EP#126 3 units to 721 units in 18 months with Tim Lyons

Tim is a 15 year veteran of the New York City Fire Department (FDNY) and currently serves as a lieutenant in the borough of Queens. Until recently, he also worked part-time as an emergency room RN at a level 1 trauma center.

Tim’s initial goal with real estate was to create passive income and in turn, be able to spend more time with his wife and three little girls. After partnering on a multifamily property he saw first-hand the power of real estate investing as an opportunity to create passive income and build wealth for his family.

He started Cityside Capital with the goal of not only growing his own portfolio but also helping others realize the power that real estate investing can have on creating passive income and building wealth.

Cityside Capital has $45 million of assets under management including 335 multifamily units. Tim has also invested as a limited partner in 256 multifamily units in Texas and in a large retail supercenter in Tennessee.

Transcript

Rama (7s):
Welcome to creating wealth through pass your apartment investing podcast. In this show, we will discuss about best and worst experiences abroad as you want to add to apartment investing. And I am your host farmer Christian. Now let's begin the show. Today's our guest is Tim Lance from Cityside capital LLC. Welcome Tim.

2 (30s):
Thank you Rama.

Rama (31s):
Sure. A little bit about Tim, Tim Lance is the founder and managing partner of city side capital LLC. Airless gets an education and investment company that focuses on multifamily real estate assets that ill strong returns for investors. Tim is also a left-hand in the New York city fire department of D and Y where he has served for 16 years until recently he also worked part-time as an emergency room nurse at a level one trauma center teams in shell goal with real estate was to create passive income on intern. Be able to spend more time with his wife on three goals. After partnering on a small multifamily property, he saw firsthand the power of real estate investing as an opportunity to create passive income and build wealth for his family.

Rama (1m 17s):
It started to decide capital with the goal of not only growing his own portfolio, but also to help others realize the power that realestate university can have on creating wealth. So with that, Tim, would you like to add anything to your background?

2 (1m 30s):
Well, that pretty much covered it. So thanks for having me and I'll see you next time now I'm going to get no, that was great. Thank you for that introduction. I think it's pretty cool to kind of, for the listeners to see that I'm just a regular guy, right? Firefighter, former ER, nurse, and now, you know, turn multi-family investor. So thanks for that introduction.

Rama (1m 48s):
Sure, sure. Thank you. And you wrote a book like bringing value solving problems and leaving your legacy. So we share a little bit more about that.

2 (1m 56s):
Yeah. So during COVID I joined the mastermind with a personal development like success group called well, it's actually run by Jim Roan, former business partner, Kyle Wilson. And, you know, I just, it was COVID. I could have just sat and watched Netflix, but I wanted to kind of just keep on moving the ball forward. So I got to surrounded by some really high level people. And a lot of them were participating in writing this book and sharing their, their successful journeys in entrepreneurship and business ownership and, you know, just tremendous, tremendous stories. And they invited me on and I, you know, took the opportunity to basically tell people, you know, through the lens of that book, you know, my journey from firefighter, ER, nurse to multifamily, and it was just a awesome experience that hit number one on Amazon as a bestseller.

2 (2m 48s):
So it was, it was a great journey and I'd like to do some more of that, but yeah, you can get a free copy on my, on my website, if you want to take a look at that.

Rama (2m 55s):
Awesome. Thanks for sharing that. So what is Sherry, what thought process of getting into real?

2 (3m 1s):
Yeah, so again, you know, being a firefighter and ER nurse, everything was great. You know, I had three little kids and I had two jobs that I liked more even loved that because, you know, showing up to the W2 job, I, it was always a new adventure every day was certainly never the same. And you know, it's a firehouse to great atmosphere and culture. And I just love the firefighters that I work with. And I've had a tremendous amount of great days and a couple of soul sucking said, Dave, you know, but it's a great way to make a living. And, you know, at the end of the day, I still can get a pension from that job, which is not something that most people in this country have access to.

2 (3m 42s):
So I'm grateful for that. And then on the ER, nurse side, like I was always, I always had to work, you know, I get to work as much or as little as I wanted to, but the problem started being Rama that, you know, I was working 70, 80, 90 hours a week. And because I like to, I'm a hard worker and, you know, and, but my family was missing me. I was missing my family. I was starting to feel it, they were feeling it. And I knew there had to be a better way. And you know, real estate was one of those things that I always just said to myself, you know, one day I'll get started in real estate. One day I will actually take action and looking back, it was because of those limiting beliefs that I had about getting started and how to start and where to start and what to do and who to trust and all that stuff.

2 (4m 27s):
And, you know, do I have enough capital to get started? And it's scary. It's the unknown, you know, and I finally read a book that most real estate investors have kind of come across at some point on their journey called rich dad, poor dad by Robert Kiyosaki. And I think that really just pushed me over the action line to start, you know, and within three months of reading that book, I was closing on a three family, three family rental property that I bought with a friend of mine again, because I didn't want to do it by myself. I was nervous. And, you know, we still own that property to this day. It's performing fantastic. But at the same time, buying a 1920 bill three family wood-frame structure, you know, that was throwing off a couple of hundred bucks a month in, you know, in passive quote unquote passive income.

2 (5m 14s):
It just wasn't moving the needle for me. And at the time I was listening to all these podcasts and hearing about multifamily operators that were just regular Joes like myself and making it happen. So it really piqued my interest to investigate the multifamily space. But again, you know, like the limiting beliefs were, you know, crushing me because I was, you know, caught up in spreadsheets and underwriting and cap rate. And, you know, I didn't exactly know how to do that. So I initially that had prevented me kind of from, from looking into taking the next step, but with a little guidance from coaching and mentorship, I got into the multifamily space. Awesome.

Rama (5m 53s):
Awesome. Thank you. Thanks for sharing that and share your journey like from moving three units to on nine 40 units, what, what like a hundred millions maybe, I don't know, 18 months or even more than that. So how did he achieve that? Share some best and challenging experiences from it?

2 (6m 8s):
Yeah, so, you know, once I decided to, you know, crush some of those limiting beliefs that were holding me back, I ended up getting some coaching and mentorship in the multi-family space. And that was honestly the best investment that I've made today because it really just supercharged not only my confidence and clarity, but it gave me the opportunity to be surrounded by many, many high level successful operators, same for investors. And everybody had the same goal and was willing to push each other to be better and to learn. And it was just a fantastic, fantastic community. So, you know, with that being said, I had that, you know, strength from, from my kind of foundation of, if I found a deal, I can bring it back to my community.

2 (6m 57s):
We can talk about it, we can underwrite it together. My coach is a master underwriter and you know, so during COVID, I just underwrote deals, I called brokers. I called owners, you know, and I had the opportunity of a lifetime given to me basically by one of my coaches who we had really hit it off. And we're both new Yorkers and he invited me into his syndication. It really get a firsthand look behind the scenes. Look, I should say about how multifamily syndications work. Because when I started, I didn't even think that I'd be doing syndications. I was really focused on doing a 10 or a 20 unit property with my brother and my father and maybe another partner.

2 (7m 39s):
So it was kind of exciting, same time to be on the GP side of the syndication, seeing that process from due diligence to getting the funding to financing or, you know, the whole kinda the whole process. And Chris really gave me the opportunity of a lifetime. So at the, at the end of the process, we had to raise some, some equity for the deal. And he said, you know, do you want to go out and see if you can raise some money? And I said, well, I don't even know where to start. You know, I mean, I don't even know if anybody would give me five bucks. So, you know, he kind of showed me what he did. And I kind of went out to the people in my life, some friends and family, and we were able to raise some money and I kinda fell in love with the, with the whole syndication process from that experience.

2 (8m 24s):
And that's how we kind of moved from 43 units to 43 units. And then very quickly we went, you know, to our next property, which was 144 units down in Greenville, South Carolina. So, you know, in commercial real estate Rama, as you know, it's a team sport, right? So I'm in New York. My brother, Greg, who is my business partner is down in Virginia. So we weren't necessarily going to be boots on the ground. We weren't experienced enough to be underwriters or asset managers, right. We're still learning, you know, but we were, and we're w Greg and I are certainly not handy the way we grew up. You know, I don't know, you know, Greg knows how to hold a hammer correctly. So we weren't going to be doing that either.

2 (9m 4s):
So, you know, raising capital kind of came naturally to us because, you know, being from the greater New York city area, just people in our ecosystem, you know, we're looking for something like this and had the means, and that was going to be going to be our spot spot on the bench as far as, you know, being on the team for multifamily. So, so we did our first couple of deals, you know, by networking and then, you know, Greg and I, we wanted to raise capital as our primary, you know, spot on the team. So we decided to, you know, get involved with a multifamily broker dealer that specifically dealt with what we were doing. And a lot of people don't really understand the broker dealer model, but essentially it's just a, it's a capital solution for operators that may be able to raise, you know, a couple million by themselves, but they don't have the necessarily enough investors to really get all the equity they need.

2 (9m 57s):
But at the same time, they don't really want to go to a private equity group or to a family office. Not that there's anything wrong with those entities, they serve a great purpose, but sometimes people can lose somewhat time in the, in their deals, voting rights. There might be some hurdles written into the contract, such as a preferred turn or a IRR hurdle that needs to be met or a lockout period. So we kind of solve that problem as a middle market equity source that we can bring our investors collectively from the broker dealer platform into, into these deals. So we had to take some exams series 82, the series 63 and the SIE exam. And then we had to be onboarded with a broker dealer.

2 (10m 39s):
But now we, you know, we specifically raised for eight, soon to be nine vetted sponsors across the United States that were vetted by the we broker dealer who, you know, has a pretty thorough vetting process, including, you know, background checks and going through their books and business plans and walking all their properties. He spent the last year flying around the country, walking all the properties. So by the time, you know, our investors get a deal, you know, put in front of them, it's been underwritten at the operator level and vetted. And then it kind of comes to our platform where our team, we have an underwriting team, they have a compliance team, a legal team, you know, they do a, they do a double-check, you know, they take a look and make sure that the deal checks all the boxes that we're looking to accomplish and make sure the underwriting looks good.

2 (11m 26s):
And then only then do we move forward and go to market with one of the deals. So it's a pretty interesting model. I think it's going to be the future of multi-family investing syndication type investing, because there's an extra layer of, you know, compliance and due diligence that is put on a deal, which is kind of, you know, adding to the risk return, you know, environment for the investor. Yeah. Thank

Rama (11m 54s):
You. Thanks for sharing more about that. Would you share any challenging experiences?

2 (12m 0s):
Yeah, I mean, I could probably do a whole nother show about my experiences, right. Because you know, when you're first raising capital for deals, I was always Tim, the ER, nurse and Tim, the firefighter, and now I'm Tim, the multifamily apartment investor. Right. So, you know, changing that paradigm and getting people comfortable with that fact. And, and I'm talking about people that were close to me, you know, family and friends and college roommates and everything. I really had to kind of just create a thought leadership platform. So no, we did a website and, you know, we put up blog posts and we, you know, to engage with the public, you know, about what we're doing and what's available to them because even the most high net worth people that I know they don't know about this, they've been, they've never heard about this.

2 (12m 48s):
And they find it strange that maybe they don't know as much as they like to about this vehicle of investing in real estate, because they've been so successful. And how is it that Tim, the fireman, Tim, the ER, nurse, you know, has access to a deal like this and then bringing it to market. So, I mean, that's been, that's probably been one of our, my biggest challenges is kinda navigating through that. Not so much now as it was in the beginning, but certainly, you know, that was early on one of our biggest challenges. And then, you know, something that I, you know, kind of grew into over the last year is, is education. So I love talking about real estate. I love talking about syndication as an investment vehicle. I think it's very powerful.

2 (13m 30s):
And like I just mentioned, not a lot of people truly understand how it works, how it can benefit them. And as we all know, the operator side, you know, a confused mind will tend to say no to an opportunity if they don't understand it. So I kinda made it my mission to, you know, spend some more time on the education side while we're about to launch a podcast and a YouTube channel kind of focused on that education piece because I just, I love it so much. I see the value in it. And I just kind of want to bring that out to, you know, the regular, everyday investor that just may not know what's available to them.

Rama (14m 6s):
Awesome. Thank you. And what is shared investment philosophy team?

2 (14m 11s):
Yeah, so right now we're kind of focused on lighter value, add property, you know, in high growth markets, you know, such as Arizona, Texas, the Carolinas, Tennessee, Florida, Georgia, kind of everybody else's, but we're also kind of focusing on the Midwest with a new operator that we're going to be onboarding. So we're looking for, you know, a couple of things we're looking to have, you know, properties that when properly vetted and underwritten can perform. And, you know, we're looking to give those risk adjusted returns to investors first and foremost. But you know, our philosophy is that we want to have relationships with solid operators with experience with, you know, property management companies that are employing the latest technology and AI technology to run these properties so that they can perform for not only our investors, but for the tenant and their experience in living in those properties means a lot to us.

2 (15m 9s):
So, so that's a win-win for everybody involved.

Rama (15m 12s):
Awesome. And what do you share any one breakthrough moment in multi-family space?

2 (15m 17s):
Yeah, the breakthrough moment, you know, there's passive investing I think is kind of thrown around a little bit too much in real estate that term. And I can tell you that running the three family property, which was our first property is not exactly passive right in the beginning, I was mowing the lawn and gardening and shoveling. So, and you know, we were rehabbing first for unit upon takeover. And I, like I said, at the beginning of the show, I'm not exactly the most handy guy around, but I fought my way through it. I wanted to, I wanted to learn, I wanted to do that kind of stuff, but it wasn't exactly passed. And then when I got into multi-family specifically the syndication space I have since invested as an LP as well and other deals, and I can tell you that the breakthrough moment was wow.

2 (16m 5s):
When I got my K one at the end of 2020 from, you know, not only being the general partner, but also in a limited partner that the benefits are incredible, right? You're getting losses, you're getting income. And the hardest part of my day as an LP was to get the sponsor and the vet the deal. And then I can put my head on the pillow at night, knowing that my money was working for me. So, so I've been on both sides of that equation. And, you know, as far as passive investing and real estate comes, you know, syndication was the huge breakthrough moment for me, you know, just being, just knowing I was in the right space.

Rama (16m 42s):
Awesome. So what is shared any of your best multifamily investing experience so far?

2 (16m 48s):
Yeah, I mean, there's several of our properties that are just doing really well, like right through COVID and that was another big thing was we got started, you know, as you know, right in the middle of like a pandemic, you know, or we're raising millions of dollars from friends and family through a pandemic and uncertainty, but, you know, in doing so, you know, right now we're recording in August of 2021, you know, being on my weekly property management and asset management calls, there's, you know, the properties are doing fantastic. Collections are fantastic. And not only that because of the inflationary pressures and the supply side of the equation, where there's not enough housing, the rents have organically grown to in a lot of our properties, you know, we're in the first year of operations and they've already surpassed year four and five proforma rent.

2 (17m 40s):
So it's been incredible to be on the operation side and see the organic rent growth, you know, just kind of blowing past expectations. Cool.

Rama (17m 50s):
And what do you share any like stuff, challenging experiences and multi-family space?

2 (17m 55s):
Yeah. The challenging experiences will sort of play off what I just talked about too, because it's not all sunshines and sunshine and butterflies, you know, at some of our properties, you know, there have been some people who have experienced some difficulties and so sort of navigating the eviction moratorium and trying to connect them with as many resources as possible. I give a lot of credit to the property management companies who are, you know, nothing but professional and have been really instrumental in connecting, you know, not only the tenants with resources, but the general partnership team with resources as well. So that's been a challenge. And also at least at one of our properties, we did have a challenge on keeping a full-time maintenance guy on staff because, you know, they were making, you know, just the, the extra $300 a week benefit from the federal government was making and the employment picture a little bit more difficult than it had to be.

2 (18m 54s):
You know? So, I mean, that was a challenge too. So, but all in all, I mean, there's really, there's going to be challenges in anything to do in real estate, but it's just having that team around you, having that property management team around you, that asset management team, you know, that has been in the trenches and has the experience and when problems come up, you just, you know, you find a solution and that's pretty much been the biggest way that we have navigated the waters there in COVID.

Rama (19m 20s):
And what is share your current focus and something you're excited about now?

2 (19m 25s):
Oh yeah. So right now we are, we're focused on just not only raising retail money from retail investors, but we're also focusing on the institutional space where we we've had some conversations and some deep conversations with pension funds and some private equity funds about coming into the multi-family space, because that's kind of what, you know, a lot of the bigger players are looking for. So we're really excited about that. And, you know, we have people on our team through the platform that specialize in institutional raises. So, you know, we've been able to work very closely with, with them to try to make something happen. So that's something I never thought I'd be doing, but I'm super excited about. And also just taking the investor phone calls.

2 (20m 6s):
I love waking up in the morning, checking my calendar online and seeing somebody signed up for a call to connect with people and to be able to, you know, meet them where they are, if they are experienced investors. Perfect. You know, I mean, here's what we do and, and, you know, let's, let's work together. And then if they're novice investors who heard me on a podcast or something, I love to bring them on that journey about, you know, whatever, you know, just education about what multifamily can afford them and the opportunities out there. So, but yeah, I mean, we have, like I said, YouTube channel will be starting up soon and podcasts, and I'm super excited about those two ventures. So yeah. I mean, it's a great time to be, to be sitting in the seat, you know.

2 (20m 46s):
Awesome.

Rama (20m 47s):
Awesome. So anyone

2 (20m 48s):
Advised that to have impact an impact on me. So, I mean, there's been some really instrumental people who have helped me on this journey and, you know, a lot of them have been my mentors and coaches with the program that I came on board with, you know, a little over a year ago, year and a half ago, maybe. So it's really just kind of surrounding being surrounded by those high level people and being able to pick up the phone and get on a zoom call and run through some, whether it's underwriting or investor relations or raising capital, whatever it was, having those successful people who have been in the trenches, they've done what I'm trying to do. And they were, they were educated. They were coach coaches.

2 (21m 29s):
So they have been the biggest source of strength in this journey. And I'll be forever grateful, number one, but number two, it really kind of, you know, ignited a spark in me to kind of do the same for other people who are trying to get started.

Rama (21m 42s):
Awesome. So you need one personal habit that helping you to be successful,

2 (21m 47s):
Getting up early 100%, I read the miracle morning by how hell rod and the 5:00 AM club by Robin Sharma. And I just really, you know, I was one of those people that would wake up at the last minute and then hit the, hit the road running. Right. But you know, my wife and I just, you know, we just decided to, to change that all up, right. Get up early. So we got three little girls in this south 10, seven, and two. So once everybody's up, it's like a circus. So I used to get up at five, but now I'm getting up at four 30 and I can get several hours of, you know, work or content or whatever I need to get done before everybody wakes up. And I already feel somewhat accomplished by the time we're sitting down for breakfast.

2 (22m 27s):
So that's been huge.

Rama (22m 28s):
Awesome. Awesome. So anyone booked that impacted your life?

2 (22m 32s):
The one book there's been so many, but if I had to pick one it's either. Yeah, it was probably StoryBrand by Donald Miller or the wealthy gardener by John Sophia, Donald Miller, for anybody out there who is involved in the space from the general partnership side, it is a eye-opening marketing type book or focused on the customer journey. It's just, it's an incredible, incredible book. And then the wealthy gardener is more of a book for a passive investor. Are actually anybody, anybody who's in, who's interested in personal development investment. Yeah. I give back, I like to coach my girls sports names, so basketball, cross softball, you know, so being involved in the community that way, and then also with another real estate community, I've been asked to give some talks now.

2 (23m 24s):
So I just love kind of connecting with people that way and sharing some of the knowledge and experience that I've had on my journey.

Rama (23m 32s):
So how can listeners can connect with you?

2 (23m 34s):
Yeah. You can come see us on the website. It's city side, cap.com. You can connect with me on Facebook, Instagram, or LinkedIn. I'm pretty active on those social channels. I try to, to all the direct messages that I can. So, and then my email is just simply Tim at city side cap.

Rama (23m 52s):
Awesome. And thank you, Tim. If you like the show, please subscribe, share, rate, and review. And if you want to connect with me based in mere message info@wishartcapital.com, thank you for listening, creating wealth through pass your apartment investing podcast. I hope you'll learn something from the show. See you in the next episode. Thank you. Any information provided from these chores are educational purposes only as always, please consult with your own CPA, legal and financial advisor before investing.

0 (24m 28s):
Okay.