Transcript
Speaker 1: All right, tyler Kabul commercial in Nashville the triple net least beard. What's up, buddy? It's all in the beard. Man Brian, what's going on? buddy, excited to be here. Dude, i'm so excited, man, this is going to be a good one. So you and I met in Nashville, me and a couple of the guys we got together about 25 of the homies and all of us had a little impromptu mastermind session and we thankfully were able to have you come out and speak to the group, and that was a great time, man. We had some awesome perspective about what you were doing locally in Nashville, some things that you were doing that are just blowing other deals out of the water. You're doing one deal that would maybe take somebody else 20 deals to get the cash flow and the equity from Man. I'll let you introduce yourself to the people.
Speaker 2: Yeah, that was a lot of fun. I think we ended up talking for well, an hour and a half or two hours and a girlfriend ended up getting mad at me because I didn't tell her I was going to be that way And I figured it was just going to be like a quick 30 minute drop in and head home and ended up having a great time with you guys. So that was a lot of fun, oops.
Speaker 1: I'm sorry for friendship.
Speaker 2: Sorry that we brought the mirth. Yeah, i got started in commercial real estate 10 years ago, dropped out of college after my freshman year and started working as a project manager for my grandfather's construction company And about three months into that got a job offer to come be the in-house leasing agent for a boutique development firm that had they were mostly building residential, but they had a few commercial projects that they had done A couple hundred thousand square feet, about 500,000 square feet of commercial retail space, that a couple hundred thousand square feet of industrial and 50,000 square feet of office. And back in 2013, the market was very different. Nobody wanted to lease. It's wild now. Back then I was knocking on doors, i was cold calling anybody just trying to get a deal done. So it's nice kind of having that experience compared to what it is today, where now we're having to just swap tenants away that we don't feel are really the best fit, did that for a couple of years, took those assets from about 70% occupancy up to 92% plus, and I was fortunate enough to be involved in all of the development meetings that they had every week on every project that they were working on. So over that two year period I learned how to put a deal together and found a piece of land on a Bellevue, did my first development with the company, which was 42 townhomes And about four and a half years into it, left and started the Cobble Group, which is my commercial real estate brokerage.
Speaker 2: That same year I started Parasol, which is our property management company, doing office, retail, industrial and multifamily. And then I've been buying and renovating buildings since 2019, but in October of 2020, i officially started my development firm because we finally got to a scale where I needed a team to help me do what we're doing, and so now today we'll do anything from a little six-bed car wash that we converted into five micro restaurants at a bar, all the way up to the largest project we have going on right now is a 32 acre master plan community in Madison. Tennessee Finally has about 330,000 square feet of retail on it, but we're going to tear all of that down eventually and build about 1.5 million square feet of mostly apartments. They get so over 1100 units in the current iteration of the couple hundred thousand square feet of office and some ground floor retail.
Speaker 1: So we do a little bit of everything, nice man. Everyone needs to start somewhere, so I'm glad that you're getting started. It starts small. It starts small. No, that's awesome man. So that will zoom out real quick and then we'll zoom in super, super fast. What's the total AUM right now and what's the average cash flow that's popping out from all of that?
Speaker 2: Oh man, that's a good question. Aum right now is well over 40 million. It might be 50. I haven't gone back and calculated it in a bit. We're also about to buy another $10 million property here soon, So that'll add to it. Cash flow is tough because the deals that we had cash flowing we ended up selling a lot of the stuff that we're doing.
Speaker 2: Yeah, it makes sense Like, why keep the income coming in? Most of my cash flow actually comes from my businesses. A lot of the deals that we got up that were cash flowing really well, we just got offers on that.
Speaker 1: we couldn't say no to.
Speaker 2: Yeah, it was ridiculous. We bought one property for $1.8 million, put $600 into it and sold it for four or five in 18 months. It's things like that happen where you're like, yeah, i guess I don't need to cash flow that bad And a lot of our projects are like heavy value add or ground up development. Out of all of those projects that we have right now, the 32 acre master plan development is cash flowing. We're distributing a minor share to investors every quarter but really the value is in the dirt And that's how we play, like cash flow is great but we can create a significant amount of value. Let me put it this way We bought that property for $18 million 32 acres and we're under contract for six and a half at well over I'll say well over $10 million for six and a half acres. So we're basically going to almost pay off our initial capital investment from one fifth of the property.
Speaker 1: Yeah, yeah, and that's how the game works. So it's like the way that I see commercial real estate is people start in different paths, right. So you start people kind of start, i feel, with single family home $200 a month, net free cash flow and maybe get to multi family where you get maybe 16 unit or 16 to 60 unit like apartment complex multi family, and then it's a little bit more cash flow. Then you start bringing them like syndications and then you have LPs, you have investors. Then it's a little bit more of a tricky situation which you and I can get into here shortly. More of a job, yeah, more of a job, and you've got bosses again.
Speaker 1: But before we get into all that, i'm very interested with your vertical integration because, like you said, cash flow and that's why I asked the question because you manage your cash flow through all these different buckets and all these different ways that you can make capital from a deal vertically, and that's super interesting to me. But first I want to get started with one of the deals you mentioned, the wash, because that adds a little bit more of a secret sauce to why you do commercial. So can you talk to us a little bit about your newest one, the wash and what that is. So it's the. You bought a car wash and you converted it into this really cool hip center and you had some parameters around that decision making that I thought were really interesting with how you operate your business, so let's dive into that.
Speaker 2: First, it was a really interesting project because we had our own criteria right How we look at projects, and then on top of that, we had some constraints from the local government. So it is on a major thoroughfare And if we tore the building down, we were going to have to give 20 feet of right of way to the city. The parcel is barely 50 feet deep right, so that's taken up almost half of the land and with setbacks and everything like that, we wouldn't have been able to build anything there, and so we actually ended up keeping the existing structure, and so we thought, okay, how are we going to work with this? What would go in here? And we'd looked at Airbnb's office space little retail shops and even like apartments, right And nothing was really all that exciting.
Speaker 2: And back during the pandemic, my brokerage team was getting a lot of calls from restaurant groups that were asking for smaller restaurant space, ideally zero indoor dining. They just wanted to focus on to go and delivery. And man, i just kept having to tell them that doesn't exist in Nashville. It's not like New York City where you can just rent a shoebox on a corner, like the bodega.
Speaker 2: Yeah, like that just doesn't exist here. Back then, and mostly even today, most your average restaurant national is probably 1500 or 1800 square feet, right? I was driving past that car wash one day, had literally just gotten off the phone with another restaurant group and I thought to myself like man, wouldn't that be weird if we put a bunch of kitchens in there? And in the beginning of the pandemic, all the rage, everybody was talking about ghost kitchens And so that was just on my mind. I had just written an article about ghost kitchens And I started thinking to myself like, huh, that'd be interesting. Like maybe we do like a retail facing ghost kitchen and make it so that it's pandemic proof. It's just kitchens, basically stationary food trucks.
Speaker 2: And call my architect And I was like man, tell me to go away if you think that this is absolutely insane, but what do you think about this idea? And he was all on board and the rest is history. Now there are 400 square feet each and that includes a walking cooler, so they are literally walk up counter service restaurants. And in the very beginning we started thinking like, hey, how cool would it be to bring some of the brands to East Nashville that are big in Nashville but aren't on this side of town, and we started thinking, oh, maybe Hattie B's or Martin's barbecue, which are really big brands in the city. But The more we talked about it, we're like and those guys can afford to go wherever the hell they want. They're crushing it. Why don't we like? because of the nature of these units, they're really cheap, especially compared to other restaurants. So why don't we shift this towards your startup restaurants and treat it like a co-working space.
Speaker 2: Yeah, test kitchen like co-working space for restaurants. The average restaurant ended up getting open for less than $30,000 and we focused on small businesses. So the restaurants that we had either we're doing pop-ups or had a food truck and they're crushing man. It's so much fun. My office is next door now We just moved there. I eat there every damn day and I tell myself officially when you get to build your own food hall, you pick the concept. So you want to eat at.
Speaker 1: Yeah, yeah, and it was also interesting to that point. You said that you like buying and developing places that you would want to hang out at. Can you speak a little bit on that?
Speaker 2: Yeah, that's all that's important to me. I don't want to do any of this stuff. That's Look, dollar General makes money, right, apartment buildings makes money. But to me there's just something really cool about creating space And I think that phrase gets overused and the impact of it has been diminished. But creating space to me means you're creating something that has this magnetic draw for a neighborhood that otherwise wouldn't be there. It adds to the neighborhood, it gives, it increases property values, it increases demand for people wanting to be in that area, because you've created a destination where people want to go and spend time.
Speaker 2: And when we were Concepting the wash, i wanted something where people could hang out at for two hours, right, three hours. Take your kids, take your dogs, grab lunch, grab a few drinks, hang out outside with your friends and Just enjoy yourself, because there's not really a whole lot of areas that you can do that. Most restaurants in Nashville It's. You go eat and the waiter looks at you awkwardly. If you're sitting there after you've already paid your check, hey, get the hell out of me to turn this table, especially during lunch rush. Yeah, exactly, and we just don't have that at the It's. It's, we've got free Wi-Fi. You can hang out as long as you want. We really wanted to create It's like the Starbucks third space kind of analogy.
Speaker 1: Yeah, that was a literally what I was thinking as soon as you were saying that is, i was just thinking when you go?
Speaker 1: So I just got done traveling around the world and me and you talked about that a little bit, and it's really interesting to see how different things are everywhere, except for America, right. So it's like America is so car-centric and parking-centric that it's not people-centric anymore, and whenever you have the small pockets of cities like a Charleston or like even Boston is pretty well developed to where it's more walkable, right, and you have more third places. So for people that are unfamiliar with the term, third place is the concept of you have your work and you have your home, but people used to have a third place that they would congregate and they would hang out, and that doesn't exist anymore because we all eat in our cars, we travel in our cars to work, that we come home from work in the suburbs 45 minutes away And there's nowhere for us to congregate to make social interaction harder. So that's why I thought that was interesting that you mentioned that and that's, i think, a cool Ideal and a cool goal for people to invest in the asset class at commercial real estate.
Speaker 2: Yeah, it's a lot of fun. Man, you think about the way that humans used to live back in the day. You'd walk most people walk to work, right, it takes some sort of mass transit and You'd walk down to the local grocery store, you'd walk down to the bakery and then there was the local neighborhood pub where you'd catch up with all your bodies after work. And to me there's something almost romantic about thinking back on that and how cool that was and how community building that was. And I think that we've lost a lot of those kinds of spaces. And to me, the coolest thing, i've gotten to know the regulars at the wash because I'm there all the time, so I see them all the time and I'll watch them walk a couple of blocks down to the wash. That's just. That's really cool to me.
Speaker 1: Yeah, that's awesome man. So you also have another ambitious goal, which is to add to the Nashville skyline. Talk a little bit about that and then we Would dive into the actual, like the rest, of why people should invest in commercial real estate.
Speaker 2: Yeah, absolutely So. My overarching goal it has been this way for probably seven years now, maybe as to build the most architecturally significant building on the Nashville skyline. Growing up in Nashville, i've always had the Batman building. It was built when I was a baby, right. So it's been here my entire life. And The Batman building help first. It's called the Batman building because you could shut.
Speaker 2: You just know what it looks like. Everybody knows what that looks like, but it's such a symbol of the city that people use it in their business logos. It is like a symbol of net. This building, this random office building downtown, is a symbol of Nashville And to me that's always been interesting. Like how amazing would it be to leave your legacy on the skyline Like that? and I'm probably gonna jinx it because somebody might beat me to it If I just say this out loud and put it into the universe. But Art Deco is a phenomenal style. You drive, you walk around Chicago and you've got these incredible 1920s, 30s, 40s buildings Art Deco, gothic, really cool styles and then you've got these brand new glass towers and The contrast to me is really interesting. Nashville doesn't have any of those kinds of those Art Deco or Gothic style buildings, and so that's the kind of style that I would like to go with, because Nashville has plenty of glass towers And I know it's more expensive to do Art Deco, but it'll be worth it.
Speaker 1: Yeah. So talk to the person right now that's listening to this and they're like man, okay, cool, like I get the emotional appeal, i get the creativity. You can really take a space and kind of create your own destiny with it. There's a lot of different angles and a lot of different avenues to make a deal and be creative with the deal, with the tenants That you pick with it, how you convert the space So from an investment perspective. So you got somebody that's got maybe a couple hundred thousand We'll say maybe they have a hundred thousand dollars. They're getting started in real estate, they're looking around at all these different asset classes and they're looking at multifamily. They're looking to maybe doing some Airbnb's and they hear about commercial and they say, okay, commercial real estate. I get that and I understand, like the riches, that the rich people do commercial real estate. But I don't really know how I would dip my toe in that water. What is some advice and kind of a roadmap that you would give to that person that's listening?
Speaker 2: Yeah, there's a few different ways for you to get started. With a couple hundred to three hundred thousand let's say it's three hundred thousand dollars, you know right now you'll probably be able to buy about a million dollar property. It's not going to go very far. So you know you may want to look at investing in a real estate syndication, finding a group that's what we do, right, but there are plenty of other syndicates out there and investing with that. Right, because instead of buying a Million-dollar property, you'll buy a twenty million dollar property And you'll still get the same, if not sometimes better, returns than you would on your own, because you've got an operator that actually knows what they're doing. But it's more secure. Right, because a twenty million dollar property It's big enough. You're probably gonna have multiple tenants as well as a better location. There's a number of factors that go into that. Now, for a million bucks, you can still get a Dutch brothers coffee, right, or something that's really small, single tenant at least, maybe a smoothie king or one of those kiosks, and those are great. We only have a handful of clients every year that go for that. We typically recommend that they either bring in a couple of friends, join together and go buy something bigger or Just hold off. It's. To me It's a lot of fun It's. I know that Everybody says that there's more risk in commercial than there is and multi-family or single-family.
Speaker 2: I think that completely depends, right. You can't just blanket statement and say commercial is riskier than multi-family or single-family, in my opinion, because it depends on what you're buying. If you've got a really good broker or really good advisory team that is walking you through the process, that you could make a much better purchase decision on commercial than you do. If you're trying to buy a single-family home by yourself Because you think that you've inspected the property and turns out there's a crack in the foundation behind that door that you didn't look in. There's so much risk, in my opinion. When you're making your net profit is $200 a month on single family, then HVAC unit blows out and you there goes your profit for the whole year.
Speaker 1: Oh Yeah, i've been a part of it, man. So I just evicted this chick and we just did 15,000 of cosmetic rehab to one of my houses And it led to me making the decision to sell the freaking properties. Because I was just like, look like This is 15,000 bucks. I have an operating account, i've got this in, like in reserves, but I'm like dude, that just killed my cash flow for the next year And why am I even thinking about this? This is like nickels and dimes. now, at this point, i was like it's time to move on to the next thing and the bigger and better. So, yeah, i've been there.
Speaker 2: Yeah, that stuff blows my mind because and honestly I think it's because people don't understand that real estate syndications exist or they don't trust like crowdsource or these online crowdfunding resources. Because, look, the biggest excuse of, oh, I'm buying single, I can only afford single family is the price point right. Commercials too expensive, multi families too expensive. I got to buy a single family house. How much are you putting down? 10, 20, 30 grand? for that much you can invest in a real estate syndication or you can invest in crowdsourcing and the returns you'll get over five years are probably better and your risk is a lot lower. You know, I mean our deals, the average. We average about a two times equity multiple. It's probably a little bit higher than that, considering the last few exits that we've had, But we aim for a two times equity multiple in five years and three to five years on all of our projects. So you put in 20 grand, we'll be giving you back 40 grand. You still get the depreciation. You don't have to take on the risk The HVAC unit blows out, you don't lose your income for a whole year, You don't have to deal with a tenant getting evicted And you just don't have to go through that whole process, So I skipped single family residential.
Speaker 2: I'm not a big believer in investing in that. I think that it is so overhyped. It's painful to watch. Sometimes You see these bigger platforms talking about it a lot. I didn't buy my own house until this past year. I've been buying real estate since 2019. And I refused to buy my own home because I can't stand the guy. But Greg Cardone does have a good point when it comes to owning your own home, Right.
Speaker 1: I'm renting again Just because I just for me I was doing the house hack strategy live in one apartment. The other part's out very popular. And then it got to the point where I was like, okay, i'm done living in my own basement And now it's been very pleasant to live in a nice penthouse apartment in freaking Austin, texas, but then that may not be the right move for somebody that's just now starting out Like you have to have somewhere else to put the capital and you have to be saving capital and investing capital to be able to do it. But yeah, I completely get where you're coming from, so I 100% agree with you.
Speaker 1: Syndications are awesome, and especially commercial syndications like you're talking about. So my one kind of how do I want to say this When it comes to a timeframe and a time horizon so my entire day job is helping people leave corporate America within six to 12 months, right? So these people are like, okay, how can I aggressively invest for cash flow now so that I can be able to get out of this job just enough to get out of this job And I can focus full time and play the equity game? Because, like for me, for instance, it doesn't make sense for me to invest a couple hundred thousand dollars in a syndication, because that cash flow isn't like that attractive to me Yeah.
Speaker 1: Yeah, it's tied up And I'll be like, okay, cool, i'll get that in two to five years, cool, but that's not going to really move the needle for me. So if you're Tyler Cobble and you had called $100,000 just to make it fun, because it's a low amount of money right now for commercial especially But you were like, okay, cool, i've got this, i've got this six-figure job, we've got $100,000 saved up. Screw single family. We don't want to do that. But I need to get out of this job, dude. I hate this job. It's ruining my relationship. My marriage is on the rocks. I've got kids. Man, i didn't need to get the hell out of here through real estate investing. What does Tyler Cobble do? Go No pressure.
Speaker 2: Yeah, if you're asking what Tyler Cobble does, this is a slaps his beard oil in and goes to work. That's right. I'm throwing it all on YouTube.
Speaker 2: No, seriously, Honestly probably not a bad. Probably not bad. So what? what I would do and we're probably going to have to talk about what's more realistic but what I would do is go find a piece of land that is big enough to be rezoned for higher density, go through the zoning process, pay for all of the engineering, pay for all of the architectural and design and get everything pushed through, get it rezoned and flip it to a developer.
Speaker 1: I mean, I did that on the last year.
Speaker 2: Yeah, it's a lot easier. I bought a piece of. You have to know what you're doing, though, right, that's the one caveat. So maybe, if you got $100,000, find somebody that knows what the hell they're doing and just partner with them on it and make it happen. But I bought a 1.7 acre piece of property in November of 21. We got it rezoned for, so we bought it at 11 units. We got a rezoned for 63 units, bought it for 650. Yeah, casual, bought it for 650 give or take, and now it's worth $2.1 million today. So we're under contract. It's going to sell next January. The only reason that it's taking that long. You could do it way faster than we did.
Speaker 2: When I was going through the process. I was originally going to develop this property myself, and I made a commitment to the neighborhood that if they gave us this zoning, i was going to do some affordable housing or attainable housing on the site, and so when I went, when I ran my numbers after construction costs skyrocketed. I couldn't make the deal work. So I made it my mission to go out and find an affordable housing developer that could, and they take a long time under contract. So we've been under contract for several months now and they won't close until January. But they are very committed and make it happen. That's how we turned a $200,000 equity investment. Let's say we've got less than $100,000 in other costs right, far less than 100. So there you go, 300,000. Find two friends that have 100 grand with you and make it happen And we're going to walk away with after commissions I don't know one, four.
Speaker 1: So not a bad day.
Speaker 2: Not a bad day.
Speaker 1: Not a bad day. No, i had a guy. I have a buddy that came on here, cody Bugin. He does that. He does the land flipping, so that's his whole, that's his whole jam. So he takes dirt, gets it commercial, graded ready, sells it to the large development communities, makes hand over fist money. So, guys, if you want to go listen back to Cody's show, i'll put the link in the description. But yeah, no, i think that's a great idea.
Speaker 1: So let's go back to some of the misconceptions around commercial. Because, like, when I hear commercial and I'm thinking about getting started in it, obviously it makes sense in the macro because the way that you guys are playing on the chess board, it's like you, it takes longer to make a move and it's a longer game of chess but each move is more impactful. It's like it may take this may be a two year game, but that two year game is going to give you a $20 million spike in equity. So it's a different game to play. And you and I were speaking before and you said, like, when I was hearing you speak at Nashville, you were saying, okay, i started as a broker, started as like a leasing agent, started doing this door knocking, cold calling. You had a zone of genius and area of expertise. So for somebody that's getting started off maybe somebody that's even listening to this in college right now would you recommend starting off working in the commercial space and becoming a broker, becoming an agent and then going into investment, or do you think that's unnecessary?
Speaker 2: That's a great question, and I love the way you phrase it too, because you added in the college piece If you're in college and you're starting off your career, 100% you should become a broker. Without a doubt. You should become a broker. Go get your license, find somewhere to hang it and learn everything that you can and be a broker. It's really tough to get your foot in the door. I'm not going to lie Like commercial real estate is one of the most competitive industries to break into. But be the annoying kid that shows up with everybody's coffee every morning And eventually they will find a place for you to stay there and you'll become a broker eventually.
Speaker 2: The biggest thing I say to do in that when you're young, you have no commitments, you have little to no overhead. You can live at your parents' house and bartend at night. That's what I did. I lived with. I didn't live with my mom, but I lived with a roommate, and I also waited tables on the weekends to make this happen, because I only made $40,000 my first year, which seems fine. But when you're pure commission, you have no idea when you're going to get paid next, and so you might need to wait tables to make sure that you're covering all your bills at every time, but it's, hands down, the best way to learn. You get paid to learn Really. It's paid training for investments because you get to work with all these investors. You get to see how they look at things, what they're going for and watch how they do it, and that's hugely impactful For 99% of everybody else that's out there, that's already in the corporate world.
Speaker 2: Hell, no, don't bother getting your real estate license. Do not become a broker. It takes three to five years before you even get into the swing of things on the brokerage side, because it is such a long learning curve in commercial real estate. It will take you forever. It will take you so long And by then it's like you might as well just be committed to doing the brokerage side of things right. But if you're 22, five years, you're 27,. you've made some really good money. Now you know what you're doing. You're a little bit older. People will trust you with your investments. That's cool. But if you're 35, 40, 45, 50, there's no point in wasting that time. You've probably already got enough experience to just go find the right people and build up a good team and start the investing side And let some other kid, go pound the pavement and knock on doors for you.
Speaker 1: Yeah, and to go back to the syndication, i think it'd probably be a good idea to throw 50, 100k in with a good syndicator and watch how they operate, just to get some skin in the game and just to watch how they move and they operate the deal and handle the deal. Would you agree with that? Oh, 100%.
Speaker 2: Look, if you've got $250,000 just sitting there, throw 50 into a syndicate. Talk to your friends, figure out who's a good syndicator to place that capital with and make sure you fully understand what's going on with the deal. Ask all the questions. No question is dumb. You don't necessarily have to be accredited to invest in syndicates. You can be a sophisticated investor, which just means you need to know what's going on in the real state world. But that $50,000, you're going to get a return on it, depending on what kind of deal that you invest in. You might get quarterly cash flow. You might invest in an development at which point you're not going to get any cash flow for two to three years, but then you'll get a big pop on your equity and you'll get the monthly updates or the quarterly updates and you'll get to go on the property tours and hear what the investor's plan is and how they came to that, and see all of their presentations and materials and everything that they're doing. And you'll learn quite a bit from doing that?
Speaker 1: Yeah, i love that. So why commercial over multifamily? Everyone loves multifamily. Tyler Man I, why do you not love multifamily?
Speaker 2: Yeah, we were talking about this before we went live. I can't stand multifamily. Shout out to Mike Teravella Bless you, buddy. I don't know how.
Speaker 1: Screw you, Mike.
Speaker 2: How do you sleep at night? Yeah, dude, if I was in multifamily I wouldn't be sleeping at night either. Man, i'm just not. I told my Mike's great, by the way, We're just giving him a hard time. I hate him. No, i love you, mike.
Speaker 2: I told my clients on the brokerage side five years ago to stop investing multifamily. I said it's not worth it. Cap rates are getting way too compressed compared to what you've got to work on here. The value add is just not there anymore.
Speaker 2: And everybody talks about how multifamily is the most secure asset class that you can be investing in, and I think that in some respects that's true, but I think in others it's Patently false. I think that a lot of multi-family that's out there now is actually very risky Because your cap rates are so low, the cash flow is almost non-existent and the debt is incredibly high, and we're seeing that now. If you've got an adjustable rate mortgage. That guy out of Houston, texas, lost 3200 doors Last month or two months, a couple months ago, because he had an adjustable rate mortgage that just skyrocketed And he was so far underwater He just he handed the 3200 units back to the bank. It's just not. It's not there for me.
Speaker 2: I think that there are a lot of people that will always need a place to live. I think that it is true that most people are renting now. They're not buying, and we could talk about how that's, because buying houses nowadays is completely unaffordable to compare to how it was 20 years ago. But look, a Lot of what happened in multi-family has happened in the last 10 years. That's what people don't really understand or remember. Is that before, like 2012, the multi-family craze was not a thing.
Speaker 2: There were groups that were building multi-family and buying multi-family, but it wasn't like what it is now. It was when it was under the Obama administration. They changed the 506 B and 506 C syndication rules And allowed you to raise capital from friends and family instead of accredited investors only. So all of these syndicates started popping up, raising capital from friends and family and buying these 1970s, 1980s, 1990s and 2000s apartment products, renovating them a little bit, passing it on to the next guy. He'd renovated a little bit with some more meat on the bone. Pass it to the next guy.
Speaker 2: One of these apartment complexes have taken what six, seven turns in the last 12 years, which is crazy if you think about that, and there's nothing left to renovate. So not only have they been completely fixed up, reds are probably pushed to the absolute maximum where they're gonna be able to get to right now, and There's not. There's no meat on the bone. Interest rates are high, cap rates are low. It doesn't make any sense to me. So I am not a fan of multi-family also. I just Personally I don't want to deal with somebody's personal home. I have walked through these apartment complexes before. It is Disgusting how some people live. I do not want to have to evict somebody out of their house. I just don't want to deal with that. So I stay far away from anything that anybody actually lives in.
Speaker 1: Yeah, we have a lot of multi-family guys on this podcast. Hey, I like contrarian viewpoints.
Speaker 2: I don't want to be an echo.
Speaker 1: I don't want to be an echo chamber man. I don't want to be an echo chamber when everyone to do live their best. Exciting life, brother, all right.
Speaker 2: I love it.
Speaker 1: Yeah, okay, cool. So last 10 years we got this wave of multi-family. What's this? So now we're going through an economic procession and things. There's going to be deals popping up left and right as these operators get Washed out. That's cool. People that are well-capitalized and connected will have deals. So what's the next 10 years? What's the next wave, are you thinking? Do you think it's commercial?
Speaker 2: Yeah, i think it could be commercial. I think a lot of single family I think single family is gonna be huge Residential element, residential development is gonna be huge. Yeah, we just don't have enough housing And I think that a lot of that has to do with where people are moving. I think I don't think in San Francisco They're saying, hey, we don't have enough housing right now.
Speaker 1: Or office space, or office space the playdevil's advocate. They've got 40% vacancy.
Speaker 2: They're getting crushed. Right now I was talking with one of my brokers on my team. Phil Fletcher moved here last year from San Francisco. He's broke with Davidson young there for seven years I think, and now he's working with us and I was talking to him about it And it's getting worse. Yeah, the office part is bad. But now he said Nordstrom announced that they are not renewing their lease on five floors and like the main district down there And a couple of other groups, i think even like Banana Republic, is not renewing their lease. They're all closing their stores and getting out of San Francisco, which is really bad when you have big brands like that deciding to shut down. It's only the beginning of how bad it's gonna get in San Francisco.
Speaker 1: So I think ghost town, from what I'm hearing.
Speaker 2: Yeah, i think we're gonna see. I'm not saying anything that anybody else hasn't said. The Sunbelt is an amazing Area to be investing in. It's basically Arizona over to Carolina. You think about the markets that are in that. You've got Austin, you've got Dallas, fort Worth, you've got Nashville, you've got Atlanta, charlotte. There's a lot of really good markets in that area. They're very strong and I think we're gonna start to see a lot of people that Might want to learn how to invest remotely and figure out how to get into those markets, because they're just gonna perform really well. We're not expecting Nashville to slow down Until about 2032, which sounds crazy to say and I hope it's true. I don't have a crystal ball, but it makes a lot of sense when you think about how many jobs are being relocated to Nashville And also how many just housing units behind. We're about 30,000 plus Housing units behind what we need for the city. So there's a lot to be done.
Speaker 1: Why do you have your own property management company, isn't that?
Speaker 2: an absolutely terrible idea.
Speaker 2: That's great. Yeah, i think that was the one thing that I was like yeah, property management. When we were talking to the mastermind, i was like property management is not. You don't make money doing it, don't do it, it is. I've got a phenomenal team so I don't have to be involved in it, and I love that. Back when I was a little more involved in it, i couldn't stand it, but it's always it's been.
Speaker 2: Yeah, it's been a really good way for us to maintain solid relationships with the owners, which leads to the brokerage helping them buy another deal or us JVing with them on a deal. There's a lot of synergy that comes out of that. That's intangible to the property management company. We get leasing assignments out of it, but also I'm a landlord, right, so I want to make sure that my properties are being taken care of in the right way, and It's way easier for my property management team to be sitting in on all of our development meetings, all of our brokerage meetings every week To know at any given point what is going on in the company. So we just make sure that our processes are a little bit better. But Outside of that, if you're wanting to make money, do not do a property management It it makes money.
Speaker 1: But when does it make sense? So if somebody's listening to this, and they're multiple, that have hundreds of units, thousands of units, thousands of foot of commercial space, at what point is the juice worth the squeeze to bring it in house?
Speaker 2: I think it depends on how much of a job you want, right, you could start your own property management company at. I think the lowest I've seen ever make sense was like 75 doors. If you're buying residential most departments you really want to start off like a 150 doors because then you've got scale to where you can actually justify having property managers on site. Once you get into that realm, you're dealing with hiring an HR. It's a business, right. There's a lot that comes with it. So Most of the guys that I see it's. It really becomes a few hundred doors before it makes sense because You're only paying a percentage of the revenue and you're not having to deal with any of the issues that come up. So it's pros and cons. What do you want to do? Do you want to civic cocktail on the beach and get a report, or do you want to Have to pound your personal staff to get you updates?
Speaker 1: Yeah, now we've gone to the point of the show where people that all the true real estate investors are still listening and everyone else has been Trowned out by commercial real estate. So now you guys have earned it. So now we can talk about the fun stuff. That's fun for me, which is you with your branding and the YouTube stuff. Yeah, it's like for me, like personally, some our real estate, because I make so much more recurring cash flow through my media company now That I'm having a freaking blast. Baby, there ain't no cap X over here, it's just Impressions and just right after man. So talk about the importance of branding your YouTube channels, your social accounts, give a plug and then talk about the Importance of branding and how that's impacted your deal flow. You're hiring your team. All that good stuff. Oh, yeah, it's amazing.
Speaker 2: So YouTube channels. Just at Tyler Kabul, I'm teaching you about commercial real estate investing there. I think I'm at 23,000 subs right now and the channel makes I don't know 10 grand a month, something like that.
Speaker 1: I didn't even think it would be making that much.
Speaker 2: That's pretty sick. Yeah, so it's only about $1,000 off of ad revenue, but I sell underwriting spreadsheets for running numbers on commercial properties And then I also I sell some consulting, which I'm not really counting in that revenue because that's more like active. I have to actually do something there. And then I've got a course on commercial real estate investing for beginners, and so that ends up being about $10,000 a month with all of those, and so it really it's break even, but it's a break even marketing. It's break even marketing that just absolutely crushes it for the brokerage and for the development side.
Speaker 2: We get more clients for the brokerage team out of that than Instagram, which is crazy because Instagram used to crush it for us. It still does, but YouTube's better. I get investors from all over the country. Now It's just it's been absolutely wild. So, yeah, the deal flow of the investors that we get out of our Instagram account and YouTube account has been phenomenal. I think that branding yourself and putting yourself out there is the best way for potential investors, partners, anybody, to get to know you, because you're sharing who you are, you're sharing yourself, and they get to know you. There are people that have been following me on Instagram for six or seven years that I have never met before. But they comment on all my stuff And I feel like I have known them for that long.
Speaker 1: Yeah, it's hard to bullshit after 400 hours.
Speaker 2: Yeah, exactly.
Speaker 1: You're pretty pathological at that point.
Speaker 2: Yeah, you're gonna slip up at least once.
Speaker 1: Yeah, i love that And I like that. You mentioned that it helps with your brokerage and everything, because now it's gone all organic with all of my marketing And we're recording this. At the end of May and during the month of May, i said, okay, i'm not gonna do any paid. I did $30,000 of paid advertising in Q1. And this month of May I said, okay, i'm just gonna post two videos a day, that's what I'm gonna do. I'm not gonna spend any money, i'm just gonna post two videos a day, that's what I'm gonna do. And the result was about 80,000 followers gained across platforms, 4 million impressions, about 4,000 clicks on my links and 556 new listeners to the Action Academy podcast. So a lot of them are listening to the show right now. That saw a frickin' TikTok that I did And it's just. I keep telling people, man, it just. It doesn't matter if you don't know what to direct people towards, yet It just makes things easier, makes life easier.
Speaker 2: Just do something.
Speaker 1: Yeah, i'm not even raising money yet, dude. I don't even know what my next real estate thing is gonna be, but whenever I find it, then I'll have a frickin' distribution army. Like at that point, you can send an email, raise 100 million and then take it right off into the sunset.
Speaker 2: Think how fast Brandon Turner can raise capital for Open Door Capital, Because he spent all those years on the podcast getting everybody to know who he is and now he'll send out an email and have that capital raised in 48 hours. It's insane. But yeah, I wanna talk to you about that sometime. With what you're doing on Instagram Reels and TikToks, cause you're in my feed all the time, So you're crushing it. I wanted to let you know that too. I was like you're in my feed almost every time I open it up.
Speaker 1: Heck yeah, brother, the commercial. That's an interesting point, right. So it's just so I post twice a day and for people, so for me guys listening, i'm trying to tell you guys over and over again. It's not just about money, it's about Tyler is a kick ass operator in Nashville, right, and so he's watching me and like my crap's popping up over and over and over and over again. So as long as he doesn't follow me, hopefully, after a couple of years.
Speaker 1: He's gonna be like I freaking know Brian, i'm gonna like I know Tyler. So then the time will come where I'll have capital and I'll have a bunch of people that have capital and say, hey, i really want to invest in Nashville. Oh, i know Tyler. Tyler has two decades of Nashville investing experience. And then we partner up and I've got the distribution vehicle right there And, guys, that is how it works. If you don't have audience, you don't have distribution. If you don't have brand, if you're not putting yourself out there, you don't get that. The other guys do, i don't know, do with that information what you will. So, brother, if I can, people follow you again, give another plug.
Speaker 2: Yeah, yeah. I want to say to that too. It is not the person who is best at their job, that is gonna be you. It's whoever's better at marketing. But you can follow me on Instagram at commercial in Nashville. You can probably just search Tyler Cobble on Instagram. I respond to every DM, So if you got questions, hit me up. If you want to learn more about commercial real estate, check out the YouTube channel Tyler Cobble.
Speaker 1: Rock and roll, Tyler. Thanks for coming on, brother, It's been blessed. Brian, thanks for having me man With that. It's been Brian Tyler, with the Nashville Action Academy podcast Sounding Off.
