Tailwind Talks
Tailwind Talks is a podcast for high-performing professionals who want to build serious real estate portfolios without leaving their careers. Hosted by an airline and military pilot turned investor, it dives into actionable strategies for scaling your real estate portfolio while balancing the demands of a full-time job.
Tailwind Talks
Why Relationships Matter More Than Money (long term)
Ever wonder if you can build a real estate portfolio while working a demanding full-time job? Cole proves it's not just possible—it's happening right now. Fresh off his morning flight as an airline pilot, Cole closed not one but two profitable Milwaukee properties by afternoon, showcasing the power of preparation and strong industry relationships.
Cole walks us through both deals with refreshing transparency. The first property, a two-bed duplex purchased for $112,000, generates nearly $1,900 in monthly rent with projected 30-40% cash-on-cash returns despite today's high interest rates. The second, a smaller single-family home acquired for $68,000 below the asking price, offers similar returns plus significant equity upside.
What makes this episode particularly valuable isn't just the impressive numbers—it's Cole's candid discussion about the importance of relationship building in real estate. By intentionally listing his own properties with agents who previously brought him deals (despite being licensed himself), Cole cultivated connections that now bring him off-market opportunities. This strategic investment in relationships has paid dividends far exceeding the commissions he forwent.
Cole doesn't sugarcoat the challenges either. From unexpected property damage to the complexities of using hard money financing, he addresses real concerns investors face. His philosophy of keeping commitments even when deals become less attractive than initially thought highlights why reliability matters more than short-term gains in building lasting wealth through real estate.
Drop a comment if you found value in these real-world deals and strategies! Cole plans to continue sharing actual investments rather than theoretical concepts, making this the perfect time to subscribe and follow his journey balancing aviation and real estate success.
What's up guys. My name is Cole, I am a part-time real estate investor, full-time legacy airline pilot and a part-time military instructor pilot. And today I got home from Austin at 8 am and by 4 pm I had two deals closed and we're gonna go through them step-by-step. So first deal we've got ourselves a lovely two bed, one bath upper lower duplex in Milwaukee here, and they were originally asking $130,000 for the purchase price. Just by looking at it and knowing the area, I thought that was at least $10,000 off of what I was looking for. So I sent them about $115,000 would be interesting to me and I went and walked it with the owner and with the agent that's representing him today and we ended up coming to an agreement at $112,000. $112,000, obviously a little bit off their purchase price, but I'm taking it with basically purchase price. But I'm taking it with basically. I wouldn't say sight unseen, because I went there, but without a formal inspection and without any kind of hassle I can close in two weeks.
Speaker 0:And this isn't using my own money, I'm not that rich, so it's really just using hard money and that's why I baked in a little bit lower price too to make up for the fact that I'm going to have to pay through the nose for this hard money. $999 was one of the rents and $899 was the other rent. So you got a total of $1,898 against $112,000 purchase price. That's pretty solid as it is, but also, when you're looking at it, insurance on this is about $1,200 a year, the taxes on this $1,830 a year on that and then water and sewer. I plan for about $1,600 a year for the water bills on that property. There's obviously going to be other expenses. This doesn't include the property management fee, which is about 150 bucks a month. 8% of the gross rents is what I pay. So when you're looking at it, all in all, you're looking at about $538 for operating expenses and then you're also going to be looking at about $600 a month for the loan itself.
Speaker 0:Now, that really fluctuates. Are you putting 20% down? Are you putting 50% down? Are you using hard money? These numbers really don't include what I'm doing with the hard money. Hard money is a much higher interest rate, but it's for a short period of time, so usually I try to get off of it as fast as I can and find a long-term solution for it. So that's what we'll be planning to do here. I'd like to do it in less than three months, but there's a lot of seasoning requirements and it's not as simple as just get hard money and put it on, get it onto a long-term solution for the debt.
Speaker 0:We're looking at a cashflow about $9,180 a year right, so let's just say 9,000, because there's going to be stuff that breaks. Maybe it'll be even a little bit less than that. But when you look at that against what you're putting down on it, even with about 20% down, which is about just over 20 grand 22,000, that's about a 40 some percent 41% cash on cash return. So is it actually going to be that? Absolutely not. There's going to be stuff that breaks. I'm probably going to lose a water heater right away, or a furnace or a window. There's always something that happens that you can't predict. I literally just had somebody throw bricks through a window of one of my buildings last week. So anything can happen in this business and you just have to be prepared for the fact that anything will happen. In this case, I'd probably expect maybe about a 30% cash on cash return, but in this environment with 7% interest rates, that to me is a really solid return with a pretty solid building.
Speaker 0:This place is actually owned by a guy that has now retired out of the city of Milwaukee. I won't put him on blast and put his name out there, but he had about 400 some units in Milwaukee. One day he just got up and sold everything. The way that you know it's his property is because he floor to ceiling tiled everything with the same, like 12 by 12 inch gray tiles basically, and he would do that for counters, floors, bathrooms, everything was the same. So when he had tenants move out, he gets pop out a couple of tiles, put new ones in. He literally had properties that were just filled with tiles. They weren't actually filled with tenants, they just filled it up with all their extra tiles so they could use them when they had turnovers, because they were just doing that all the time and he made a big business doing that and it's not glamorous but it does get the job done.
Speaker 0:I've got two of his properties from another deal in the past. Now I'm gonna have this one Deal. Number two is a two bed, one bath single family home. They were asking 85,000. So a far cry from the original asking price, but again using hard money. Close in two weeks.
Speaker 0:Pretty attractive to some sellers. To me it doesn't really make a difference. Usually if I'm selling something I'm planning for 45, 60 days on the road anyways, so I don't care if it closes tomorrow. But in some cases it is necessary and so I think that kind of helped things out here. It's 700 square feet, so it's really small, and typically I tend to stay away from things that are less than a thousand square feet because when you're looking at a house to buy, most people are filtering out anything less than a thousand square feet to begin with.
Speaker 0:As far as the numbers go on this deal, taxes are just under 2000 a year. We've got 1946 on taxes. Insurance I'm planning for again 1200 a year. It could be a little bit higher, it could be a little bit lower. It might actually be a little bit lower in this case, but that's what I'm planning for. And I got my management fees of 8%, so about just under a hundred bucks a month. So the total annual operating costs works out to be about just over 4,000 a year, 42.50. And the monthly cost on that is 3.54.
Speaker 0:Financing with 20% down Again, this is going to be a hard money deal to begin with, but eventually it will be moved to a long-term solution. So when you look at this $13,000 down, when you finance that, it looks to be about $360 a month, and this thing is bringing in that $1,150 a month in rent. Maybe $1,200 a month is what you could get at the max, so I'm just going to plan that it stays the same. And when you look at that, you're looking at a total operating costs of $715 a month against your $150 for your rent. So that's a cashflow about 435 a month or 5,000, just over 5,000 a year. And so when you look at that against your down payment is about a 38% cash on cash return, and the reason that that's important is you got the cash on cash return, but I bought this for $68,000. When I clean it up and get things squared away with this place, I think it could be worth at least a hundred, and so now you've got that.
Speaker 0:What I've talked about before is that you've got that equity play, but you've also got the cashflow play. You don't just have one, and in both these cases I think you have both, and especially in this case, you have the equity play. So it's something to think about when you're looking at these deals. Cashflow is great and I love cashflow and, but when you're looking at it for the long term, the equity is really where you make your money and that's where you get true wealth generation from. So I'm not going to get rich off an extra five grand a year and to some people that is a lot of money and I'm not saying that it's not. It's just that five grand a year, even 30 years out, that amount of money is not going to be enough to really change your life, especially with the way inflation is going. I'm not really doing this for the cash flow. I'm doing this for future me. I'm doing this for 10, 20 year me and I think that there's going to be some equity to play on this one.
Speaker 0:Something important to note about this deal is that these came from a relationship that I've built over a couple of years. I just first did a deal with them about a year ago. Two duplexes I bought from them about 220,000 was the purchase price and it worked out to be a pretty solid deal for me and for them really. And then I actually gave them a couple of my listings. Even though I'm a licensed real estate agent and I could list my properties for free, I chose not to do that so I could foster the relationship with them, and they're well aware of this, and I thought it was good business. Hey, you guys cut me a deal on this property. I'm going to cut you a deal and let you list a couple of my properties, even though I don't need that help and I don't even need to sell those properties, but it was something that I thought would foster a relationship. And, lo and behold, two weeks ago those closed and now they already found me two more deals that I thought were attractive.
Speaker 0:So when you start looking at this stuff, sometimes it's worth it to take a little bit of a short term hit for a long term gain, and I wasn't even sure if anything would ever come back to me. They still listed the properties and got me a good price for them, so I was happy either way, but I thought, hey, if I'm going to throw them a bone just like they threw me one, maybe we can get something going back and forth. I think that $10,000 that I spent in listing it with them instead of listing it myself is actually going to pay dividends down the road, and that's something that no one talks about is a lot of these little things that you can do to try to build your relationships, and the only way that this stuff actually works is if you actually follow through with what you say you're going to do. And I think that is where my biggest strength is and I think that's a strength that a lot of people could build early on in real estate is if you say you're going to do a deal, even if you find out down the road and man, I don't really know if I want this deal or whatever Once you put your pen to that paper and once you give them your word, you got to stick to it.
Speaker 0:Even if it hurts you in the short term, help you in the long term, and I think that's something that people lose sight of all the time and they end up shooting themselves in the foot and become an unreliable buyer. And if you're an unreliable buyer to a strong seller in the city that you're at, you're going to get trampled by everybody else that they take seriously. So I would really recommend, if you put the pen to that paper, stick to it, because that's really going to pay dividends down the road and in this case it's paid well over what I actually invested with them as far as having them list something for me, and hopefully this continues down the road. Even if they see this a shout out to them, they'll know who they are. Hopefully this continues down the road and we can foster this relationship and continue to do business. That's good for both of us.
Speaker 0:Anyways, I literally landed from Austin this morning at 8am. I was home by about 10am and before you knew it, I had two deals under contract by four or five o'clock in the afternoon. So it is possible to do this while you're working a full-time job. If you found any value in this or you're interested in this at all, drop a comment. I'll continue to try to put out content that's based on what I'm actually doing out here, instead of just talking in generalities and not really providing a whole lot of value. So if you've got value out of this, let me know I.