Converting Apartments to Short-Term Rentals for 3x the Revenue with Tim Bratz

Summary and Highlights

👤 About Tim Bratz

Tim Bratz is the Founder and CEO of Legacy Wealth Holdings, a commercial real estate investment firm headquartered in Charleston, South Carolina, with a portfolio of roughly 2,800 rental units valued at over $350 million. He’s transacted on more than 6,000 doors across his career, scaling from single-family flips to a multifamily portfolio that once peaked near 5,000 units before Tim intentionally trimmed it down for quality over size.

Tim is also the founder of Smart Management, an all-in-one AI-enabled property management platform built to unify leasing, accounting, communication, maintenance, and reporting — for residential, commercial, and short-term rental portfolios — into a single system. He also runs the Legacy Family Mastermind, coaching entrepreneurs on scaling into multifamily real estate, and hosts his own show, The Legacy Podcast.

Originally from Cleveland, Ohio, Tim got his start as a real estate broker in New York City before relocating to Charleston in 2008 — right as the housing market collapsed. With no lender willing to bet on an unproven 23-year-old, he financed his first property with a credit card balance transfer check. That resourcefulness became the throughline of everything he’s built since.

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🏢 From Broker to 6,000 Doors: The Long Game

Tim’s path into real estate started as a commercial broker in New York, closing leases for landlords who were pocketing millions off deals he’d spend hours negotiating on their behalf. That imbalance is what pushed him to the ownership side.

After moving to Charleston in the middle of the 2008 crash, he found his first deal — a $25,000 listing he negotiated down to $14,000, funded with a $15,000 credit limit increase on a Mastercard. He renovated it himself, sold it 100 days later, and netted $13,000. He just kept repeating that formula.

By 2012, Tim moved into multifamily, drawn to the efficiency of managing one roof and one utility bill instead of eight. Partnerships, flips, and a turnkey rental business followed, before he made a deliberate pivot in 2017: stop flipping single-family houses entirely and go all-in on acquiring apartments. That decision compounded into thousands of units acquired across 2018–2021, before rates, insurance costs, and labor expenses forced a multi-year period of defense — trimming the portfolio down to today’s roughly 2,800 units, still worth over $350 million.

For a related look at what disciplined, intentional scaling looks like on the STR side, check out how Fouad Bazzi and Jacinda Neustel built an 82-property portfolio across six markets using the same “growth isn’t just more doors” philosophy Tim describes.

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📉 Why Commercial Real Estate Is Taking Arrows Right Now

Tim doesn’t sugarcoat the last few years. Multifamily is valued on the income approach — income minus expenses equals net operating income — and while rents stayed largely flat from 2022 through 2026, expenses climbed dramatically: property taxes up over 25%, insurance premiums doubling or tripling in coastal markets, materials up over 40%, energy up 50%.

Add in variable-rate loans hitting the steepest Fed rate hikes in history, and a lot of operators found themselves squeezed with no exit strategy — unable to sell, unable to refinance, forced to just hold on and cash flow.

Tim’s advice for anyone navigating instability, whether in commercial real estate or short-term rentals: control the controllables. He restructured investor returns, negotiated seller financing, and avoided cementing losses on properties that were still cash-flow neutral, even when they weren’t performing like they used to. The parallel to STR revenue management is direct — operators focused on amenity and property-level upgrades that move revenue are applying the same discipline: control what you can influence, hold steady through what you can’t.

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🏠 The Multifamily-to-STR Conversion Play

This is the heart of the episode, and it’s a strategy most short-term rental operators have never considered from this angle.

At Legacy Wealth’s apartment complexes, Tim typically converts about 5% of units at any given property into furnished, short-term-licensed rentals — the ceiling most lenders will allow before it creates financing complications from over-concentrating revenue in a single stream. The tiered approach looks like this:

• Standard 12-month lease: baseline rent
• Furnished 12-month rental: costs roughly $5,000–$6,000 to furnish a one- or two-bedroom, generates about $400/month extra — paid back within a year
• Mid-term furnished rental: roughly $800/month extra, paid back in about six months, on shorter commitments
• Fully licensed short-term rental: generates two to three times the revenue of a standard annual lease

For multifamily owners feeling squeezed by flat rents and rising expenses, this is a direct lever to boost net operating income without adding debt or units.

And here’s where it gets interesting for STR operators specifically: Tim sees this as a wide-open door for short-term rental experts to partner directly with apartment owners who don’t have the team, bandwidth, or hospitality background to run this themselves. That can look like a rental arbitrage lease on 5–10% of a building’s units, a revenue-share or equity-stake arrangement, or simply offering furnishing and management services in exchange for a cut of the lift. For a good model of what a hospitality-meets-operations partnership can look like at scale, see how Tim Hubbard built a remote-first operations model managing 220+ properties without losing owner brand control.

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🎯 Why Now: The Case for Approaching Multifamily Owners

Multifamily owners right now are, in Tim’s words, buying time. Many are locked into properties they can’t refinance or sell without taking a loss, and they need three to five years for the market to recover. That creates a specific psychological opening: an STR operator who shows up offering to lift revenue on a slice of a struggling property — without requiring the owner to sign on new debt or raise capital — is solving a real, urgent problem.

Tim’s framing: you don’t need to be the one buying the building. You can generate cash flow, in some cases with very little money out of pocket, by structuring a lease-and-furnish arrangement or negotiating an equity stake tied to the upside you create. It’s a different way of thinking about growth that doesn’t require acquiring more properties outright — a mindset echoed in how Kenny Bedwell of STR Insights talks about building an ownership mindset across every part of a hospitality business, not just the properties you personally hold title to.

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🔁 Trimming to Grow: The Jack Welch Approach to Portfolios

One of the more counterintuitive ideas Tim shared: growth doesn’t always mean adding more units. Borrowing from Jack Welch’s approach at GE, Tim periodically evaluates his entire portfolio against objective criteria — ROI, ease of management, risk exposure, loan structure, proximity — and trims the bottom 10–20% every few years, then backfills with better-performing assets.

He applied the same logic to his own operations: narrowing his footprint from 12 states down to just Ohio and the Carolinas, where he and his team are actually based. Fewer, better assets outperformed a wider, thinner spread. This is the same principle behind smart use of a lean, focused team over sprawling operations — systems and clarity compound faster than raw headcount or unit count.

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🧠 On Cycles, Ego, and Permanent Decisions

Tim’s read on the current market cycle applies well beyond commercial real estate: every bubble follows the same arc. Early operators succeed, outsiders pile in, prices peak, latecomers buy at the top, and the smartest people quietly start exiting before the crowd panics. He’s watched this pattern play out in multifamily, and he sees the same forces having worked through short-term rentals over the past several years.

His caution for STR operators facing pressure to sell at a loss: don’t make permanent decisions based on temporary circumstances. If a property is cash-flow neutral and manageable, holding through a downturn is usually the better long-term play than cementing a loss — a philosophy that pairs well with the business-owner mindset shift Yvonne Halling built her €10K-to-€100K B&B on: patience and structure over short-term reactivity.

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🧭 Rapid Fire

Mindset advice for someone starting something completely new:
Stop making statements like “I don’t have the money” or “I don’t have the time” — full stops that shut down thinking. Instead, ask empowering questions: How could I find the money? How could I get the time? How could I learn this? Resourcefulness, Tim says, is the ultimate resource — and it compounds the same way consistency does, over a long enough timeline, into outsized results.

On mastery: Tim points to research on mastery and the well-known 10,000-hour rule popularized by Malcolm Gladwell — the reminder that real expertise in any field, STR operations included, takes years of consistent, full-time reps to build. If you’re not willing to put in that time yourself, partner with someone who already has.

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🔗 Connect with Tim Bratz

• Instagram / X / Facebook: @timbratz
• LinkedIn: linkedin.com/in/timbratz
• Legacy Wealth Holdings: legacywealthholdings.com
• Smart Management: smartmanagement.com

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🚀 Ready to Build the Business That Runs Without You?

Whether you’re managing five apartment units converted to short-term rentals or fifty standalone properties, the operators who scale sustainably share the same trait: they build systems, brand with intention, and don’t rely on marketplaces to control their guest relationships. CraftedStays helps short-term rental operators launch fast, mobile-optimized, SEO-driven direct booking websites — so you own the guest journey from search to stay. Start your free trial at CraftedStays.co and start building a brand, not just a listing.

Transcription

Tim: I don’t have the money, so then they don’t go pursue something new. I don’t have the knowledge. I don’t go and pr– Like, by doing that, it’s saying, “Hey, I don’t have the resources.” Well, like, guess what? If you’re resourceful, if you know how to go out and find the resources, like resourcefulness is the ultimate resource.

And so I would put myself in a position where I’m asking myself questions. How can I? Right? Empowering type questions. How could I do this? How could I solve that problem? How can I find the money? How could I get the additional time? How could I learn? Right? Like, and there’s, there’s answers to those questions that are very efficient ways to gain access to knowledge, time, resources, money, all those things.

But you gotta be resourceful, right? And you have to focus on the resourcefulness first, and if you’re resourceful and you approach every problem and every question with resourcefulness, you will find the resources, and you will be able to solve a lot of problems and create this awesome momentum that positions you for big success down the road.

Gil: Before we bring on our guests, I wanted to talk just a little bit about something that I’ve been hearing a lot from hosts. I keep on hearing the same thing: “I know my website isn’t converting, but I can’t afford $8,000 on an agency to rebuild it.” Here’s the thing, you’re learning all these marketing strategies, you’re driving traffic, and you’re putting it all to work, but if your site isn’t really built to convert, you’re basically lighting your energy and money on fire.

And even if you could afford an agency build, every time you want to test something or make a change, you’re having to pay them again. You can’t iterate, and you can’t test, and you really can’t improve on things. You don’t need a custom $10,000 website to get the conversion rates that really matter. You just need the right platform.

That’s why I built CraftedStays. It’s purpose-built for short-term rentals and designed from the ground up to help you drive more direct bookings. You can finally turn that traffic into bookings, and you can keep on testing and improving as you learn. You can make changes all on the platform. You don’t need to learn something new.

So if you need some help or you wanna get started, go ahead and go to craftedstays.co and start your free trial. Now, let’s bring on our guest and dive deep into hospitality and marketing. 

Gil: Hey, folks. Welcome back to The Booked Solid Show, the show where we bring in top operators to discuss hospitality, operations, and direct bookings.

On today’s show, I have Tim Bratz. He owns over 2,800 doors, valued at over 350 million. He walks us through how he’s grown from being an intern to now scaling a multifamily investment firm. We also dig into what he’s seen throughout all the different waves in real estate, why he’s moving some of his units into short-term rentals, and why now commercial real estate operators are now motivated to partner up with short-term rental operators.

So without further ado, let’s bring in Tim 

 Gil: Tim, welcome to the show

 Tim: What’s up, Gil? Good. Thanks for having me, man. Good to be here

 Gil: Yeah. Yeah, it’s good to have you on. We typically focus on a lot of folks kind of in the vacation rental, short-term rental space, and you come from a totally different world. Actually, not totally. You’re actually pretty ad- pretty adjacent to it. Um, but you come from a different perspective, so I would definitely wanna dive directly into today’s show and really get to know kind of how you built your portfolio to what it is today and some of the strategies that you’ve been deploying on your side.

So maybe to kind of start us off, Tim, tell me a little bit about yourself.

 Tim: Yeah, man. Well, I mean, I’m, I’m from Cleveland, Ohio originally. It’s where I grew up, and, um, went to college ’03 to ’07 and saw everybody making money in real estate. And so I thought, “If all these people are making money in real estate, I could probably do this too.” And so in 2007 when I graduated from college, I, uh, jumped into real estate.

And I, I thought you got involved in real estate by becoming like a real estate agent. And so my brother was living in New York City at the time. I moved out to New York City. I got a real estate license and somehow lined up and, uh, and, uh, placed it with a commercial brokerage that did a lot of like, uh, leasing for offices and retail and did a lot of investment sales as well.

And, um, closed on some transactions that were just simple leases, and I remember thinking like… I’ll give you example. There was a falafel shop in Greenwich Village that I brokered, and it was 400 square feet, and they signed a lease for $10,000 a month on a 12-year lease term with 4% annual escalations. And I remember doing the math on this thinking, “This landlord’s gonna make like $2 million on this over the course of the next 10, 12 years for doing something at one point in time.”

And he had, you know, eight retail spaces and another 10 stories of apartments above it. And I remember thinking like, “I’m on the wrong side of the coin. I need to be owning real estate, not just brokering it.” And so, um, love New York, but I wanted a little bit more lifestyle type, um, structure and s- heard some good things about Charleston, South Carolina.

And so I moved down to Charleston, South Carolina in 2008 and kinda became, uh, began my investing journey at that time. Um, and so, like, you know, I show up to the party, and everybody’s running out the back door because the whole market collapses in October of ’08. And so, uh, fortunately, I didn’t buy anything with like a stated income loan or like just, uh, no document loans and, uh, get over-leveraged and, and, um, go bankrupt.

So I learned a lot from watching other people at that time. And, um, and fortunately, right when I was about to start investing, dude, all the prices started just plummeting. And properties were hitting the market for 10, 20, 30, 40, $50,000, um, that you’re like, “Oh man, like how do you lose on something like this?”

And I remember, um, thinking like, “I wanna go and buy everything.” The issue was nobody was loaning money to a 23-year-old kid who’d never done a deal before in the worst real estate housing crash in the history of the country, right? And so you had to get creative, and I bought my first house. I was like, “Well, who’s giving me money?”

And the only person giving me money at the time was MasterCard. And so I asked for a credit limit increase, and they gave it to me. I asked for, um, $100,000. They only gave me 15,000. But you gotta ask big, right? And, uh- They gave me 15,000. I found the cheapest house in the MLS, which was listed at, like, 25 grand, and we went back and forth, and I got it for $14,000.

And so I wrote a balance transfer check, brought it to closing, closed on that property, literally did all the work to it myself, and, um, uh, turned around, sold it about n- 100 days later and, uh, made $13,000 on it net. And I just remember, like, this was the biggest check I’d ever earned up to that point in my life.

And I remember thinking, like, everybody’s running from real estate and saying, “Don’t do it.” Like, it obviously works, right? Just must have been a bad business plan. So I just did more of that. I did it again, did it again, did it again, plugged into some of the local real, real estate investors associations, and I started meeting people who had money.

And they said, “Hey, I, I got the full-time job, but I have this 401that I can self-direct,” or, “I have, uh, some cash,” or, “I have a line of credit on my house that I can, uh, access and tap into. You go and do the work, you go and find the deals, you go and operate those, and then I’ll bring the cash.” And then we came up with equity splits.

And, um, you know, I bought about 10 houses over the course of the next two years and, um, just on short, or, I’m sorry, long-term leases. And, um, wasn’t rich by any way, by, by any means, but I had enough residual income coming in that it exceeded all my business expenses and my personal expenses and left me with about an extra $1,000 a month.

And I remember thinking, like, “I got this figured out,” you know? And, uh, and I wasn’t rich, but I was technically financially free, if you go by that, by that, um, definition of it. And so, you know, th-that- Uh, staying in that lane and then, um, found my first apartment building, came across an eight-unit building in twenty twelve, and just the efficiencies of going into multifamily, um, really resonated with me.

I love the idea of going to one property instead of eight properties. I love to look, look at one foundation, one roof instead of eight foundations or eight roofs, right? Paying one utility bill or one tax bill instead of eight. And, uh, it was just much more efficient and less wasteful than, um, the, the single-family stuff that I was doing at the time.

And so I went heavy into multifamily with a couple of partners. They brought the money, I did the work, and over the course of the next three years, um, turned about a million dollars into a hundred forty apartments. And, um, and that partnership kinda faded. They wanted to take their money off the table, didn’t wanna contribute anything else, and wanted me to then go out and get the money and do all the work, and I only had a third of the business.

And so it just didn’t resonate. We didn’t see eye to eye, and we decided to liquidate those hundred forty doors. And, um, and I was able to then go and do my own thing. So turned that into a flipping business, and I, I, I went into flipping houses in order to just kinda keep food on the table. We were flipping somewhere between, uh, eighty to a hundred twenty houses a year for the next three years.

And, um, and then started a turnkey business out of that. They were mostly flips that were, uh, turnkey rental properties. So I’d buy it, fix it all up, put management in place, and then we’d sell that to, you know, somebody who just wants to buy a house in their IRA or somebody who wants to buy a house just with cash and have the residual income, but they didn’t wanna do any of the work.

And so we built up a, a nice little turnkey business, started a management company. It– This is– I, I was back in Cleveland, Ohio, at this time, um, had moved back to Cleveland. And, uh, uh, that was all, all great. And I was still buying some apartments, some smaller apartments, and I was signing on loans for a couple other guys that I knew, um, or, or raising money and bringing capital to a couple of different deals that were down in Georgia and, um Uh, you know, sat back on vacation, I think it was twenty seventeen, looking at my net worth and my balance sheet and realizing like ninety percent of my net worth came from these apartments that was like ten percent of my time.

‘Cause all I was doing is signing on loans and raising capital for them, and then I had a big chunk of the equity. And um, and I came back from vacation, I went to my team, I was like, “We’re not flipping any more houses.” Right? Shut it down. My acquisitions guy, instead of acquiring single-family rentals, you’re gonna acquire apartments for our, our own portfolio.

My, uh, project manager, instead of renovating houses, you’re gonna be renovating apartments. And my dispo guy, you’re instead of selling houses, you’re gonna be asset managing apartments. And that’s what we ended up doing. And in twenty eighteen, I bought a little over a thousand doors. Twenty nineteen, I bought two thousand apartments.

Twenty twenty, bought another thousand twelve hundred apartments. And, uh, in twenty twenty-one, I, I reached my peak, um, of the most doors I’ve ever owned at one time, which was just shy of five thousand doors. Um, and we’ve transacted on probably seven thousand and, um, and that was great. And, um, built up and then all of a sudden, you know, the rug got pulled out in twenty twenty-two when rates started skyrocketing and insurance premiums skyrocketed and labor costs skyrocketed, supply chain still messed up, and, um, uh, energy costs have been going up.

And so we’ve been taking a lot of arrows for the past few years. I’ve scaled my portfolio down to about twenty-eight hundred doors today, and, uh, still worth about three hundred and fifty million dollars of portfolio value. Um, and I own a big, a big chunk of that. My team has a piece of the equity. Some of our investors have a little piece of the equity as well.

And, um, uh, but it’s been a lot of navigating, uh, some rough waters over the past few years. And one of the ways that we’ve been able to do that is by, by taking a chunk of our units at these apartment complexes, converting them into short-term rentals, and being able to juice the revenue at the property level, um, by doing so

 Gil: That’s, that’s amazing. Yeah, I think that the one that thread that I’m kind of picking up is that there’s this, like you mentioned, like this c- this constant navigating, there’s constant like pivot to figure out how do you fit in the current market. Because it’s, it’s almost a combination of your skill set, the resources/capital, and where the market is going.

You’re constantly calibrating against these three criterias there, because it… Even if you did have the skill, but y- the market’s not in the right place, you sh- you shouldn’t be going there either way. Um, so you’re almost as, as if you can’t really say, “I’m the multifamily guy, and I’m always gonna be doing this,” or, “I’m the fix and flip guy, and I’m always gonna be doing this.”

You had to kind of like navigate that through. Is that, is that kind of how you felt throughout this?

 Tim: Yeah, I think there’s this, this, uh, when I look back at my career in real estate, there’s like this, uh, you graduate each year, right? You go to a different grade kind of a thing. If you’re doing the exact same thing that you were doing, you know, fifteen years ago, and you got the same problems that you had fifteen years ago, like there’s a bigger problem.

It’s you not growing, right? It’s you not asking better questions about your business and how to refine and how to improve and how to grow and scale. And, and by the way, growth and scale isn’t always adding more doors. That’s not the case. Like we’ve refined considerably and reduced the amount of doors, but our doors got better, right?

We have higher quality doors. We have higher occupancy, more revenue right now than we even did back then because we had a bunch of value add, a bunch of new construction, and a bunch of like headache projects that didn’t generate any revenue. And so, um, when I say growth or when I say scale, I’m not just talking about, um, obnoxious more of everything.

That’s not the goal, right? The goal to buying real estate isn’t more. The goal to buying real estate is freedom. How do you get freedom from the real estate that you’re purchasing? That needs to be the North Star that all of us are looking at at all times for our own careers and our own businesses. And so I, I will say like I’ve gone through these graduated steps of, you know, had a real estate li– Well, first I interned for a real estate company when I was in college, and then I had a painting business when I was in college, and then I, uh, got a real estate license when I got out of college.

And then I started buying single-family houses and flipping them, and I started wholesaling. And then I got into buying and holding single-family houses, and then it got into small multi and then medium-sized multi and now larger multi. I have commercial properties, mixed-use properties, office, uh, self-storage.

I, I’ve, I’ve had pretty much everything. I’ve done development, new construction, um, and all those things, um, in order to figure out, you know, is this something where I wanna really dive deeper and, and, and go heavier into? I would say ninety percent of my portfolio is multifamily and, um, and that’s definitely my, my focus, our, our, um, highest and best use of our skill sets.

And but by doing some of the other things, we’ve sharpened the ax over and over and over again and continuously strengthened our, our positioning, where we’re very creative on how to raise capital. We’re very creative on how to structure deals. We’re very creative on thinking outside the box of the norm of what’s standard on re– like, uh, uh, revenue streams for a given property and how to reduce expenses, um, uh, on the P&L in order to tighten up the, the net operating income at the end of the day

 Gil: Yeah. Back in, uh, 2019, and you probably can relate to this, uh, maybe even earlier on or in being inside of it, but in 2019, I, I binged probably 100 episodes of BiggerPockets, and I would consume that stuff all the time, and, uh, your story reminds me a lot of some of the really big successes from folks, and I think you might have been on the BiggerPockets, uh,

 Tim: Yep. I’ve been on, I’ve been on a couple times, yeah

 Gil: yeah. Um, like what, what do you think made you so successful at ramping up from starting off from being that intern, being that realtor, and then pivoting so many times? Like what led you to the success that you had now, if you were to like boil it down to kind of the fundamentals?

 Tim: Yeah, I, I would say, I mean, there’s definitely some, some points of delineation in my journey that I can share in a second here. But I think the mindset is probably where it all comes from, right? I, I’m not I’m somebody who comes from a very blue-collar family, right? I don’t come from money, but I had a ton of support.

I never knew, um… We always had food on the table. We’re very, you know, m-middle class and, uh, didn’t come from very adverse circumstances. I’m, I’m, you know, I’m not a, um, an immigrant who came with $10 in their pocket and had to, like, build up something incredible, um, which I think is far more impressive, right?

But, like, I, I was raised by a, a policeman and a teacher, right? And had a ton of support, had a ton of love, got good grades in school, thought that that was the path that you should pursue and realized, like, I don’t like… I’m not a good employee. I’m just not good at working for other people, and I don’t like people telling me what to do.

I remember, you know, a college job, and this guy’s like, “You know, I’m not…” I, I… We got– He was yelling at me. I was like, “Dude, F this, man. I don’t need to be working for this clown.” Like, I can go and do this on my own if I wanted to, and that’s what I ended up doing. I… And, um, and so I, I quickly realized I was not a good, you know, employee listening to other people, being told what to do, given marching orders and all that kind of stuff.

So I needed to go and start my own business, and I tried to figure out what could that be. And I, I, I think what probably has separated my success is, like, I’m constantly asking and refining and reviewing and saying, “Is this what I really want? Is this really the best path to get there? Just because this is how it’s always been done, is there a better way of doing that thing?”

And I ask myself really good questions. I think a lot of people make a statement like, “I can’t buy real estate because I don’t have any money.” Boom. That’s a statement. There’s a period at the end of it, and it stops thinking. I’ve said, “Hey, I don’t have any money, but how could I get money?” And by asking yourself a question, it gets your creative juices flowing and leads your mind down a path of more resourceful questions and eventually a better answer.

And I’ve always done that. I’ve always asked myself. I’ve always questioned everything and, and thought, you know, “Is this the best way of doing it?” And because, you know, I got into single family, or I got into brokering, and I re- I quickly realized, like, there’s a better path, right? I can earn residual income instead of having transactional income.

That’s where I wanna be. So let’s go into the ownership side. I bought single family. Oh, single family’s great, but it’s an addition play versus multifamily is a multiplication play, right? I’d rather be multiplying than adding, so I went heavy into multifamily. And, um, you know, and just kinda improving the mindset that way and always asking and refining, “Is this the best path forward?”

Like, now, now today we have– I’ve taken a lot of my skillsets and my team’s skillsets and our experience, and we’ve created a property management software called Smart Management, which is, uh, it’s like, you know, AppFolio and Yardi and, uh, RealPage and Rent Manager and All these other ones that are out there that are very antiquated older systems, they’re okay for what they, what they do, but they don’t, they don’t integrate with everything else.

And I was like, “Why doesn’t everything integrate?” So we’ve taken a CRM with workflow management, with payment processing, with accounting, with property management, with communication, with digital signatures and everything else, and put it into a single singular platform with automations on top of it, uh, with AI on top of it, and it smokes everything else on the marketplace.

And we use it in our own portfolio right now. Uh, but we’ll be taking that out to the market and we’re, we’re, um, developing a, a short-term rental management piece to it too. Um, so that way, you know, these multifamily owners and stuff, uh, can manage everything all in one place. So it’s like, uh, I don’t just, I don’t just allow the marketplace to dictate, um, you know, what, what it should be, right?

I, I don’t allow other people to say, “Hey, this is what it is. This is what it’s always been. This is what it’s always gonna be.” Um, I’m like, “No, it can be better,” right? And, and as an entrepreneur, like you look at things through a different lens and you go and solve problems. And the bigger the problems you solve for more people that you can help, the more money that you can make

 Gil: Yeah. How much do you feel like it’s kind of reactive to where the market is versus like proactive and thinking about like, okay, the market’s shifting in this area and I need to go chase forward? Like, how do you, how do you feel? Like, as a founder, I feel like there’s always this anxiety of like, am I in the right place?

Should I be strengthening things or should I be looking at the next step? And you’re playing like almost like an offen- like offense, defense constantly as a founder.

 Tim: Yeah, you know, I mean, I, I’ve been investing since two thousand… Uh, been in real estate since ’05, been investing since ’09, been in commercial real estate since 2012. And so there was a, there was a long period, uh, with, with these, the crazy, um, financial collapse that happened in ’08. After that, though, it was about ten years of very steady, predictable marketplace.

The market didn’t change much from 2010 to 2020. Um, really started heating up probably 2017, 2018, 2019. Uh, but for, you know, seven to ten years, rates were about the same, the demand was about the same, supply was about the same. Like, everything was pretty stagnant. Uh, not, not stagnant, steady and predictable during that time.

So you could be more, more proactive in, “How do I get ahead in this steady, predictable market?” Dude, then COVID happens, and nothing’s been steady. Nothing has been consistent for the past six years. Like, it’s almost… It, it’s comical. Like, like I… You think about it, and you look at it. Dude, imagine getting into real estate in 2020, and all of a sudden COVID happens.

They shut down, um, uh, your ability to evict tenants, right? Like, you can’t evict anybody for 15 months, 18 months. If you’re buying a value-add apartment building or any property, and you have tenants in there who aren’t paying rent, and you can’t legally get rid of them for 15 months, which means you can’t renovate it for 15 months, which means you can’t…

Like, it, it kicks everything down the road a year and a half and messes up your timelines. Then supply chain gets screwed up. Then interest rates start changing in 2022, and we’ve had the steepest incline of interest rates in the history of the Federal Reserve. We have, um, uh, labor pricing because they print $10 trillion in a matter of two years, right?

Like, now there’s this massive inflation where everything’s more expensive. Labor’s more expensive. Supplies are more expensive. Utilities are more expensive. Everything goes through the roof. There’s a bunch of crazy storms that happened in 2020, 2021, 2022, um, that just tore through the insurance world and, and everybody’s premium skyrocketed.

So it’s like it’s been nothing but inconsistencies over the past six years, and so it’s been a lot more reactive and responsive to things, I would say, at this time. And, um, and what I would say, man, is, like, you just gotta control what you can control, right? Control the controllables, right? There’s a lot of adversities that we all get faced with, and there’s a lot of arrows that get thrown at us Life isn’t determined based on what happens to you.

Life is determined based on how you respond to what happens to you. And if you can respond better and control the things that are within your control, right? Hey, I can’t control interest rates, but I can control how I raise money. I can control maybe getting some seller financing and negotiate better terms on the sale.

Maybe I pay my investors a ten percent return, but I only pay five percent as we go, and I let the other five percent accrue and pay them back whenever we refinance or sell in the future, right? And it, it made us really, really sharp in a lot of those ways of structuring deals, raising money, and, um, refining our operations.

And we’ve tightened up like crazy to the point where we can now take our systems and our processes, put it into our software, and, uh, build a business that is worth hundreds of millions of dollars today

 Gil: Yeah. It’s interesting that you mentioned, like, the different periods in time where you had this 2010 to 2020, which is a very stabilized period, and really there it’s really about, like, refining and, and, and really scaling your operations and then also figuring out, like, what strategies do you want to approach the market with, and constantly thinking about your strategy.

But now, kind of like in this period post-COVID where this… In this very unstable period where nimbleness is probably more important than ever, like you being able and being really comfortable about switching strategies, switching gears, thinking about things very, very, uh, maybe like high risk takers, like a high risk, much more high risk than, than before is what you need to be very, very comfortable with.

That’s, that’s kind of what

 Tim: think there’s still ways to mitigate. Yeah, I think there’s still ways to mitigate the risk. I think what’s, you know, gotten a lot of people in trouble over the past five years is, like, they’re not checking their ego at the door, right? They’re doing deals just because somebody’s chirping in their ear saying, “Hey, take my money, take my money.”

And you hear that enough times, you’re like, “All right, well, let me go and find a deal and pencil it out.” Dude, if anybody penciled a deal that showed, uh, um, property taxes increasing by twenty-six percent over the past five years like they have, along with, uh, insurance premiums doubling, tripling, or even quadrupling, especially in the Gulf Coast area and, and, uh, coastal Carolina area.

Um, if they, if they penciled a deal that showed, um, uh, labor costs increasing by twenty percent, material costs increasing by over forty percent, energy costs increasing by fifty percent, all these other things, and rents being stagnant for four or five years, dude, no deal would’ve been done, right? No deal would’ve been done.

So I know, like, uh, like, um, what’s his name? Brandon Turner’s taken some heat ’cause, uh, he had a deal that had to sell and in order to do that, and his investors lost like fifteen million bucks, right? I don’t know Brandon personally. Uh, I know of him and, um, uh, but I know what he’s going through, right? Like, like, uh, there’s…

When you have that many people hitting you up to give you money and, uh, and yeah, you underwrite it in, in a few different… Like, m- I know publicly traded commercial real estate investment companies, uh, in New York City, right? Publicly traded firms. I know, I know the, the executive team. I know the CFO of one of these companies, and they have entire floors of analysts looking at every single variable that could change as they underwrite and give loans, as they underwrite and invest in themselves.

And guess what? They didn’t see this coming, right? Like, nobody could have calculated all these adversities happening at the exact same time. Um, and so there’s a lot of, uh, a lot of tough decisions you need to make. And you really need to check your ego by doing this and say, “Hey, does this deal make sense to pursue?

Or if I liquidate it and I take a loss, can I make my investors whole on the next deal? Or can I, um, put my, my, my energy and my positive mindset towards productive– solving productive problems as opposed to this one, which is just a sinking ship?” And that’s a really hard position to be in, man. It’s really, really tough for people to then navigate that, check their ego, especially someone like Brandon, who’s got a lot of public eyeballs and, um, uh, it’s a tough, tough spot to be in, man.

 Gil: Yeah, I mean, he, he’s highly respectable, like in, in the industry. Like he is one of the folks that is very transparent. He talks about what he does and how he’s building things and why he started the business that he does, and he’s quite honest about it. But I think you’re, you’re absolutely right that it’s, in many cases, like no one saw what’s coming, like no one saw it coming, and he unfortunately is just so public that he gets flamed for some of these things.

But it’s happening

 Tim: Oh, dude, it’s, it’s happening all o- like, you know, they say there’s blood in the streets. Dude, it’s a murder scene behind closed doors right now. It is over and over and o– like I know a two billion dollar debt fund that’s just being clobbered right now, right? I know, uh, multiple people who have given back properties to the bank, multiple people who have sold for massive losses, um, and wiped out all their investor equity.

It’s been, it’s been really, really bad. It’s amazing that there’s not more public, like publicity about it. Um, fortunately, thank, thank, you know, the Lord that, uh, our business, we kinda hit the wave of apartments before it kinda became cool, and we refinanced a lot of our properties back in twenty-twenty, twenty-twenty-one, and early twenty-twenty-two.

And I was only stuck with one variable rate loan and a couple of bridge loans, but they were fixed rate, thankfully. And, um, it’s still navigating some, some tough, uh, variables, but fortunately, we haven’t given any properties back. We haven’t lost any investor money. But there’s definitely some deals we had to pause preferred returns.

There’s definitely deals where, uh, we were hoping to be out of it by now, and we’re probably gonna have to hold it for another three or four years in order for the market to kinda come back a little bit, rents to start boosting up, and, um, and hopefully rates come down. Uh, but that’s the beauty of multifamily or of any rental properties.

You can hold it long term, and eventually you pay down enough principal. Eventually, those two, three, four percent annual rent increases compound, and you find yourself in five, ten, fifteen years with, uh, some spread, and your head’s back above water, and now you have some options in order to exit. I think that’s, that’s a key thing to understand in owning rental real estate is you gotta have time on your side.

Don’t back yourself into a corner, um, and be in a position where you have to return capital or there’s a maturity on your loan. Like you have to give yourself ten years of timeline at least because of these crazy variables that can be thrown at you. And if you took a look at two thousand six at the peak of the market and going through the, the greatest recession real estate’s ever, ever felt, by twenty sixteen, values were higher again.

So if you had a ten-year loan term, and as long as you didn’t have to sell, but a lot of people got five-year loan terms, and they had to sell in two thousand eleven, and then they took a bath because that was the bottom of the market. But if you have a ten-year term, usually the cycle comes back in that amount of time.

And so if you can hold on for another three, four, five years, um, that’s the play for sure. And that’s where I think a lot of people are making bad moves right now, um, in the rental real estate world, is they’re making bad long-term decisions based on short-term circumstances, right? They’re making permanent decisions based on temporary circumstances, and I think that’s a naive thing to do.

 Gil: Yeah. Yeah, yeah. As, as we’re going through this, are you still net growing your, your, your portfolio or are you kind of trading off some of the poorer units and kind of reallocating kind of your portfolio to kind of position itself for when things kind of pick up that you’re in a good place?

 Tim: Yeah. Great, great question. Um, it’s part of that growth process and that graduation process, right? I think just like Jack Welch at, at, um, GE came in a couple times to his staff and quantified everybody and said, “Hey, who’s performing? Who’s not performing?” And he took the bottom 10% of his staff. Uh, I think he only did it twice, but it’s like very well– Like people think he did it every single year.

Um, but he took the bottom 10% of his staff and said, “Hey, all the one out of tens, we gotta get rid of them. And then we’re gonna backfill it,” right? You don’t just get rid of that because the 90% that’s left, you’re gonna have the 80/20 rule on that as well, right? Or the 90/10 rule on that. So he just got rid of all the one out of tens, and then he backfilled it with all new employees.

And just by chance, there was a six out of 10 that came in. There was a three out of 10 that came in. There was a 10 out of 10. There was an eight out of 10, right? And he got some really, really great employees that, that removed the one out of tens. And he did it another few years later and tightened up the ship even more.

And I think we should be doing that with our rental portfolios too. Taking a look at your portfolio and objectively saying, “Hey, which ones perform the best,” right? Which ones have the best ROI? Which ones have, um- Are the easiest, which ones have the least amount of headaches, the least amount of phone calls, the least amount of brain damage, right?

Which ones have the least amount of risk? Which ones have, uh, balloons coming due on the loans versus long-term, fully amortized for twenty or thirty years, right? And looking at all these different variables and which ones are out of state, which ones are in state, which ones are in my backyard, are easier to manage versus the ones I have to get a hotel and a airplane flight and all this other stuff.

Figuring out what that looks like and trimming out the bottom ten or twenty percent of your portfolio every year and then backfilling it with other properties, right? You bu– You, if you, if you trim out the bottom twenty percent of your portfolio and you get rid of all the one and two out of ten properties, and, and you fill it back up with good properties, guess what?

Now you’re gonna get some eight out of tens. You might get a ten out of ten property that comes into your portfolio. And I think we should be doing that on a consistent basis. Every few years, trimming your portfolio, selling off some stuff, bringing some cash back, which is always helpful. And then, dude, we’re, we’re operators.

We, we know how to go and find deals and source properties and negotiate. We can turn on that, that, um, uh, that switch at any time and go and acquire more propt-properties. So, um, I’ve been in a net sale ’cause I’ve been refining my portfolio to just Ohio and the Carolinas, which is where my team and I are located.

And, um, and so I, I was in twelve different states, and it, it was just spread too thin. I didn’t w- I didn’t like it. And so I’ve been refining in that regard. But we have acquired some other properties in Ohio and in the Carolinas over the past couple of years, uh, just not as, as much as what we’ve been selling off.

And then the other thing that I would say is I have another huge opportunity, which is my property management software, and this is already has a, a nine-figure valuation on it. And, um, uh, and that is the– that has the highest potential of anything that can generate more, more revenue and more income for me.

Uh, and it’s easy, and it’s very lucrative, and it’s fun, and it’s just, uh, we don’t have debt or anything like that, right? And so it’s, it’s a nice change of pace. But I, I’ll tell you what, if I didn’t have that, I would be on a buying spree right now. I think there are a lot of good deals. There’s a lot of very beat-up and battered operators out there that you can go and step in for very minimal amount of money and say, “Hey, Gil, like, you’re having a tough time on AB– One Two Three Main Street, and, um- I’ll tell you what, you need about $500,000, I’ll bring the cash in order to restabilize this apartment complex, but I need full control.

We’re gonna leave your m- your investor money in on it. We’re gonna leave your, uh, loan in on it. I’m gonna step in and just inject some cash. It might only be 5% or 2% or 10% of the money needed. It allows me to get into deals that I couldn’t get into with that little amount of money, but allows me to now control it and then strike some sort of deal that says, “Hey, I’m gonna pay you this amount of pr- this price and, you know, 30% of any of the profit above it.”

So it’ll … It gives you an exit strategy and your, your investors a chance to still make and, uh, make some money long-term, but it kind of resets the clock for you. It allows me to get into a deal for less money than I could get into otherwise, and I can typically get into some pretty good deals, um, nice properties in nice areas, right?

That we can, we can come in and tighten up operations on and, um, and then have, you know, three, five, 10 years in order then, um, reposition it and see where the market turns. So I do think there’s some really good opportunities right now. I think ev- all of us need a tighter buy box, though. Just have a very clear, defined buy box.

I’m only gonna buy in this state or this zip code or this city, uh, this class of property, this certain size, this occupancy level, this whatever it is. Um, having clarity around that is gonna make you … is gonna help you make better decisions

 Gil: Yeah. And I, I’m seeing something similar on the short-term rental side where maybe it’s a different pace. I think on the commercial side, it’s painful right now because back in kind of the, the COVID days, the interest rates like went haywire where you had a lot of commercial loans that were on variable fixed rates and the rates went sky high there.

So you had… And that’s where a lot of the margins are being squeezed out of, uh, where a lot of these units are not no longer making any money. It’s because of the variable rate. the short-term rental side… Yeah,

 Tim: what I would say is, is commercial properties are, are valued based on the income approach. So it’s, it’s just income minus expenses equals net operating income. And so the income’s been flat for the past four years. We had a big jump in twenty-twenty, twenty-one, but it’s been flat from twenty two to twenty six.

So you’re not getting the growth there. And then all the expensive– expenses have increased by at least thirty percent, right? And so your NOI is dramatically less. If, if interest rates would’ve stayed the same and cap rates would’ve stayed the same, you’re still at best break even, if not still underwater a little bit.

But because interest rates dictate the multiple, right, the cap rate that you get on these apartment complexes, and those interest rates go up, it handcuffs all these operators with zero exit strategy. So now you can’t sell it, you can’t refinance it, you have to cash flow it. But if you have a variable rate loan, to your point, dude, it sucks up all the cash flow and some, and then you’re feeding this thing, and then eventually you get to a point where you’re like, “Dude, I can’t throw good money after bad.

I gotta dump this,” you know? So yes, to your point, I just wanted to add a little bit, um, additional color to it.

 Gil: Yeah, and I, I appreciate

 Tim: go- what’s going on on the short-term side though?

 Gil: So, like, on the short-term side, I think a lot of folks got into short-term rentals in kind of the COVID days, like the golden years of 2021, ’23. Like, those were, like, the really golden years of getting into it, where you could purchase anything and you would be able to put it up and, and get some pretty, pretty decent revenue c- coming from it.

However, you got this big wave where the market has matured quite a bit. A lot of folks are using much more sophisticated systems. They have better operations now. You’re not having these, like, really cookie cutter pr- like, properties out there. A lot of the ones that are really being successful is, are the ones that are well-designed.

And but now the bar is being raised so high. And now with all the instability, travel is less… At least I’ve seen this across the board. Like, I, I talk to lots and lots of property managers, and some say the market’s doing the same thing as last year. But across the board, I’m seeing quite a bit of, of drop in revenue across wide, wide portfolio, por- portfolios here.

I think that the one thing that you mentioned is really, like, like, having time on your side. And I think a lot of folks in the last 18 months, time was not on their side, and they had to figure out, “Do I sell?” And almost everybody that bought and sold has lost all their money in, in, in the deal, where they pretty much didn’t make anything, and hopefully they didn’t lose anything either.

But they’re having to go at a loss. But I think the ones that are really in a cash positive position, their ca- their, their cash flows are net neutral, they’re able to hold onto it and, like, what I’ve seen is, and kinda the smarter folks I’ve seen, is, like, the folks holding onto their properties, maybe selling off or exchanging off the properties that aren’t doing well into better performing ones.

But it’s like, it’s really a defense game right now and really trying to get time on your side to get to that two, three, and hopefully in that four year timeframe for the market to kind of pick back up.

 Tim: Yep. Yep. I mean, that’s what, that’s what’s happening. With any rental property, if you can keep your head above water, um, there’s no reason to cement a loss unless it’s a massive, massive drain on your resources. If you’re feeding this property, if it’s taking up 80% of your time, you’re negative all the time, you’re waking up in the middle of the night, you’re super stressed, yeah, you can, you can sell it, take the loss, and then go put your energy someplace else where it’s positive, you know?

I do think that there is some value to that. Um, but if it’s like, “Hey, dude, it is what it is. We’re not getting rich off of it, but we’re not losing any money. It kind of manages itself, or it’s, it’s very simple to manage with just a couple hours a week,” dude, it doesn’t make sense to sell and cement a loss, right?

If you sell right now and you lose somebody’s money or you lose your own money, dude, it’s, it’s, it’s stuck. It’s concrete, right? It’s, it’s gone forever. Versus, dude, just let it ride out. Like, let it, let it ride out for a little bit longer. See how that looks. Um, make a decision 12 months from now, 24 months from now, 36 m- months from now.

But don’t make bad permanent decisions based on temporary circumstances.

 Gil: Yeah, I think that the, the big difference is we’ve had a lot of investors that have their normal W2 and they’re not institus- institutionalized investors. They’re– They maybe had a couple hundred thousand dollars to be able to buy a property out there, but they’re not scaling, and they probably got into it for the bonus depreciation against their W2s, and that’s why they got into short-term rentals.

But they never intended to be in, like operators themselves, and they figured out like, “Oh, shoot, I bought a short-term rental. It’s not like a long-term rental. I could put a property management income in, in place. I have to manage this.” And I think the folks that are burned out that don’t enjoy hospitality, those are all ones like, “I don’t know if this is worth it. Like I’m, I’m barely cash flowing. Um, I’m definitely not making as much as, as the golden years. Maybe I just let this go, and I’ll go back to my W2.” And because they’re probably high income earners, they did this for tax reasons, they’re like, “Okay, I’m gonna redeploy this somewhere else.” But I think, like I’ve seen a lot where they’re selling at a loss, and like I wish you just held onto it because two, three years from now, it would have made such a big difference.

 Tim: I mean, if you look at any bubble Every bubble starts out and ends the same way, right? Like, it starts out with people who are in the industry having a lot of success, making a lot of money. A bunch of outsiders see them making that much money. They then leave their primary business, primary job, start jumping into that industry, right?

There’s a huge, um, uh, uh, movement into whatever that bubble is. It pushes prices up. It pushes values up. The people who are the latecomers, and almost everybody always jumps into pretty much every bubble, right? And even the, the naysayers and people who don’t wanna be involved, eventually there’s two or three or four years of positive growth, and all this…

People like, “Dang, I better go and buy it,” but they’re buying at the peak, right? And then even, even the most pessimistic people come in, and then when they get in, they’re at the peak. And then all of a sudden, either a market condition changes or the smart people are like, “I’ve never seen in twenty years of being in business values get this high, I better start liquidating right now.”

And it creates this, this snowball effect. They start liquidating. All the values start dropping. Everybody else starts liquidating, and then everybody’s stuck just, um, you know, w-when the music stops, who’s holding the bag, right? And, um, that’s every single bubble, every single time, man. And it happened in multifamily.

It happened in cryptocurrency. It happened in e-commerce stores. It’s happening in short-term rentals. It’s gonna happen in the trades, right, in all the blue-collar space with all that stuff that’s going on right now. It’s gonna happen in, um, self-storage. It’s already starting to happen in some self-storage stuff.

Like, it happens in every single industry, uh, regardless, right? It happened in tech. It happened in the, the dot-com. It happened in, um, with dandelions or daffodils, whatever the he- tulips in, um, in the Netherlands fi- four hundred years ago, right? Like, the same cycle happens over and over and over again. Dude, the smartest thing anybody can do is just stay in their lane, keep their head down, don’t look left, don’t look right, print money, and then go and invest passively with or partner up with somebody who is a full-time expert in whatever that industry is.

But usually, man, when you… Like, think about this. There’s books written on this and scientific studies on this, but it takes ten thousand hours to become an expert at any subject, right? Um, uh, what’s the book by Malcolm Gladwell? I can’t remember. Blink. And he says, uh, like there’s, there’s multiple studies about this.

Like, you have to spend ten thousand hours at something in order to then become an expert, right? So you’re just learning the first ten thousand hours. And if you do the math on that, fifty hours a week… I’m sorry, uh, forty hours a week, fifty weeks a year is only two thousand hours in a single year. So you have to be full-time in something for five years before you’re ever an expert at it.

You’re still learning all those things, and you still learn after you’re an expert, right? Based on some of these variables that change in the market conditions. And so, like, you have to dedicate minimum that much time if you’re gonna get into anything. And if you’re not gonna dedicate that much time, then you need to partner with somebody who has spent that much time in that industry, so that way- you have arms linked with somebody who knows what the heck they’re doing and they can’t, you know, uh, get moved around by these market cycles the way that everybody else has as newbies into any industry

 Gil: Yeah. Yeah, I think that’s probably a good segue also to talk about some of the things that you’ve been doing on your portfolio into, like, the short-term rental side of things. Uh, you m- you teased upon it a little bit at the beginning of the show where you mentioned that you have repurposed a lot of… or not a lot, but a significant amount of your inventory towards the short-term rental side.

Talk to me a little bit about kind of the thinking behind that and what you’re seeing now.

 Tim: I mean, this could be a huge opportunity for, like, your listeners, uh, and, and finding some great, great deals, great opportunities, ways to generate a lot of additional cash, um, and cash flow or get equity into some larger projects. But one of the things that we’ve done in our portfolio, for instance, is, as I mentioned before, income’s been flat, right?

Now we’re starting to see a little bit of growth rent, and I think we’re gonna see some rent growth over the course of the next, uh, consistently over the next four or five years. Um, but even then, man, we’re still taking arrows. We’ve tightened up expenses, but you can only do so much in order to reduce expenses.

So you really need to start looking at ways to generate additional revenue. And one of the things that we’ve done is we’ve taken a certain allocation of units at our apartment buildings. So let’s say we have a, a, a hundred-unit apartment building. We usually take about five percent of the units at any given, uh, property.

You usually can’t do more than that ’cause the lender doesn’t wanna see more than that done. Sometimes you can get up to fif- like ten percent, uh, but usually it creates some issues w- on the financing side of things for multifamily owners if they have all their revenue coming from a single stream. So anyways, we take About 5% of our units, and guess what?

We just clean them up, make them a little bit nicer and a little bit more aesthetic, and then we add a bunch of furnishings, and we put them on Airbnb and VRBO, and, uh, we do our own, uh, reach out in the different community, Facebook groups, uh, local influencers, local publications, uh, Furnish Finder, all those things.

And we, we offer a couple different forms of, of rent. One, you can come in and you can just rent a regular apartment, or you can rent a furnished apartment on a twelve-month term, right? And it costs us five or six thousand dollars to furnish a one or two-bedroom apartment, um, but we get an extra four hundred dollars a month.

So we make all of our money back within twelve months, um, on just that. Then we’re doing some short-term stuff, and so… I’m sorry, or mid-term. And so we’ll do mid-term rentals, and we’ll charge about an extra eight hundred dollars per unit per month. Uh, so we make all of our money back in about six months on those, but they only commit to six months.

But, um, it, it gets us further ahead. And then we have a handful of them that are short-term rentals that we get licensed with the local community or local municipality, and we make them short-term rentals. And we, we generate about two to three times the amount of rental revenue that we would on an annual lease by doing short-term rentals.

And so that allows us as multifamily owners to substantially boost the cash flow at that property. And it, it also can be a big opportunity for people, like, who are, who are experts in the short-term rental space to go to these landlords, right? Like, not everybody has the team built out like I do or has the, the willingness, ambition, creativity to attack it in this way that I do.

Um, and there’s plenty of operators out there where you can just go knock on doors of people who’ve been taking arrows for the past four or five years and say, “Hey, I’m willing to come in and lease 5% of your units,” and then you go in there and do a rental arbitrage play, right? You go in there, you furnish all these things, sign a five-year lease with that landlord.

They would love to see that, uh, to not have to be chasing rent and worried about move-outs and turnover and everything else, and just allow somebody else to come in and ensure that those units stay occupied, they’re getting cleaned on a regular basis, and there’s a lot of benefits to that. And you can make a lot of money.

You know, call it thousand to three thousand dollars per unit per month times five, six, ten, fifteen, fifty units, um, turns into a substantial cash flow p- play for somebody looking for that. The other option would be, “Hey, let me come in and help you out with furnishing some things and handling furnished rentals, mid-term rentals, short-term rentals, generating additional revenue, and we just do some sort of an equity split, cash flow split, or let me vest into some equity in the actual ownership of the apartment building.”

Like, there’s a lot of creative ways to do that where you can get and utilize your experience and, uh, for somebody else’s, you know, adversities that they’re facing right now, help solve a problem for them, help solve a problem for you, and rising tide floats all boats and creates, uh, a great, great benefit for everyone

 Gil: Yeah. And I think the, the one point that you mentioned is like the, almost like the psychology of the peop- like the people that you’re trying to reach out to. A lot of these apartment owners are in a tight bind where, as we sp- spoke earlier, they need to buy time for the next three to five years. And so if you’re gonna able to come in there and say, “Okay, I’m gonna help you secure at least for the 5% units that you can rent out, or if more, even better, but we’re gonna help you secure this,” and that will give them some stability in this one so that they can move on and not have to worry about it.

And that, I think that that’s like almost a reframing because they don’t… I think like some investors and some, some short-term rental operators, they think about kind of like, uh, optimizing for other things. But n- here, like there’s an opportunity where there’s a demand for it, there’s a need for it from, from the apartment owner’s standpoint, and you also have a skill set that aligns very, very well with it.

And I like how you mentioned like it’s not just one, one tactic of doing rental arbitrage, but you can take an equity stay- stake into it and become and operate in the business and take equity in, back into it.

 Tim: Yep. Yep. I mean, there, I think that’s, I think it’s a huge ripe for the taking and great opportunity for anybody who, who has the ambitions to scale in a climate that’s pretty tough, right? Like, you don’t have to sign on any loans in that regard. You don’t have to raise any capital maybe to furnish some of these units.

Uh, but if you got a great credit card or an Amex or something with no limit, like there’s, there’s other ways to fund that. And, um, and there’s a desperate, desperate need, right? There’s, there’s… Like, you would be a knight in shining armor knocking on the door of one of these multifamily owners saying, “Hey, let me increase your, your rental revenue, uh, by, uh, you know, X percent on, you know, by 100% on these f- uh, five, 10, 15 units that you’ve got over here.”

And, um, creates a win-win situation for everybody. And how many of those conversations can you have? Like, literally limitless.

 Gil: Yeah. Tim, we usually ask three questions, but I, I know we’re, we’re tight on time. I’m gonna ask you one, one specific one. What’s one piece of mindset advice that you would give to someone that’s starting something completely new?

 Tim: Love that question. I would say, uh, going back to like when I was getting started, people say, “Hey, I don’t have the time,” and so they don’t ever go and pursue something new. “I don’t have the money,” so they don’t go pursue something new. “I don’t have the knowledge. I don’t go and…” Like, by doing that, it’s saying, “Hey, I don’t have the resources.”

Well, like, guess what? If you’re resourceful, if you know how to go out and find the resources, like resourcefulness is the ultimate resource. And so I would f-put myself in a position where I’m asking myself questions. How can I? Right? Empowering type questions. How could I do this? How could I solve that problem?

How can I find the money? How could I get the additional time? How could I learn? Right? Like, and there’s, there’s answers to those questions that are very efficient ways, uh, to gain access to knowledge, time, resources, money, all those things. But you gotta be resourceful, right? And you have to focus on the resourcefulness first, and if you’re resourceful and you approach every problem and every question with resourcefulness, you will find the resources, and you will be able to solve a lot of problems and create this awesome momentum that positions you for big success down the road.

And then you just gotta let it compound, right? It’s just like there’s no secret. It’s consistency and time. Consistency plus time and, and all of a sudden, man, you’re the best three-point shooter in the NBA. You’re the best, uh, um, soccer player in, in FIFA, right? Like you are the… Like you’re the best in the entire world at that thing just by doing more of it for a longer period of time than anybody else.

That’s, that’s the secret. That’s all you gotta do is just stay consistent over a long period of time and don’t let yourself get rocked by certain different questions. Have the resourcefulness.

 Gil: I love that. I love that. Tim, it was a huge pleasure to have you on and have you just walk us through what you’ve seen kind of throughout the last decade and a half, two decades of real estate, and kind of what you’re seeing and the kind of like almost a call to action too, to some of our operators here to, to see if there’s an opportunity to partner up on the long-term commercial side and bring in the hospitality experience.

 Tim: Mm-hmm. 100%, man. I think it’s a huge opportunity right now, and I think it’s a great way that you can get involved in some really, really good deals without any risk or without… with very limited risk, without, uh, any money or very limited money out of pocket. And I think it’s gonna be a, uh… would create a huge win for both the short-term rental operator and the multifamily operator.

So go and knock on some doors, guys

 Gil: Awesome. Thanks, Tim. See you later.

 Tim: Appreciate you having me. Thank you