“You really need to have a relationship with all these people, and have people basically interested in investing with you.”

-Lee Yoder

Lee was practicing as a physical therapist and investing in real estate. He has taken this passion and considerable action to quickly build a portfolio with several small apartment buildings. Lee is the founder and visionary behind Threefold Real Estate Investing. His focus is driving the business forward by forging new relationships with top-notch professionals in the real estate world and bringing on more partners to invest alongside Threefold. Lee also hosts an exciting new podcast, Threefold Real Estate Investing.

In this episode, Trevor and Lee discuss:

  • How to transform your current career into a real estate investing career.
  • Know how to grow your real estate investment just around your local area.
  • Learn how to find better deals and how to put those deals together.
  • Know the challenges in real estate investing and learn the tips on how to overcome them.
  • Learn the key and the steps to get your investor’s commitment in a deal.

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Email us: Trevor@podcastingyou.com

Full Transcription Of Today’s Episode

Trevor Oldham  00:00

Always read your bio and hop right into it. Hey everybody. Welcome back to The Real Estate Investing exposure podcast. I’m your host Trevor Oldham. And today on the show, we have Lee Yoder. Lee was practicing as a physical therapist when he realized his true passion was building his own business and investing in real estate. He has taken this passion and considerable action to quickly build a portfolio with several small apartment buildings. Lee is the founder and visionary behind three fold real estate investing and is committed to forging a path that will generate incredible wealth and opportunity for all involved. His focus is driving the business forward by forging new relationships with top-notch, professionals in the real estate world and bringing on more partners to invest alongside threefold. Lee also hosts an exciting new podcast, threefold real estate investing, which focuses on multifamily real estate investing, while also focusing on pursuing better relationships with family and a better walk with Christ. Lee excited to have you on today. So to be on the show, Trevor, thanks so much for having me on. Well, certainly, and, and for our audience out there that that may be listening, I love for you just to hop into your real estate investing experience. And I know in the bio, you mentioned, you were a physical therapist or what you know, no physical therapy and in real estate investing seem to be two totally different worlds. So I’d love for you just to hop into you know, the decision to go into real estate investing and how you got started.

 

Lee Yoder  01:29

Yeah, yeah, I love telling the story. It’s, I think it’s very relatable. Anybody could do something like what I did, I didn’t know anything about real estate didn’t know anybody in real estate. So yeah, I was doing physical therapy, I was at an outpatient clinic, which is like, you know, to ever, if you want to go get physical therapy, that’s where you would go. And so it’s fun, exciting physical therapy. But we had to stay open late because you’re going to have to go after work, right. So I just wasn’t like the best schedule, and the wife and I were starting our family. So I kind of started looking at other things, but I’m just gonna look within physical therapy, right? So looked at home health, physical therapy, where you get to make your own schedule. And now I’m treating older people that stay at home, they can’t get out to a clinic, right. So I can see them all throughout the day. It’s a maintenance schedule. So actually switched it out for a year. And I got to experience what making my own schedule was like, and having a ton of flexibility, I was making plenty of money, that wasn’t the issue. So my wife loved it. I loved it, you know, that part of it. It was great for our family. But I was just bored. I was really, really bored. I was not fulfilled, I wasn’t challenged. So the company I was with actually asked me to come into the office and start doing some clinical director-type work. And then I was like, felt fulfilled, like it was challenging, right. I mean, just everybody’s this way. But I really like to be challenged by my job, I like to do something exciting and thrilling. So eventually, I came in with the company and I was doing all clinical director type work, I was in the office all the time, and I’m not doing any physical therapy anymore. And I just really started to enjoy it. And I kind of just kept, you know, moving up, you know, started really kind of climbing the corporate ladder, which is a common story, right. And I became almost like a director of operations. So then everything flipped. So now I’m working more hours, a more demanding job more stressful, much less flexibility. So it’s not so good for the family. And I’m not spending much time and I don’t get to make my own schedule. I was making a lot more money. And again, it wasn’t important because that we were making plenty when I was doing home health, because my wife doesn’t work. Or she was PRN as a nurse actually. But yeah, so I just kind of flipped, okay, now I’m like, my, but my job was really fulfilling, it was exciting, it was challenging. So I got to get to see both sides. And but I became a little bit disenchanted, which often happens, you know, climb the corporate ladder and, and you’re kind of seeing this, this vision that you know, your boss and the company, I was kind of working for a startup. So there was a lot of energy there. And just this, you know, kind of sell this dream, like if you stay with us, if you keep growing, you’re on track to, you know, make hundreds and hundreds of 1000s of dollars, all this stuff. But it kind of kept moving further into the future. Like every time you thought like, oh, by this time next year, I’ll be you know, truly a director of operations. And it just kind of kept moving. And so it was becoming a little bit disenchanted, kind of looking for something else. And then a good friend of mine that was helping me build the division. We were building a division together. He handed me a real estate book. And it wasn’t a memorable one. But I started kind of going on that path read Rich Dad, Poor Dad totally spoke to me and was like, Okay, I think this might take it. And what I saw on that, Trevor, and what I eventually pursued was, maybe I can have both. Maybe I can have a job. So go back to a job and I had another friend. This was part of this to told me because I started wanting to get into real estate. I told a friend that was in real estate full time. And he said, Well, what if you could leave? Like what if you could do your job from home? Is that possible? Could you have more flexibility with your job? Could you do you know your job from home a little bit more flexibility and get in real estate? And the answer was no. I mean, my job was and for a lot of people that way. I was climbing the corporate ladder was awesome. I was all in on that job. So what I ended up doing driver was leaving the corporate world, going back to the Home Health physical therapy, which again, paid me playing, but I took about a 30%. pay cut. Okay, so big pay cut, but still making enough. But now I’ve got all my flexibility back. And I’ve got like capacity. I mean, it wasn’t like a stressful job that stressed me out and took like, all my mental capacity, I could think about real estate almost all day. So I just thought, alright, well, that was my plan was like, I’ll leave, I’ll go to this job or have flexibility. But it’s also a job that’s not fulfilling, it’s not challenging to me, or the fulfilling and challenging part is going to be doing a side hustle of real estate. And so I like to own that story. And I want to tell more people about that because I’m sure you know, Trevor, like more and more our economy and the workforce is moving more toward, stays at home and flexible and control your own schedule. So not that everybody should be on a path to go full time into real estate like I eventually did. But if you want to get into it a little bit, if you want to, I think everybody should be into it, to some degree says, because it’s so powerful. Now’s the time to do it more than ever, you can start educating yourself. And even if you just get into it passively, you have maybe more time, more freedom, more flexibility to start to understand how to do that. So anyway, that’s what I ended up doing was leaving the corporate world going back to home health, physical therapy, doing real estate on the side. And I you know, that was about four and a half years ago.

 

Trevor Oldham  06:21

Now I want to talk about the first deal when you had gotten to real estate does it start off? Did you go out there and just, you know, buy an apartment complex? Did you you know, house hack, when that sort of that first deal that you put together to look like?

 

Lee Yoder  06:33

Yeah, I always knew I wanted to get into rentals, I listen to enough podcasts read enough stuff that I just knew. Honestly, I kind of already knew that my goal was to own 100 unit apartment complex 100-year plus, but just felt like that’s way too big can start that I don’t know anything. So we flipped a house, we did what a lot of people do, we flipped a house. interesting experience, I won’t get into too much. But basically, you just learned pretty quickly, this is just another job. The funny thing is like I took you know about a 30% pay cut. And I was working full-time job. And then I did the flip. And the flip honestly made me about as much as I lost leaving that job. But I was working a ton of hours on this flip. I mean, I put a ton of my own time into it. So work-wise and money-wise, it was almost like the same thing as if I stayed in a corporate position. Now I really enjoyed it. And I learned a lot. So I’m not saying people shouldn’t do that. But it only took really one flip for me to go. This is not investing. This is another job. And if you like that great, but I knew pretty quickly, I wanted to transition into investment.

 

Trevor Oldham  07:34

And as you were investing in going out there what sort of, you know, are you investing in, you know, properties around your local geographical area? are you investing out of state? Would you mind just giving our audience some context?

 

Lee Yoder  07:47

Yeah, I wouldn’t stay local. So I flipped a house in my own hometown where we live. And then I bought a duplex that was basically a flip. We rented out for a little bit. So I got a little taste of being a landlord. We did that and our hometown. And then the first multifamily property the 16 units we bought after that was 20 minutes up the road. 20-25 minutes up the road. So yeah, we stayed local.

 

Trevor Oldham  08:08

Oh, perfect. And, and you know, as the information you sent over prior to our interview today, I saw that you purchased a 48 unit and you have a 47 unit under contract, would you mind walking your audience, you know, how you found those deals, how you put those deals together? I would assume that you’re probably using some sort of outside capital and investors coming in to help you may not partner but at least provide some of the cash there to put the money towards the down payment.

 

Lee Yoder  08:32

Yeah, sure. After I got some experience doing some small multifamily and really sold the power of multifamily investing. We just started to go all-in on that. And, and we started building some kind of community and people that were interested, we had just a couple people in on this first small multi-families with us and we just did some joint ventures but more and more people want to partner. So I’ve always wanted to own bigger apartment buildings. There’s so much there’s scalability, there’s the scale that brings you a lot of extra benefits. The economies of scale of Google Cola, so yeah, we end up finding a 45 unit apartment building a big lesson on that one, you know, I found it through another investor but he’s a broker as well. He’s an agent in the Dayton area, which is you know, I live between Dayton and Cincinnati, Ohio. And it just didn’t fit his criteria. So he invests in like, c c minus d plus areas. This was more like a b minus c plus area and, and he investments like very heavy, heavy value, add stuff, and this didn’t fit his criteria. So now it’s a guy I met on bigger pockets. You know, on bigger pockets, we kind of both comments on the same vein got connected, I have a podcast as well that you run forever, great episode. And I had him on my podcast, we just start kind of get to know each other. And so he finds this deal. You know, here’s about this deal, and he didn’t want it. So he brought it to me. So it’s totally relationships. I think right now especially, it feels like to me that brokers control most of these deals, and so no one was brought to us by a broker. really more of a friend investor, that isn’t a broker as well. But honestly, it’s not brokered many deals, he works for a brokerage, where he kind of gets to do his own thing. So it’s not like he’s part of one of these big groups. And then the second one, we were looking at a 54 unit that was listed with Marcus and Millichap, you know, big brokerage. Okay. And so we’re just looking at the URL listed, you know, gonna have a lot of competition, stuff like that. And, but because I was actually selling a property with them, and had had a relationship, you know, kind of getting going with those guys over there, that office, they decided to show me a 47 unit that was off-market. And that’s, you know, that’s where you can, you know, usually find a better deal where you can usually get a better deal. So that’s only when, after we did an offer on the one that was on market, we went right to the, you know, put an offer in on the one that was off-market, they were planning on listing it, but they hadn’t yet. So we’re able to get in there without someone’s competition.

 

Trevor Oldham  10:53

That’s excellent. That’s always nice getting in getting an off-market deal, especially in today’s market, where anything, anything that’s going on the market, you usually get out and you know, you want to make an offer on and they’re like, Oh, you know, there’s 15 offers already over asking. They’re like, well, I don’t know, you don’t want to come in 100 grand under asking. So I guess I’m out on this one. Exactly. And as you’ve been a real estate investor, and as you’ve been growing your portfolio, what do you say? What do you think are some of the challenges that you’ve experienced?

 

Lee Yoder  11:21

Oh, you know, honestly, it’s very challenging.  Moreso, Well, there are different challenges. So while I was working full time, it was certainly a challenge. You know, I, I really believe in putting my faith and my family first, you know, we were definitely people of faith Christ-followers. And, our first priority is to God and to follow God and His will for us. And then my second priority is my wife, and then my kids and, and I really try hard to keep on track with that. And as you’re young and ambitious, it’s really difficult. I mean, I struggle with this a lot, I love to work. But once I found real estate, I really loved it. And I want to just pursue it. Now, but I don’t want to lose the relationships that are most important to me, which are my God, my wife, and my kids. And so that was a real challenge when I was when I started a full-time job to continue with my priorities. Now, once I went in full time, I actually, you know, had a little bit more time out, well, obviously a lot more time to focus on real estate, because I don’t have a full-time job. And the challenge there, Trevor has been very different. I mean, still some of the same challenges because I can get consumed by real estate, because I love it so much. But the challenge now is, is just in being an entrepreneur, I mean, you’re an entrepreneur, Trevor, you know, like, deciding, like what to do and when to do it. And, and then when things aren’t working and things aren’t happening. I mean, the difficulty, especially now with apartment syndication is, I mean, some guys are doing a lot more. But for us, if we close three deals This year, we’re going to be pretty happy. Well, three deals in a year is what we want every four months, right. So working for four months, and feeling like nothing’s happening is really hard, you know, because you know, it, you can go I mean, for me, I’m not that type of person, I’m probably more suited for flipping because you get to be doing something every day, and you’re seeing a change in or maybe wholesaling or something where it’s, you know, a bunch of transactions, but I don’t want to do that at all. But it’s very difficult. Obviously, that’s, that’s really challenging, to be working every day to be calling brokers every day to be underwriting deals every day, to be trying to raise money every day. And then most days, 90% of your days, you don’t feel like you got any closer to a deal.

 

Trevor Oldham  13:27

I can, I can, I can attest that especially even in my own business, you know, at least for the cash flow for our business, you know, it ebbs and flows, there’s, there are weeks where, you know, I might go two weeks on, I don’t sign it, I don’t sign a client. And then there could be a week where I sign five, new five new clients, and it’s always ebbs and flows. And I could definitely agree with those challenges, especially those weeks where, you know, you feel like you’re doing anything, but you don’t feel like you’re making any progress anywhere. And you know, that sort of mindset has to just understand that, you know, that’s the purpose of being an entrepreneur. And that’s, you know, one of one of the downfalls of working for ourselves. But on the backend, we also get to have our flexibility. As you mentioned, we also get to no one sort of ceiling cap on our income, which is also an added benefit. Absolutely. Yep. Yep. So let’s say that you have, you know, you find a deal, you know, let’s say it’s a 50 unit, and you know, everything looks good, you got it, you got it accepted. And then now you want to bring investors into the deal. Do you have a network set in place? Do you have a list of people that you reach out to where to sort of the capital raising aspects out of the business look like?

 

Lee Yoder  14:28

Yeah, you bring up a good point, Trevor, you really want to have a list in place. For one, you know, we do a 506 B, where we can bring on sophisticated investors, we don’t just have to do accredited investors. But the key there is you have to have a relationship with them. So you really need to have a relationship with all these people, and have people basically interested in investing with you in an apartment building, just in general now, they may not like the deal that you bring to them, that’s fine, but you need to have a good list. I mean, if you think you know we on this 47 unit, we’re raising 1.3 million. And, and you know, we’re gonna have to, you know, bring in 25 investors or whatever, by the time this is bullish, we’ll take it down. So we need to have, you know, 4050 investors that are somewhat interested ahead of time. So and then what that looks like is, you know, once we get into contract, we do kind of start letting some people notice a variable relationship with them, we can’t present the deal to them yet, we’re not ready, but we start letting them know we have a deal, because you may have some people that kind of need to get their money liquid, their money ready, and they’re ready, but they don’t want to have the money to sit in a bank account. You know, it’s some people who may sell some stocks like that. So you start letting people know it’s ready. We have everybody fill out an investor qualification form that kind of qualifies you either as accredited or sophisticated, cuz you got to be one or the other. Once they fill that out, then we’re ready to present the deal. And so once we’ve done enough, usually it’s after the inspection, where we put everything together. And we always, you know, put together a PowerPoint presentation. And then we present the deal to these people. And then we start asking them to commit. So they were already kind of committed to us, they were committed to multifamily investing. Now they’re committed to the deal, and they’re ready to go.

 

Trevor Oldham  16:05

That’s perfect. Yeah, I think that’s a great, great overview for our audience. And Lee, I want to be respectful of your time today. And we had a great conversation, I just want to ask you a couple a few questions. Before we end the show today. And this is a question I’ve been asking every real estate investor that’s come on the show. But in your opinion, where do you think the real estate market is going in 2021? And beyond?

 

Lee Yoder  16:26

Oh, that’s, that’s the $64 million dollar question for sure. And I, you know, the depth, the true answer is I have no idea. But just because, you know, sort of, I’ve thought we were going to like a crash or at least correct for a long time. And I point to some things that have kept us from doing that. So I don’t think you know, some of the predictions of a correction or crash or the past few years, I’ve been like crazy. Even though we’ve done the exact opposite, I think there’s a reason for that, I do think that I think one of two things is going to happen, we are truly going to have inflation like bad inflation. And in that case, we won’t crash, but it won’t be good. So prices will keep going up. But it’s going to be a bad thing because incomes are not going up. Even though the crazy thing about this recession so far is actually incomes have gone up. But it’s only because there are so many people making more not working than they were working. The government has handed out so much money that incomes actually went up in 2020, which is not what’s supposed to happen during a recession. And I know it was like a flash recession. But still, income should have gone down like it was a bad year last year, right. But somehow incomes went up. And that’s the magic of funny money that the government printing. I listened to a lot of guys, macroeconomic guys, and, and we really are kind of headed for a fiscal cliff where we don’t, if we stop printing money, we’re gonna suddenly feel that pain, we’re gonna come down. Now, you know, Biden’s already talking about an infrastructure bill. I mean, they know they have to keep pumping money into the economy, or the rubber will meet the road and we’ll see, shoot, this really is a recession. I think it’s gonna be hard to get all this stuff done. I do think we’re gonna have a correction. And I know people say like, Oh, it’s different than time is different than 2008. That’s fine. 2008 was different than 2001 2001 was different than than the 80s different than the 70s. I do think there’s a reckoning, we’re still buying. That being said, and I think you just got to be really smart. We’re buying for cash flow. We are not expecting appreciation. You know, we’re not over-leveraging stuff like that. I think there’s gonna be a question. I think maybe it takes until, you know, maybe toward the beginning of 2022, you know, the mortgage, or I got a cousin that some are in law that’s in works for our bank and does he works in the foreclosure department has nothing to do right now. He’s like, I literally don’t have anything to do because we’re not allowed to foreclose on people that ends in June, and June, I think June 30, or something like that. So does that get extended? Maybe. But at some point, I think we have to go, guys, COVID is kind of coming to an end, we kind of have to go back to normal and foreclosures are a normal part of the process. And once you start foreclosing on people, there’s a backlog. I think I think housing come down I think, you know, commercial as part of that. I do think we see a significant correction, but could totally be wrong.

 

Trevor Oldham  19:15

Yeah, that’s a great answer. And even for myself, I’ve been trying to, I’ve been looking at properties. Yeah, I want to buy the first two, three or four-family and I was looking at one last week and I’m looking I’m in Massachusetts, I’ve been looking in upstate New York, just the words where I fiance’s from numbers make a whole lot more sense out that way. And I was asking the realtor, like, could you send me like a red roll? Can you just send me like, show me like just proof that this person has been paying the rent, and she just, she kind of provided to me, and that was like, a little worrisome to me? Because if I’m taking over this property, you know, my expectation is, you know, I’m gonna apartment myself, you know, I’m always gonna pay the rent, because that’s just a normal, you know, that’s a normal Good, good thing to do. But there are people out there that just, you know, taken advantage of that they haven’t paid the rent, they haven’t paid their mortgage and it is, you know, a little or someone’s gonna happen on that day, you know, whatever it comes in the future. And at least in New York, where you mentioned June, they’ve extended it to September. So it’s like, well, you know, I want to my strategy is to do a house hack, but I don’t want to buy a property. And then all of a sudden that tends to go, I’m not going to pay their you to know, their fair share because the government doesn’t tell us to do. So. I think it’s I think it’s a debacle.

 

Lee Yoder  20:19

You gotta be careful. Yeah. Luckily, Ohio is more landlord-friendly. We’re more of a conservative state. And, and I feel like it’s just fairer. I mean, yeah, places like New York man are very skewed to the, to the tenant, which, yeah, I’m all about it. We’ve done a lot to help people. We met with our property manager today. And, and they told us and sort of, he said, Well, why are we letting this lady you’re saying she’s not paying? Well, here’s her story. And it was, you know, she had a good story. And, hey, let’s help her out. They’re getting out of the abusive relationship. And there was a reason she couldn’t pay. Let’s help her out. There’s nothing wrong with doing that. But yeah, people that don’t want to pay because the government said, Hey, because of COVID, you don’t want to pay us stuff. Man, man, and York loves that kind of stuff. So definitely, you want to be careful. I mean, for us, that’s not the COVID has not been an issue at all, and why with our renters, but we have different laws, different states have different laws.

 

Trevor Oldham  21:11

Yeah, exactly. But earlier, earlier, in our conversation, I mentioned I, you had mentioned that you were you know, you had read some different real estate books. And I was wondering if you had a favorite real estate or business book that you’d recommend for audience check out?

 

Lee Yoder  21:24

Yeah, one book I like to recommend is a compound effect by Darren Hardy. Because it’s like I told you to do it. It’s, it’s a true principle throughout any time, any part of your life. I mean, it just the compound effect is so real. And it’s so powerful, but it’s so hard to do. I mean, I really struggle with it. But if you can stick with something long enough,  you are going to see this compound effect. And what that means is like, it’s just like building up, it’s coiling up, and it feels like you’re making no progress. But all of a sudden, it just takes off, you see this exponential growth. And I think that it’s just so such a principle that is so true in so many areas of life. It’s definitely true. I feel like in real estate investing, where you know, you’re looking at a guy, and he has 1000 units, and you’re like, Oh my gosh, I’ll never get to that. But you find out that he’s been doing it for 15 years, and he accumulated 900 of those 1000 units in the last two years. So for 13 years, he only accumulated 100 units. So now it’s like, oh, well, accumulating 100 units over the next 13. Well, that sounds a lot more doable. Right? And then you find out the first 10 years, he bought and sold and went bankrupt at one point, you know, I mean, so like, it’s this whole thing to it. It’s you know, I think it’s Ryan cleaver, somebody says, Real Estate’s not a get rich quick scheme, it’s a get incredibly wealthy for sure, over a long period of time. And that’s definitely what real estate is. So if you can, if you read the compound effect that helps you maybe just stay true to that principle and understand that you’re gonna feel like nothing’s happening, and you’re not doing anything. But, man, so many people give up at that point, if you’re the one that does it, you’re gonna see an exponential reward.

 

Trevor Oldham  22:59

That’s an excellent book recommendation actually had another interview with another, another adjuster at 230. So is the audience listening is not gonna know what that means. But about an hour and a half ago, I had an interview with another real estate investor. And he had also mentioned the compound effect as one of the books that he would recommend to our audience. That’s, that’s great to see that you mentioned it as well. And the last question today is, is working our audience find you?

 

Lee Yoder  23:24

Yeah, absolutely. Jump on our website, we got a great website, threefold. It’s th r, e, f, O LD, and then R E, I like real estate investing.com. So threefoldrei.com jump on there, we’ve got a great ebook that we’re really excited about, Jeff we just came out with is called five steps to a passive income for the full-time dad. So a lot of things I was talking about, you know, just how it’s really challenging. Join a priority, you know, work really hard, provide really well for your family, but also be there for your family, be supportive, have a good relationship, spend time with your family. And I just think too often people think like, the only way to make more money is to take that next promotion to work harder to work more hours to trade more time for money. And even if you don’t get into real estate, or actively, or try to get into a full time, even if you could just save up some money and invest it in real estate. Your Money can make money for you, right? Like you can, you can let your money work for you. So I just kind of give the example. Like, if you could just save $50,000 and overall you’re getting you know, let’s say you’re only getting a 10% return on that. So that’s just an extra $5,000 a year but a lot of times for people that means an incredible vacation for the family. And that’s why they want to work harder is because they want to provide these incredible it gives you but what if you can save your money and let your money provide that vacation for you, and then you don’t have to trade more time for money. So that’s what we’re really passionate about. So yeah, check out our ebook there. You want to get more information you can fill it out we’ve got a sheet there and our contact sheet on our website you can fill it out and become part of our because we send out a weekly email so you can become part of our community. That’s the best way you can email us at info@threefoldrei.com we’d love to chat with you.

 

Trevor Oldham  25:02

Awesome. Thank you for those. I’ll make sure for the listeners listening there will be included on the show notes on our website. And Lee, thank you for your time tonight and I’m sure our audience found a lot of value.

 

Lee Yoder  25:11

Thanks, Trevor.