey Sib. I'm looking on Loopnet every day. It's garbage. Yeah. Where do I find a good deal? Oh single single family multi family. I don't care. Where's the good deals? What would you do if you're restarting again and you had capital more than 50k serious capital you want to build wealth in real estate what would you where would you be looking for deals? Uh so for me I had gotten to a point where since uh uh again uh based on the background that I had and I had worked in corporate finance I had accumulated enough capital uh that my first few deals were slightly larger deals uh that put me on the map and I started in Bloomington and uh so so my route was atypical so I'll mention that but then I'll mention let's hear that's yeah so so uh so my route was again uh I was able to invest right off the bat in some uh larger multif family projects in Bloomington. And Bloomington is small enough that word spreads pretty fast. And then uh brokers were bringing uh uh again these deals, these uh uh deals that had not hit the market yet. They were bringing them to me and uh that allowed me or gave me the flexibility to sift through and find the good deals. Uh but for most people, I think that's where the property management and brokerage fields are so good because it really is a moving target about where the ne that next uh next good deal or that good opportunity or that good asset class is going to be. If you have your ear to the ground as a broker, you know where the opportunities are headed, where the investors are headed, where the interest is uh for for people uh for buyers. uh and that allows you to be ahead of the curve and uh preempt those opportunities. You might know of an investor who's a client of yours as a broker who's looking for XYZ type asset. Uh that would give you a good idea. Okay, these kind of assets are in demand or hot for investors. You find it, lock it in through an option or again with a PSA that is assignable uh sale purchase and sales agreement that is assignable. Uh get it that way and then again uh present it to investors. but find a deal that is too good to be true in terms of it's a great location. It is exactly what those investors were looking for based on your uh prior conversations with them as their broker and uh present it to them but ask for some sweat equity. And I've seen that happen quite a bit where you when you bring a deal to them and you're willing to do the work for them. A lot of these investors uh whether they're executives, business owners, uh physicians, they have their day jobs. They're looking for somebody who can find them amazing deals and run with it. Uh so so they're willing to share the ownership with them in those situations. My experience has been that that's a faster way of growing wealth. Uh cuz uh buying single family rentals uh slowly steadily over time uh again buying something improving the value in it so you can refinance and get your equity out and buy another property with that and go like that. uh after 2008 2010 after that crash there was a big window where that was a great opportunity. Now those deals are harder to find but obviously things do move in cycles. So that opportunity would come back again but for right now I feel that uh that opportunity is not as u easy to implement as uh a lot of friends were able to achieve it again in uh early 2010s. Uh so right now I feel that becoming a subject matter expert on the sweat equity side again figuring out helping these investors that have the money helping them find deals and then uh figuring out a way of sharing ownership in those deals helping them manage and run those deals as well. That's a faster way of wealth building within real estate. Uh but that again is assuming that that's your goal to uh to in a short span of time generate enough equity in various real estate deals. Uh but again if the goal is to slowly and steadily again um be a landlord and slowly build that cuz again uh not everybody is in the brokerage field. There's people who want to dabble in real estate but also uh are limited with their time. For them obviously that's harder to achieve. uh again being being the bird dog in those situations. So for them, yeah, that might make more sense. Find a good asset that is below market value, put the 50,000 down to acquire it, uh rehab it, rent it, and um again, slowly and steadily go from there. Well, I appreciate the perspective because one, it shows there's not one way to go about it. Absolutely. And I know a number of people that that did start the single family, they realized this is a lot of roofs, this is a lot of HVAC's I can break. let me consolidate that. Then they go get apartments. Then they next thing they know they're building industrial whatever. That's one route, right? Or it's like, hey, I have my two rentals and I'm I'm investing in, you know, some crypto, some stocks, some rentals. That's fine, too. And they have their chew, right? That's okay. But they still need to make a smart decision when they're buying when choosing to allocate that capital and however much is going to go into real estate. But what I think you just shared that I we haven't talked a lot about on this podcast that I am somewhat familiar with is this whole idea of like basically becoming a GP by being the dealfinder. Yeah. Like the two and 20 model in uh private equity is really powerful. I've wanted to do it, but for the listeners, what that essentially says is you put in 2% equity and you get 20% uh you put in 2% of the initial cash, you get 20% of the equity. That's how private equity and buying businesses works. These private equity shops, they use other people's monies and they put in a tiny bit of capital, sometimes no capital, 0% if they're the ones doing it. And then if the deal performs, they'll get 20% whatever percentage in the agreement. But if I found a great deal, hey Sib, uh you know, you're selling a let's just say, you know, god forbid you had a a a bad thing happen and you have to sell some sort of property super quick. You share it to me. Great. What I'm going to do is take it, try to negotiate for the best deal, and then bring on someone that has the capital to buy it, and maybe I'm putting in this much sweat equity, 2%, 1% even, maybe 0% even if I can negotiate it. Someone is bringing the 25% and then the bank's bringing the rest. Right. Absolutely. That is how you build explosive wealth. Absolutely. Easier said than done. But I mean that that's how all these guys in India that I've talked to that do apartments and that's how they all did it. Absolutely. Absolutely. That's uh the only way of uh growing your e wealth uh starting with the limited wealth growing it in a very short span of time. And again, there's no substitute to subject matter expertise in that. The only way somebody's going to give you uh a share of that property where they're putting in 100% of the equity is because they are deriving that value from you that they otherwise would not have. So becoming a that subject matter expert that you know all these neighborhoods that you know where the what the economics of these neighborhoods are what asset classes are performing well uh where the trends are headed where the puck is today and where it's going to be again is multif family going to be performing very well or is it getting overbuilt and there's another asset class that's going to do well. Uh same with neighborhoods. Is this neighborhood going to be growing because there's an employer going in there or the city's investing this money in there? all those things. If you have know those things like the back of your hand and you can speak to it when you're meeting and networking with investors, they'll know that this is the guy that like knows what he's talking about is going to help me make money and obviously if he's going to make money in the process as well, then like I'm all about it. Yeah. I mean, there's names we could mention which I'm not sure if we need to. um just with BAM Capital and Helix that that's what those guys essentially did, but they didn't do it when interest rates were high and there was cap rate expansion. They did it right before, right as interest rates were low and there was cap rate compression and all of a sudden their one to 2% equity they put in to these apartments or properties, whatever it is, just exploded because they appreciated so much. Absolutely. Through the marketplace, these things are all worth double. So I mean it's still the same fundamentals for I mean the people listening. still buy good real estate, wait, but you know uh and history does tend to repeat itself. So the good thing is that you guys are studying the past. You guys are studying what works, what does not work and then again staying in the market and be ready for when the opportunity arrives because you've already studied it. You understand how these things function uh how the real estate market, how the cycle, uh how those things work and uh when those opportunities are ready, you guys are ready to pounce. And I think in that fundamental, it's the relationships too, right? To be able to get to those feel like that matters more than anything else. Yeah. Yeah. Absolutely. Right. Like how did you get into the Bloomington game? I'm assuming there was some relationships. Yeah. And Bloomington. Yeah. And Bloomington is small enough that you are able to obviously connect with people easier but at a more macro level like the same principles apply in India as well. Uh relationships, networking, talking to people, adding value to people. uh I think that is the best way to uh develop those long-term trusting relationships. Uh so yeah, put yourselves in those situations where you are able to interact with high netw worth individuals that are investing uh that are interested in in investing in real estate. Uh have conversations with them like show your value to them that uh you know what you're talking about regarding the real estate game. uh and uh when opportunities arise try to understand what kind of properties they're interested in investing in what kind of uh return that they're looking for uh based uh armed with that knowledge then when those opportunities arise like and obviously be on the lookout for those opportunities uh and when they arise like I think it'll be it'll be an easy easier sell to those investors but uh but that that' be my suggestion that long term um eventually obviously when you've built enough capital then you basically uh flip the role. Then you're the asset allocator that's then putting the money in those different deals. You set back my phone. You just enjoy and like send me the deal. People are bringing deals to to you at that time, but at this point, you're the person that needs to be finding and structuring those deals and bringing them to people and keeping a slice of equity in those deals. You got to hit the the bootstrap, get on the ground and and absolutely build your way up, you know, through the the education. Well, S, we loved having you on. Before we let you go, we have three questions to wrap up the episode. Kick it to Tyler first. Yeah. What is um a habit that has changed your life? I think uh I have gone from uh being a soloreneur uh where most of the deals that I was doing uh was basically just me and I uh learned the value of teams and partnerships and relationships. Uh so uh I pivoted from my friendships being just purely uh friendships to them evolving into a more holistic uh relationship where again we're helping each other out like grow in each other's businesses giving each other advice as well. Uh so I think that habit of being proactive about uh seeing like what my friends around me what their needs are what they're working on and proactively giving suggestions, advice, input uh being a valuable resource to them. I think it's uh it's very synergistic in the sense that uh well it's also more of a kingdom based paradigm. Absolutely. It's not just me, my wealth and my family. It's actually we're there's bigger important things. Absolutely. Yeah. And that that abundance mentality I think that like just grows the pie for everybody then yeah that's a huge principle that if you can give up your own you can sacrifice your own and give back to others like it it comes back tenfold it's very fulfilling absolutely what's an area of your life you're focused on growing uh man right now it's uh so I have a 10-month old baby so being a father I think that is like one of the most important responsibilities and one of the most fun experiences as Well, uh, so yeah, that's a big focus for me right now that, uh, be becoming the best dad I can be. What are some challenges that you're facing? I have a 9month-old, so right there with you. Yeah. Uh, I do feel, uh, lucky and blessed that, uh, again, I've got a very supportive spouse, so she makes that very uh, very manageable, but uh, uh, but obviously being more cognizant of finding that balance and uh, uh, because we have obviously all these competing goals. we have limited time but we have uh unlimited uh requirements that we're getting pulled into. So prioritizing and uh at the end of the day just taking a step back and realizing okay this is the amount of hours that I have this is what's important for me and then just uh just uh not doing the things that like don't fall in that uh that top priority list. Yeah, we have one more question for you before I ask uh the question. Um, I do want to mention to everyone that you're coming on our next real estate master class on August 7th with Ethan Fernab. Just it's going to be amazing chopping it up with you guys. And I think we'll talk a lot we'll talk about real estate, but I think we're talk a lot about uh faith and life and um important meaningful work within real estate and just building relationships in that. Yeah. I know Ethan's a role model for me in how to truly find that balance uh between work and faith and having the concept of work as ministry. I think he does it better than anybody I've seen. So just just uh an amazing guy to talk to and learn from. No, absolutely. He's he's changed my paradigm too. And to what what's at the top of the hierarchy is it you know and he he really exemplifies what if you put redemptive uh you know seeking at the top and uh it's uh it's been cool to get to know him more so people can come out and meet you and meet Ethan. But super important question. What is your favorite uh date night spot in Indianapolis right now? So my wife and I, we were in uh Bloom in Indie downtown for around 7 8 years. Uh really enjoyed that as well. Vita used to be our spot over there. Uh with the baby, we moved to Westfield recently and Mterrey in Caramel downtown. That's a good one as well. So that's our spot these days. So that's where we can be found. Man, their ramen noodles are amazing. And they're a twist on ramen noodles cuz they're actually dry ramen. So uh so something different but uh delicious. So, I would highly recommend you guys try it. There we go. We got to go check it out. Yeah. Well, thanks for coming on the show. Where can people find you, guys? Uh, so I've taken a step back from real estate uh pivoted to went from being an asset deployer to an asset allocator. So, I'm a private wealth adviser now uh helping investors uh with uh just uh their holistic uh investing needs. So if you want all this knowledge bottled up and then helping you deploy capital, you can have him on drip. I mean that's that's incredible. I don't know who doesn't need to sign up. Well, this has been another episode of the Roots Podcast. 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