Real Estate Investing – Passion Enabler

Mike:This is the flipnerd.com “Expert Real Estate Investing Show,” the show for real estate inventors, whether you’re a veteran or brand new. I’m your host, Mike Hambright, and each week I bring you a new expert guest that will share their knowledge and lessons with you. If you’re excited about real estate investing, believe in personal responsibility, and taking control of your life and financial destiny, you’re in the right place.
This is episode number 440 and my guest today is Tyler Swift. Tyler and I are cut from the same cloth regarding understanding that real estate investing is a great vehicle to use for enabling the lifestyle that you want. You don’t want to necessarily be passionate about real estate itself, but it just might be the vehicle that gets you where you want to go.
Today, Tyler shares how his passion for travel has been fueled by investing in an Airbnb property in Colorado where he likes to ski, and in projects in Colombia, South America where he like to visit. Now, despite the fact that his main investing business is in a small town in Missouri, just maybe real estate is the vehicle you’re looking for to enable you to do more of what matters most to you, whether it’s travel, more time with family, more time volunteering with your church, or whatever is important to you. Let’s go ahead and start today’s show. I hope you’re going to enjoy it. Please help me welcome Tyler Swift to the show. Hey, Tyler. Welcome to the show.
Tyler:Thanks, Mike. I appreciate you having me.
Mike:Yeah, yeah. I’m glad to have you on. Honestly, I’m glad to talk about this topic and for those that are listening right now, we’re going to really be talking about Tyler is an adventurer, of course, he’s not married and doesn’t have kids so he’s able to kind of do some things that a married guy with kids like me can’t do, but we’ve kind of found a way to merge together real estate investing and a passion for travel and exploring and checking the world out. And truthfully, it’s something that Tyler is really passionate about, and it’s something that I talk a lot about too because, you know, when you first start your real estate investing business, you just want to make money. You got to replace your income. You got to get kind of financially sound. But then you get to a point to where it should be about lifestyle and living a life, a more full life. And so, that’s what we’re going to talk about today.
So, Tyler, hey, before we get started talking about some of the cool things you’ve done and a little bit more about what you’re doing now, tell us your background as to how you got started in real estate investing at all.
Tyler:Okay. Okay. Yeah. So, I guess to really take it back, I was born in a small town in Southwest Missouri, about 10,000 people. And looking back on it now, I kind of consider it was a life in contrast because while I was living in this small town where people don’t get out a whole lot, the focus and the narrowmindedness is there, my parents were also exposing me to a lot of travel and diversity. And at a young age, they took me and my brother on trips and really encouraged us to explore and be open to the opportunities that the world had to offer. They loved to cook and so they’re always bringing all these different spices and flavors in. And it was a struggle to balance that with the small-town Missouri life.
So, I got a little bit of trouble as a kid, acted out some and probably didn’t make the smoothest transition, but where I really started to find a little bit of a window into that other world or how to bridge the gap, so to speak, was a Spanish class in high school. And of course, a lot of us had to take it. And then as it wasn’t required, I kind of started scratching my head and I said, “Wait a minute, I think I like that. I think I want to continue that.” So, I really embraced it and started to pursue that and ultimately was plotting my escape from Missouri which was graduation day, right?
So, that’s what I did. I graduated high school in Missouri and quickly went to the University of Arizona. That was a place to be closer to Latin America, which is where my travel bug and which what was hitting me a little closer to home and appealing to my heart. So, I continued to learn Spanish, made it a focus to my studies there, ended up with a degree in Spanish and Portuguese both, also studied history and got a degree in history with most of that focused on Latin American studies.
Mike:Oh, awesome.
Tyler:Took the opportunity to study abroad a couple of times. Went to a place that was off the beaten path. And as you said, I’m an adventurer. I don’t necessarily always go where other people are going. So, as I was looking at study-abroad programs, you saw all the ones in Costa Rica and these other places that were real well-known, Belize or whatever. And I found one in Cuenca, Ecuador and had never really considered that place or thought about it, hadn’t heard it. And so I jumped on it. And that was my first formative experience in Latin America where I actually lived with a family, was really forced to learn the language and get a deeper understanding of the culture, and the way that they were so welcoming, and it was such a warm culture. I was sold at that point. So, I was hooked.
Mike:It’s like those Midwestern values on steroids in South America.
Tyler:You know, it is. They’re very down-homey. They’re very family-oriented. The weekends were all going to the family side, a little [cinca 00:05:00] outside of town where the extended family get together and eat and play and just have a good time together. And so, they’re very traditional in their values. And I am as well, being from a small town in Missouri. So, that’s something I’ve been long holding onto and transfer across to another part of the world.
Mike:Yeah, that’s awesome.
Tyler:I also studied in Fortaleza, Brazil, so I learned a little bit of Portuguese there. Not quite as proficient with Portuguese as I would be with Spanish, not as easy as I anticipated. And as I wrapped up my studies, I got a degree in international business. I wasn’t really sure where all that was going to take me at that time, and I’d actually backed off of an engineering degree to do these things because it’s just where I felt like my passions were and everything else would fallen to place later. And as it was, I graduated and it was like, “Well, now what?”
At that point, I had an opportunity to pursue another one of my passions which is aviation. And that took me to the other side of the planet. And I went to Guam, USA and was based out of there for a number of years working in the aviation industry and primarily as a helicopter mechanic and also as a pilot a little bit. And the reason I like to include this in a little bit of real estate story is that it really did instill a deep level of respect for maintenance. In the aviation world if you don’t maintain things properly, people’s lives are on the line. So, in the real estate world, I think we all get pretty complacent about maintenance and it gets glossed over a lot. It’s not the sexiest part of the business.
Mike:Yeah. Usually, we try to do the bare minimum and defer as much, that cash flow down the route as we can.
Tyler:Yeah. So, you know, but preventative maintenance is a big thing in the aviation world. And you can’t just gloss over that. And really what happens is if you don’t maintain things on an ongoing basis, it just costs you more later. You’re just taking the can down the road and it gets, you know, bigger can. So, that’s been a valuable experience as well to bring into this world of real estate investing. And that didn’t really begin for me until about 2008. I had actually come back to the U.S. to get my rotorcraft rating as well so I could be a helicopter pilot and mechanic professionally. And at that time, the economy started collapsing around me, the aviation world as well. And I came across the little book called “Rich Dad Poor Dad.” So, I have to give a plug and credit due where it’s due.
And it just clicked for me. It made all the sense in the world and I couldn’t wait to just jump in and kiddingly now I kind of say face first because I didn’t really have the resources or experience or any other good reason, not a whole lot of support. Everybody kind of thought I was crazy to be quitting a good job and going into real estate investing in 2008.
Mike:And to give some perspective, so how small of a town were you in Missouri? Because I think there’s a lot of real estate investors they’d always like they assume, “Oh, you’re in Dallas or Chicago or Houston, some big market, things must be easier there.” And you’ve done very well in a market of . . . I know you kind of moved around a little bit too, but talk about that a bit.
Tyler:Yeah, for sure. So, the town I’m from is 10,000 people. That may be a little under the line of what would be a very good opportunity to build a real big real estate business. But the neighboring town was 50,000. I’m sure that still sounds very small to most people. And it was then, but we did a great job, I think, of developing a real estate business in a small town. And for us, it was always about the cash flow and the passive income as we’ll kind of get to. Real estate in a lot of ways was about taking control of my financial future so I can pursue some of these other passions with more of my time and resources.
So, it’s a greater area to build rental portfolios and I think a lot of these smaller towns that are probably underserviced by the real estate investment community still have those opportunities as well.
Mike:Yeah, no doubt. No doubt.
Tyler:It’s definitely a more of relationship-based business, I think, in smaller areas. You’re going to have to capitalize on the opportunities you get. It’s not necessarily just a skimming off the top kind of a business model. You have to find ways to make deals happen when the opportunities come.
Mike:Yep, yep. So, when did you kind of realize that real estate investing was not just a way? Like for me, you know, I wanted to leave corporate America. I had left corporate America. I didn’t want to go back. It was more of a financial play initially. Like, I wanted to basically, you know, kind of determine my own financial destiny. I didn’t want to have to go work for somebody else, and I never thought about the lifestyle pieces of it as much as I did. Like, I just want to be my own boss and have control at a high level at that point. When did you discover that it could enable some of the other things that you had a passion for?
Tyler:You know, honestly, as I read “Rich Dad Poor Dad” back in 2008 and hadn’t even really considered real estate investing before. That was the wheels that were spinning.
Mike:Yeah, okay.
Tyler:I love to travel. I didn’t want to work for other people. The things you just said, I wanted to have that control of my time ultimately became the most important thing. And so, when I started reading about cash flow, which Robert Kiyosaki is big about passive cash flow, get out of the rat race, it all just made sense, the faster I can do that and the faster I can get to back to these things that I loved.
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Tyler: . . . 2008 and hadn’t even really considered a real estate investing before. That was the wheels that were spinning.
Mike:Yeah, okay.
Tyler:I love to travel. I didn’t want to work for other people. The things you just said, I wanted to have that control of my time ultimately became the most important thing. And so, when I started reading about cash flow, which Robert Kiyosaki is big about passive cash flow, get out of the rat race, it all just made sense, the faster I can do that and the faster I can get to back to these things that I loved.
Mike:Yeah. Yeah, that’s cool.
Tyler:So, it wasn’t an inherent passion about real estate in the beginning necessarily. However having said that, you know, my family, it had some rentals here and there. They never operated it as a primary business, but I was exposed to it on different levels and realized that there was value in it. So, for me, it was just taking that and being more focused and serious about it and making it that primary focus.
Mike:Yeah, that’s awesome. Yeah, I don’t know if you remember, so for those of you that are listening, Tyler is a member of our Investor Fuel Mastermind Group, Real Estate Mastermind. And Matt Andrews is as well. Matt Andrews is an awesome guy as well. And he gave this quote one time, and right when I saw it, I was like, “Oh my god. I’ve never seen a way to see it that way.” I’ve actually kind of stolen it a few times, but he gave a quote that real estate investing isn’t the thing. It’s the thing that gets you the thing.
Tyler:Right.
Mike:And I know that and I believe that, but when I saw it, it kind of said so succinctly. I was like, “That’s exactly it.” That’s what we’re talking about today, right?
Tyler:Yeah, yeah, that’s easy to get sucked in to the real estate world and there are so many different moving parts and it’s such a dynamic business. I developed a passion for real estate itself now. I love to fix old houses. I love the design elements. I come from background of antique dealers, so some of these houses we buy have . . . full of old antiques.
So, I love all that, but it was really through the process that I developed more of a bigger passion around real estate itself. It was never the . . . It was the means to the ends, like you said. So, it’s the thing that gets you the thing. And it’s easy to lose focus on that. I think you got to remember what the real thing is for you.
Mike:It’s easy to get caught up. And I was talking to somebody about this yesterday. It’s easy to get caught up in, you know, if you’re in a bunch of Facebook groups, which I am and that you probably are, too. But there’s always people like the hype is always on, you know, how many deals you’re doing or how big the deals are. Here’s a picture of a check, like, all that stuff. And that feeds egos, right? But it doesn’t really feed your soul, like, using real estate as a vehicle to do something else you’re passionate about. For the people that are listening right now might be travel like Tyler and I love to travel, too.
Or it could be spending more time with your family. It could be just having more time to care for family members that have special needs or parents that need help or whatever those things are for you, it could enable that. That’s really what it comes down to is real estate doesn’t have to be the end. It could be a means that help support something else, right?
Tyler:Absolutely. And it does create that lifestyle. You know, things happen. You kind of brought some up. You don’t necessarily always plan that you might necessarily have to spend a bunch of extra time with your family. But now, something has happened in the world. And because you have this business that operates and brings you income anyway, you’re not stressed up because you can’t work and take care of the family or whatever at the same time.
So, it really provides a very nice security blanket and level of comfort to be able to sleep at night that you know that things are going to get taken care of even if you have to miss a day here or there.
Mike:Yeah. And so, there are some things that, you know, Lindsay and I, my wife and I tend to go to some of the same places over and over again. We love going to Colorado. We actually go in the summer most often. And we go to Cabo and there are some certain places where we go. And we’ve been talking lately about doing something that exactly that you’ve done is you have an Airbnb place in Colorado because you’d love to go out there, but it’s also an investment opportunity, right? So, tell us a little bit about that and kind of how, you know, along the same lines of what we’re talking about here, you’re merging together two passions, real estate and a vehicle to allow you to go to Colorado and ski and hike and do whatever else you like to do.
Tyler:Yeah. It’s a really exciting time to be able to do this. Part of this is all, you know, facilitated by technology and the advancement of some of the things that we’re able to take advantage of. But at the end of the day, Mike, you know, I love to work. So, even if I went on a vacation, I wouldn’t be able to just sit on the beach all the time. So, I’ve kind of turned my vacations into my work and my work into my vacations or vice versa. And as you said, it’s really just a merging of two passions.
So, the first step in that direction was my brother and I. We love Colorado and grew up going out there about once a year for a ski trip mostly. But even that minimal exposure really, always drew us back to the mountains from the Ozark Mountains here in Southern Missouri. So, it’s not too big of a leap.
And what we did back in 2015, my brother is kind of a wild hare. He gets all these crazy ideas. He’s like, “Let’s buy a place in Colorado and we’ll rent it when we’re not there.” I said, “Okay, sure. I’ve got my financials ready, you know, in this business usually.” So, we sent him out there and figured the local bank to tell us, “Go back to Missouri, boys and call us in a couple of years,” kind of thing. But they actually approved us.
And so, we pulled the trigger and jumped on it. We bought a condo, a ski-in/ski-out in Steamboat Springs, and it’s just been a dream come true. We’ve used it but frequently, probably getting out between 5 and 10 times a year throughout the winter and summer. And of course, we’re managing it in the meantime. We’ve got some help on the ground out there. But it’s doing a great job covering those expenses and covering some of our lifestyle to be able to use that as well.
Mike:Yeah, that’s awesome.
Tyler:So, we got in at the right time. Things are going really well. In fact, we just got back a couple of days ago from being out there. And we were remodeling it. Getting a little facelift inside so it’s a little bit more ready for guests this year. And hope to continue to get a lot of use in it ourselves as well.
Mike:And kind of high level, what do you think about that model of Airbnb or VRBO in terms of, you know, again, we talked about . . . we live in Dallas but we live in the northern suburbs and we talked about getting a condo in, like, Downtown Dallas because it’s different going maybe down to Austin or something out in Colorado. A few places where we like to travel, it’s like, you know, kind of, “Why not?”
Tyler:Sure. There’s definitely some considerations I’d advise people. You know, if you’re going to get . . . if it’s a true investment, then it has to be driven by the numbers, of course. And I think that for a one unit, you know, we have one condo out there and it’s like running a one-room hotel. It’s a little noisy. We get some calls. My brother deals with a lot of that. We love hospitality. We love that part of the business so we enjoy it, both of us and it’s okay. But as a pure investment, it would be a pretty noisy investment. And unless your numbers weren’t real right, there’s definitely some risk.
If you’re going to get enjoyment out of it on a personal level and have some sort of a lifestyle experience, now you can kind of write off your trips like the business trips because you’re going to check on your investment, then that has a value as well. So, you have to consider what that value is and what your goals are with that investment and how you’re going to manage that financially.
For us, that was definitely a little bit of a lifestyle play. We also anticipate having a really nice back end on that because we renovated it and now that we’ve made the repairs, we could probably sell it this year. And my brother has kind of got dollar signs in his eyes about it because our realtor is poking us saying, “Hey, guys, there’s no inventory. You want to sell?” But I’ve talked to him to hang in on for another year or two.
Mike:There you go. There you go.
Tyler:But, you know, there is . . .
Mike:Even if you sell, you might to parlay that and upgrade, right?
Tyler:Well, that’s what I told him. I said, “Until we can really upgrade into, like, a bigger house or something out here in a place similar, then I don’t see the point in selling it.” But, yeah, you know, it’s a good investment but definitely, I would make sure that if you’re going to do that to consider how much work it’s going to take and decide what the value you’re going to have in your lifestyle there.
Mike:Yep, yep. So then, not a huge leap to get a place in Colorado from Western Missouri, right? But what do you call it, Southwestern Missouri, is that what you referred to?
Tyler:Yeah, Southwest Missouri.
Mike:Southwest Missouri, okay. But then, you decided to take things down to South America, so tell us a little bit more about that?
Tyler:Yeah. So, we have our great lakes here and rivers and we got a family cabin down the lake. We have the mountain house in Colorado now, so it’s like, “Well, we wanted the beach place, right?” I’ve always loved Latin America, of course. And my brother also did a year on the Gringo Trail backpacking down through Central and South America.
So, we started primarily looking at international destinations for a beach resort. We looked really closely at Belize, Costa Rica a little bit, Panama and kind of working down through there. Again, as we would go to these places, just kind of something interesting for your listeners if they enjoy this sort of travel-work lifestyle, I couldn’t just go sit on the beach and read books all day, but what I could do is to look at properties and see what’s going on in the area.
And so, we would do a little bit of research before we go and find out who the agents were and find out who the best, you know, tour companies were, who the best property managers were. Is there anybody down there doing investments and developments that cater to the U.S. investor? We’d often reach out to those people before we go, and then when we get there, we kind of have this inside track that they’d introduce us to the local people who are the movers and shakers and [inaudible 00:20:14] coming off the cruise ship with a camera and an umbrella drink and the masses. You know, we were kind of coming in the back door and getting a much richer experience of the place, and really just enjoy the process, really enjoyed meeting people like that. I enjoyed vetting those opportunities as they kind of came.
Never really pulled the trigger for various reasons in different locations. And then last summer, I sort of honed in on Colombia and Cartagena and thought, “Look, here’s a place with a city and a beach. Colombia has got a lot of perceptions that are diverged from the reality at this point.” And so, again, kind of where people aren’t necessarily running to yet, but they have experienced a big boom over the last 10 years. But it became on my radar and I went down there last summer. And that’s where I really kind of honed in on what I’ve got going now and what the opportunities that really were down there.
Mike:Yeah. I don’t know it as much as you do. I mean, I’m going to ask you maybe tell us a little more about it, those examples. Because I think, you know, I think if you go back even just a few years, even really today still, a lot of people are most comfortable investing right in their own backyard, you know. But I think part of it is, probably for you and for some people that are listening right now is those that like to explore, those that like to travel, those that like to kind of get out of the box and do things, see the opportunity to go to kind of far-off lands where there is kind of untapped opportunity, right?
I mean, I know some that you shared at our last event, you were sharing some of the stuff about really kind of opportunities to travel to Colombia and just how . . . and of course, Stinson on our team here who is here with us at FlipNerd just went to Colombia as well coincidentally because his girlfriend is a Colombian. But we’re talking about, like, getting these just luxury places that are far, far cheaper than anything you would get in America or even in Mexico.
So, maybe talk about the travel side of it, and then let’s talk about the investment side of it, but just get the opportunities that are down there to travel. And I want you to tell people this too because a lot of people assume when they hear Colombia, you know what they assume. They assume that, you know, they’re going to basically get tangled up with some drug traffickers or something like that. It’s not the case anymore but . . .
Tyler:Yeah. I mean, it’s like I’m jumping through to here so I get passed to narcos or something.
Mike:Yeah, exactly. I actually just got done watching “Narcos” a couple of months ago. When you start talking about Colombia, that’s the first thing that came to my mind. But talk a little bit about it from a travel standpoint in terms of the opportunities that are there.
Tyler:Yeah. So, just as purely a traveler, so Colombia itself has, you know, not necessarily been one of the highlights on kind of the Gringo Trail on the map for a lot of people as a destination. However, having said that, it has changed a tremendous amount over the last 10 years. Their tourism has really grown. They’ve seen a major appreciation in their property values in cities like Medellin and Cartagena.
One of the cool things about Colombia is that because of some of that stigmatism, they were never really reliant on the world to support them a whole lot. So, they’ve become a very self-reliant country. They have a lot of domestic travel. And actually, it’s really interesting, I just got back from Mexico City and then I was in Puerto Rico before that. And just asking Uber drivers or, you know, bartenders or whoever that I have a chance to have contact with, it’s like, “Who do you mostly see here? What travelers do you mostly see?” Colombia is almost always second on the list after Americans, which really surprises me. But they have a really big travel mentality.
So, they’ve got a pretty good infrastructure for that and Cartagena is their number one travel destination, and it has been for a long time for other South Americans as well. It’s a UNESCO Heritage Site. The colonial Walled City still has the wall that they built to keep all the pirates out when they were funneling all the gold out of the South America back to the old world. And they’ve done a tremendous job preserving that. They’re very friendly. They’re very warm. They’re very open. Prices are definitely cheaper than a lot of other destinations that you go to. Cartagena is the most expensive place in Colombia but still comparing that to a major U.S. city, you’re going to save a tremendous amount when you talk about accommodations and food and drink and things.
Mike:Sure, sure. And can you give us some idea of, like, when you travel there, you know, it’s going to cost X% as if you want to . . . like for example, I go to Cabo. We go to Cabo quite a bit because we have a timeshare there. Cabo is probably more expensive than even in Dallas like going out and stuff like that. It’s not necessarily cheaper, which a lot of people associate going to Mexico with being less expensive. Not where I go, not in Cabo, right, but I know that’s different.
And I went to Southeast Asia before and you could, like, eat and drink for hours and your bill is like eight bucks. So, I mean, give a little perspective on what that means in terms of like where you stay at, in terms of, like, eating and drinking, I guess.
Tyler:Yeah. So, like, Cartagena itself, and this is kind of cool obviously. They’ve got the Walled City. That’s going to be the most desirable and the most expensive. There’s a neighborhood next to that, Getsemani that’s up and coming. They are doing a Four Seasons Resort there. I’m sure those are going to 200-plus a night rooms. But then there’s the Airbnbs and some of these other projects with Life Afar that we can kind of talk about. You can get places in some of these periphery neighborhoods that are still good stable neighborhoods, a little bit more of a neighborhood feel, almost better really in my opinion for a place to stay within a five-minute walk to all the attractions and things that you want to go do. And those rooms, you can get a great room for much less than a 100 bucks, $67 to $80 a night.
Mike:Wow, that’s awesome.
Tyler:And you’re talking about a fully-furnished two-bedroom luxury Airbnb style apartment with quality service. Food and drinks, same thing. If you want to eat off the street or if you want to jump into a local hole in the wall kind of a thing, you can eat for next to nothing for, you know, $4 or $5 and buys a great meal. But having said that, you can go to one of the top bars in the Walled City, Alquímicos and they’re going to be happy to make your handcrafted cocktail, a little costly, you know, 10 or 12 U.S. So, it’s really a little bit of both in a place like Cartagena because of its cosmopolitan nature.
And Medellin would be similar to that. The further you get away from big tourist areas, the cheaper it is. For example in Medellin, you might spend $80, $90 to be in a primary neighborhood, but you can stay in the neighborhood right next to there for half that. You can get like a five-minute walk. So . . .
Mike:That’s awesome.
Tyler: . . . all kind of depends on what style that you want and it’s there’s for you.
Mike:Right, right, yeah. So, talk a little bit about the investment opportunity, some of the things that are going on there. For Americans to go invest there whether it’s like Airbnb or some of the things you’re doing with a company called Life Afar, just tell me about that.
Tyler:So, initially, when I went down, it was to look potentially buying an apartment that we could use a few times a year and then rent out when we weren’t there similar to what we have in Colorado. And one of the companies that I found that catered to that the best was a company called Life Afar. And so, as I started looking at their products, I stayed in one of their units. It’s the first time I went down.
Then I found out they had another product that they called a PREP, which is package real estate investment property. And that was as their business began to scale, they started to do instead of just one apartment in this building or one apartment in that building. They started to get them all in-house. And so, they do this bigger crowdfunded projects on a large building and all the units would be converted. It would have some co-working space, maybe some shared space for kind of, like, more community feel.
Ultimately, what Life Afar is doing is combining the best of all previous travel options into one sort of package. So, you know, before you had the hostels. They provided great support when it comes to community, organizing trips, figuring out what tour companies to use, having that, but of course, accommodations are pretty dismal to say the best. Then you had hotels which service is up in the air. Accommodations sort of run the spectrum. It’s a bedroom at the end of the day.
And then when Airbnb entered the scene, I think a lot of us have rediscovered new ways to travel and get a little bit more of that local feel, stay in that neighborhood instead of just in the noisy, you know, touristy part and have a proper place with privacy in the kitchen and the things and the amenities that we need. So, they’re bringing a high level of service to the Airbnb experience, and then also incorporating some of that community feel with co-working spaces and that concierge service whether it’s legal or tax help or visas, really whatever you need, they’re there to help. So, understanding that the guest experience is the primary driver behind all this.
And now with Airbnb, the transparency that we all have there if it goes, we can, of course, review our host but they also review us. So, when I realized the platform that these guys have been building over the last 10 years and who was involved in it, I started meeting some of the primary team, the executive team. And I was just blown away by this level of sophistication that they’ve had. They’ve had a lot of success and they’re really scaling up at this point and entering new markets like Puerto Rico, and Panama, and Peru.
So, I was excited to divert from just having an apartment, and I thought about just a PREP. And then ultimately, I decided to take an active role with the company. So, I have invested with the company and I’m technically in charge of expansions and regional development as they continue to grow and scale.
Mike:Yeah. That’s cool, man. You’ve made the ultimate commitment to travel and real estate by doing that in a very big way and on another continent.
Tyler:[inaudible 00:29:42] Mike:Yeah. So, it’s interesting because, you know, I just actually did a couple of multifamily deals. In fact, we have one that’s supposed to be closing here in the next few days. And I basically invested as a syndicate, a part of a lot of other people. But there are opportunities to do things like that, and projects like this in South America where there might be somewhere where you like to travel to. It might create an opportunity. And you correct me if I’m wrong, but when you decide to invest in these things, you might actually have access to actually go stay in these places and things as well, right? Or certainly, you know, it could be a business trip to go, kind of using air quotes here, business trip to go check on your luxury property in Colombia, right?
Tyler:Yeah, absolutely. So, there’s two groups of investors that go. So, I guess, just to back up a little bit, one of the unique things about the Colombian real estate market is that there’s like 3% mortgage penetration. So, there’s no debt there. So, as they grew this business, it was all equity financing and mostly from U.S. investors. A lot of them were just passive. Maybe it was something they like to talk about and that, you know, they want to diversify their portfolio. So, it was a fun cocktail party conversation they had with investors in Columbia or wherever, but didn’t necessarily use it.
What we’re finding now and what’s more exciting to me is this group of people my age, our generation who have done well for themselves in the U.S., do like to travel, do have a little bit more of a global mentality at this point, and that includes both lifestyle and investment. And so, those people we feel like is the real future of continuing to crowdfund these projects. They’re not like a timeshare. You don’t buy a certain amount of time in a certain building. You can technically invest in any of their projects and then you become part of their network, and they have a loyalty program. But even if you really wanted to stay in the project you invested in, you would stop to pay.
But it’s at a discounted rate. And like I said, they’ve got a loyalty program that provides some pretty cool incentives for that. And that’s the nice thing too because then you’re not tied to just one apartment and you can start to now have access to their entire network over a number of countries.
Mike:Right, right. And for people that invest in these deals, and maybe you could give a link or tell people how can they learn a little bit more here in a second. And this isn’t so much is a plug. I’m really curious. I mean, this is fascinating to me. So, what types of returns do people typically get on investments like that relative to investing in a multifamily type investment in America where it’s at least deemed to be kind of more safe maybe, you know.
Tyler:Right. Yeah. I mean, that’s obviously the big question, it is an investment. So, you will own shares if you were to do a PREP. For example, one of the package properties, you will own shares in that project. So, they project a certain number of returns. If you’re buying in during construction or preconstruction phase which is typically when most of the funding happens, they project a certain return. They have some keystone programs that are automatic certain returns. And those are usually 8% or 9%. Their numbers aren’t quite conservative and I think the reality is over their past projects, they’re usually getting up closer to the 12 and even up to 14% range for some people on a cash on cash return. Then obviously, you do still own equity. And so, as that project appreciates, and, you know, as they exit, then you will have the ability to have a really nice backend spread as well.
Mike:Yeah, that’s awesome. I’m just going to say this out loud because I’m thinking about it here. If it’s based more on equity from outside investors and it’s basically, you know, one of the things that props up American real estate a lot is the fact that there’s so much debt, right? Money is easy to get to but when it’s not backed on debt, I just got to believe it would seem to be much more stable. You’re not at the mercy of what banks are willing to lend on and cheap money, really.
Tyler:Right. Yeah. It’s incredible to look at a city like Medellin, which is around three million people and the infrastructure and the development, it’s clean. They’re just so sophisticated and think that there’s no debt there. It’s just mind-boggling for someone from the U.S. where we don’t hardly see any equity anywhere really. And so, we’re like always searching for it, you know.
But they’ve managed that process very well, and yeah, I mean, you know, when it comes to the investment, there’s going to be a lot less people telling you what to do and potentially pull in the rug out from under rates or changing the rules on you at some point because it is.
Mike:Yeah, yeah. Yeah, I want to talk to you a little bit more about some of the excursions that you’re doing in a second. Before we move on, like, if folks wanted to learn more about the stuff that you’re doing at Life Afar, maybe investing there, where should they go for that?
Tyler:Well, the basic website is just lifeafar.com. So, lifeafar.com. You can also reach out to me directly. My email handle is just tyler.s@lifeafar. That’s [email protected]. Also one of the best places for people to go, I think, is to YouTube. Our vlogger, Sam, he’s an Australian and he’s been doing this for a while with Life Afar. I just wanted to show. She does a fantastic job with these videos. They’re not real kitschy. They’re not really even a whole lot about investment stuff. They’re more frequently just an opportunity to give people a little bit of a window into some of these locations, some of the culture and some of how things work.
It’s like, “Oh, you saved $50 on staying with us and not in a hotel. This is what you can go do with that $50. And so, it’s a little bit more of an opportunity to try to show people what these areas are. Make people have a better level of comfort, because I’m not going to lie, it’s a little nerve-racking when you book a ticket for yourself to go to Medellin for the first time. You’ve never been there. You don’t know anybody. You’re not really sure what you’re getting into. But when you start to see this or now that you know that there’s people on the ground in these places and you have that ability to reach out kind of, like, we try to do on our own, it makes it a lot easier.
Mike:You recently shared some, I don’t know if it was like a video or maybe some picture, it was just amazing. Like, that was just breathtaking beauty that’s out there. And for somebody that likes to explore and experience other things, I mean, it definitely makes you think for sure. So, cool, well, I’ll add some of these things down on the show notes.
And then the last thing I want to talk about is one of the things you’re doing, so again, you’re in our Investor Fuel Mastermind, and we had our meeting a few weeks back, our quarterly meeting and you offered a couple of kind of tours for our members to join you. One of them was like outbacking in the Ozarks. And one of them is actually going down to South America and down to Colombia on kind of a tour there to do a bunch of really cool things.
And so, just talk about back to the passion part of this about, and I think I told you. I just booked a . . . our next Investor Fuel meeting that’s coming up, we’re all going skiing afterwards. And then on the back end of that even, I just booked a snowmobile trip up in Yellowstone with my buddy, Corey Peterson and our wives. And just, you know, for me, it’s all about experiences. I know it is for you, too. And just talk about the importance to you of surrounding yourself with like-minded people. Because now you’re kind of like marrying together three passions, right, real estate, a passion for living a rich life, and being around people that you enjoy, that make life more full. Kind of talk about that as . . .
Tyler:Yeah. No, I’d love to. And just first and foremost, I really do appreciate everything you’ve done for me to help encourage me to be part of Investor Fuel. There is a lot of things about that that are out of my comfort zone, giving presentations being one of them. But it was the impetus I needed to really get it together and give it a little more focused and be open to some of these bigger ideas.
Mike:For those listening, by the way, Tyler and I have known each other for probably about 10 years or so. Yeah. So, yeah. I drug him into it and then now he’s happy there.
Tyler:I’m happy, yeah. No complaints. And it has, like you mentioned, man, there are so many people in that group that have so many cool things going and just cool perspectives on life and business both that I think when you start to surround yourself with people like that, it has a very real synergy and a very real impact to kind of pull you along and push you along, so to speak. So, I’ve enjoyed the process. I’ve enjoyed getting out and meeting new people and doing some of these things that I’m not so comfortable with.
As you mentioned, it kind of sprout. I never really envisioned myself much of a tour guide. I mean, for a number of years, I was just pretty happy turning wrenches on helicopter engines by myself, you know, with some headphones or whatever. But this business has really forced me to focus on the importance of relationship and the significance of the experiences that we have versus the things that we have.
So, with that in mind, I had a number of people during one of my first presentations just telling people kind of where I’m from through some pictures of the Ozarks. And as mentioned, I’m an adventurer. I love the mountains. I love to backpack. I love to hike and climb and do all those things. And a lot of people say, “Hey, I want to come to the Ozarks and do that.” So, I thought, “Well, okay. Let’s see who really wants to come.”
And so this trip, I organized a few dates and kind of put together a rough itinerary and just put it out there for everybody. And I’m actually super excited. I’ve got four or five of us that are already 100% committed on going. I suspect we’ll have a few more people, and I think that will just be a generally good time. Not part of my business. I’m not a wilderness leader at this point or anything. I don’t have a wilderness guide business, but those are the kinds of experiences and what we’ll talk about and what we’ll share on that kind of a trip is yet to be seen. But I’m certain that it will have lasting impact for all of us.
So, I’m super happy to be a part of that and have be that platform to help raise that kind of interest, and introduce some people to the Ozarks, because like Colombia, the Ozarks is often underappreciated and kind of just a flyover state, something that you don’t really want to stop off the interstate or whatever unless you have a good reason. But if you’re interested, I’m here and there’s good reasons. So, that’s been cool.
The other one is, yeah, we’re going back to Colombia in January. This is coming quick. So, if you are seriously interested in Life Afar and what we’ve got going on down there, we highly recommend you to reach out to me soon, because, again, we feel like it may be a stretch for some people to make an investment in a place where they’ve never been. But if you really go there and see with your own eyes what is going on in this country and what the opportunities are and what all it has to offer, and meet Life Afar and meet some of us that are on the executive team and see how we run a company and see our projects, we feel like at that point it’s a much easier thing for somebody to get their head around.
So, we’re offering a trip. It does have a cost but that can go towards your investment, and it’s a week January the 16th to the 23rd, I believe, are the dates. And it’s just going to be a good time. Not a lot of pitches, not a lot of sales stuff, we’re really just going down to have a good time and enjoy the culture. We’re going to spend some time in Medellin and Cartagena, both.
Mike:Yeah, that’s awesome. That’s awesome. Yeah. One of the things I’d found, truthfully, one of the reasons why I created Investor Fuel was, you know, this is could be a lonely business, right? We got our heads down. We’re focused on, you know, building our businesses and building rental portfolios or whatever it might be. And sometimes, you kind of look around and I don’t know about you, probably you felt some of this in a small town it’s like, “Who do I resonate with around here?”
Even if you had an awesome week or an awesome year or an awesome day, sometimes it’s hard to, like, know who to celebrate with or who to, like, share war stories with or whatever, and that’s really why we created Investor Fuel was to get around people like us. And, you know, it’s easy for me to plug it because I’m obviously biased. But, you know, when we leave Investor Fuel after being there for several days, it feels like you were together with your family, right? And you’re leaving and people are sad to leave sometimes. We would have to get home to our families and do all those things but they’re pretty good experiences, I’d say, in terms of getting around people like you and people that are going to push you to another level. And I feel the same way about travel too, right? You’re constantly pushing the boundaries of what you’re comfortable doing and that’s why they fit so well together.
Tyler:Yeah, no. I couldn’t agree more, you know. It is the impact that others have, I think, that are the most lasting impact on you and definitely in Southwest Missouri getting this business up and running. It’s hard to find a lot that would relate to that story. And like you said, sometimes it’s even like the victories that you want to celebrate but you kind of can’t. Like, you know, you make a lot of money on a deal or whatever, who can really appreciate that without feeling bad or can relate to it on what level? And it’s tough. So, it’s been fantastic to have a good network of people who are always trying to push the envelope and always willing to be open to newer ideas and new perspectives and continue to evolve.
Mike:Yeah, awesome. Awesome. Well, Tyler, hey, thanks for sharing your story, man. It’s exciting and we’re going to add links down below for anybody that wants to learn more about Life Afar, how to get a hold of Tyler. If you could send me afterwards, send me the YouTube link you’re talking about, we’ll get that on the page as with all. And if anybody’s interested in learning more about Investor Fuel, our mastermind, it’s pretty exclusive. We don’t allow just anybody in. So, we have a process or you apply and then we’ll talk about into.
Tyler:Now that I got in, you cut all that off.
Mike:What’s that?
Tyler:Now that you let me in, you got to have some standards.
Mike:Yeah, that’s right. That’s right. Well, you raised the bar. We raised the bar because of you, Tyler. But no, we’ll add links for all the stuff down below if anybody’s interested in learning more. Tyler, anything else I missed at all?
Tyler:I don’t think so, Mike. I really do appreciate you having me on and I’m looking forward to seeing everybody again in February. And thank you so much for all you do for everyone.
Mike:Yeah, absolutely. And everybody, really, real estate should be feeding your passion whatever it is. Like, we talked about travel today, but it could be anything. It could be doing something charitable for your church, whatever it is, you know, real estate is the great enabler, I think, for a lot of us whatever your passion is. So, hopefully you enjoy today’s show. This is episode number 440 with my buddy Tyler Swift.
We’re going to add links for all the stuff we talked about down below in the show notes. If you haven’t yet subscribed to us on iTunes, Stitcher Radio, Google Play, YouTube, anywhere where you might watch or listen to us, we’d love it if you subscribe, give us a positive review. And of course, you can watch or listen to all of our shows. Actually, this is episode number 440 of this show. We have a few other shows that we do as well on real estate investing. It’s over 1,500 different shows on real estate investing and you can find all that on flipnerd.com. So, I appreciate you guys all so much. We’ll see you on the next show.
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