Working Capital The Real Estate Podcast

Investing in Multifamily While on Active Duty with Tim Kelly|EP42

Feb 24, 2021

In This Episode

Tim is an active-duty Chief Petty Officer in the United States Navy and has been serving his country for 15 years. Now stationed on shore duty in Pensacola, Florida, he is fully pursuing his dream of owning and operating multi-family real estate and helping others realize their financial freedom goals!

Tim has been investing in real estate since 2011 where he purchased his first single family residence with the intention of forcing appreciation and flipping for a profit. That was also his first “house-hack,” and he quickly learned the benefits of long-term buy and hold real estate were much more aligned with his goals.

Through analyzing hundreds of multi-family properties, Tim has built an incredible network of real estate professionals, owns, controls, or has directly been involved in over 1,000 income producing units and looks forward to acquiring 5,000 multi-family units within the next three years.


In this episode, we talked about:

  • Tim’s investing journey and career by house hacking while still serving full-time as a Chief Petty Officer in the United States Navy in Pensacola
  • Tips and strategies for raising funds for your first deals
  • His mission in helping military members achieve financial freedom through real estate investing
  • Type of deals he had
  • Tim’s ideal structure for investments
  • And MUCH MORE!


Resources and Links 

FREE BOOK: Military House Hacking – How to live for free, earn passive income, and create generational wealth



Jesse (1s):

Welcome to the working capital real estate podcast. My name is Jesse Fragale. And on this show, we discuss all things real estate with investors and experts in a variety of industries that impact real estate. Whether you’re looking at your first investment or raising your first fund, join me and let’s build that portfolio one square foot at a time today on working capital, we have Tim Kelly. Tim is an active duty chief petty officer in the United States Navy and has been serving his country for 15 years now, stationed on shore duty in Pensacola, Florida. He is fully pursuing his dream of owning and operating multifamily real estate and helping others realize their financial goals through analyzing hundreds of multifamily properties.

Jesse (43s):

Tim has built an incredible network of real estate professionals owns controls or has directly been involved in over 1000 income producing units and looks forward to acquiring 5,000 multi-family units within the next three years. Also, for those looking for a financial model to do a quick analysis on real estate, you can go and head over to the working capital So that’s the working capital Just put your email in and you’ll be able to download that Excel spreadsheet or ladies and gentlemen. Welcome to working capital the real estate podcast. I have a great, awesome dude on the show today. His name is Tim Kelly, Tim, how are you doing today,

Tim (1m 24s):

Man? I’m I’m doing our fricking standing excited to be here too. We just, I, I get the opportunity to talk about things I love talking about, and clearly you love talking about them. There’s a passion with, with you as well. So let’s just have some fun, man. Let’s, let’s add some value to people and just have a fun conversation.

Jesse (1m 40s):

Awesome man. Yeah, really mindset growth development productivity, real estate, real estate, real estate. I could talk about it all day for those that don’t don’t know your background, they heard a little bit of the intro. You have a very unique background, not just in real estate, but just in general, if you could talk a little bit about that background and maybe kick us off in terms of, you know, how you got to where you are right now and, and yeah, we can go from there.

Tim (2m 7s):

Yeah, man. So quick bio Tim Kelly I’m situated in Pensacola, Florida. Right now I was brought here with the United States Navy. So I actually just separated back in November after 15 years. So I was active duty Navy quickly kind of went up the ranks to the senior enlisted leader kind of realm. And then I just got out after 15 years because of, because of my decision to have, you know, be curious and take action on personal financial education building wealth, which led me to real estate investing, which led me to large multifamily syndications, mobile home park investing and apartment investing and just general wealth building through mindset, growth and development, and having that, that whole entire 100% holistic abundance mindset instead of just being a great investor, let’s, let’s grow in multiple ways and, you know, and impact positivity in multiple facets of life.

Tim (3m 2s):

But I mean that, that’s the thing. I was on deployment in 2014 and just had a stack of books that all had to do with building wealth and, and money didn’t really know much else. At that point. I had used my VA loan and back in 2011 to, and I was house hacking before I even knew what that meant. I just was running one of the bedrooms out in my single family home. It’s my wife. And I said, Hey, there’s a lot of spaces, two master bedrooms, let’s rent. One of those out, most of the mortgage was covered. And then, you know, what, on that deployment then after that deployment 2015, it was my education year where I just paid a lot of money to one of those, you know, gurus that had a three-day bootcamp and then got mentorship and education. I got a really good idea. High-level view kind of what horizontal across all the different ways you can make money in real estate and generate wealth and passive income and what all that was.

Tim (3m 48s):

But I didn’t really have any traction cause I just had, I was like taking action in too many different directions, but the minute I kind of started focusing and then working with one-on-one with coaches, that’s when I had that kind of a pithany that transition for me, where I just honed in specifically on a large multi-family real estate, apartment complexes and mobile home parks. And the minute I’ve kind of honed in on that, I, I was able to speak the language and people were able to take me seriously. And then I started working with one-on-one coaches and that just got me to the next level. I was able to quickly, you know, just the minute I got here to Pensacola, which was just like four short years ago, I had no rentals. Other than that, that one house that we ended up selling for profit.

Tim (4m 29s):

And then I invested in a four unit property here, we using a two Oh three K FHA loan because I love the house hacking the house hacking strategy is amazing. We could talk all day about how I believe that really should be the first step that everybody does. If they’re interested in real estate investing, especially not selling, but buying and investing in real estate, starting with the house hack strategy. If your family can, you know, can, is conducive to that type of environment, which normally you are. For instance, I had a single family home with a duplex behind it. That was a triplex. And I lived in a single family home, which is a lot different from living in a three side-by-side units where you share walls, right? So don’t let that limit you from going out there and finding the perfect setup for your family.

Tim (5m 11s):

So, and then I bought that fourplex and then six months later syndicated my first 42 unit apartment complex. And that was, you know, not even four short years ago. Meanwhile, now we just sold that for amazing profits, you know, six figure paydays for all the owners. And you know, now I have over 1200 doors that I’ve helped close on control, you know, help get to the closing table and both, you know, in apartment communities, mobile home communities. And I did all that while I was active duty. And now like while we were building this big education and military community where we’re showing people how to do what we’re doing, like by our side to side by side of they’re watching us what we do and we’re teaching them and mentoring them on how to do the same thing. It’s all military members, both veteran and active duty.

Tim (5m 52s):

And again, it’s called active duty, passive income. That’s awesome, dude. So for the timeframe there, 15 years

Jesse (5m 58s):

Inactive duty, and you went into that house SAC first between the house SAC and the 40 unit, what type of timeframe was that? And how did one lead to the other? Cause that’s, that’s amazing, but I know a lot of, a lot of people hear those big jumps and they’re like, shit, like there wasn’t a stepping stone. It’s just like, no, you knew how to do it. And then you moved up to a multifamily.

Tim (6m 17s):

Yeah. Like I said, man, I got here, literally I got orders to Pensacola. Let’s say nine months prior. Right. I got here in March of 17 and that month I close on a fourplex because I, I got orders and I started networking with people. I came to look at some properties. I network with agents, other multifamily investors, because at that point I already knew I wanted to go large multifamily, but the priority was the house hack of fourplex. And that’s exactly what I did using the FHA two or three K loan where I wrapped a hundred thousand dollars worth of rehab costs into a loan purchase price of those four units was one 50 in Pensacola and like a nice area of Pensacola. So I paid 150 for the four units, put a hundred K rehab.

Tim (6m 59s):

The total purchase price was two 50. And I only had to put 3.5% down, which was about 15 or 16 grand at closing. So I that’s all I did. And then since then it’s been a greatly cashflowing fourplex, but six months after I closed on that is when we bought the 42 unit. Because at that point I already knew I wanted to do edge single multi-family Ultramar large multi-family. So I was building a network of people in Pensacola to that I knew I could partner with. And I knew I needed a partner with people. The coolest thing about like multi-family is, you know, you don’t do it all on your own. You just gotta find the other people who could bring more value that you don’t bring and you can make it as passive as you want, like truly as passive as you want.

Tim (7m 41s):

And I, and we can go into the, how I believe, you know, a lot of people say there’s no such thing as passive income. Well, I agree to an extent, right? Unless you have it structured where it actually has passive and we can talk about that. So that kind of gives you an idea is because I knew I wanted to do large multi-family and I got to Pensacola with the intent of large multifamily and then six months later, I closed on a large multifamily, but I just had to take advantage of that fourplex house hacking strategy in the meantime.

Jesse (8m 6s):

Yeah, for sure. So if you take us back before we get into some of that and I really want to do before we go there, though, in terms of a lot of times, the knowledge that people get to even get into the point where you’re even looking at 40 units and that’s things you just mentioned, building the team, finding the right people, understanding that you could do it passively, not passively, you know, what was it during the time in the military that assisted you in doing that in building the foundation, at least the knowledge foundation before you ended up going out and actually execute it.

Tim (8m 35s):

Yeah, man, like I said, I, I paid about 30 grand for rich dad, poor dad, real estate education and mentorship. And I got a really good high level view of all like how people make money. I got really good fundamental. And then like, there was a couple of classes where I learned about commercial real estate, just general. And then I learned mobile home parks just like general. And then I learned about, I think like creative financing and single families. And I learned about wholesaling cause that’s, that’s what I just, everybody did. So I had those four that I learned from, but then like I didn’t really get traction until I like chose one specific niche to just master become the best, the best person I know at the most educated person I know at that one niche was a multi-family and that’s where I kind of leveled up because I honed my focus on my education, where I was able to, like I said, have conversation with brokers and investors and partners and potential, you know, investors or potential partners, because I just got, I invested in my education.

Tim (9m 32s):

I, I honed my focus on one specific niche. So that’s the biggest thing. Like those people just getting started, you know, have a general understanding of all the ways you people make money in real estate from the single family flip to the large, massive multimillion dollar syndication and commercial real estate, like learn all the different ways. And then one of them like the more you learn, the only, the only purpose is just to pick one, like do all that research just to choose one and go super vertical. I go horizontal across all of them, choose one, go super vertical, become the expert. And then, and then that’s where you kind of start get traction. And like, for me, I hired one-on-one coaching and I just, I was away. It was at a level up. And that’s why I was able to go from four to 42 with within like a six month timeframe.

Jesse (10m 16s):

Yeah. Sometimes if you don’t figuratively burn the ships and just go in and sometimes you’re just, you’re in that phase of collecting knowledge for, for too long. So, so you’re in a, you’re investing now. You’ve, you’ve moved up to a little bit larger scale apartment buildings. Are you sticking to a certain asset class within multifamily in terms of, you know, a B like what was, what was the philosophy at the time and how’s that evolved to being at 1200 today?

Tim (10m 42s):

Yeah, I mean, it started, you know, back in, I would say 15 end of 15, early 16 when I started actually focusing on the multifamily and again, the BNC class value add mom and pop stuff. The, you know, 80 to 150 units is really what we were looking at. And then we ended up finding just one that was like less than two hours away from here. That was the 42 units. So I was, I started just looking for the mom and pop value ad, you know, that you can just force appreciation, refinance and role. And just to make sure you have the right properly structured financing and, and management in place and all that. And it’s pretty much the same thing. It’s still the same thing other than the fact that about, about a year, probably less than a year after I closed that 42 unit, I bought a mobile home park.

Tim (11m 27s):

Cause that’s, when at that time there was actually a little bit of a Delta in between the cap rates of apartments when they were like eight. And then they started going down seven and where mobile home parks were still like nine or 10 cap. So like, I was just really interested in just learning everything I could about that. So I dove into that, invested a lot of money into education on that. Then I ended up buying a bunch of those and now we, but the current team, the ADPi community, we have our, an acquisitions team or we’re buying assets and we’re, so we could show our community how it’s done. You know, we’re focusing on both, both apartment communities and mobile home communities, but we’ve also looked at a lot. I’m almost almost secured a couple of storage facilities too.

Tim (12m 8s):

And that’s also another asset class we’re interested in,

Jesse (12m 10s):

Right on tiny boxes, big profits, a shout out to Hunter there. I, so in terms of, I mean, you’re going through that, that process and you talked a little bit about passive income and how you can structure it the way you want to structure it, depending on the level of involvement that you want. What a, what does that look like for you? You know, what’s, what’s your, your ideal structure for these types of investments?

Tim (12m 32s):

Oh man. A long time ago, when I first started like got into this game, one of the first mentors I had great dude, Keith wine hold. He’s like, you know, a rich dad follower. He’s big fan he’s part of that club. He’s like a Forbes writer. He has a podcast called the get rich education by Keith wine holes. And I remember he, he said, you know, a lot of different things, the one thing which was just separate, just like invest, live where you wanna live and invest where it makes sense. That’s one thing he told me and I love that that’s resonated very much with me because I live in a market where there’s not a whole lot of large multi-family property. That’s why we had to go to mobile, Alabama, just North of mobile, Alabama and lower Alabama, which is not far from here, but like in Pensacola area within like a 45 hour, minute, hour drive, there wasn’t a whole lot.

Tim (13m 19s):

So he told me he, he had said that the wait, what was the question, man, remind me, I just lost track

Jesse (13m 30s):

Talking structure passive. And basically, yeah,

Tim (13m 34s):

He, he helped me kind of understand the importance of R O T I, a lot. Everybody looks at ROI, you know, return on investment. What is the ROI return on time invested? Like how much time are you really putting in? Because that is how you can calculate how passive it is. Clearly if you’re putting two hours a month in something and you’re collecting mailbox money, that’s pretty darn passive. Like you’re not actively working for that money to come in. And if you have to put zero hours, that’s infinite amounts of return. And if you put no time, but like you probably had to put some time in initially you had to dedicate, invest your time, maybe a little bit of money in order to stabilize that stream of revenue. Like there’s some kind of gift.

Tim (14m 14s):

There’s some kind of sacrifice. But for me personally, I didn’t get into real estate to manage properties, manage tenants. I got into real estate to build generational wealth and have businesses and invest in businesses and real estate that paid me multiple streams of passive income with this very as little time as possible that you put into it, rot eyes is always going to be high. The return on my time invested always has to be high. So for me, I’m never on operations. When we’re talking about buying, you know, just from getting under contract, all the things you have to do before closing, closing, operating refi, all operate refi, maybe, you know, get on the market off the market and then sell that cycle. The only participation I have is finding the deal.

Tim (14m 58s):

I don’t underwrite, but it’s on the acquisition side. So I find the deal, negotiate contracts, raise capital help with due diligence, get to the closing table, secure the deal, boom, on the acquisition side. And then I don’t have any at all, any involvement at all in operations, because I don’t want, like, that’s not why I got into this game. There are other people who are interested in managing the asset and interested in managing the managers. Yeah. I’m not, I would rather go make more deals, stabilize it and work with the best operators that I could possibly find. Yeah,

Jesse (15m 32s):

I think it’s, it’s interesting when you, at the beginning of your career, you see, at least for me, you see kind of the, the general idea, you know, property managers, people that are buying properties. And then as you get, as you see the nuance, you start seeing people that are capital raisers or they’re just acquisition people. And then you see that, you know, the people that are managing the managers are still operators. And I think that’s something that, you know, over the last few years, I started to really appreciate the fact that asset managers are full-out managers. They are on the operations. And, and it’s, it’s a good point because a lot of people think that if they’re going to syndicate deals or raise fund money, that they have to do every single thing. Even if they know that they’re not the property managers, but that’s not true.

Jesse (16m 15s):

It sounds like that’s what you’re doing here. You’re basically, you love the novelty of finding, acquiring, getting a good deal. And then it sounds like moving onto the next one,

Tim (16m 23s):

Dude. I mean, that’s the thing like too well, I got a lot of clarity and you know, we have a multifamily Academy, very robust Academy and course, and a mastermind, right over a hundred military members who are, who are investing in, in specifically multi-family and commercial are in this mastermind, an Academy in the Academy. One of my favorite lessons, because I think it was pivotal for me when I learned this is, you know, the, the, the six roles of the general partnership, right? So you have GPS and LPs in a syndication. When you raise capital, you’re raising capital from the li limited partners, the LPs who are your capital partners, or are passive investors, right? You’re using their money for your down payment or your equity. The general partners are the one that literally do everything. They find the deal, negotiate contracts, due diligence, operate everything, right?

Tim (17m 7s):

So the GPS, you know, there’s a bunch of roles. And meanwhile, I don’t want to get too much into this because it really depends on the deal. All of the roles should have a compensation model attached to him. Most people will like, don’t even talk about how they’re going to get paid. When they structure this partnership, they literally have this operating agreement. That’s created this LLC that’s created, let’s say you go buy a hundred units. There’s going to be an LLC. That’s created that will own that property that will directly own it. That will one at closing that and see what we’ve curated. And then all the investors they’ll have an entity, not your personal name, you’ll have an entity that not even your personal name is tied to, that will own your share of this property. Right? So all the GPS, all the things that happens in the general partnership to be divided up like, which, what do I bring to the table?

Tim (17m 52s):

Because if you’re looking at a hundred plus units, don’t think you’re going to be fully the only general partner. And then you raise all the capital on your own because you’re, you’re one guy who has to do all the investor relations, all the management, you’re the single point of contact for the property manager. You’re, you’re conducting all the different types of due diligence, the three types of due diligence, the, the market due diligence, financial due diligence, property due diligence, right? You need teams to do this stuff. You need partners to do this stuff. Even if it’s in your own backyard, it’s just too much. Most people, even if they have 100% free time, they don’t even do it. But most of the people who are probably watching or listening, I have to assume, have a W2 salary job, like have a job that they’re trying to get out of.

Tim (18m 35s):

So you just don’t have that much time. I mean, there was this dude on our huge Facebook group that we have like almost 20,000 members there, literally there was a guy who’s like, I want full ownership of it. I don’t want to have any partners and blah, blah, blah. I’m like, dude, that’s cool. If that’s it, if you sit well with that, but understand you won’t be able to scale period. There’s like there, it’s not humanly possible to take it all on your own. So I’m, and I’m open to that because I know there’s things that I’m not good at. I don’t underwrite. I’m not the numbers guy. I go out there and connect with brokers to generate deal flow and raise capital and negotiate the contract and get it to the closing table. And then I, like I said, I leave it to the best operators, but I’m not the guy that underwrites I worked like all my best partnerships were with far left brain people who are highly analytical data driven.

Tim (19m 22s):

They’re the numbers crunchers. I’m the right brain guy that pretty much does the promoting, you know, interview speaking, marketing, raising capital, invest, relates, stuff like that. And so that’s just worked for me, but having that self-awareness what are you bringing to the table and having the clarity of what does it take to close the deal? What are all the roles? And then my bias based on my self-awareness, how do I fit into that puzzle? And then having the, or having the ability to go share that exactly that with people, once you do what you just determined. Okay. I have self-awareness I know I can do this, this and this, and then creating a, an elevator pitch or an elevator hook, 15 to 20 seconds that says, this is who I am, is what I do.

Tim (20m 5s):

This is what I bring to the table. And this is what I’m looking for. Tell me about you. What’s your story? What’d you what’d you got going on, you know, and be genuinely interested in everybody that you interact with in this business, every networking, meeting, every meetup, virtual or not be so interested in everybody else, don’t even worry about your damn self at all, but have that elevator pitch or elevator, you know, model or whatever you want to say that hook. Because when, when you’re interested in them, they’re going to ask you, Hey, tell me about what you got going on. And then you’re gonna be able to say, well funny that you ask my partners and I invest in blah, blah, blah. You know, and then you go on and just try to hook them. And then just to maybe have them sit down with you and go over your entire business model. Cause that elevator pitch or hook 15, 20 seconds quick, it’s very clear, very easy to understand, like a five-year-old can understand it.

Tim (20m 51s):

And I think having that clarity and simplicity separates the people who are able to scale quick because they don’t think they have to talk this advanced terminology, especially when you’re talking to investors, you’re going to be educating investors when you’re talking about even accredited investors that you’re, that have, that are multimillionaires, that are going to be investing in your deals. You’re going to have to educate them on like the benefits of investing with you in a syndication, like in simple Barney terms. If you try to get talk all advanced, they’re never going to invest with you. Yeah. Like you have, like, you’re talking to a five-year-old you have to just be legitimately not like disrespectful, but tactful, just very simple terms. Barney style is what we, what we call it. Yeah.

Jesse (21m 28s):

Yeah. I think that’s a great summary and it’s kind of like the Jim Rowan, you know, you can get everything you want if you give, if you get other people what they want in life. And I think that’s really part of what you’re doing as somebody trying to raise funds. And I think it’s a good, it’s a good summary in the sense that a lot of people just assume you’re there’s the LP. Those are the passives GP. That must be the operator. When the GP really is all of these different roles. And you can have competencies in different ones that like you said are very, very different than a, than the other. So, you know, I want to talk, you, you mentioned, you mentioned mastermind and I don’t know if you’ve noticed this over the last few years, you know, I’ve heard the term I’ve been in commercial real estate for a number of years. I’m a broker as well, but the term syndication has been thrown a lot around, a lot more over the last few years.

Jesse (22m 10s):

I don’t know if that’s just me seeing a yellow car, but it’s it, I’ve seen that and mastermind and it’s tough to kind of differentiate, I think for a lot of people out there between, like you said before, and I think it was in Darren’s where you have some joker broker that you don’t know if it’s somebody that’s really, you know, these gurus out here. So when you’re looking at that stuff, obviously you see the better benefit of masterminds, but how do you make sure that, you know, you’re connecting with the right people that you’re, you’re getting in contact with the right one

Tim (22m 36s):

Ones. You’re going to know exactly when your experience, when you experience it. And you know, for we, we talk about this all the time in the ADPi community, active duty, passive income community, the success triangle. Like if you starting from zero, you know, what’s the quickest way to success. You know that by the way, we’ve literally mapped that out. And in the multifamily Academy where like the goal is within 12 months, you’ll go from knowing nothing to securing your first large commercial deal. But we talk about the success triangle and it starting from zero to get to where you want to go as fast as possible. You need to learn as much as you possibly can dive into a specific niche network and take action.

Tim (23m 17s):

That’s it like every single day learn more and more about your industry grow as a person grow as an investor, grow as a parent, grow as a leader, grow as a Christian grow as a philanthropist, grow every single day, grow as a person because no matter what, you’re going to be able to add more value to people. And the goal here is to have more abundance and more income, the more value you add to more people, the more abundance you’ll receive, right? Truly believe that stand firm and believe in that. So as you’re learning and growing your networking and finding people that you can latch to who have been there and who have done that and who are willing to hold their hand down and pull you up to their level, and then instead of kind of reach up and pull you down.

Tim (23m 58s):

Cause there, there there’s a lot of people that we are all surrounding ourselves with, especially W2 atmosphere, even, you know, the military, a lot of people that are literally right around us, the closest people that we spent are spending most of our time with they’re weighing us down without, without you even realizing it it’s inevitable because they have scarcity mindsets and they will look at you at like, you have two heads. If you say, Hey, I’m stationed in Japan. I’m about to buy 200 units in Knoxville, Tennessee. People in our mastermind are doing that. But like you tell the app, take it easy. Don’t invest. Exactly, man, you are just going to tell you that they are pulling you down inevitably. So you have to be so, so intentional about who you put yourself in with, you know, every environment that you’re in, who are you surrounded by?

Tim (24m 42s):

You have to be so intentional because they will make or break your success. And when you join a mastermind and I know it’s been overused and some people just use that term very loosely, but it’s a group full of people that will hold each other accountable to their goals, get to know each other, not for any of their own benefit, just because they know if they add value to a mastermind, they’re going to receive so much value to and whether or not this mastermind is with potential partners, it doesn’t really matter. As long as they’re high level thinkers, they’re in a place where you want to be, where you strive to be, and they’re willing to grow, reach down and pull you up to their level and they’re willing to hold you accountable. And if you are not willing to, and this is actually something that ADPi just released me and my, my friend and business partner, Kevin Brenner just released his 13 week journal.

Tim (25m 29s):

It’s just a 90 day fricking action planner. And if you’re not willing to take something like as a journal and, and, and create these goals, like put these goals in place that are, you know, the smart goals, right? And then track the goals. If you’re not willing to establish these goals and then track the goal. So you can measure them and put an account, some kind of accountability system in place, you’re you, you don’t deserve to, to meet those goals, right? Because you have to grow to be that person. But when you have a big mastermind, maybe it’s a bunch of high-level thinkers meeting once, twice, three, even four times a month. Cool. But you need a small micro tribe of three to four people that you meet with minimum once a week.

Tim (26m 12s):

Maybe they’re not business partners. Maybe they are. It doesn’t really matter. All they’re doing is, Hey report, how are you doing on your goals? And they’re actually there to support you, answer questions. It’s a, an accountable that accountability is absolutely crucial for people that are really trying to completely one 80 from one career into a new career. We just happen to be talking about real estate right now, but you could do that in, in business, in any industry. It’s just all about mindset and you’re hot. You’re understanding how high-level thinkers, how they think, how they, you know, what they invest in, how they spend their time. And you could study all these very successful people like you’re interviewing people who are successful, man, any podcast, any book like that is just value and content to get inside the heads of successful people.

Tim (26m 55s):

And it’s all out there. And so much of it is free. So continue the mind feeding every single day and understand that failure is part of success. It’s stepping stones to success. It’s not like the, the failure should not weigh you down. They should be like, cool. I need more, I need more failures. I need more nos. I need more rejection because that’s part of the process. And I can’t get to the next level until I have more nos and failures and rejection. That’s how you should be thinking like moving forward.

Jesse (27m 18s):

Yeah. It’s, it’s cool that you mentioned free because it’s like, as much as I, you know, it’s, I would probably guess you and I are very entrepreneurial guys. We, we need to be working and you have this thing where somebody said, I can’t remember who said it recently to me, but they’re like, you know, if you don’t pay for something, you’re just not going to value it. And I do believe that to a certain extent, even for myself, where, like you said, all this information is out there, it’s free. I try to absorb as much of it as possible, but there is something to be said for you, go into whatever you want to call it. Mastermind, workshop, coaching, where you do pay, you put a little bit of skin in the game, and then all of a sudden you do treat it differently. It’s a bit of a different thing,

Tim (27m 54s):

Dude. I mean, I pay depending on the year, if you like to include travel and everything, you know, between 50 to a hundred thousand dollars a year on mastermind.

Jesse (28m 5s):

Yeah. Yeah, yeah. And I was, you know, if this was five years ago, I would’ve said that’s crazy. But once you see people that not only not just run them, have done them, have gotten value out of them. And I think for context for listeners, you know, when you say 50 to a hundred thousand, if somebody said 10,000 or somebody said a quarter of a million, what you have to look at as you back up for a second, did that guy meet a, a $200,000 investor? Or did they meet it, you know, a half, a million dollar investor into their deals or somebody that’s just going to invest with you in perpetuity? Like whatever it is, it’s, it’s something that you really have to put in context to what you’re getting out of it

Tim (28m 41s):

A hundred percent, man. I mean, I stand behind the value of one-on-one coaching with the, with the right coach, of course. And I’ve, I’ve done it even before ADPi was a thing I was doing. One-on-one high performance and real estate invest in coaching. And I’ve always had a passion for it because the minute I started doing it, I started growing and it really, really helped me. And that’s all I want to do is just give back and pay it forward and help as many people. So now, I mean, we have ADPi and the mastermind and all the cool things happening within the ADPi ecosystem. But outside of that, I’m doing still doing one-on-one, you know, high performance coaching, which a lot of them, you know, a lot of my clients are working in the multifamily realm, but high performance is high performance regardless of your industry.

Tim (29m 25s):

So yeah. Especially if you decide to work with one-on-one coaching, man, it’s, it’s always worth it.

Jesse (29m 29s):

So Tim, was that for you personally, was that something that was, you know, already in your, kind of in your DNA as your personality, or was that something that as a result of the military, really, you just, you kind of put the value so much higher than maybe the average person.

Tim (29m 46s):

Yeah, man, I got to say it’s probably a hybrid because it’s funny. My mom is an educator, my brother’s an educator. And so I think there’s, I just, it is in my, especially based on personality assessments that I’ve done, which I highly recommend that. But going back to when I was talking about self-awareness, all you can do is just take like the disc profile, their Myers Briggs, and learn about yourself. If you don’t have that, self-awareness, it’s going to be really difficult to get, be successful in business. And so cause you have to really, really be intentional and know what you bring to the table. So the more I learned about that, I, I did learn, I am the type of person that wants to just like help and add value and give back and just, just, you know, kind of like a mediator type person, like just peace peacemaker.

Tim (30m 29s):

That is part of my DNA and how my characteristic traits, but obviously in the military, obviously we are literally depending our lives, you know, are, are dependent on each other’s ability, you know, in whatever we’re doing, whether it’s a mission or if it’s just a ship that’s out to sea doing some, you know, bullshit sea trial, whatever, you know, or is it like, or a fricking Lanny crack craft air cushion takes a whole truck load of Marines to shore. Like you’re relying on your buddy. And I think the, and that’s why the, the, this community is so special because there’s immediate bonding and immediate trust. And everybody in the mastermind because we get all, like most of them are active duty. I, like I said, I just got out, but most of the active members of our mastermind are active duty, taken down deals together.

Tim (31m 16s):

And it’s just, I don’t know, it’s something to watch, man, but I don’t know. Did I answer your,

Jesse (31m 20s):

That does. And you know, I think we should give a little color to ADPi here for people that aren’t aware what it is, what it is you do there and why it’s why it’s so special.

Tim (31m 31s):

Oh yeah, dude. I mean, so it’s really just education is at our core, it’s active duty, passive income. And I mean, education is that our core and it started with just a military real estate investing Academy, a very, very simple course about a little bit about VA loan, a little bit about turnkey, a little bit about, you know, single family and residential investing, just the basics, even some legal insurance, like it’s a really good course. And it was just, but it was very outdated. We actually completely just revamped that thing. So it’s education and there was a podcast, you know, we’ve actually had the pleasure and ability to, to interview people like Robert Kiyosaki and grant Cardone and Jocko, Willink and Elena Cardone. And, you know, we have all these people. And then we were interviewing like junior military members at both on the commission and enlisted side that are just going through our courses and going to house and successfully buying deals during their active duty career.

Tim (32m 22s):

So that’s pretty cool. And you know, and then it turned into the academies and masterminds on two different tracks. We have a single family, residential Academy, a mastermind, and now, which is what I spend most of my time on is the commercial and multifamily education and mastermind two different tracks and so very robust and self-paced education you could even watch or listen to on an app. And then you mastermind multiple calls a week. Plus the whole mastermind has direct access to our entire leadership team through a walkie talkie app. It’s like a group app called Voxer. It’s a free for, yeah. If you heard a box, man, I mean, you haven’t heard of Oxford. It’s, it’s really the number one way. ADPi team communicates every single day tap to talk.

Tim (33m 3s):

It’s easy. Right? And you could have a whole group of people, so they have direct access to us and clearly we’re doing deals. So we’re walking the walk and we’re talking the talk as we’re showing them how to do their own deals and encouraging and making sure they realize like all this is part of the process. And again, the goal within the first 12 months of everybody joining the goal is to have the first deal done. But then like we, we were listening to the community and the Facebook group is like I said, almost 20,000 people. It’s insane. And you know, there’s financial services that we ended up creating because there was a demand and the veterans United lender and the USAA and Navy federal, they’re not actually serving veterans that well. So we created a mortgage branch.

Tim (33m 44s):

We created an insurance brokerage and we created a whole entire network referral of military agents that actually understand investing that we can connect our community with. And that’s pretty rare, not only finding an agent who understands investing, but an agent who’s military or prior military that understands the best thing is another very narrow niche. So we go out and vet these agents. So we have this big enterprise and a lot more stuff that’s happening, but in general, that’s what it is. And it’s a lot of it. The content free free VA loan mastery course, I wrote three books. Two of them are free right now, the blueprint to financial success and the F all in one credit card. And then we have a best-selling book called military house hacking.

Tim (34m 24s):

That’s an Amazon bestselling book, number one, best seller free on our website, military house hacking, check it out. Cause I mean, most vets don’t realize the power of the VA loan and most vets are not taking advantage of that. So yeah, it’s really just the awareness, getting the education out to the vets and then the people who are serious about it and want a big build, a big portfolio, whether they want to buy one single family home using their VA loan or go buy a a hundred unit apartment complex. Like we’re there we’ll coach you, we have the experience. This is how it’s done kind of thing.

Jesse (34m 51s):

That’s awesome. Awesome, man. Well, we, we ask we’re coming, coming close to the January. We asked a few questions to everybody, but before we get there, I wanted to touch a little bit on mindset. I know it’s a passion for you and, you know, just want to talk a little bit about how important mindset is, and, and not even just in terms of real estate, but you know, in your career, whether it is W2, T4, you know, corporate income, passive, whatever it is. Yeah. Maybe you could, you could share a couple of thoughts on it.

Tim (35m 20s):

I mean, I would, I would, I, we could talk for the next couple of hours straight about the importance of mindset and what does that actually mean? And then, you know, well, how do you, if you have this mindset, do you have the ability to change it? And yes, the answer is yes, you do by growing every day as a person. And well, what are those, you know, how do you, when this mindset came well, you just start to pick up the habits and the traits of the most successful people who have written books and are telling you what they did and how they think through things. And, and like I said, how do, how do they manage their time? Like learning about what the most elite do. And there’s so many podcasters and books out there that you can just get that information. And you just act as if you just start, you just start acting it out.

Tim (36m 0s):

And you’re in your own mind, like understanding what the morning routine, like the miracle morning, that whole series of amazing books like hell L rod, I’m actually in a mastermind with him go Bundance he literally just researched and studied all the people that he could find who are the most successful. What do they all do in the morning before? You know, everybody else woke up at nine, what, you know, what do they all do? And he put this whole like matrix together. Savers is the acronym, all these different things that you do. So the content is out there and mindset. You know, if you’re not, it really starts with your self-talk. And the best thing you can do is evaluate is really listen intently to what you’re saying to yourself, as things come into your world and you’re presented with situations, how are you responding up here?

Tim (36m 42s):

How are you reacting and responding? Because no matter what your success and your destiny is only like actually 10% of those things that happened to you and 90% of how you react to what happened. So you can react hundreds of different ways. But if you think about it, remain cool, calm, no matter, no matter what it is, I got it. And then you react say, Hey, well, let’s, let’s try to work through this and figure it out. Like, regardless of the situation, no problem. I got this, you got to have that mindset. You know, it’s like, well, a lot of people will wanna react, react, emotionally, use emotions that are logic, you know, understanding that the most successful people on our planet, you know, are the best time managers, you know? And I think the reason why is because they value their time and they value other people’s time, more than average, more than most people.

Tim (37m 28s):

So if me, I value your time very much. I value my own time. So I’m going to be as fricking strict and you know, as possible with my own time. So every 15 minute block in my schedule, I have dedicated to a task or something that is occupied. Maybe I get four blocks. So I can for an hour, I’ll be like this morning, I ran and swim. I’m training for an off-road triathlon. So that time is blocked off. But before that, I was doing my morning routine, reading the Bible, visualization, silence, you know, warming up my body. And then after that workout, what are the 15 minute blocks? Like, how am I feeling those time? Because time is the one thing that we can’t get back, man. And we have to be able to use it.

Tim (38m 9s):

And that’s why financial freedom to me was like such an Epic thing. Because with financial freedom, it’s not just like, it’s not about money. It’s about your, your, your freedom, your own freedom and more options and your time, right? You get your time back. When you have revenue that you don’t have to exchange your time for. You have the freedom to go help more people. You have the freedom to go lay on a beach for a month. If you want, you have the freedom to do better things for your family. You know, crew go, go pursue a passion. You know, we’re going to passion project that you can maybe figure out how to monetize and turn into a business, you know, but now you have time to do that because you’ve hit that first Mark, that financial freedom. And then from that, it’s just abundance, wealth, preservation, wealth acceleration.

Tim (38m 51s):

Cause you know the game and you understand the game. I can just ramble about this stuff, man. Just go my getting up here, guys, like, you know, evaluate, how am I talking to myself? How am I treating myself? Where the responses in my head positive or negative easiest thing you could ask, was it a positive response or was it a negative and is the way that I’m reacting to what’s happening to me going to help me get closer to my goals or is it holding me back from achieving my goals? Again, questions that high-level thinkers ask themselves every single day. You know, again, I learned this, you know, people who are super high level, I realized they have these habits. So I, you know, I started the same habit every single day. I will read, I will write and I’ll ask the same, same question to myself.

Tim (39m 37s):

What can I do today to, you know, make my life or business better, faster, more efficient every single day I’ll read, I’ll write and ask myself that question. I like it. And again, it’s because I’m reading books and I’m talking to people and I’m paying to be in these masterminds. And I’m surrounding myself with people who are way smarter than me. And I just sit back, shut up, ask questions, try to add value where I can and be a student and like just surrender and be vulnerable and learn. You don’t have to, you don’t want to be the smartest person in the room, man. Like you’re not getting any better. You’re adding value to people. But if you’re trying to really grow and learn, you need to be in a space where there’s people who are smarter than you, more successful than you and are willing to help you out.

Tim (40m 17s):

You know?

Jesse (40m 17s):

Yeah. That’s great, man. I think it ties in perfectly with the return on time invested and I’ve, I’ve always liked the concept of very few things. We control reacting to things is one of them and it, it is something we control. And it’s just a matter of kind of honing that. We’re going to ask you four quick ones here, Tim, if you’re ready to go, I’ll fire away. Let’s go. All right, man. What was, what was one of the most important things, you know, now you wish you knew at the beginning of your career, career

Tim (40m 47s):

Military or a real estate investing specifically

Jesse (40m 50s):

Either, or,

Tim (40m 53s):

You know, I wouldn’t change obviously anything. I obviously don’t have any regrets there. You know, everything I did in the past got me where I am today and I’m so blessed and thankful about all the people that have been put in my life. But man, I mean, I would say I would, I would skip the time where I’m like, okay, I’m trying to figure out what to invest in. So I’m going to learn a little bit about wholesaling, maybe try it and dabble in it. Well, I think I like creative financing better or maybe tax liens on the single family. Oh, I liked this birth strategy. Well maybe, you know, small, small multi-families, but like instead of dabbling and trying each one, I would just get educated on all of them just to pick one as fast as possible and then hammer down and be the best at it.

Tim (41m 35s):

And I think I probably got to got to where I am now, maybe a year quicker if I, if I did that. But other than that, man, it’s just that. But again, this extra time has helped me develop into who I am today. Maybe a year early. If I did it a year earlier, I wouldn’t have thought through certain, certain processes the same and I wouldn’t have been at success. Like I wouldn’t have the same level of success. I maybe would have taken a bad, you know, bad beat down and stumbled. And then I wouldn’t be where I am today. So, but not knowing what I know now, I probably would just would have started that process quicker. I would have invested more into education initially. I wasn’t, I was very hesitant. I was trying to just do free YouTube, Verna university and books and podcasts.

Tim (42m 18s):

But you you’re in your own head when you’re doing that. You’re in your own head when you’re doing that. And you’re not realizing that you’re actually hurting yourself by staying in your own head and I would get out connect with more people. But I think that was what I was really good at was like literally every day I said, I wore five people that I could connect with in this industry that I haven’t talked to yet just to share my story and share my criteria and what my needs. But again, the priority is them, their goals, their needs, who they are, what they want, their family, their hobbies. And I like using the Ford acronym, family, occupation, recreation, and dreams. If you don’t know what to talk about to an investor or brokers, you need to get to know them first for family. Talk about the family, talk about their occupation, talk about their, what they do as a recreation and what are their dreams, right?

Tim (43m 1s):

And then you can just say, Hey, have you ever considered getting involved in real estate investing? Right? And now that you know, like a lot about them and their goals, what are their goals and investing before you even pitch a deal or talk to them about real estate, genuinely give a shit about who they are, that human on the other side of the phone or the microphone or whatever it is. And then if it makes sense, like you’re connecting ethically, morally head heart, then you say, Hey, let’s talk about the deals in business because you don’t want to. And to back one, this last thing I’ll say is like you, every time you talk to a broker property manager, GC, actual partner, it’s a partnership dude. Like it, you have to say, Hey, this is a partnership. And my goal, my effort, I’m putting my effort in like, this is a long-term relationship, but you’re gonna have to go through a couple that don’t work out.

Tim (43m 47s):

And then you’re going to find that one. That’s like the partnership is long-lasting generous. They’re symbiotic. It’s just really good. But you might have, it might take, it’s a lot of failure partnerships in order to get to that point.

Jesse (43m 59s):

Awesome. We talked about this a little bit, but in terms of mentorship, was there one specific mentorship earlier in your career that kind of got you where you were?

Tim (44m 11s):

So I didn’t, like I said, when I first ended up working one-on-one with, with coaching, that was a, a paid coach that I worked with. One-on-one that I got to know for about a year. I was, you know, associated with this, this whole mastermind group is global like entrepreneur network. And then there was coaching and stuff in that. And I’m working with coaching. I actually tell still to this day working with that same and that dude, he had, it was a game changer since I started doing that. But it wasn’t like one person, like in the beginning, I was just, like I said, reaching out, like when I had the foundational education and I was confident enough to like talk to brokers about cap rates and NOI and debt, service, coverage ratio, and value at all that stuff. I knew the terminology. Cause by the way, anybody can learn it if I can, anybody can, but then I would, I would reach out to them and call them and you know, then that’s where I kind of just failed a lot.

Tim (45m 1s):

And everybody, some people laughed at me and couldn’t take me seriously, but I just kept going. I just full failure as part of the process, let’s just keep going. I’m not stopping all I knew in my head, I’m not stopping. I’m just going to keep going. And eventually I’ll be successful if I don’t stop, you know? Yeah.

2 (45m 16s):

What are some resources that you’re, that you’re listening to or reading right now?

Tim (45m 21s):

Yeah. So I am doing clearly we’re, we’re focusing on real estate, we’re focusing on large multi-family apartment communities, mobile home parks. I’m always learning more and more about that industry just in general. So a lot of my education time that I time block and set aside is towards growing and just making sure I’m up to date in those initiatives, in those asset classes. Right. But there’s two industries right now that I have already started investing in that I will continue to dump a lot of capital in one, primarily is crypto and Bitcoin, you know, ETH and just mining and, and their blockchain technology in general. So that’s what I’m educating myself on.

Tim (46m 3s):

I’m in a couple of different masterminds. And actually just before this, I was on a micro tribe call with a lot of people in this mastermind who are very successful. Like multi-millionaires in Bitcoin. We were just all talking together and bullshit and, and figuring out which coins go for and where it’s headed. And like there was a lot of financial analysis that was just on the screen. I’m like, dude, I’m telling you guys to decide, no, I don’t, I don’t know where this is being recorded February, but I don’t know when he’s going to release, but you know, the end of 21 is going to be at least a hundred K Mark. My words, I’d be willing to bet on it right now. It’s going around 40 grand per Bitcoin. It’s going to be at about a hundred grand by the end of 2021 minimum. I’m that bearish on it.

Tim (46m 43s):

So I’m learning more and more about that as well as the cannabis industry, there’s a lot of growth in the cannabis industry, but both of these industries are still like volatile and there’s still, I’m not set on it. So I’m really learning a lot. So when I make big plays in big investments in either cannabis or crypto, I’m confident and I’m not going to back out like it’s one play. That’s just going to go for the next couple of years. But other than that, man, it’s a constant Bible. Every single morning I read scripture. I, you know, I do a lot of networking with the guys at the church and help my walk with, you know, closure get closer to God. And my walk with Christ has been improving over the last couple of years, but there’s so much out there to do and, and see.

Tim (47m 25s):

But I, I like listening to a lot of Bitcoin stuff right now, crypto stuff and cannabis stuff, just cause that’s where I’m putting my, putting a lot of my capital.

Jesse (47m 32s):

Yeah. Awesome man. Well, you’ll have a good partner on the, on the off-road triathlon there in terms of my last and favorite question, favorite or favorite your first car make and model.

Tim (47m 44s):

The first car that I owned was a, I don’t even know it was, it was, so it was a Saturn four-door sedan. I don’t even know what the model was. It was like green, small Saturn four-door sedan. That was the first door or the first car that I had in high school. It was my sister’s that she, she had. And then I got it when she went, when she went to college. And then after that it was a Chrysler Sebring.

Jesse (48m 12s):

Oh, I haven’t remembered the Sebring. We had a Sebring,

Tim (48m 14s):

My mom’s Chrysler Sebring convertible. That is unreal after high school. Yeah. It was like 2000 to two. Yeah.

Jesse (48m 21s):

That’s awesome. I remember my mom had a 1996 white Sebring and I just thought it was the shit. Cause it didn’t have a root.

Tim (48m 29s):

Yeah, my mom’s was the 98. That’s funny. Awesome.

Jesse (48m 32s):

So we’re aside from Googling Tim Kelly active duty we’re where can people go to, to learn more and you can get some resources?

Tim (48m 41s):

Yeah, definitely. I mean, if you’re a veteran of the military or active duty military and you’re at all, even remotely interested in taking advantage of your VA loan or you want to one day own a a hundred unit apartment complex, you have to just tap into all the free resources that active duty passive income has. Like just listen to our podcast, read our free book, military hot sacking. There’s two other free books. There’s a free VA loan mastery course, huge Facebook group, all that stuff. And then if you’re like, okay, this is making sense to me. And you want to invest in your education. There’s both single family and residential and commercial and multi-family and as well as financial services and experts that can really take you through that whole process. So I hang out in, you know, our military multifamily Academy mastermind Facebook group.

Tim (49m 23s):

I hang out a lot of that, do a lot of Facebook videos and Facebook lives on that, but that’s a closed group for just the mastermind members, but I’m on LinkedIn a lot. I’m on Instagram, a is just the website. All my shenanigans are on that. And, and of course, you know, if you guys are listening to this, you know, shoot me a text. If you have any questions at all, you want to pick my brain. I want to get to know you just shoot me a text and we’ll hop, we’ll schedule a call. We’ll just talk. If you have any questions or if I can help you in any way and add value to you, just shoot me a text at (847) 910-9161. Just let me know. You heard me on this podcast and we’ll, we’ll get on a call.

Tim (50m 4s):


Jesse (50m 5s):

My guest today has been Tim Kelly, Tim, thanks for being a part of working capital.

Tim (50m 8s):

Yeah, absolutely. Man. It’s been a pleasure and an honor, I appreciate you having me on dude.

Jesse (50m 13s):

Hey everybody. This is Jesse for galley. Before we started this episode, I just want to say thank you so much for everybody that keeps on listening, it really is amazing to me and I can’t. Thank you enough. What would really help us out is if you enjoy the show to go over to iTunes and leave us a star review.

3 (50m 28s):

Also, if you have a favorite episode, what would be great is if you could share it on social media, whether that’s Facebook, Instagram, or LinkedIn, anyways, enjoy the show. Thank you for listening to the working capital podcast. My goal is to help individuals break into real estate investing as well as educate experience investors. If you enjoyed the show, please share with a friend, subscribe and give us a rating on iTunes. It really helps us. If you have any questions, want to learn more or likely to cover a specific topic on the show. Please reach out to me via

3 (51m 10s):

My name is Jessica galley and I’ll see you back here for the next episode of the working capital real estate podcast.

4 (51m 16s):