JF1813: Growing A Brokerage While Working Full Time & Commercial Real Estate Investing with Tyler Chesser
We get to hear a personal story of a person who got their real estate license for some extra cash. After making that extra cash, Tyler didn’t stop there, he decided to take it full time and is still currently in that role. Hear how he grew his business to being full time, and continues to scale in the commercial real estate investing world. If you enjoyed today’s episode remember to subscribe in iTunes and leave us a review!
Best Ever Tweet:
“In my opinion if someone is getting into multifamily, they should start smaller” – Tyler Chesser
Tyler Chesser Real Estate Background:
- A CRE broker, personal development thought leader, and multifamily investor
- Total transactions over $50 Million in real estate investment deals
- Based in Louisville, KY
- Say hi to him at https://tylerchesser.com/
- Best Ever Book: Ben Franklin’s Biography
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Theo Hicks: Hi, Best Ever listeners. Welcome to the best real estate investing advice ever show. I am Theo Hicks, and I’ll be hosting the podcast today. I am with today’s guest, Tyler Chesser. Tyler, how are you doing today?
Tyler Chesser: Theo, it’s great to be with you, sir. I’m doing great. How about yourself?
Theo Hicks: I am doing great as well, I’m looking forward to our conversation. A little bit about Tyler before we jump into our conversation – he is a commercial real estate broker, personal development thought leader and multifamily investor. He’s done a total transaction amount of over 50 million dollars in real estate investment deals. He’s based in Louisville, Kentucky, and to learn more about him and to say hi to him, you can visit his website at TylerChesser.com.
Before we dive into it, Tyler, can you give us a little bit more about your background and what you’re focused on now?
Tyler Chesser: Sure. When I got started in my professional career, I was doing international marketing for a Fortune 500 firm. It was a great way to get started, and really the reason why I got into that is because I was always fascinated with decision-making behind consumer behavior. As I got into that, I grew a lot in that business; however, I recognized so many limitations in terms of being in that corporate environment, and I started to recognize that my corporate climb was going to be a very long and slow one… So I started to sort of identify what are some other options for me in terms of how I can maybe do some timeline hopping and expand my capabilities from a financial perspective, as well as just choice perspective in my life.
Long story short, I ended up getting into real estate, and I got my broker’s license about six years ago… And started selling property. I kind of built my business on a one-by-one basis, and got referred, and grew my business through referral, and started to sell multifamily properties, as well as retail office, land, and some industrial as well. So really I’ve built my business from there…
And then I also invested in myself, whether it was personal development or investing in properties myself, multifamily properties, and then also investing in my own personal and professional development, whether it’s CCIM, or coaching, or what have you… But that’s really kind of been my path, so to speak, for the past 10-11 years or so.
Theo Hicks: When you initially got your broker’s license, were you still working a full-time corporate job?
Tyler Chesser: I was, yeah. And it’s funny, because when I got my license I just decided “You know what, I’m gonna sell houses on the side.” I had purchased a house a couple years before that, and I decided maybe I can do that, and make some extra cash… And I did that, and I actually doubled my income within that first year… So I got to a point where I said “Well, okay, now I’ve got a choice to make.” I felt like I had a pretty good job, but at the same time I felt like I was on a path that maybe had some more opportunities for growth, so I decided to take the plunge there and had some other opportunities that gave me some more credibility, and also gave me some more stability in that business, so I decided to jump in full-time after about a year of doing it on the side.
Theo Hicks: That’s interesting, because I know a lot of people that are interested in real estate investing, that a big thing is quitting your full-time job and doing real estate full-time… Would you wanna walk us through how you were able to double your income in that first year by not necessarily focusing on real estate full-time? How were you able to balance your full-time job and growing such a large business selling real estate?
Tyler Chesser: It was definitely not easy. I had to get up early, I had to work late, I had to spend nights and weekends either showing property or gaining my understanding in my business… So I would wake up at 4 AM before I had to be in at work at my main job, at 9 AM. So I’d be up at 4 and kind of working on at least either my understanding — I actually had a coach at the time who was helping me get acclimated in the real estate business, and so I would do a lot of the things that he directed me towards doing, and spending my time on those various things… So it took a lot, really.
Honestly, I set a goal for myself of a date that I wanted to become full-time in the business, and I exceeded that and I was able to make that happen a little bit earlier than I expected… But it was certainly a sacrifice to be able to build my clientele from a one-on-one perspective. I would show properties to one client on a Tuesday evening, and the next day we’d be making offers, and by the end of that weekend we’re doing inspections, and those kinds of things… So it was a big time-sacrifice, but that’s really kind of the behind the scenes of what I did.
Theo Hicks: That’s interesting. Anyone who’s listening – it sounds like it is possible to go from not really being involved in real estate at all, to being able to replace that full-time income in a year, if you hustle for it.
So right now you said you work with some multifamily investors, and I personally am trying to get into the multifamily realm… This is more of a personal question, but I know a lot of people listening are, as well… So what’s your decision-making process when someone comes to you and they’re interested in buying multifamily? They haven’t done a deal before. What types of things do you look for in that individual to decide whether you’re going to work with them or whether you’re going to pass on working with them?
Tyler Chesser: Well, first of all, I think a lot of people — it’s kind of a hot topic for the day for people to say “Hey, I think you should start big and go big.” A lot of people do that, in some ways, and I really don’t think it’s the best idea. In my opinion, I do recommend if people are getting into multifamily to kind of start small or to learn, because I know personally my first multifamily deal, when I did it, I made every mistake in the book when I invested in my first deal… And it was certainly painful, but I wasn’t put out of the game, because it wasn’t a massive deal. But I think it’s worthwhile to start small. Then once you kind of build your systems, you build your team, you build your understanding, then go larger, because certainly you do have economies of scale that are extremely valuable. So that’s what I would say first as far as my recommendation for people who are getting into that business.
But as far as how I evaluate potential clients in that space, I evaluate people who — are they willing to be realistic, are they willing to learn? Are they willing to understand and realize how challenging it can be at times, but also what it really takes? What kind of cash do you have on hand, what type of financing discussions have you had? What type of properties are you looking at, specifically yourself, and where do you wanna be and what are your goals? Goals are extremely important. I think if you have somebody who has clarity and someone who’s willing to achieve clarity through consultation with myself, or maybe someone on my team – I think those are things that I look for for somebody who’s getting started in multifamily.
Theo Hicks: That’s solid advice. Are you typically helping people sell their properties, or are you also helping people find multifamily deals as well?
Tyler Chesser: We do both. We work with multifamily investors from all over the United States, as well as internationally. Acquire and dispose of multifamily, as well as other commercial real estate investment assets in Kentucky and Indiana… And primarily in the Louisville submarket, surrounding here, so you’ve got Southern Indiana, as well as Louisville proper, and we’ve got 13 surrounding counties.
So that’s where we’re most knowledgeable and where we find most of our deals, but we do work with folks who are acquiring and building their portfolio, as well as people who maybe they’re downsizing or they’re expanding their portfolio through exchanges… So we’re really kind of the consultants for our clients in whatever way, and so we have discussions with our clients, whether or not they’re making moves… But we certainly can make those deals happen whether it is an on market or off market transaction. In fact, over the past few years we’ve done a tremendous amount of off market transactions; it is all about knowing what’s going on on the street and what conversations are being had on a daily basis, and even right at this moment.
There’s so many different things… It’s all about relationships and it’s all about what sort of market knowledge you have, and that’s one thing that we’ve been blessed to be able to obtain over the years – people who’ve trusted us, and trusted us with information on things that they’re thinking of doing, and us kind of coming in and helping them expand their portfolio, or resize it in whatever way that makes most sense for them and their outcome and their goals.
Theo Hicks: Do you mind walking us through high-level what your strategies are for generating these off market leads? Or even on market leads. I guess just deals in general, specifically multifamily, and then maybe give us a specific example of one of the better deals that you’ve found and sold to a client.
Tyler Chesser: Sure. We’re a part of many different organizations – real estate networking organizations – and you’d be very surprised to know how many deals are done just by having a conversation, either over a cup of coffee, lunch, or over a drink at a bar. People are saying “You know, I would consider doing X, Y and Z”, and send a few text messages, and then the next thing you know, you’ve got a deal done. So it’s really interesting how that happens, but it is really all about relationships when it comes to off market.
When it comes to on market, certainly we’re sourcing deals from many different locations, whether it’s our local platform – we utilize Catylist – or whether it’s a national platform such as LoopNet, or otherwise… Really, that’s one of the big challenges in the broker space – it’s such a fragmented business, and there’s so many different platforms where people are marketing deals. So it makes it challenging, but we have our eyes really everywhere, and we’ve got auto-searches set up, and we have filters, and all these different things for all of our clients… So when we have discussions, we have large databases that we’re inputting information and we’re keeping our clients abreast of opportunities very frequently, and informing them of what types of opportunities are becoming available on or off market.
At this point in the market people have to move extremely quickly, so we try our best to communicate that, that we’ve gotta be really acting quickly… But it’s all about really over-communication; that’s one of our core values. If we’re not certain that someone has received a piece of information, whatever way we need to get in touch with them, whether it’s a call, or a text, or even a Zoom call like we’re doing right now – we do a lot of that, and we try to get that information out.
It is somewhat of a fragmented process, but we do our very best to get the information, whether it is something that is nationally or globally marketed, or something that is written on the back of a napkin in your local bar.
Theo Hicks: And do you mind giving us a specific example of the most recent off market deal, how you found it, and the story behind that?
Tyler Chesser: Sure, absolutely. This morning, actually right before I got on this call with you, we had a group that gave me a call and said “Hey, we’ve got this property, it’s 36 units, and we’d like to place it. Here’s the details on it.” They sent us over a commission agreement; they’d like to get it done off market. There’s some reasons why they don’t wanna go to market, and it really has to do with their operations and some of the details there…
But it was really more of a call, and they said “Hey look, do you have anyone who’s interested in this?” It was a 36-unit deal, and it’s got an assumable note and really attractive terms; it’s a Freddie Mac assumable deal. That’s a great example of “This is a pure phone call.” “Hey, I know you’ve done some deals for us before, and we know that you have an extensive network, so we’d love to find that out.” It’s a great example, but we also have pitch sessions with other brokers and investors, where people say “I’ve got this property, I consider letting it go, but I’d like to 1031 exchange into this type of asset. Here’s my criteria. Do you have anyone who’s a taker?” And we do that stuff every single week as well.
You name it, it happens extremely frequently. The most recent example was just right before this call; we got a call exactly on “Here’s the details, here’s where it is, here’s the rent roll, here’s the T-12. Can you get it done? Yes? No? Alright, perfect. Let’s do it.”
Theo Hicks: Thank you for sharing that example. Last question before we get to the money question… Since you are obviously a broker, but you also invest yourself, what are your thoughts on investors going out and finding deals themselves, versus just using a broker to find the deals for them?
Tyler Chesser: Well, I certainly think everyone has their own strategy, and some strategies work better than others for some individuals… But I think in our business, since it is so fragmented and it’s so — you have a really huge requirement to have deep and extensive relationships… For the most part, in most markets, your brokers are gonna be really the gatekeepers on that, so I think I would probably recommend for the most of your listeners to be working through brokers, because that’s where they’re gonna find the best opportunities. Those calls, like I just got right before the phone call here with you today, doesn’t normally happen for the most part for your average individual investor… So these are kind of deal sources through most of your markets, and I think most markets have probably your top five, six brokers who are gonna really have a lot of that information.
So I would recommend that you consider to work through a broker and try to build loyalty, build a relationship with some of your more active brokers, because they’re really gonna be a gold mine for you.
Theo Hicks: Alright, Tyler, what is your best real estate investing advice ever?
Tyler Chesser: My best ever investing advice is really to build relationships. Build long-term relationships and focus on how you can add value to the other person… Because it’s a people business, whether or not we like it. It’s certainly properties, and numbers, and cashflow, and IRR, and cash-on-cash, but at the end of the day it’s a people business, and how can you help someone else achieve their ends is really how you’re gonna be able to achieve your own ends.
Theo Hicks: Alright, are you ready for the Best Ever Lightning Round?
Tyler Chesser: Let’s do it!
Theo Hicks: Alright. First, a quick word from our sponsor.
Theo Hicks: Alright Tyler, what’s the best ever book you’ve recently read?
Tyler Chesser: Well, I’m a huge reader, and I would say recently my favorite book that I’ve read is Ben Franklin’s biography by Walter Isaacson. I loved it.
Theo Hicks: If your business collapsed today, what would you do next?
Tyler Chesser: I think if my business collapsed I would be an author, because I enjoy writing, and like I said, I love reading… So maybe I can put something out there of value. I think that’s what I would do.
Theo Hicks: Have you written a book yet?
Tyler Chesser: I’m in the process right now, actually.
Theo Hicks: Nice. We’ve released three books; if you need tips, feel free to reach out.
Tyler Chesser: I would love tips. I love that, thank you.
Theo Hicks: How would you start over if you had little or no capital?
Tyler Chesser: If I started over with little or no capital, I would focus on one relationship at a time, and what I can do to kind of sweat-equity get my foot in the door.
Theo Hicks: What is the worst deal that you’ve done?
Tyler Chesser: The worst deal I’ve ever done is I’ve bought an eightplex when I got started in my investing business, and I have made every single mistake. The financing that I put on the deal was terrible… I managed it myself for a while, which was not a good idea, with all the other things I had going on… And I made a lot of the mistakes on the contracting and the rehab, and all that. But I learned very valuable lessons, so I don’t regret it, but I made many, many mistakes.
Theo Hicks: What about the best deal you’ve ever done?
Tyler Chesser: Currently, I’m under acquisition for an apartment building, and I think it’s the best ever deal that I’ve ever done, because we’re getting basically the entire rehab budget that we’ve put together to be contributed by the seller on this deal… So we’re really excited about that. I feel like it’s a home run, especially in a tight market. So I think that’s the best deal I’ve ever done.
Theo Hicks: How did that happen?
Tyler Chesser: Well, it was kind of a distressed situation. The owner actually passed away, and it’s an estate sale… So there’s a lot of distressed qualities of the asset, and we were able to utilize a lot of that to our advantage. And certainly, I think that our negotiation was relevant, because there were an overwhelming amount of challenges… But with what we have as far as our partnership and the capabilities that we have, we think that we’re able to accomplish a little bit better cost of renovation than others would be, through an internal rehab team, and such. So it makes sense for the seller to contribute in that manner, but it also makes it a heck of a deal for us.
Theo Hicks: And then lastly, what’s the best ever place to reach you?
Tyler Chesser: The best ever place to reach me would be on my website, TylerChesser.com. Then you can also subscribe there. If you go to TylerChesser.com/subscribe, that’s the best place. We do a connection newsletter, and it’s a great way to stay in touch… But also on Instagram at @thetylerchesser, as well as Twitter at @thetylerchesser.
Theo Hicks: We will have Tyler’s website in the show notes. Well, Tyler, I appreciate you coming on and talking with us today. Just to quickly summarize what we discussed – first, you told us how you were able to double your income in your first year selling houses on the side, which is an amazing feat. I guess the reasons why you were able to do that was just you hustled; you got up early, stayed up late, worked weekends, and had a coach to guide you along the way.
You also talked about the importance of having a quit date in mind, when you wanted to go full-time and how you were actually able to achieve that much sooner than you expected.
You also gave advice to anyone who’s just getting into real estate, to start smaller and to kind of learn the process, set up systems, build your team, understand before you go big… And once you’re ready to actually invest in multifamily, from a broker’s perspective, they’re gonna want to know “Are you realistic? Are you willing to learn? What upfront work have you put in already? What kind of cash do you have on hand? Have you talked to lenders? What kind of properties are you looking for? What are your goals?”
We talked about how you are able to find your deals off market – just through relationships. You gave us an example of how you found a deal this morning, from someone reaching out to you. And from an on market perspective, just kind of going on those local and national online platforms where people are posting their deals.
We also talked about whether you think people should use a broker or go about it themselves – your advice was since the brokers are most likely gonna have those deep relationships, they’re gonna be kind of the gatekeepers in the market, so your advice is to work through those brokers.
Then on a similar note, your best ever advice was to focus on building those long-term relationships with others, and more importantly – and I totally agree with this – is focusing on how you can actually add value to the other person, instead of just expecting them to work with you without really giving anything to them back.
I appreciate you coming on the show today and speaking with us, Tyler. Thank you to everyone who’s listening. Have a best ever day, and we’ll talk to you soon!
Tyler Chesser: Thank you so much.