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You're listening to the master passive income podcast network.

Welcome to the passive Income Life podcast.

We're breaking down the mindset, strategies and actions to break you out of financial dependence of your job or business and into the life of financial independence where you choose how you get to spend each day.

So live on four weeks of vacation per year or flip the script and live on 48 weeks of living per year.

What you going to do?

What you going to do?

Welcome to the passive Income Life show where we guide you to a seven figure income with a special focus on making passive income so you can live the dream life.

And now here's your host, Zach Zimmer.

All right, welcome back, everyone.

Today we have my good buddy Steve Yoke, who, you know, we've been close friends now for going on four years, maybe five years.

And postcard.

Yep, yep.

We'll talk about how we met and, you know, you're gonna hear a great story of, you know, Steve's come up from, from teacher to largest flipper in Ohio.

Probably.

I don't know if we could ever find the data, you know, of where you rank nationally.

But yeah, you know, it's been a long time coming.

We've never been able to l on this.

Thanks for having me on, Zach.

I appreciate it.

I've been looking forward to this.

So let's start, start from, you know, start from the beginning, you know, a little bit about, you know, anything that, that sparked your interest in business in your childhood up to, you know, becoming a W2 educator.

So both my parents owned small businesses growing up, so I was always involved, helping out in any way possible.

You know, my dad owned a bait and tackle store in area Portage Lakes, right outside of Akron.

And, and I would help count nightcrawlers, move cases of pop beer, whatever, you know, stocking shelves.

That was like what I did all summer, but it was always math related.

I was always counting stuff all day, every day.

So I was big into that.

And it was kind of funny.

One of my friends was talking about, you know, playing Monopoly and I was like, man, I was obsessed with that game as a kid.

All I did was play this game.

And he's like, dude, that's why you buy so many houses.

It's like Monopoly to you, but the adult version.

And I was like, I never made that correlation until yesterday.

But yeah, I was a fanatic Monopoly player.

Always playing, playing, playing, playing.

Even had on the Xbox.

You could play way faster games, by the way.

And then growing up playing a lot of sports, grew up in Akron, Ohio, the suburbs.

And then, you know, as a kid, I.

One of my baseball coaches was like, hey, you know, you want to help me clean out this rental property?

They had like a set out.

I didn't realize what it was at the time.

It was a set out, though.

Like, the bailiff was there and we were putting all of our stuff on the curb and then we were cleaning it and he was going to re rent it.

And that's kind of one of these like 14, 15, 16.

I was doing this kind of triggered the ideas.

Now, kind of funny.

He buys properties in Barbadon, the city that we're stationed in.

So he kind of created his own competition in a way.

Right.

But yeah, he got.

So I want to go back real quick, so.

So my father also had a family business.

Yeah, but.

But you know, he was so busy and I guess so my parents divorced when I was five, six years old, so.

Right.

So my.

I really only have my weekends with my dad.

But I guess what I was getting at here is my dad never influenced or, you know, tried to engage business mentality, business ownership and into me through.

Through that, like.

So your parents were together?

Yep, they.

They were together.

I was 21.

I got divorced.

Okay.

So that's.

I bet that's a big difference.

You were with your dad, you know, full time through that time.

And did he, did he try to engage business thinking, ownership into you through those years?

I mean, I.

He paid me to count night crawlers and wax worms.

Right.

I was creating ways to do it faster.

Right.

So picking them out of a flat, you know, and it was like a full flat.

It was like a box of night crawlers.

Right.

Counter the 12s, 24s and hundreds.

Right.

And then I was like, well, I could dump these out over like a.

I put a.

An old sled I would dump them out into, and then it would kind of spread them out so I could separate the dirt faster and get to the worms quicker.

And we had like the Indians game playing.

I'd be counting night crawlers.

And then I, you know, found out when I was doing wax worms, if I use something to like, kind of like divide the wax worms and spread them into the cups faster, I guess.

Right.

Cause I was paid per cup or per flat.

So every time I would count out 500 night crawlers, I got 200, I got $2.

So like 4th of July weekend, like before that, that was like the biggest fishing weekend in the area.

We would have 30 flats of 500 night crawlers.

And we count them out into 12s, 24s, and hundreds.

And I was just like, yeah, all for two bucks.

Okay.

So I.

I would negotiate my pay.

I think we started at a dollar, and I think I ended at 3 bucks before I sold the business.

But it was just, you know, thinking of faster ways to do it.

So I would just cup all the night crawlers and then I'd put the dirt in.

It was like, you know, do all count all the night crawlers, then put all the dirt, then do the lid.

So it's systematic.

Right.

I wasn't trying to just do one cup at a time.

Right.

Cause I wouldn't make any money.

So I was creating a way to do it faster.

Creating a high school in high school was when you did this first cleanup.

Yeah.

So I was doing the night crawlers when I was probably like 5, 6, 7, 8, 9.

Okay.

I was super young.

I saved money to buy a TV.

$210 TV for 17 inches of greatness.

But.

And then high school was kind of the clean outs.

And I did that for a few, few people actually, outside of just my baseball coach, one of my buddies, dads had a few rentals right by Hoban High School.

Okay, so you were, you know, engaged with rental ownership in high school.

And.

And what do you recall, kind of what you're thinking about it was back then was this, like, oh, I want to be landlord.

I want to do this 100%.

I was the one.

Clean out is always very vivid to me.

We were there.

We were.

It was filthy, greasy, grimy, whatever.

She lived there for a couple years.

And we're just cleaning it, cleaning it.

And then we start going to the paint, right?

And he's like, hey, I got like 50 buckets of paint.

Just dump them all into these 5 gallons and mix them up.

He was a painter by trade, so he had a ton of like half gallons mixed it up and just started slapping it on.

And I don't even know what the color was called.

It was just.

It was the color.

And dudes were walking by being like, hey, how much is this going to be for rent?

He's like $600.

And the guy's like, I'll pay you upfront for a year right now.

And I was like, how much?

You said, what?

Okay.

Knowing now that's the worst landlord move you could make?

And he was well aware that it was the worst landlord move he could make without screening the tenant.

So, yeah.

Yeah.

So that kind of triggered me.

I was like, dude, you can get 12 times $600 up front rent.

I was like this back in 2005.

So like that was, you know, money in my mind.

Yeah, 7, 7200 bucks.

And I was like, yep, yep.

So that was, that was high school.

And then at college I played football for a few years.

Small one, double A, Robert Morris University.

And then I was always hurt.

So I just came home and no major injuries, just like broken finger, torn this, torn that, you know, whatever.

So came back to Akron and just got my degree in middle school education.

And as I'm becoming like a junior and senior, I'm just like looking on Zillow like every beginner does, right?

Just combing Zillow like it's your job.

And I was convinced like 100% that I was going to buy a duplex within 30 minutes of wherever I got a teaching job.

So my senior year I was applying to any school, any school, like an hour radius of Akron.

Right.

Application, application, application.

I put in like 30, 40 applications.

And then, you know, I'm working full time at Red Lobster serving tables and shrimp.

You know, I was, I was hustle.

I was making good money there.

Like I was making 2, 300 bucks a shift.

But I was, I'd leave the shift and I'd be like sweating.

So I'm doing that, I'm applying.

I have the, I was in a fraternity, so I had the pledges, were grading all the kids homeworks for my student teaching.

So they're grading all my homeworks for me.

I'm working, I'm applying.

Like life's great.

Get a call from city Brunswick, Ohio.

Came in, interviewed and got the jobs.

Then I was hard looking for a duplex.

That was in June of 2020 or 2013.

And then by October 2013, I bought my first duplex in Lakewood, Ohio.

No furniture.

Just went up there and slept on the floor the first night with some buddies and threw some air mattresses out and you know, walked around town and thought we were the coolest thing ever.

Had no idea where we really were.

Yeah, yeah.

Well, that turned out to be one of the best moves I ever made.

Ended up buying another duplex in Lakewood.

And then.

So did you, you house hack that first one?

You lived in half and rented the half.

Okay, so I lived in half, rented half, and then I rented the rooms in my unit.

So it was a two one and a two one.

So I had one.

And you just did a 30 year fixed owner occupant on it.

FHA moved in, put down my three and a half grand or whatever it was.

On a $7 purchase, my buddy was paying me $300 to live in the one room plus split utilities.

The attic was unfinished, so this was like my first variants.

So I had to figure out how to finish the attic to make a third bedroom because I could get 300 more in rent, right?

And then plus my, my attic bedroom would be really nice.

So we ran, we ran a power, I ran a new panel up there and then I ran all the wires off the new panel, you know, and then did all the drywall work and flooring and paint and all that stuff.

Anytime I'd hire someone, I said, I'll hire you, but I have to work with you.

I feel like any contractor now would have laughed me out of the room.

Right.

And I was like, I don't, I don't care if I'm picking up screws or whatever.

I just want to work with you.

And yeah, that's how I learned how to do everything that I know how to do.

So we have laid tile flooring, I've drywalled, I've painted, ran wires, three way switches.

I mean a lot of that stuff.

You know, I've not done anything.

I've, I've cleaned gutters.

I think one time early on in investing when I was running weight, a property was way screwed up.

Break ins, contractors bailed and I was like, okay, I guess I'm gonna get on the roof and clean out these gutters.

That's what you chose.

I mean most, the most unskilled task that had at that property that I could, that I could do to try and move things along.

Yeah, hey, you guys just gotta dive in.

I mean, I got, I got no issue diving in myself.

I know we had a backup at a property about six months ago and I showed up with boots and a suit and start shoveling.

Just need to get it done.

I think that's, that's why all the workers, you know, appreciate me.

I'll dive in and I'll carry flooring.

I signed up to carry bricks into a basement next week, like, whatever.

I mean there's, you know, when you're starting, you got to get involved in those things.

I mean, from, from number one, you know, probably a cost basis necessity, like, oh, I can't be throwing all this money away.

Two, you know, to, to learn those things, you know.

Now I, I didn't have the time, you know, I had full time W2 and I didn't have the time with, you know, young kids at that time when I was starting to.

And that was.

Yeah.

Same time frame, like 2013.

So I didn't.

And unfortunately I didn't.

I never got to learn all these things.

But.

So, okay, so you had a couple duplexes, you're teaching one.

And then I bought another one.

I bought a very, very foreshadowing.

I bought a turnkey rental in Maple Heights for $45,000.

Okay.

So someone else had rehabbed it.

Yeah.

Not to my standards or not to what we do now, but it had new paint, the floors look good, and there was new cabinets I was in.

Okay.

Okay.

Yeah.

So then we bought another duplex a year after that.

So I had five rentals.

I was full time teaching.

I was about five, six years into it.

Just met my now wife at the time.

You know, we're living in the duplex.

Yeah.

Okay.

And right from the beginning, what was, what was kind of her.

Her opinions of rental real estate.

Very supportive, pushing, driving you, or very questionable.

How did that go?

I was already investing at that time, so I think she knew that was just going to be part of the deal with me.

I was already buying houses.

It wasn't going to be like, you can't buy houses now that we're together.

But I know.

First time.

Well, she moved in with me when I was in my first duplex still.

And we moved from living upstairs with my two roommates to the downstairs unit when he moved out.

Me and her did all the flooring, the painting, and just light touch ups.

Looking back, it's kind of funny because she paid for the flooring.

So what a great, what a great investment.

Yeah.

Yeah.

So she bought all the flooring and I installed it.

We lived there for like two or three months and then I found another duplex I wanted.

So we moved and she was like, what about the flooring?

I'm like, hey, it's in there.

We were just dating at the time, so I was like, you know.

Oh, she was paying rent too.

Oh, boy.

Okay, that's nice, right?

Your, your girlfriend's living with you, paying rent, all your roommates are paying rent.

And I got another duplex and a turnkey rental and you know, all that stuff.

So I was living large with my, my teacher salary for sure.

Okay, so what year.

So what year did you start?

So you got into a partnership?

It was a partnership on some of these.

No, those were all mine.

Just after probably like 15, 17 or 18 got into a partnership.

Being naive, I still thought everything I did was gold in real estate.

So things didn't go so well.

You know, we Broke off the partnership a couple years later and then got into what I'm doing now, kind of what I was convincing them or trying to talk to them about doing.

And they were full time in the business and I was the third partner that was a teacher.

So my opinions weren't, you know, valued or respected or heard, I guess you could say.

So I started.

As soon as we broke off, I started doing turnkey rentals, selling them and, and did a couple of those and did a couple regular flips and it went well and I met some of the right people to kind of hook me into, you know, finding people that needed turnkey rentals.

So it's a service, providing turkey rentals as a service that's end of the day.

Well, and it's tough, it's, it's tough to sell that, I mean that product to people here.

Right.

Because they can see, oh well, I can, you know, why can't I go buy and rehab them and, and cut that margin, your margin out of it.

So you really have to find, you know, the out of state investors that can't, they can't find, rehab and manage those properties from a thousand miles away.

Yeah, 100% you're paying for a service for me to renovate the property.

That's all it really is.

And then my uncle does the management on the back end.

So he runs a management company which has been awesome.

It's a smooth, easy transition, easy handoff.

You know, once the project's done and we're appraised and inspected, they start marketing for a tenant before closing.

And you know, we usually have a signed lease within 30 days of closing, as always the goal and 95% of the time it hits.

Yeah.

So I want to focus on the scaling because, you know, this a term I came up to describe you a while ago.

Scale a holic and you know, so I want you to talk through so people understand what, what's been done.

But more so how you did it because finding houses, finding contractors, managing, those are all things that are a lot of effort to scale.

And so let's go to when you started, you know, 2018.

I think we met in 2019.

So talk about like somewhere in there.

Let's talk about the volume and, and starting this thing in like 2018 when you broke off and.

Yeah, I think the break off is 2019, to be honest.

Okay.

But either way, so we broke it off.

I bought one or two.

How I bought one house for three grand in barbered at the time.

And I was like, I had to flip this one, I got a few things from the partnership.

Yeah.

Three grand on 8th street in Barbara.

Wow.

Yeah, it was crazy.

It needed a lot of work, you know.

But here they're just.

Everyone knows where we started.

Start out buying one house, right.

In 2019 to.

In 2025, quarter one.

So January to the end of March, we've renovated and sold 40 houses and I've also kept an additional tenants rentals.

So we did 50ish houses in the first quarter of the year.

So you know, 12amonth now.

Yep.

On base for 200 for the year.

Yeah.

In a 20 minute radius of barbered in Ohio.

Okay, so let's talk about how we get there.

Right.

So you buy the first house.

Still working my W2, so going to it on weekends, stopping down once or twice during the week.

I still live about 35 minutes from the area that I work in.

So getting that house, moving it, you know, I already had some private money lenders that kind of do it institutionally that I knew and they charged a large amount.

They charged 15% interest and six points.

That was their fee to do the project.

But I was like, hey, we need three grand to buy it.

I need 60 grand to renovate it.

And we took out several 40 yard dumpsters.

I was bringing kids that I coached in football, bringing them down to Barberton on the weekend and we'd fill up a dumpster and then head back.

So we were doing a lot to fill it up and get it done.

Any little thing we could do on our own, we'd do it.

So I was always, always positive to help keep the cost down.

Right.

You got to do some things to kind of moving along because I didn't have huge Home Depot discounts.

I didn't, I wasn't fuel per caping at the time.

I wasn't getting great deals from contractors yet because I didn't have those relationships.

Now the guy that rehabbed that house still works for me today, which is an unheard of situation.

He's five years and 100 houses into it, probably still works for me.

Right.

So that's always a cool little little thing to, to know.

He even painted my basement when I finished it at my own personal house.

Yeah, that's a pretty, pretty good relationship and a long relationship in the world for sure.

So scaling wise things that I do to scale, right.

So I personally try to meet every contractor, especially when we first started and build a relationship, shake their hand, walk the property with them, tell them thank you for their time coming out, looking at it and just do the little things that you can whenever you can to help out.

Whether that's drop off a pizza, whether that's they have a bunch of trash in the house and they're like, working on plumbing.

Like, hey, this is all trash, right?

Okay, cool.

I'll take it out and just start throwing in the dumpster.

And don't, don't act like you need anything for it.

Don't be like, hey, I'm gonna take 50 bucks off.

Let me take all this trash out.

Nope, still paying the full amount.

Do.

Give them a little help.

Let them know you're invested with them.

Right.

So my, My project manager now knows that he has to shoot me a text and be like, hey, can I buy so and so pizza?

Always a yes, right?

Always a yes.

Hey, can I give Tim a fill up in his truck?

Things have been a little tight.

He said, yeah, fill up Tim's truck.

I got fuel perks for days.

Right, Whatever.

So doing those little things to build those relationships, treat people like people.

Right.

Just because they're working for you doesn't mean there's a level to any of this.

Everyone's on the same level because you need everyone pushing the boat with you at the same pace.

A lot of times people, like, degrade people in a way.

So I try to make sure that I show that, hey, I'm a.

I'm an equal.

I'm.

I'm with you here.

And like, try to be modest, right?

Just try to be very modest in what you do.

Like, I still wear a Walmart hoodie all the time.

Sweatpants all the time.

I don't pull up in a.

A Rolls Royce and then act like I'm blue collar.

Yeah.

You know, I drive F150.

Right.

And that's what it is.

It's not tricked out.

It's not a Ford Raptor.

It's.

It's a XLT Ford.

Right.

So your base model for just being part of the.

Part of the crew.

And then as far as finding deals.

Right.

There's a few ways you can find deals.

Right.

Find them on the mls, which is just the listings.

Right.

You can market.

Which I've done.

I did a little bit.

That's how I met you.

Right.

I marketed for a friend.

Yeah.

Yep.

So for anybody.

And I don't.

Obviously didn't talk about this yet, but.

Yeah, I got a postcard in the mail one day and I'd heard about, you know, yoke property.

Steve Yoke.

I don't know, I think on maybe on Facebook you know, through something, I'd seen your picture or comments.

And so I remember calling the postcard and some lady answers, and I was like, you know, and I got 50 at that time.

Yeah, 50, 51, 52 properties or something.

I was like, let me talk to the gu.

I don't.

I don't want to talk to.

I don't want to talk to the secretary.

Let me.

Let me talk to the guy.

You know, I got 50 some properties.

Let me talk.

And, you know, I think you called me back the next day and I was like, hey, let's go golfing.

All right, let's go golfing.

Let's talk.

And, yeah, that's where we kind of started our.

Our chit chatting.

And at that time, I think, yeah, you were flipping or on pace for maybe like, 20 that year, something like that.

They're doing a couple at a time.

I know on the golf course today, you agreed to lend to me, so I think you even funded a deal.

Yeah, probably.

Yeah.

Because at that time, I was kind of done.

I was done buying rentals.

I was doing syndications and lending.

And I was like, yeah, yep.

Let's do a note.

Let's go to Florida.

Right?

Didn't I say that?

Okay, let's go to Florida in a couple weeks.

My wife's like, you met a guy via a postcard.

You went golfing with them, and now you're gonna go to a sister's condo in Florida.

Yeah, yeah, yeah.

That was funny.

And I.

Then I was like, I think I have to go.

I think.

I think I need to.

To network here, because I was still.

I just quit teaching at that time.

And 20, 21, I just quit teaching.

And because I had a son at that point, I had to.

Otherwise I would be able to take off.

Maybe I had to have a son at that point.

So you did.

April, you're spending.

You were spending, like two days a week at home.

And I remember, I was like, man, you got to get her to quit her job so you can have more time.

Because your time, you know, your.

The income you bring per hour of work way, way offsets what she's doing as a teacher.

That's her.

Her something.

That's her passion, right?

Yeah.

You can't.

You can't take enjoyment and satisfaction, gratification.

But if, you know, if she was only working for money, that's where you sit down and say, hey, it makes no sense, you know, when I can go do these things and make a lot more to.

To just retire.

You.

Yeah.

100%.

I mean, yes, I was.

When I first quit, I was watching the kid two days a week and I was working three days a week.

I took an unpaid year from teaching so I could still go back and get my job in a year if I.

If things didn't go well.

Right.

Already had money saved up, so I was like, hey, I gotta take this unpaid sabbatical year, whatever you want to call it, maybe a little bit unethical in the sense that I should have been watching the kid five days a week, but I was still spending two days a week with them.

And then we had a babysitter for three days a week, so I thought that was fair.

And then, yeah, so we started doing that and started finding houses, right?

So I was finding some on the mls.

I tried to do a little bit of direct marketing.

I got a couple deals, but I started having a lot of other things going on with the rehabs because I was the project manager as well.

So I was like, man, I don't have time to market call these people, follow up.

If they weren't selling me their house on the first visit, probably wasn't happening, which isn't the best way to do it, right.

So I started making friends with wholesalers.

So for those who don't know, wholesalers are people that find off market deals, usually at a discount, otherwise no one buys them.

And then I just was trying to be the easiest person to work with.

I said, hey, I need a two week close.

But yep, close in two weeks.

Boom.

I made sure closing processes were smooth.

I thanked him for bringing me a house and I asked him, hey, if you have any more, I'm also buying and you know, Akron, Canton, whatever, you know, and they just kept bringing me more houses and I kept meeting more wholesalers.

Yeah, I bought three houses last week.

I need three more.

And they would bring me more houses.

And I just kept buying and kept buying and kept buying.

And I think the thing that a lot of people would do at this point, right, you're.

You're making money flipping these homes.

They would start buying boats and, and Lamborghinis and whatever.

I still live in the same house when I was teaching that I do now.

Right.

Nothing's changed.

So a lot of money gets reinvested into the company to help that growth.

So I was able to accelerate the growth by living modestly, you know, in just a normal house that I had when I was a teacher.

Right.

There was no lifestyle jump.

Right.

There was just the same thing I was doing, I'm doing now.

And that still continues today.

Like, I don't have, I never bought a Florida house.

Sorry, Zach.

Yeah, this is, I mean, this is a big thing that I've had really put blatantly in front of my face here, you know, a couple weeks ago of a high, high, you know, high six figure income person that, that reached out for some, you know, financial help, you know, guidance.

And, and that's where, when, when I was like, well, you know, I sent them my spreadsheet, you know, that this person's a friend.

I sent them my spreadsheet because I don't, I don't hide my income and expenses.

I share it.

I talk about podcasts.

We live at about 45% of what comes in a month.

And we used to live even on less than that.

And so, Yeah, I mean, 55, 50% of what comes in every month just snowballs.

And, and this individual was living on like 99% of their income, including their quarterly bonuses.

So their quarterly bonuses were already spent as the way of life for them.

And, and this is a person.

Yeah, I mean, they're a family that, like, that should be way, way, way better off than they are.

But they, you know, very little net worth.

I mean, yeah, like as much net worth as I had 15 years ago as just a little W2 engineer.

And this person is a serious, serious position.

And so, and that's the biggest thing like what you're saying.

Yeah, you're not, you know, spending like I am and you probably spending well above like me, but you're living on probably 15, 10 of what's coming in.

So, so 90 of what's coming in, you know, is just getting snowballed and reinvested.

So, you know, it'd be something interesting.

You know, I've challenged you a lot on this at like, when do you slow down and get your time back?

Because what you've done, while it's amazing, it's, it's a time suck.

Right.

You work quite a bit and, and we've, we've talked about, you know, do you hire a director of operations?

And maybe we'll get into that here in a little bit.

But yeah, I mean there's, you live well below your means so that at some point you can have, you can get your time back, right?

Yeah, I could.

I mean, I recently hired another person onto the flipping side, right.

So I have a full time secretary on the flipping side.

I have a part time secretary on the flipping side two days a week.

I have a full time project manager.

And then I just Hired a acquisitions person that's going to walk houses.

Right.

So my project manager, my acquisition person.

Walk houses.

I don't walk a ton of houses anymore.

Okay.

Which is kind of.

That was the biggest thing you were doing.

That was the biggest thing you were doing.

You were the acquisitions guy.

I was, yeah.

Now I'm just working on selling the properties, make sure things are moving.

Right.

I've been doing a little bit of lending like, like we've talked about, you know, and just, you know, just kind of checking out different things.

And most recently every dinner now I put my phone on.

You've been to my house, I have an island.

Right.

Dinner at the island.

I put my phone over by the corner where the coffee maker is by the stove and I'm like, just leave it there, plug it in.

Because it's always dead because I'm always on it.

Yeah.

And that's my 20 minutes of just a little bit of serenity.

And then I try to just not be on it as much once I get home after 4:00.

Well, it's definitely, you know, so we had what an hour, hour and a half the other day together and you're doing 2-3x what you were doing on one of our early Florida trips when you couldn't get off your phone, your phone was just non stop.

And so again, on that hour, hour and a half we had the other day, I don't think, I mean you had messages, you had some messages, but I don't think you got on a call at all.

And you're doing 3x what you were then.

So you're doing the right things.

And, and so that's the question, like, do you eventually, you know, just.

I think the answer is you hire yourself out of business.

You get a director of operations that handles all operations, you hire a GM of sales that handles the sales and you keep this thing going.

If it, if it can keep going or if somehow, you know, the markets just change then becomes your time to just be a, an investor.

Right.

Like me.

And you just sit here and you look at deals and you send a wire and you lend and you know, you do these things instead of running a very active company.

Yeah, I mean, I think that's kind of what we did.

I, I did, I wasn't the best at project management.

Right.

I was good at making relationships and finding contractors, but I wasn't, you know, my level of construction knowledge wasn't someone that was doing rehabs.

Right.

It was someone that did a little bit of rehab.

So I Hired that out first, you know, and then I also hired a full time secretary.

I wasn't, I'm not super organized as you know, I'm more bigger picture idea, get it moving.

So I hired those two positions and then the acquisition is probably the next thing, right?

I take the most calls from wholesalers now.

Contractors don't call me anymore because I backed my project manager 110%.

I said, hey, call the project manager.

Hey, call the project manager.

So eventually they stopped calling me because I was no help, right?

I've never been to the house, can't help you.

So now we're buying and selling houses that I've never been in, which is kind of weird.

Good in a way.

I'd say probably 30, 40% of the houses I've never walked now.

Well, and that's what we got.

You know, people, most people probably have not heard the term VA versus NVA value add versus non value add.

It's a term in continuous improvement value stream mapping.

And like if you look at the time it takes to make a vehicle, right?

It might take a vehicle two days to go through the assembly line, but when you look at the true value added machining time, it might be like four hours, five hours, right?

So there's, there's four hours of value added time to assemble a vehicle in a two day total supply chain lead time time.

And so you got a day and a half or whatever of non value added.

And I, so I looked at that when I was flipping like I'm completely non value add.

My value add is just the money here, right?

The agent finds the house.

I empowered the agent to pick everything because I don't want to hear that you can't sell this as, oh, why'd you pick that countertop, Zach?

Why'd you pick that paint color?

Why'd you pick that lighting?

No, you told me this is a good flip.

You're going to pick the countertop, the lighting, the paint colors, the vanity.

And I'm not a contractor, so you know, hand the keys to the contractor, tell them and pick it out, he'll hand it back to you, you sell it.

And I, you know, I did a couple flips that way where I never saw them.

And that's the same thing with you, right?

You're not going to do the work and you're not going to sell it or you know, you know what these things.

So it's like stay out of their way, give them the money, hit the check, hit the button to sell them and stay out of the way.

Yeah, I mean, that's something that I try to do.

And all of our houses are pretty repeatable.

It's pretty obvious.

You know, it's all the same color paint, all the same cabinets, all the same flooring, all the same lights, all the same fixtures.

The only thing that changes is the layout of the house.

Right.

Where we add the half bath on the first floor to add that rental value.

And then just if the furnace is older than 10, hey, we replace it.

If the hot water tank's older than five, we replace it.

The roof is old.

Three tap shingles replace it.

It's all this box.

The only time it gets these right.

You got your standard operating procedure.

And then in your case.

Right.

Well, people would say, well, how do you know that they.

That they did it right?

Or how do you know?

Well, all your homes are going to be inspected and inspection.

If that inspection report comes back kind of ugly, hey, contractor, project manager.

I mean, boom.

You know, that's a warning.

Like, if I get another inspection list like this, you know, you're done.

Or hey, hey, guys, four stars, five stars, great job.

Yeah.

Each one they get.

They get a test on.

Essentially, the project manager's pay is 50% tied to his inspection reports.

Yeah.

So how incentivized to make sure those inspections go well.

And they've gotten a lot better.

You know, contractors are going from house to house to house.

My uncle's managing the house on the back end, and if something goes wrong, he calls me, you know, he's like, hey, there's.

There's this issue, this issue, this issue.

And we'll.

We'll send the contractor back or I'll just pay one of my handymen to go do it.

Like, whatever you.

Maybe something small.

So that's true.

So they're still getting graded a year down the road because that home inspector might not have caught something.

And then down the road, you have a problem and you got a.

Jim, why the heck did you do this?

Like this, you know, you can't do this, man.

Like, now we're dealing with it a year later.

Yeah, yeah.

And I've.

I've let go of contractors after they've done four or five houses for me because all four or five houses I'm paying to fix.

That's another thing about buying a turnkey rental off me.

If something's not right that we did, I make it right.

You know, that's a day one, day one.

And whether the person knows or not that I had to go back and fix it, it I don't think they ever find out, but whatever.

Yeah, some of that, you know, you got to keep that seamless, right?

Like if plumbing.

Okay.

Yeah.

Past inspection.

But it, you know, it fell apart a year later.

Yeah, we're just taking care of that seamless.

You're not even going to see that investor.

You know, that was our bad.

And now it's taken care of and you didn't even know.

Yeah, we just do a 30 day.

I'm hard on a 30 day.

Like as long as it wasn't tenant.

Cause once the tenant moves in, I usually give like a 30 day like grace period.

So the maintenance person will call me and be like, hey, yeah, you can.

Always tell if something was wear and tear or if it wasn't.

Normally you could tell if something, something.

Was done not right off.

You're like, why is the door off the hinges and the doors ripped out?

It fell.

Okay.

Yeah.

So.

Okay, so you're, you're doing, you know, on pace for 150 this year.

I'd say close to 200.

I mean, closer to 50.

50 houses.

Between the rentals and the flips in the first quarter, 5 times 4 is 200.

We're not even summer yet.

Summer's busy season.

So yeah, if we do be crazy, what's been your.

It is.

Is it more of a constraint?

Supply or demand moving?

Which one's more of a constraint?

Right now it's a cycle, right?

So first time it's like, hey, I don't have enough houses, so I buy more houses.

Then I don't have enough contractors, so I find more contractors and then I finish more houses.

I'm like, oh, I gotta find more buyers.

And then I'm like, I don't have any inventory, so I need more inventory.

Then it's the cycle of Steve.

It changes every two, three weeks.

So you got three, three constraints.

That could be, it could be your ability to find the houses, your ability to, to rehab the houses, or your ability to sell.

So you're managing these three constraint levels and you're squeezing the balloon whichever way you can.

Okay, I gotta go find more buyers.

Oh, I gotta find more contractors.

I need to find more.

And then what happens is, as you squeeze it to fix the one problem, you then create another problem, right?

Because you find you then need more houses.

You find more houses, you then need more buyers, and then you find more buyers.

The demand is more.

So just it keeps pushing up this situation to where I have to keep meeting these demands, but the demands are higher every cycle.

I Go around it.

So I think that's what's caused the growth is because I'm like, I got people texting me they want houses and I, I just bought one house and that's everything else is under contract.

So then I'm like, well, and then as you feed property management, you, you may have to pull some good guys to just be working full time on property management, repairs and turnovers.

And so that, that business that you have to support your customers.

Right, okay.

That can pull from, from their flipping.

Yeah.

So everyone pulls in every direction, but it always forces someone to improve what they're doing, which then forces the next step to be like, oh, I got to meet that demand as well.

So it's really just, it keeps forcing more and more volume.

It's all more and more volume.

Because I always tell a contractor, like, if you're working for me, I will always have a house for you next as long as you do a good job.

And that's always held true.

That's always held true.

I've never looked at anyone said, I don't have company work.

It might not have been the work they wanted to do, but it was payable work.

And it was always something available for that person to jump to, which is unheard of.

Right.

Everyone always says that.

They're like, oh, I've worked for you forever.

Don't worry about it, dude.

If you're flipping two, three houses at a time, you're not going to be able to tell that to a sub.

You know, you're not going to be like, we bought 22 houses in March this year.

20, 25.

In February we bought 17 and in January we bought 10.

There's no one locally that can tell you that they're going to have work for you.

Like yokel help work for you.

Oh man, AEM was telling people they're gonna have work forever for people.

Well, that's a whole, I mean, you can go on that road.

I'm, I'm not going to touch that.

With the ten foot pole for those listeners.

Yeah, AEM was a local.

I mean, they were doing a lot of volume, but they were a Ponzi scheme.

I thought, I mean, they.

All right, I thought they were doing a lot of, they were, they were taking a lot of money, let's put it that way.

They, they had raised and taken, I mean, the lawsuit is over a hundred million.

I don't know how much.

But yeah, they, they had taken a lot of money from investors to flip and sell properties.

And I was invested not Directly with them.

I was invested through an intermediary that didn't tell me my money was with them, but they PG my money.

And so there's.

It was lost in the Ponzi scheme, but I had these folks PG'd and so I ended up getting paid back from them.

So I got out of it clean.

But, yeah, that was a big, big deal here of somebody who had aspirations to get to your size.

You know, I don't think anybody goes into.

Very few people get in because I've been in a couple of Ponzi schemes now, unfortunately.

Three or four.

Yeah.

I mean, yeah, but.

Yeah.

So I don't know that any of them intended them to be Ponzi schemes.

They just got out of control because they let the, they left the dam open for money to come in, and their strategy did not have good placement for where to put that money, whether it was this natural gas one that I was in or AEM in real estate or Marco Santarelli in the notes.

Like, you know, that's another one that's just bad.

But, you know, I've got, I got out of all of them except one I was fortunate enough to get out.

But, you know, I think they all intended things and then they just couldn't execute while they just had way too much money coming in.

And, you know, so that's the key in yours is while you controlled the funnel slowly, you know, certainly with me, you know, I've had money and you're like, okay, I'll take 100 here, I'll take 200 here.

You didn't say, yeah, Zach sent me half a million dollars and I'll just figure it out.

You know, you took it as you needed it, right?

And, and you, you used, you know, institutional commercial lending, which was per property.

So you've conservatively taken money as you've grown, but you've just though.

What's that?

You would have gave me all 500, you know, you.

The first time, you know.

Yes, because, because when I was first started lending to you, I hadn't, hadn't gotten all these, I hadn't gotten burned all these times.

I'm saying like a year ago, you wanted to do a revolving one.

You would have.

If I would have said, yeah, I'll take all 500 instead of tearing it, you would have given it to me at that point.

Maybe, Maybe.

Probably.

I mean, I knew you, right?

You've, you've, you've vacationed with me, you've been to my place.

We've, you know, I think I trust Well, I know I trust you a lot more than the people who.

So the initial ones.

I just trusted Everybody back in 2020-2023.

I mean.

Oh, you're telling me this.

I mean, why.

Why would you lie?

You know, I'd never been burned, and when people talked about their business plans, I felt that they're talking like I talk about my business plan, and I mean, when I talk about, you know, northeast Ohio real estate, like, that's the Bible.

Like, that is what really the truth is of what my model looks like and what my investing looks like.

And when they.

They told me their plans, I just believed them.

And.

And that's why I've lost seven figures in syndications and one, you know, one Ponzi schem get out of in time.

And it's.

It's been painful, but.

Yeah, you know, I know you.

You dabbled, you know, probably through some of my talking about syndications, and.

Yeah, I mean, you.

You haven't had the best experience either, but you.

You just trickled in.

You didn't.

You didn't dump in like I did.

Oh, yeah.

You were like, why are you only putting that much?

I just want to see how it goes.

Dabble my toe in here, and my toe is a little bit crispy, a little burned.

I actually, I met someone that lives in Pureland.

He's gonna.

I need to get the address of that self storage.

We can self storage the piece of land after two years.

So I need to look up the land or maybe you know, where it is.

Like, I'm gonna send him the address, and I'm gonna drive by.

He lives in Purland.

Like, I just talked to him yesterday, buying a duplex off me in Akron.

Super nice guy.

He's like, dude, I will drive by and take some photos for you.

I was like, sure.

Love seeing some grass.

It's a piece of grass.

After two years of having her money on top of the three other ones that I'm in that are all pieces of grass.

One.

Yep.

So, okay, so the flipping, the property management.

So now, you know, talk about.

Oh, yeah, before I want you to talk about these synergies and these hacks, you know, the.

The.

The.

The Chase card, all your little hacks.

Because I love hacks.

I mean, that's some of the stuff I've been doing forever.

So to talk to folks about some of these hacks that you've developed where, you know, just 1% of your, you know, $2 million in spend.

Right?

That's big.

And so let's hear Some of those, those things.

Yeah.

So hacks that we do.

So Home Depot does 2 1/2% cash back, half percent in gift cards and 2% in like a physical check.

So we signed up for that just being part of the Cleveland RIA Association.

You get that?

So we've signed up for that.

So we're getting two and a half percent on.

We spent $2.4 million at Home Depot quarter one this year we spent over 700 grand.

So we're on pace to beat that now.

Now did they 1099 you on that?

Nope.

Because it's return of your funds.

Yep.

Just like credit card rewards.

So all this stuff is tax free in your pocket because it's considered return of your funds, not income.

Yep.

Awesome.

Big that.

And then we use, when we buy Home Depot stuff, we use gift cards that we buy at a local grocery store.

And that hacks.

That racks up like food and fuel perks.

So we're able to fill all the maintenance trucks, vehicles, my vehicles, you know, my uncle's vehicles, and then also buy groceries for free.

I paid for gas for years.

I just started using it for groceries about a year ago.

So like last night, I mean that's.

Got to be a ten thousand dollar a year benefit because I mean like.

Last night I was like, hey, let's get steak.

So we went and bought.

Nice place you go for the giant eagle counter.

Hey, what's the.

I want, I want the Tomahawk.

Where's the Tomahawk?

I don't see it out here.

Go cut me that.

Yes, please.

Bring your whole cow forward.

Yeah, so yeah, you know, and I even sell the fuel perks too.

My neighbor for 50 cents on the dollar tree service business.

He's a good dude.

Kids love him.

He always listen play on the equipment and stuff.

So he's like, yeah, 50 cents on the dollar.

I'll bring the 240 gallon tank with me.

And we, we fill it up every month and you know.

Yeah, a little bit here, a little bit there.

Always helps him and helps us as well.

So Depot fuel, are you using that Chase card That gets you two and a half?

Chase car gets you two.

I think it's 2% back.

I don't really know.

But yeah, basically the cash back from the Chase card, then just the totality of the spend.

Because you remember we spent a lot of money at Home Depot, but we also spend money at other places as well.

Yeah.

About roofing, siding, windows, materials, furnaces.

I joke that I make more in cash back than I did teaching It's a reality just on stuff you do every day to help, you know, trigger that.

And then just opened up a new credit card at Home Depot for a separate business that does 2% cash back on the Home Depot card.

So, you know, for the PM Company.

So they'll have their own separate it instead of using giant eagle gift cards.

Okay.

Yep.

So we get in cash back there, and then just having a large account at Home Depot, you get a huge discount on it.

I know one of the protests told me we were the largest account in the Akron Canton region last year.

So it's.

That's huge, you know, outspent.

But AMJ, which is Section 8 in Akron, so beating up government organizations left and right out here.

Yeah.

Yeah.

So they have a lot of housing units in the.

In the area and a lot of.

A lot of employees, but maybe after Elon gets done there, they won't have as many.

If I can hire a good maintenance guy.

There we go.

That's true.

They would have a lot of maintenance people, but they've been working for a government entity with very little accountability.

So I don't know how they're.

I don't.

I'm certainly not speaking for everyone, but generally, government workers tend to be not the.

The most.

So I know when I go into Akron municipal buildings, you know, you walk in there at 4:15, they.

They burn fire through their eyes.

When you walk in there, 4:15, they're already.

The desk is already closed up and doors are almost locked.

What are you doing coming in here?

4:15?

Yeah, I mean, that municipal stuff.

So it's funny.

Like, I remember I used to go to eviction court.

They'd be like, oh, you're good.

Just walk through.

Okay, thanks.

I was like, all right, didn't check me today.

That's cool.

Reassuring.

So I.

I know lending is another thing you've been diversifying into, and.

Yeah.

So talking about.

Talk a little bit about that.

Yeah.

So we do.

I do lending out of my ira, and I do lending just out of regular capital.

So they have about 25, 30 loans out right now between the IRA and.

And individual lending, which has been awesome.

You know, it's something that I aspire to retire in at one day.

I always joke I'm going to retire when I'm 40, but I don't know.

It's just tough to quit.

Just tough to quit.

I don't want to be a quitter like you, Zach.

I just can't.

Can't just quit, man.

You got.

You got to look at Time and, and we don't know what, we don't know what time we have here, right.

You know, unfortunately, I lost a cousin at four.

He was 43 here a couple months ago.

And yeah, I mean it was, it's not like he battled something for a long time.

It was just boom, one night and, and done.

And so that's, that's the one thing that everybody's got to think about is, you know, if they, they set these dates and they keep pushing them out and pushing them out and you might never hit it.

And, and I saw it.

I've talked about it with both my father and my father in law.

We're both still alive, but their physical health just fell off a cliff after their retirement, you know, at 60 or whatever.

They both work toward and you know, they had these visions, right, of fishing and trips and travel and you know, my father in law, they love Colorado and hanging out there all, you know, for months at a time and, and they can't.

Neither one of them can do the things that they had expected to do in their golden years right after they worked their 35 year, 40 year time span.

And so that's what I, you know, I just tried to talk to everybody about is setting those, those targets and, and holding as tight to them as you can to make sure.

I guess I always, I always thought like when I retire, like I wouldn't have the business, but I think a better way is just replacing myself in the business and continue the business.

Because the amount of like, mentally I feel like what I really enjoy is like there's.

And one of my employees said this to me, like, Steve, you feed hundreds of families in the Akron Canton area and you house thousands of people, right?

Wow, that really hits.

Hits a little bit different when you think about it like that I could never close up shop.

I feel like I'd be.

If that's what we said, like if this process is still working, you know, instead of, like I said, if you're living on 20, 15 of what's coming in, right, you, you change it to okay, I'm gonna live on, on 17 per, you know, whatever, because I'm gonna hire somebody and pay them 150 grand a year to be the director of ops, right?

And, and to.

So that I go in for a meeting a week week.

I go in on Mondays and we do it rtgw.

Things gone right, things gone wrong of last week's, you know, sales last week.

And you're just having a board meeting for two hours, right?

You know, and that's, that's what you are.

You now become the board of director, the chairman of the board for, you know, yoke property, Akron turnkey.

And, and that's what you do.

And then the rest of your time you just kind of, you know, you do what I do up.

You do some lending, you do some this, and, and you're traveling the world and you know, spending 20 weeks gone like, like I'm spending on, on the passive life dog realzack.

Zimmer.com so 20 weeks away from my house.

I feel like I, I like where I live though.

Like, I feel like I'd be like a part time person.

But winter here is horrible.

It's just gray and gloomy and muddy.

Yeah.

I mean, I don't, I don't know, I guess it's just what we grew up with.

Right.

So it's.

No, it's normal.

But not once you have palm trees and ocean and dolphins.

I love Florida.

I mean, who doesn't love warm weather?

Right?

Yeah.

So.

So okay, so right now your thought is, is till 40.

And I think.

Yeah, and I think that's definitely.

That should be the hard stop of replacing yourself.

You know, if Akron turnkey is still doing great, you know, you're replacing yourself by 40 to, you know, step into a chairman type role.

Yeah.

And it's 35 now, so four and a half years to start putting pieces in place because you just can't do it overnight.

It's got to be slowly and calculated and this.

Yeah.

You're not just hiring somebody.

You're probably developing somebody from within, you know.

Yeah.

That's the best way.

Yep.

Because it's not like I can be like, hey, I need a paralegal.

And you just find a paralegal and plug them in and they're just doing the same thing.

It's a unique business.

There's no, there's no one in the Akron Canton market where I'd have people that are already trained doing what I'm doing.

There's no business that's selling turnkeys and then managing them here in Akron can.

Right.

They might be doing pieces of it, but not the whole cycle.

So that's a couple minutes.

Tell us, tell us about these turnkeys and where they can, you know, tell us what do they look like to an investor and where can they, you know, find out more?

Yeah.

So if you're looking to buy a turnkey rental, that's cash flowing from day one, Akron turnkey is your only stop that you need to go.

To the reason I say that is, you know how we update these properties.

So let's just start with the outside.

If the roof is a three tab roof, or if it's missing shingles, we update it with a brand new 30 year dimensional shingle.

If the roof, if the windows have wood windows, we replace them with vinyl hung windows.

If there's water in the basement, we do a full interior waterproof roof.

If your wall is out of plumb, then when I buy it, let's say it's more than 2 inches out of plumb, we'll replace the whole entire wall.

If the furnace is older than 10 years, we put in a new furnace.

If the hot water tank's older than five, we put in a new hot water tank.

If you don't have a breaker box, we'll put in a breaker box, get rid of the old fuses.

We always do updated kitchens, baths, flooring, paint, lights, and then we add a half bath on the first floor in every house.

Why do we do that?

Because all the bed, all the rentals are three bed, one bath, four bed, one bath bath.

So if you have two, it's better than one.

Every family will tell you that.

I had that conversation actually this morning on a rehab I got going on in Maslin and Larry was like, you know, let's add a half bath on the first floor.

There's a closet down here.

I'm like, yep, do it.

Yeah, it's, it's totally makes it more rentable.

Especially if you're not trying to clip an excessive amount more for that half bath.

Or even if you're just trying to get the same, you'll get a better tenant because you'll have more applicants that want two bathrooms and that want one.

One.

No one ever said, hey, I have a family of five, give me one bathroom, please.

No one's ever said that.

So they'll appreciate the second bathroom and that'll get you tenants that stay a longer time.

And then on the management side, we require three times net income to move in.

So not gross, actually what they're taking home three times net.

And then we're looking for a 560 plus credit score.

If they're below that.

We're requiring first month, last month in security deposit, no recent evictions or anything weird on the background.

Then we're also diving into credit reports like how are your on time payments?

Like why is your credit score where it is, good or bad?

Right.

So if they have 30 credit cards that just opened up and they're completely over leveraged.

That's not someone we're going to rent to.

You know, ever since we made this change about 18 months ago, it's really helped with the long term stay of our tenants, just the quality of tenants that we're getting.

So just trying to go above and beyond to create less turnover which provides more cash flow.

And then also we stand behind the tenants we put in.

So if they don't pay rent, rent, if they also, they move in, they stop paying rent within the first six months, we release the property for free.

Nobody else is doing that.

Nobody.

I've never even heard that before.

So that's, that's how much we believe in the process of what we do.

Yeah.

So talk to what, what should, what these numbers look like?

What's your average turnkey?

What's that?

What's that sell for?

What type of cash flow?

What an investor expect.

So you're looking anywhere from 125 to like 145 is the typical purchase price for a single family home.

And you'll be, you know, cash flowing around month, 300 bucks, give or take a little bit.

And that's renting for how much?

So yeah, we're usually running anywhere from 12 to $1400.

Okay.

So 130, 1300amount a month in rent and 300, about 300 net cash flow.

Yeah.

Depending on if you're doing a DSCR loan, a conventional, you know what that looks like and you know that's a fully updated property with all the mechanicals.

Having 10 years of life plus is the big thing.

It's not just rent it, it's rent it with updates.

Yep.

So they're getting 300 month in cash flow.

They're probably getting 200amonth in principal pay down at the start.

I'm sure I'm like 100ish, but yeah, you're somewhere.

Depends on the term.

You know I'm used to 20 year, I do 20 year amortization.

If someone's doing a 30 year for better cash flow, they're getting less pay down.

Yeah, yeah, you know, so yeah, they're looking, you know, they're probably approaching that at that double digit, like total return when they look at it.

Yeah, for sure.

With depreciation and appreciation.

So know last year we saw 10% of patient Akron.

I don't tell people that, but I just say hey, 2 to 3% appreciation and you'll have your big ears, you know, I mean that's what you look for is to get a good bump here and there.

Yep, yep.

Okay.

And so where can they connect with you?

Where can they find properties connect with you?

Akron turnkey.com or you can find me on Instagram at.

Steve, Yo.

I post four real estate videos a week just on real estate content, so.

All right.

And we'll put all that in the show notes.

The Akron turkey website is Instagram.

And yeah, and I think there's.

There was some real juice here.

Those hacks, right.

Six figures just in perks because of just spend.

So, you know, people really got to take advantage of all that.

And I, you know, I regularly kind of settle credit cards and banks to make sure I'm trying to get everything when I don't even really spend that much, but just maximize these things.

And yeah, and good stuff there about developing the team and rewarding them and treating them, you know, treating them with courtesy.

So, yeah.

So good, good stuff.

So, yeah.

So, Steve, thanks for joining.

This was great show.

Great info.

You know, everyone will have his info in the show notes and you can reach out to me@realzackzimmer.com with your thoughts on today's episode or what you want to hear more on.

And as always, thanks for joining me.

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