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Aug 23, 2018

Mortgage note investing is not as sexy a topic as multifamily investments or fix and flips, but it’s one of the most lucrative real estate investing options Tyler Sheff has discovered. In this conversation, Tyler shares a wealth of insight from his long and multi-faceted career as a real estate investor. You’ll hear how Tyler got started doing fix and flips, transitioned to investing in multifamily buildings, and has built a mortgage note portfolio of over 200 notes.

But you’ll also hear a thought-provoking discussion of why he and Jonathan both believe that a market correction is on the way, and what will happen to the many investors out there who are over leveraging investments beyond what the numbers dictate when that time comes. It’s a sobering reality that you’ll be able to learn from, so be sure you listen to this episode.

Do a good job telling people what you need and they will sometimes provide it

Drawing from his experience as a police officer, Tyler Sheff learned very quickly that just as in police work, the relational part of every real estate deal is the most important component. It doesn’t matter if he’s working to secure a multifamily apartment building or to take over a non-performing mortgage note, investing is a relationship business.

Successfully finding the money to fund real estate deals is rooted in building great relationships as well. Tyler discovered that if he became skilled at sharing his projects with people, even if they didn’t know anything about real estate investing or mortgage note investing, he’d find potential investors who only needed to understand what he was doing to become interested in partnering with him. You can do the same thing - but only if you’re committed to learning the people skills that make for good investing relationships.

Build a team of experts to make up for your lack of expertise

One of the catch-22 issues in the multifamily investment space is that brokers and investors alike are hesitant to give new syndicators or sponsors a chance because they lack experience. But you’ve got to have an opportunity to get experience at some point, right? How does it happen?

In this conversation, Tyler provides a couple of examples of how he was able to gather a team of people who had expertise and experience in particular aspects of the real estate investing process and then leverage that expertise in a way that made his deals attractive to investors and brokers. In his words, he was a “team builder” and that became the skill others could trust. You can hear more of Tyler’s intriguing story on this episode of The Real Estate Launchpad.

If you educate, you can dominate: Tyler Sheff’s approach to meeting potential investors

It’s always difficult to find investors, even for most seasoned syndicators or mortgage note investors. When Tyler Sheff first began exploring multifamily investing he took a novel approach to building relationships with would-be investors. He invited people to join him to play a board game. No joke.

How did this turn into investor relationships? Because the board game was called “Cash Flow 101,” an educational tool created by Robert Kiyosaki. As people who were already interested in real estate were educated about how things worked through playing the game, and as they got to know Tyler and became familiar with his investment opportunities, it was a natural relationship-building environment. Learn more about Tyler’s innovative approaches to real estate investing, on this episode.

As a multifamily owner, think of yourself as a service provider, not a landlord

Tyler Sheff can’t remember ever having to evict a person from one of his multifamily apartments. That fact makes it sound like Tyler has a magic touch, but he says it’s nothing more than the application of simple kindness and decency toward other people that makes the difference. He’s intentional about meeting every tenant so they know he is a person, not an ogre. But he does more than meet them, he listens to them. When it comes time to invest in “value adds” to the properties where they live, he knows exactly what to do because his customers (his tenants) have already told him what they need.

Tyler shares a number of stories about how he’s done this and explains the long-lasting results that have come from seeing himself as a service provider instead of a landlord, so be sure you make the time to listen.

In This Episode Tyler Sheff says...

  • [1:55] The 30 second version of who Tyler is - house flipper to multifamily investor
  • [3:59] A primer on how buy and hold real estate and multifamily solved Tyler’s tax issues
  • [7:45] A true zero-money-down deal Tyler was able to pull off
  • [10:55] How can you promote your deals when you have no track record?
  • [13:31] Tyler’s initial method for attracting investors to his deals - a board game
  • [16:24] Setting his sights for bigger deals - apartment buildings
  • [22:50] Using his experience as a police officer to meet and help his tenants
  • [31:26] Note investing: an amazing new opportunity for Tyler, and how he got started
  • [37:14] Measuring the risk on buying a non-performing note
  • [43:01] Why Tyler believes there are good deals available all the time
  • [47:40] How can good multifamily deals be found in a difficult market?
  • [50:49] The danger of working with sponsors who live off of acquisition fees with no vested interest
  • [53:01] Harbingers to a downturn in the market: What may be coming
  • [58:41]

Resources Mentioned In The Episode

Connect with Tyler Sheff

Connect With Jonathan and Real Estate Launchpad

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