153. 50 Houses in Less than 2 Years to Multifamily Syndications with Wyatt Simon

Hey, welcome back to the Average Joe Finances podcast, everybody. I'm your host, Mike Cavaggioni, and today's guest is Wyatt Simon. Wyatt. I am super excited to talk to you today. I know we tried this once before and we had some technical difficulties. The funny thing is, I was getting ready to interview somebody yesterday, and I had the same thing happen to me on my side, technical difficulties, and we had to reschedule. So things like that happen. But I appreciate your patience and and rescheduling with me and looking forward to having this conversation. Hey,

thanks for having me here, man. Life sometimes has curve balls that you just gotta deal with, and I think that's what, that's how you tell people that can make it happen versus can't, right?

Yeah, absolutely. I love that man. Way to start. Way to start. Hey so the first thing I'd like to ask you is the same question I ask everybody that comes on this show, and we wanna know more about you. So if you could share a little bit about yourself, share your story. Who is Wyatt?

I'm a kid that grew up in Colorado and went off to middle of nowhere Nebraska to play basketball. There I learned nothing but drinking games and then found myself working for a home buying company back in Colorado afterwards. And that was when I read Rich Dad, Poor Dad. And from then on the journey was how do I create this financial freedom that that they talk about in the Purple Bible? So from from there, I took a job in Omaha where I met my where my girlfriend now wife at the time and started working at W2 buying houses and using the BRRR strategy and after a certain point, I realized I was tired of buying on market and from wholesalers. So I joined a course and a mastermind and started setting up my own deal flow system. Ended up buying about 50 houses within the last two years and reached our financial freedom number. At that point we quickly realized that this was something that was scalable, but only to a certain point. And that was when we pivoted into multi-family real estate. From there, now we are on our sixth multi-family deal that we're doing. We currently own 157 units, I guess 158 today, and it'll be 170 tomorrow. We're just continuing to scale the multi-family portfolio now and doing it all regionally here in Lincoln and Omaha, Nebraska.

All right, fantastic. So you're investing in your backyard. Which is funny because a lot of people I talk to in the multi-family space, invest way outside of where they live at, right? They're looking in all these different areas. It's pretty awesome that you were able to find a market that you can key into nearby, right close to where you live. So I wanna kind of recap on a couple things, right? So you said when you were going to school you were learning nothing but drinking games sounds a lot like you know what it was like for me when I first joined the Navy. But then you read Rich Dad, Poor Dad, right? And I'm glad that you called it the Purple Bible cause I also call it the Purple Bible. It's one of those foundational books. Everybody that wants to get involved in real estate investing or just, building up their financial freedom in general. It's one of those foundational books that, that it's kinda like a must read. You need to read that book. That's awesome, man. Now you started in the single family space, right? And then you switched over to multi-family. What was it like, what was that point where you said, you know what, this. This isn't enough right now, or I'm not, we're not scaling fast enough. We gotta do something different. What was it like when you hit that switch or what made you hit that switch?

Yeah, it's a great question. Truthfully, we bought a couple apartments last year while we were scaling the single family business. And then a light switched when we bought two apartment complexes that did just as much as the 25 houses that we bought last year and it was like, huh, I'm putting in a lot more work for these houses than I am for these apartment complexes and I'm getting the same amount of return. And that was when we started scaling that business and really making that pivot, which I think a lot of investors do at some point.

Okay. Awesome. Now, did you guys, did you start that off as JVs and like you just had a few partners and you were taking them down by yourselves or did you write start off right away in syndications?

We start as JVs. And truthfully, I come from a property acquisition background. So we were putting together, our first 23 unit we did was seller financed in a JV model. So there was a few components to it which we didn't have to put a lot of money down. And so I was able to negotiate less, only having to put 10% down, and then I was able to partner with somebody who was able to do that.

Oh, that's awesome, man. So you were able to get the other 90% seller finance?

Exactly. Yep.

Oh, man. What a great way to, to get your first apartment deal done. So that's one of the things that would motivate you to keep pushing on that. Now when you did that, what, when you know, you closed on that first 23 unit, when you wanted to go get your next one, what did that look like? Because the first one sounds like it was one of those home run deals, right? Like one of those, Hey I got, was able to sell or finance, I only put 10% down. We crushed this thing cash flowing, feeling great. What did the next deal look like? Was it similar or was it a lot different? Because a lot of times, you got that, that first one that pumps you up and motivates you and then you run into something that might cause issues or problems or it's a little more complicated. So what did that next deal look like?

Yeah, truthfully, the next one wasn't too complicated. We got it off market and it was a nine unit. I partnered with the same partner and him and I actually brought the same amount of money to the table on that one. And that one we were actually able to BRRRR out and increased the value. And 15 months later we refinanced all of our money that we put in out of that apartment complex and some, and we still own that one to this day.

Awesome. So when you refinanced it and got your cash back, was it still like a really good positive cash flow?

No it's still positively cash flows, yes, but it's almost breakeven. So the cash flow is negligible. But I am of the mindset that real estate has so many other aspects to it. With the tax benefits, with the \ equity gain that you get and the appreciation. So if I'm breaking even on a deal, if I can continue to recycle that money into higher return deals, then I'm very happy doing that.

Yeah that's fair. Because when you look at it too, when you guys did that cash out, refinance and got your money back, and then some, like you said, the beautiful thing about that is that was tax free, right? You got that cash back tax free. And if it's breaking even at this point, hey that's okay cuz you got your money back out and now you've got another asset that, that is pretty much just paying for itself and it's just sitting there. So who knows what you could do with that in the future, you. Keep fixing it up, making it nice and do more value add and make it worth more and sell it in the future or just hold onto it. Let it turn to a little mini cash cow. Okay. Awesome. So that was the next deal. Now going from there, how did you scale up? So you got the 23 unit, you got the nine unit. What was the next steps to that got you to where you are today?

That's a great question. I'll give a little tip that I didn't know the banker actually helped me out when we bought this nine unit. They were list, they were asking 5 75. We ended up getting it for 4 55 because we negotiated some stuff. Long story short, they had a horrible management and so we took over and took over that management problem. But when we had appraised, it appraised at 5 75. And so we instantly bought a building with a lot of equity in it, and the bank said, Hey, you could use that equity instead of bringing a down payment to buy another building. And the ugly term is cross collateralizing, right? The fund term is pledging equity . And so at the time I was like, let's keep on growing, right? Let's keep on scaling. And so we were able to buy a 12 unit apartment and we only had to bring $36,000 down cuz we were able to pledge the rest of the equity to that building, which then continued to allow us to scale and add more value. And that was the next steps for us on that front. And it went pretty well. We've refinanced that nine unit and we've added a lot of value to that 12 unit now as well. So both of them are, six figures more in value. And then we're not refinancing because the interest rates we have are in the fours, not the sixes.

Yeah. Yeah. Gonna keep that where it's at for now. That's smart man. So now you've been doing this, what for six years now, you've been in real estate.

Yep.

How many years were you in single family before you switched over?

I would say all of them six years in single family. And truthfully we partnered our home buying business with another home buying company. So now we just enjoy a royalty for all the systems that we set up.

Okay, fantastic. So the switched multi-family was recent?

Yeah we started buying multi-family early last year.

Okay. Okay. Right on. So you did, how many deals did you do last? Because you're still doing single families, right?

Yeah. So I think we did 28 deals last year. And 25 of those were single families. And then, yeah, right on this year we've done, I think we've gone 24 this year already. And we've done two multi-families this year.

Awesome. Have you gotten yourself to the point where you've you've reached financial independence? Is, are all your expenses covered from your investments?

Yeah, that's a great question. And the answer is yes. And I hit that earlier this year. So in like February. And man, that felt good. And now it's like I work even harder . So yeah, I don't know.

Congratulations.

The number is the number's just a number.

Yeah. Okay. So you hit that number. You said you're working harder, but like what is the financial freedom piece actually given you the freedom to do?

In December last year, I walked away from my W2. Which was a fantastic feeling. But I wasn't financially free at the time, so it was a little scary. I had 68 units at that point. And then once we closed the three and a half million dollar deal earlier this year, that really put us at the number of where we needed to be at and now what we do is we love just being able to run the business from anywhere we are. For instance, we're heading to Austin on Thursday for a real estate blockchain Summit conference and just having the ability to travel is it's a really awesome feeling. And that's how we met actually, was we met at Vince Gethings Hawaii Mastermind Blueprint which pulled my arm to come to Hawaii, man.

That's right. Yeah. That's good stuff. I remember we were talking poolside at the poolside bar. That's when we started talking. And yeah, man I knew right then and there. I was like, I gotta have this guy on the show. Absolutely. Out here crushing it. So now you only do, if I recall correctly from that conversation, you've only done JVs, right? Like you haven't done any syndications yet?

So that's correct. At that point we, it was true. We're closing on a 12 unit JV tomorrow, and then in four weeks we are closing on our first 506b syndication. It's a 36 unit.

Awesome. Yeah. Hell yeah, man. Congratulations. That's good stuff.

Thank you.

That's, even since that conference, man, you've been making just such awesome progress, which it wasn't that long ago. I think the conference was what, two and a half, two and a half, three months ago or something that we did back in May, right? So it looks like you got back to Omaha and just started hitting it again and just crushing it. Well done, man. I'm glad I got to meet you at the conference, man. You and your wife. That was awesome. Okay, cool. Now with everything that you've been doing where do you see the future? Where's the future taking you? Are you gonna continue down this multi-family route, are you looking to get into something else? Are you looking to eventually walk away and retire? When do the wheels fall off?

Great question. Yeah. So what I love doing is helping people achieve the same freedom that I was able to achieve. And so that's why we're pivoting more into the syndication aspect. Right now, I love creating passive cashflow And the way that we do that is with value add real estate in the Midwest markets. We love Omaha and Lincoln because they're they're such great cash flow markets and they're pretty recession resistant compared to the west and east coast right now. So we just want to help more people create that passive cash flow. I'll tell you we are value add investors so we're really not looking for just buy and hold assets. We're looking for something we can fix up and then refinance our money out. And that's how we can supercharge returns for not only ourselves, but for other people. And that's what I've done all my life to get to where I am now at the age that I am. And yeah, if it ain't broke, don't fix it. Just help other peoples do the same thing.

Yeah, man. Absolutely. That, a famous saying for a reason, right? If it ain't broke, don't fix it. Cuz a lot of times especially in the real estate space, you'll, you'll get into a project and you're gonna, you're gonna say, okay, what can I do here? What can I do there? Sometimes it's best to leave certain things alone and focus on the real issues. And speaking of that, what are some of the things that you've seen as a real estate investor, both on the single family. And the multi-family side, what are some of the differences that you've seen between when you run into issues with single-family rentals versus when you run into issues with multi-family rentals?

We run into issues a lot because we are vertically integrated with property management. , I can tell you a story after story about that. But to answer your question on multi-family versus single, I the issues that, this could come from the conference, right? What Vince Gethings said, you get paid based off the issues that you solve. And when you're solving issues in the multi-family game, usually there's a couple extra zeros at the end of it compared to the issues that you solve in the single family game.

Okay. No that's a great point. It's all about that scalability piece. As a matter of fact, I was having a conversation with Vince and one of the reasons he was telling me why he got into multi-family real estate is he said, look, if I have 20 houses and each one of them need to have their roof replaced, I'm replacing 20, 20 roofs. Where if I have a 20 unit apartment building, if it needs the roof replaced, I'm replacing one roof. So think about how much money you're spending on those 20 houses versus how much you're spending on the one apartment building, right? That's one of the reasons why I was like, oh, wow, light bulb moment okay, multifamily is, one, you can scale quicker, you can get more units, you can cash flow higher. And then there's a lot more that goes into building the value of multi-family units versus a single family home. It's gonna be based on the market around you and the neighborhood and how other homes appraise and what they sell for, and then what your home is gonna appraise for. Where the multi-family units, it's based on how much you're renting these units out for. And as long as you're doing everything you need to do to fix property up and raise rent, back to the market rate. You have significant value that you can add to those assets. For me, that was like a huge selling point for sure. All right, man.

Yeah I couldn't agree more on that note. I don't know if you'd know who Logan Rankin is. But one of his quotes that I absolutely love is he was focused on buying properties and when he made the switch to buying businesses, he took off and we're not buying properties anymore, we're buying businesses.

Yeah. That's one way to look at it. That's awesome, man. Now you had mentioned earlier that you have a property management business as well, and it's vertically integrated into your real estate investing. So how does that work? Cuz it, that seems like it's a good way to you know I guess manage both businesses, but they speak to each other, right? They're incestuous and they I guess it's what's the right way to put it? No, I guess that's the best way to put it. They're just speaking to each other. They're vertically integrated and Yeah. I get that terrible word, incestuous. But so how does that work for you? By actually having your own property management company. Normally people would hire that out, right? Or outsource that. So what's it like having your own, that manages all of your portfolio?

It's challenging, but it's very rewarding. And truth be told, I never thought I would want to be in property management. Some days I definitely don't want to be. But we are able to provide so much value and I'll get into this a little bit later, last year we fired two third party management companies that just weren't getting it done because in real estate, I fully believe there's only three ways that you can really, you either win or lose. You buy it right, you finance it right, and you manage it. And we were buying and financing properties, right? I can tell you that. But the management component is so huge and crucial. And so now we have full control A to Z and what we do, and it's it's nice knowing that we're responsible, not someone who makes a call and doesn't follow through.

Yeah, I would hope that if you call the property management company, cause there's an issue that it's gonna get taken care of cuz it's your own company. But that's the other part of it too, is now if there's an issue, you're calling yourself. It's hey we gotta get this squared away. We gotta get this fixed. And I could see where. That could be a little more tedious, with the issues that come up. But at the same time, now you have full positive control of that. And you probably, and I'm just gonna ask you, but you probably already have this, but for your property management company, do you have have you hired other people to actually run that for you to separate it from yourself a bit? Yeah, absolutely.

Truth be told we're getting to a point where I can almost step out fully in property management, which I'm really grateful for. Our team currently has six. We're actually onboarding a Lincoln Operations Manager tomorrow because we have a hundred units in Lincoln and a hundred units in Omaha, which is about 60 miles apart. And so now we're growing regionally and it's nice to finally have boots on the ground in Lincoln rather than our team going back and And on top of that, we really, there's two ways that we can add a lot of value. Number one is the property management, but number two is the construction piece. And so we, we do have four guys that work for us full-time, and all they do is our construction, our rehab, our unit turns and then we outsource the, the higher level subcontractor works such as electrical, plumbing, stuff like that.

Okay. Oh, that's great. So that's another piece that you have built in native to your companies. That's definitely gonna be more cost effective and save you in the long run. But the whole thing about standing up that that spot out in Lincoln that's gonna be huge because, if you think about it that you said it's 60 miles away, right? So if you think about just the commute that your team's having to make over there, and the time that gets eaten by that a lot of times that time is. Time costs a lot of money, right? So that time is worth a lot. 60 miles. That's an hour, right? , so that's two hours a day that somebody would lose just going out to the Lincoln properties just to make them.

And gas ain't cheap.

And gas ain't cheap, that's for sure. So that's why you guys need the next step is to get your EV station set up. And get your fleet of of property management, Teslas. And then you'll all be set. \ Wyatt Simon: Amen, man. Yeah. I will say we run everything based off traction Awesome.

Just R&D

so you're running off at EOS?

Yep. Yeah,

man, that's good stuff. I still, I gotta stop slacking. I gotta finish reading that book. But so far it's made me realize that it's okay to outsource certain things and I that I need to do more of that and focus more on the things that I'm good at and give some of the things that I'm not so good at to people that are better at that. So that's one of the things I appreciate about that. Awesome man. Okay. I'd like to transition this into something that I call the final round. It's where I'm gonna ask you some kind of hard-hitting questions, and it's gonna give us an idea of how Wyatt is under pressure especially when he is gotta deal with some of these crazy situations that he deals with in real estate investing. So if you're ready to go we'll get this party started.

Let's make it happen.

All right? Let's make it happen. Wyatt, the first question I have for you is, what's the biggest mistake you've ever made in real estate investing?

So the biggest mistake that I ever made was my third house that I ever did. And I bought it for, gosh, I think it was $40,000. It was a cheap house, little two bedroom shack basically. And I bought it in Bellevue, which is a suburb of Omaha. Did not know that Bellevue's City is much more strict than Omaha. And so when we were doing the work, I went in there, I was doing all the work at the time after work, I was like, I'm just gonna go in there and do the house. We'll be fine. Well I got shut down by the city and our rehab budget went from 25K to 65K cuz we had to redo a lot of it.

Oh wow.

So that project was back when I was. 23 years old. So I did not have many contacts and it took me 11 months to rehab that house. So the holding cost ballooned up. And it was just a big learning experience to know, okay what subcontractors I need to know what general contractors I need to have. And to make sure that I'm good with the city and not red tagged. But thankfully that house did end up turning up, the market kept going up at the time, which was great. But I did buy it, right? And so even after everything they had appraised at 125 and I was able to BRRR out all my money.

That's awesome. The only thing is it worked out because, like a lot of times, you hear people say that the cash is made or the profit is made. When you close the deal. Not when you're doing your rehab and all that other stuff, right? So the fact that you found a good deal in the first place that you were able to afford this $40,000 extra hiccup that you ran into, right? Because you're talking about you went from a 25k rehab budget to 65k that's significant, man. And you were still able to come out on top. That is kudos to you, man. You found a really great deal that you were able to make that mistake and recover from it. So that's awesome. The next question Wyatt I wanna ask you ties into this, but it's what is something that you've learned that you wish you knew when you first started?

I wish I would've known about scalability a little bit faster and I wish I would've known about coaching a little faster cuz everything changed as soon as I got involved with coaching. It's crazy the amount of reduction of risk that you can have and the increase of speed that good coaching can bring. and I know you're a coach as well and I just, I'm a firm believer in coaching and we were just talking about this before then you, you have a coach and you coach.

Yeah, I literally I was late to our interview and I had to apologize to Wyatt cuz I was actually on a Zoom call with my coach getting yelled at about having to do some more reach out and get some more leads for the stuff I'm working on. Apparently I'm not doing enough and that's okay. I need that accountability and I think everybody needs that accountability, right? That's why I'm a firm believer in that and I practice what I preach, right? Yeah. Wyatt that's awesome, man. The fact that you realized this, and I know you said you wish you would've learned that earlier on, I feel like you still realized it pretty early on and figured out what you needed to keep pushing, right? So you got the coach, you go to conferences, you go to masterminds, right? You embed yourself in all of those things to only make yourself better. And I think that's the piece that people need to really understand. Like when somebody goes out and they get into a program like that, they are trying to make themselves better. Don't knock them for that. Now, don't go to one of those things where it's like, Hey, yeah, come on out. And then at the back of the room, sign away, $40,000 or bust out your credit card or Here, we'll help you get a credit card. Yeah, you might wanna stay away from those. But there are some really legit programs out there. They're pricey, but man, they'll, they will really. Take you to the next level. So I appreciate you saying that. And how don't you, I don't have any of those programs guys, so I'm not saying that because anything like that, but I'm saying it because it does work. And actually, Wyatt, I wanna, I want to ask you something offset from the final round really quick because, we're talking about all this stuff that you've been able to do, but I want my listeners to know how old are you?.

I'm 27 years old.

27 years old, and you reached financial independence this past February freaking fantastic. And you did that through real estate, so that's awesome. Just wanted to make sure we got that out there. Okay. So the third question of the final round, sorry, I went off on a little tangent there. But the third question is do you have any tips or tricks that you would recommend to someone that is just getting started today?

I think education is huge. So when I was starting out, I listened to Bigger Pockets podcast day in and day out, and then I repeated it while I was working on properties and just continually learning on my drives on the gym instead of listening to music, listening to podcasts, filling up your head with people that have been there, just like this podcast, right? Listen to people that have, that are maybe ahead of where you want to be so that you can pick up the nuggets to get you where they want to go, and that is how you'll get ahead in life for free and then if you wanna supercharge it, join some coaching.

Yeah, no that's fantastic. Great tips, great tricks. Podcasts, I think are one of the things that like were like a catalyst for me to really step up my game. Of course before I hired a coach, but it was the podcast that I would listen to and just listening to other people, bigger pockets was a big one. Absolutely love that podcast. It's one of the things I would listen to on my commute to work. And sometimes in the gym, but sometimes when I'm in the gym, I need some really motivating music. So I'll bust out some Chave and stuff and gets me pumped up. But podcast man, I'm telling you when you're on a commute to work, it makes you rethink that commute to work. It's man, I just, I don't like driving to work. This really sucks. I wanna get out of this nine to five. And then you listen to these podcasts where people are talking about how they did that through real estate investing or through other means, right? Through other ways of building financial freedom. But, you listen to that and it's just something that it, it ignites that spark in that fire. Or if you've already have that spark in that fire, it's already it's putting more fuel to it, right? So definitely listen to stuff, listen to content that's gonna help. Keep going and get better at your craft. So I love that, man. I call myself content sponge. It's podcast YouTube. I'm on all that stuff. Anything that's gonna help me get better. All right. Speaking of the final question of the final round, Wyatt, is, do you have a favorite business investing or real estate related book or podcast or both?

My, I would say. Besides the Bible, the best book out there is Seven Habits of Highly Effective People by Stephen Covey. I read that once a year. I see you looking for it in the back there. Yep. Holding it up right now. But man, that book is phenomenal and I was really grateful I was able to discover that at a young age. And so one of the exercises is begin with the end in mind. And you know you're going to your own funeral. What's that gonna look like? What kind of life do you want to design? What do you want people to say about you. And just think through with that and design a life that is going to be, is going to produce what you want that to be.

Yeah. Wyatt, that is phenomenal. That is a great recommendation. Now what about a podcast? I know you mentioned bigger pockets. What any other ones?

Yeah. Besides this one, of course we got,

thank you.

We got bigger pockets is where I started. And then once I started getting to multi-family, I started listening to Jake and Gino. So really enjoy Jake and Gino if you're looking to do more multi-family things. And those are really my two big ones. And then just always listening to Audible, . Average Joe Finances: Awesome, man. Awesome. Hey what did you think about the conference having Gino there to speak? Oh, that was fantastic, man.

That was pretty cool.

Every time Gino speaks. Yeah he's so good. He's the epitome of a guy that's taken action at a young age all the way through to where he is now. And just what he's built is pretty incredible.

Yeah I just like him cuz he is from New York, like me, and New York Italian kid, he was in the restaurant. And doing his thing before he got into real estate. I just thought it was awesome, man. He's got a great story anyway and they also have a great podcast, so go listen to his podcast as well. Wyatt, this has been absolutely awesome, man. That's it for the final round, however. I do have one more question for you, and this is the most important question of all because there's people sitting here listening to the show and they're like, man we heard some of the stuff that, that Wyatt was working on, the things that he's done. And he's only 27 years old and reached this financial independence number that's absolutely amazing. We wanna know where we could find more information about 'em. So if you could, Wyatt, please share with us. Do you have a website anywhere on social media we could follow you? Anything like that you could share with the listeners today?

Yeah. I put out a lot of content on Facebook, so feel free to head over on Facebook and add me. Wyatt Simon. I dunno, I think I'm the only Wyatt Simon on Facebook, so I'm the first one that pops up the least. Okay. I do have a website. So if you're looking to talk more about business and what we're doing www dot f as in full, C as in circle, equitypartners.com. So www.fcequitypartners.com and then on Instagram I'm @wyattbuyshouses.

Awesome. That's pretty easy to remember. However, I will make sure I have all those links in the show notes to make it easier for all of you guys to either click and copy and paste away, but don't do it while you're driving. Okay. Wyatt, this has been an absolute pleasure, man. Really grateful that I got the chance to meet you at the conference and actually sit down and have this conversation today, even after the technical difficulties of last time, what you know this was great, man. I really enjoyed it.

Yeah. Thanks for having me on and thanks for your patience, man. We made a happen.

Yeah we made a happen, man. Awesome. Hey, and to my listeners, thank you so much for joining me and our special guest, Wyatt Simon on the Average Joe Finances podcast. Go leave us a five star review and tell us what you liked about today's episode with Wyatt. Aloha from Hawaii and have a great rest of your day.