Listen to Tim Kelly discuss purchasing 1,200 multifamily units while on active duty. His focus has now shifted to helping current active duty individuals learn how to do what he did. In addition, he has massive personal goals to achieve another 5,000 units over the next three years and to grow his net worth into the eight figures!

Table of Contents:

• Where To Listen To The Podcast
• The 1200 Multifamily Units
• Acquiring Multifamily Units While in Active Service
• 1200 Multifamily Units: Making It Happen
• Invest in Your Knowledge
• The Secret in Raising Your Multifamily Units Capital
• How to Reach Tim Kelly
• Join This Multifamily Conference

The 1200 Multifamily Units

Darin: Tim Kelly was in the Navy for 15 years, currently lives in Pensacola, Florida with his wife, Allyson. While still in the Navy, he acquired over 1200 multifamily units and achieved financial freedom. He's focused on teaching those currently on active duty how to do what he did. He loves what he does and he's got a ton of energy and passion. He also has massive goals. One, to acquire another 5,000 multifamily units over the next three years. And secondly, to grow his net worth into the eight figures.

Just a little bit on how I know Tim. I went to a mastermind meeting in Jamaica with like, I don't know, there were probably like 25 of us. And I was invited by another guest that I had on the show, David Toupin, with Obsidian Capital. He was on episode 12 and he was kind enough to invite me. He's in his 20s and I'm like, you don't want a 50-year-old guy like me. So I ended up mentioning that and he said, "No, jump on board. We're going to have a good time." The first night there, I ended up meeting Tim. We shared a few beers and a cigar and just got to know each other. And I'm so glad he's on today. So to start out, can you share with the listeners how many multifamily units and how many properties you're currently invested in?

Tim: That was such an incredible trip in that mastermind. Huge shout out to SecretX and the guys that put that together, and can't wait for the next. And even during the pandemic, we were able to go to Jamaica and hang out.

Who Is Tim Kelley

Tim: My name is Tim Kelly. Over the last four or five years, just specifically honed into multifamily to include mobile home parks, apartment communities. I'm looking at storage facilities now, but while I was on active duty military, I was in the Navy. I'm still here in Pensacola, I'm out now. I separated back in November because of real estate, but I accumulated ownership, either own, control, or help close over 1200 doors.

While I was on active duty, while I was still building this huge community Active Duty Passive Income. And so hopefully, that lights a fire in some people to understand, if I could do it, anybody could do it. This dude, I'm just a simpleton from the Northwest suburbs of Chicago. And I joined the Navy for a lot of different reasons, but I got out of it what I needed it.

It just completely transformed me into this person that is just highly focused and gritty and understands leadership and work ethic, and hard work. Because of the military and this is one of the biggest things we stress, is that the military will make you or break you. And a lot of those people are realizing, look, all these qualities I'm learning in the military, they apply very well in business and investing in real estate. So yes, that's a long answer to your question, bro.

Darin: First of all, thank you for your service. Very much appreciate that. How long were you in the service?

Tim: I hit 15 years this past September, and then I separated in November. So I had 15 years.

Darin: Fantastic. And the other thing that I didn't know, you just mentioned, which is pretty crazy, is that you actually acquired 1200 doors while you were still active.

Learn, Network, Take Action

Darin: It wasn't like you got all that experience. You left the Navy and then you started to invest in real estate. While you were still on active duty, you learned how to do this. How did you do it?

Tim: Yes. It really was just a mixture and this is the success triangle that we talk about on our platform all the time, in the ADPI community, is to learn, network, and take action. So you have to educate yourself. You have to learn is number one, and that's what I did. I was on a deployment in 2014 and I read a bunch of books and had no idea what real estate investing was. So I just was interested in building wealth and financial management. And I just was never comfortable with giving my financial legacy to somebody else, like a joker broker or what most people call a certified financial planner, right?

Or some kind of financial advisor. Most of those people are salesmen and they put you into the vehicles that make them the most commission if you're not aware of that. So I was never comfortable with that.

And so I just kept educating myself and I kept seeing this pattern of real estate investing. Anybody could do it, it builds a lot of wealth. I learned all the profit centers of real estate. And if you own and control long-term real estate, all the profit centers continue to pay.

And that explained why I heard so many times more millionaires and billionaires are created inside of using real estate as a vehicle than any other, really, an investment vehicle. So I just kept being curious. I was super curious and how, and so I learned.

Building Wealth With Investing in Multifamily Units

Tim: I went horizontal across all the different ways that you can generate income and build wealth in real estate. And then I learned a little bit about the large multifamily asset class and multifamily units and I was hooked. And so that's where I started.

I bought a single-family home using my VA loan in 2011 before I knew anything about real estate investing. And then I ended up house hacking and renting out one of the bedrooms to cover most of my mortgage before I knew anything about house hacking. Then when I learned about investing, I went straight for multifamily units. I bought a fourplex of multifamily units the minute I got here to Pensacola and six months later, bought a 42 unit apartment complex.

Syndicated that with some friends while I was stationed here through guys at the Meetup, at the REIA, on BiggerPockets. And now, fast-forward, that's all we were focusing on, was the large commercial apartment communities, mobile home communities. And now, not only are we teaching everybody in our military community, in the Active Duty Passive Income community, how to do what we're doing, but we're showing them how to do it. They have direct access to us and we build these portfolios. Now we're showing all of our veterans in our community how to do the same thing and we're just having a blast.

Darin: That's amazing. I'm not familiar with how it's set up when you are in the military. If you go into the corporate world and you sign your HR papers and you end up signing up for a 401k. So you have a certain part of your money that goes to the 401k.

How the Navy Inspired Tim’s Passion for Multifamily Units

Darin: And if you're in the corporate world like I was until I got involved in real estate investing three years ago, you put that money aside and you pick an option, whether it's ETFs or something, and then you just let it ride. And hope that somebody else is going to make you money over the years.

And it's supposedly going to compound over for years and years. What's it like in the Navy? Is it, you still have those same options or is it different?

Tim: That's such a good question. And this is where ultimately down to the root, is where I've really found my passion for real estate. And the Navy and the military, really, the DOD has something called a thrift savings plan, TSP, thrift savings plan. It's just a 401k for them, for people who are in the military and in government.

And so if you think about the limited amount of financial education in our society and our culture, just the civilian sector, it's even worse in the military. Because in the military you go through boot camp, you literally have like a 15 minute class of a financial advisor who really works for Navy Federal or something like one of these big institutions or USAA. They come in and they tell you about their bank. And they get you set up with a bank. They don't give you any education.

And then for another 15-minute block, you'll talk to somebody who works for the veterans' affairs and they'll be like, this is the TSP, it's just like a 401k, you're going to, by default, have a 1% going into the TSP. These are all the funds, you've got the CSI lifestyle fund, G-fund.

Owning the Land We Serve

Tim: I'm not going to inform you of any of this, but those are your options. Now go to work and go learn your job, go learn your trade, go to your command, don't worry about money. And so I just was never cool with that. Now, we're educating people a little bit on the TSP, but we are educating people like, look, if you leave your money in the TSP, there's nothing wrong with that, but you have to be okay with a whole bunch of things. Number one, you can't touch it till you're 59 and a half.

Two, you're being highly taxed on that money. Number three, you're probably going to be in a higher tax bracket when you actually are 59 and a half, hopefully, that's the goal. And if you are in a higher tax bracket, if you have a traditional TSP like a traditional 401k, you're going to be taxed at that high tax rate. So, there is a Roth TSP version to have that tax-free growth. But at the same time, man, just again, we're not saying the TSP is wrong, not saying that you can't invest in paper assets and the stock market and mutual funds, stocks, and bonds, because there are people who are very successful with that in the financial independence movement. But we preach owning land, owning the United States. We serve our country, let's own as much of our country as possible.

And that alone should be enough drive. But then when you learn about the loopholes of real estate and tax benefits and cash flow. You could use other people's money to buy it. And you could provide investors incredible returns without even having to invest any of your own money or using your own credit.

Acquiring Multifamily Units While in Active Service

Tim: You could literally create wealth for yourself and for other people. So that's what we preach.

You just need some ambition. And you just need the willingness to learn to network with others and to take action every day and complete that success triangle that we always talk about.

Darin: That's awesome. But you did it while you were still in service. How did you go about doing that? You mentioned that you started reading a bunch of books.

Tim: It was just a bunch of books. And then I got off that deployment and 2015 is when I started putting it all into play. I spent a lot of money with a large organization. A large guru organization to learn about real estate, to get mentorship and coaching. I spent like 30 grand to get a real estate education and real estate mentorship and so I went through all that.

Then that's when I realized, okay, now I know enough about real estate and I networked with enough people to choose one. And that's where I chose multifamily units and I started honing my focus instead of spinning my wheels with all those residential single-family creative financing stuff. Most people start in wholesaling and stuff like that didn't make sense to me and what I was looking for is passive income.

I knew even if you wholesale a bunch of deals every single month, you work and you get paid one time. And that's earned income, I was looking for passive income.

If you are trading your time for dollars, that's earned income and you can never really generate wealth.

And I did have a little bit of capital, but not really that much to get into my first syndication.

How the 1200 Multifamily Units Started

Tim: But since then, I put very, very, very little capital into all these deals that I now have ownership in. And that's over 1000 doors. We just sold one of our communities at the very end of 2020. But yeah, man, it was just education. So I paid for education, then I just immediately realized the REIA was a very powerful network.

The power of your local real estate investment association. So I'm in Pensacola now but in 2015, I didn't do it, I was in Virginia Beach stationed there with the Navy. And so then I joined the REIA, I joined the local REIA in the Hampton Roads area, which was in Norfolk, Virginia. That covered Virginia Beach and Chesapeake and that whole area. That's when I focused on multifamily units and I got to Pensacola. Six months later, I had the 42 multifamily units. And the minute I got to Pensacola, that same month, I closed on the fourplex because I knew I wanted multifamily. But for owner-occupied, I used the 203K FHA loan. And you can only go up to four multifamily units when you're using the owner-occupied loan.

So I got a fourplex with the intentions of house hacking and using the 203K FHA loan. Then six months later, I bought that 42 unit deal. And then it's been large multifamily ever since. It was just really a combination, like I said, of learning and continuing to learn every single day and not caring about all the other fluff and gurus. Just learning, learning, learning, honing your focus, picking a niche, getting really good at it. And then network with people while you're learning. You don't have to wait until you're an expert to start networking.

The Importance of Networking

Tim: You have to network with people while you're learning. Because there are so many other people that will not only teach you stuff, but they'll learn alongside you and be a potential partner. So that is how you find like-minded and like-hearted people.

It's super important that you connect with those individuals as fast as possible that are like-minded and like-hearted. How do you find those people? Become genuinely interested in everybody around you.

Any kind of meetup, any kind of networking event, Zoom or face-to-face, be very interested in everybody in the room and what their goals are, what they have going on, how they got started, what they're looking to do. That's when you find potential partners. And that's when you find potential brokers, lenders, friends, people in the industry that maybe you're not going to partner but you could support each other, give each other referrals. So you have to network while you're learning every single day, while you're growing as a person every single day, and then take action every single day and understand you have to grow as a person like I just said.

I said that quickly, but your mindset and your ability to grow into the person that achieves the goals that you want to achieve. You want to close 100 doors this year, that's cool. You could easily do it and learn what it takes, but you have to grow into that individual who then is able to close 100 unit property. If that makes sense.

Darin: Yes. You said a lot of great things there. One thing that you mentioned was you spent $30,000 or around there on a mentorship group. You're in the Navy, I'm guessing that that was a pretty sizable investment for you.

Multifamily Units Are Worth the Investment

Darin: So I've talked to a lot of people and I joined a multifamily mentorship group myself and invested in that. But there's a lot of people that I've talked to that are like suspect. They're like, "why would you invest that much money?" So help us understand, from your perspective, why that was worth the investment.

Tim: I think for a few reasons, looking back. Well, even better programs and academies and masterminds and coaching for a fraction of that price. And so I don't think anybody should be spending that much money on real estate education. If you want to go to college and not really just have a piece of paper that says look, I was smart enough to get through four years of college and throw my life away and now I'm in 100,000 dollars worth of debt.

No, you shouldn't have to pay 20, 40, 50 for this type of education. So at that time, I justified it because I think that is ultimately how uncomfortable I was with the idea of me staying in for 20 years and doing what everybody around me was doing for that 20 years. And then maybe at that 20 years, then maybe get out, get another job in the same field. I think a lot of it had to do with, I was not passionate and I didn't love what I did in the Navy.

Looking back, I have no regrets at all. The Navy made me who I am today and all the people around me. My prior chiefs and officers that I looked up to, and now I became chief. And all my brothers and sisters in the chief's mess and all things they taught me.

Commitment for Financial Freedom

Tim: No regrets, but I was uncomfortable and I think I was really committed to the idea of financial freedom. And I knew that real estate can get me there and I knew I was bold enough to take it on and do it and make it happen. I think a lot of people don't have that confidence. Maybe they have a little bit of like, because they heard their uncle just lost his shirt in real estate, whoever. But deep down, even regardless of knowing that people fail in real estate, even despite this thing, I know that I could overcome those challenges and be successful and achieve financial freedom.

So I was just like, with conviction, I knew it was going to happen. From the very start. I didn't even know what I had to do. And I didn't know what it took. I didn't know how many times I was going to have to fail. And I didn't know who was going to be my team and my mentors. I didn't know any of that, but I knew I was going to make it happen. And I think there are not many people that have that bold tenacity to know, I don't care what it's going to take, but I'm going to make it happen. Now look, fast-forward four years, I'm living it because I think I was bold enough to know that I could make it happen. Then I was bold enough to do what it took. And that's a lot of sacrificing money, resources, time.

I had to spend a lot of time and money on resources and learning and reading and networking. I mean, I sacrificed myself and my family for the last four or five years. But now, all my time is back.

Becoming a Millionaire While in the Navy

Tim: And it's not about wealth or money, dude, it's about time and freedom and options. And nobody could tell me what I need to do anymore. Especially being in the military, I'm so used to having to comply with orders and follow the chain of command.

Now I am my own chain of command. I'm creating my own bank and my own economic system using whole life insurance policies and different assets. Different entity structures and legal structures and design. So there's nothing like having complete freedom and autonomy to do whatever you want at whatever time you want with whoever you want. Do you know what I mean?

And I think I had that tangible vision and I saw myself making it happen. I justified spending 25 or 30 grand initially because I'm like, look, if I invest this much, how much is it going to pay me? It's not, how much does it cost? Me investing in that, how much has that investment made me in the long run?

I became a millionaire in the Navy, on an enlisted salary, not an officer's salary. Now I'm going for an eight-figure net worth in 2021. And that's because I made that initial investment. I made that bold assumption that I'm going to make this happen. I don't know how long it's going to take or what it takes or who I need to connect with to make it happen, but I'm going to do it. And because I made that investment, now I am where I am today and I would want to change nothing. So clearly I justified it by making it happen. But at that time, I didn't know whether or not I was going to make it happen.

1200 Multifamily Units: Making It Happen

Tim: I knew I was going to make it happen, I just didn't know when or for how long, but that investment made sense to me at the time.

Darin: That's awesome. So you didn't use this word, but I think that with you and a lot of other successful people that I've met and interviewed and talked with, I think that you have to decide.

You have to decide that you're going to go after something and be committed to doing it.

So you had made a decision and you were committed to making it happen. And like some people have said to me before in different opportunities, well, what if this doesn't work? And I'm like, well, I don't think that way. I just think, what do I have to do to make it work? And it may not be a straight line, we might have to pivot and we might have some bumps along the road, but I'm going to get there, just like you said. So that's fantastic.

Tim: It won't be a straight line, expect a complete just cluster. The route to success is clearly never straight. Assume there are failures, assume struggles, assume challenges. Because those failures and struggles are stepping stones to success. They are not burdens to success, they are part of the process. We could talk about mindset for the next 10 hours, man. I love mindset stuff.

Because whenever I say you have to grow into that individual who achieves the goals that you set out to achieve, well, that's growing your mindset and understanding these things that we're talking about. Like our failure as stepping stones, or if our failures maybe these triggers that mean you won't be successful. No, they're not.

Mindset Is King

Tim: You can look at it in two different ways, but the person who will eventually be successful understands that failure is part of success, it's part of the process. And that to succeed, you need a lot of no’s, a lot of rejection. And some people hear, one, no, one, get out of my face, one, why would I ever invest with you? One, you're never going to be successful. And then they take a seat and they never do anything ever again for the rest of their life.

But then there are people that understand, again, the mindset, just understanding and being content with rejection and no’s, being content with growing every day as a person, being content with knowing you are a product of your environment and who you surround yourself with, your circle of people.

Those 10 people you spend the most time with, you are an average of everything about them. How much they weigh, how much money they have in their bank account, their income, what they eat, how happy they are, how they treat their spouse, their spiritual beliefs, the average of all that.

You are an accumulative average of those, the people that you spend the most time with. It's just inevitable, there's nothing we could do to combat that. And again, the mindset. Understanding, okay, get coaching, get mentorship, reach out to people, add value to people, learn, network, take action. The simple concepts that we teach in mindset about time management and using your time efficiently and all this stuff, that has to go along with you learning the mechanics of multifamily real estate and whatever niche you choose. Grow as a person and learn all these mindset things at the same time.

Get Your Momentum

Tim: And that is how you really flourish and really just get a lot of momentum in your life and business.

Darin: That's fantastic. So you mentioned ADPI, obviously an acronym. What does it stand for?

Tim: Yes. That's Active Duty Passive Income. Little play on words there.

Darin: There we go. So now you guys have your own podcast and you also have education programs, right?

Tim: Yes. Active Duty Passive Income is just at our core. We are an education platform and community and movement. It started with Mike Foster, who's now the podcast host, and Markian Sich, they went to the Naval Academy together. Markian is an active duty Marine, Mike recently separated from the Navy and they went to the Naval Academy together. They were both officers and they had this idea like, hey, real estate is cool.

They heard about turnkey, they heard about, hey, you can maybe go to your duty stations and use your VA loan and house hack and do all these things. So they created a course and created a Facebook group and created a podcast. Fast-forward, six months, then they found Eric Upchurch. A lot of people know Eric Upchurch. He's just an amazing dude, former army, combat veteran. He's just shit hot in real estate and in business and I'm fortunate to have him on my team.

He became a co-founder, then Adam La Barr came on for the multifamily through the Jake and Gino community and group. They found me, the other multifamily guy who was focused on multifamily. I got training through Rich Dad and obviously, Eric got training through the whole Rod Khleif Organization. So we have all these different experiences and we all had deals already done and now we're coming together.

Focusing on Educating People

Tim: We all have the education passion to show other vets how to do everything from just being smart with your finances and understanding credit and debt. To be smart with your VA loan and learning about the VA loan. We have a free VA loan mastery course inside of our community. All the way up to how to buy 100 multifamily units while you're stationed overseas in Korea and you have a team back home.

Darin: That to me is crazy, to be overseas and be able to be involved in one of these deals.

Tim: That is what we're doing. And there's a handful of people inside of our military multifamily academy and mastermind who have partnered and who are overseas doing deals back in the States while they're stationed in Japan, Korea, Italy, Spain. It's amazing to watch, man, and it's super humbling. But yes, so education is at our core. So we have this podcast. Somehow we've had the honor to interview Grant Cardone and Robert Kiyosaki and Jocko Willink and Rod Khleif and all these people.

But we also interview our junior sailors and service members and marines and E1s and junior enlisted and junior officers who are just stumbling across our book or Googling VA loan. They're coming across our course and they're reading our book and they're joining our community and they're taking action and getting it done. So we have a pretty cool podcast, but then we have courses and masterminds both as in the single-family and residential track, and then the large multifamily commercial track. I'm one of the lead coaches in the multifamily. I'm the director of the multifamily piece and really the VP overall in charge of all things education.

Understanding the Process to Become Successful

Tim: But we have education as our core, man, and we have masterminds. And then we were able to start up a mortgage company and insurance brokerage for financial services. Because to be successful in real estate, you need to understand financing and lending and you're obviously going to need insurance. So we have these financial services because we want to provide better service and give better terms to our vets and people in our community compared to the Navy Federal USA, the Veterans United, who are not really taking care of our vets, who are actually using them and undermining their education. So we're trying to educate them so they understand terms and build wealth using their VA loan for 0% down. You can get in a fourplex for 0% down, just as an example.

Then we're also giving them quotes and allowing them. Now you can go get quotes and you'll understand the process. And now you could choose the lender that makes the most sense for you and stuff like that.

Darin: That's a lot. I wasn't in the service. But if I'm in the service and I'm listening to your podcast or I'm listening to you right now and I'm thinking to myself, you know what, I want to do this. I want it, but I have no idea how to get started. Tim sounds really knowledgeable, but there's a ton that he mentioned. I don't even know how to get started. How does somebody get started?

Tim:  So I do want to make sure everybody who's listening understands, even if it's one person that's actually listening to this. And especially if they're in the military.

Convince Yourself to Convince Other People

Tim: There was just a very, very short time ago where I knew I wanted to generate cash flow and achieve financial freedom using real estate. But there was a time where I had no idea what the heck I was doing, where I was going. There was a time when I seriously tried to learn and I'm like, look, I can't figure this out, this is too much, I'm not going to be able to do this. I had self-doubt, limiting beliefs. And then I just cut through that noise and just continued learning and continued believing in myself. Then I started taking action and just learning more and more, then I paid for coaching and mentorship, and education. Then I joined some networks and I was hanging out with people.

And because I educated myself, I was able to talk to people at a level that they would accept me as an expert. When you have enough education, you build confidence. And when you have confidence in your education, you can go network with people with confidence. If you can't convince yourself: I am a multifamily investor. And I will close at least one deal this year, 100 multifamily units, whatever your criteria are.

If you can't believe yourself, if you can't convince yourself, you're never going to convince the partners, your investors, your team members, who are whoever they are. They will never be able to take you seriously. If you can't, with conviction, believe that you will close a deal, that you are that multifamily investor.

That's really one of the number one things you need to do, is figure out what niche you're in and your criteria and convince yourself that you are going to lose X amount of deals this year.

Invest in Your Knowledge

Tim: Because then when you have that conviction to yourself, even if you say to yourself 100 times in the mirror when you go talk to other people about it and you have conversations, people will take you seriously. And that's when it's like you're in a different ball field. It's a completely different game when people take you seriously, even if you have no experience.

But your credibility, based on how smooth you are, how confident you sound, and how you're able to just speak the language and talk the talk, that's where people start taking you seriously. And that's where you can start raising capital and actually look for good off-market deals and connect with brokers and find partners and find investors and stuff like that. So I don't know. This stuff gets me excited because if I could do it, anybody can.

There was a time when I struggled and I didn't know, but now. So step one, you have to understand and be content with. You have to educate yourself and consume every possible thing.

Darin: All right. So I listened to you, I'm like, yes I'm in. These guys sound like they know what they're doing. How do I get a hold of you? What do I do?

Tim: Honestly, you could do one of two things. You can go to activedutypassiveincome.com and then join the Facebook group. So check out our Facebook group. Check out our podcast and go to the website, download the free book, get into the VA loan mastery course for free. I wrote two other books that are free about how to establish your financial foundation and an all-in-one credit guide. And we recently just released this, this isn't for free.

Get a Battle Journal to Achieve Those Multifamily Units

Tim: This is actually free for all of our mastermind members, but this is a battle journal. It's a 13 week, 90-day action journal, action planner. Step-by-step process how to set your goals, establish goals and then track your goals and then have an accountability system in place to hold you accountable to your goals. Because you could have all the knowledge, you could have goals in place, but if you don't have some kind of accountability system in place or an accountability tribe or group who's asking you for weekly updates, you're probably going to struggle. Not very many people on their own could achieve their goals without the help of some kind of support group or team or tribe.

Darin: On that note, you can agree or disagree with me. But my view is that you can go out and buy a duplex or a fourplex, or if you have the capital, an eight-plex on your own. But if you really want to get into the big multifamily world, 60 multifamily units, 100 multifamily units, 150 multifamily units, 200 multifamily units, you're going to have to partner with somebody. And so in order to get that first deal done, you don't have the experience, well, you go and partner with somebody who does have the experience. And so they are the credibility factor. The management company that you're going to hire to manage the property, they are your credibility factor. The attorneys that you use are a part of your team. They are the credibility factor.

Tim: Totally. And that's the thing. A lot of people are afraid. I have to go talk to people and network and get out of my little shell. And even during this pandemic, people have been quarantining.

Be Brave to Struggle and Survive

Tim: They're like, they still just want to be comfortable and sit inside and not go talk to anybody or put any work into it. You have to understand, there's going to be a lot of work, a lot of sacrifices, failure, struggle. There's going to be people that tell you that you're stupid, that you're never going to be able to achieve your goals. You have to be bold enough and just be ignorant enough to be like, thank you for your input, watch me prove you wrong.

Darin: Let me say something on that note. Look, if you just hang out with the people that are not in the space, you're going to hear more and more people tell you you're crazy. But if you get into a network of like-minded people that have already done it, they're going to help encourage you. And you're also going to size them up. You're going to size them up and you're going to say, look, these are good people, but they're just people. And if they can do it, I can do it. But if you sit home and you don't get plugged in with people that are already doing it, you're going to feel like it's impossible.

Tim: I 100% agree, man.

Darin: So you talked about financial freedom. Just let's talk about freedom. How do you define it?

Tim: When you're talking specifically about financial freedom when you talk about freedom in terms of financial freedom, it's something that I think a lot of people are going for and a lot of people have their own definition and interpretation. But, it all goes back to time. Who is in control of your time and the amount of control you have of your own time?

Defining Freedom While Having the Multifamily Units

Tim: When I say financial freedom, it is, you wake up whatever time you want to wake up. You don't have to be anywhere ever on someone else's obligation and you don't work for anybody. You have your own time to spend with the people that you want to spend it with. And you do the things that you want to do based on when you want to do them and your schedule and what means most to you. For me, that's my family.

And when I realized that most people who have financial freedom, they've been able to add so much value in some kind of industry where now they have generated passive income and they have multiple streams of income and their net worth is going up, whatever. But most of the people who achieve that point, are very, very, very philanthropic and very giving and generous with their time. So I realized, me personally, the fact that I don't have a 9:00 to 5:00 gig, a military 9:00 to 5:00 job, during that 9:00 to 5:00 time, I could figure out how to become a better person and add more value to more people.

I love self-development. Love professional development. So many people achieve financial freedom and massive wealth because they've added so much value to people already, usually, those people go figure out ways to make this world a better place in some way. They go give more. Obviously, the more money you have, the more people you could help and the more you can give. And the more of this world you could change. But when you have time, you can go dedicate your time to helping more people and then growing yourself.

Work on Yourself While Helping Others

Tim: So the more you grow, the more value you could add to more people. Then work on yourself. Take some of the time to work on yourself. But then you have even more ample time to go make this world a better place. And whatever your calling is, whatever industry you're in, whether it's a hobby or a passion project or whatever it is, people who have achieved financial freedom have an attitude of gratitude. They're thankful for that time, so they really use that time to do good things.

Darin: Look, you said it earlier, you're already a millionaire. You're trying to get to the eight-figure mark this year. But you're on this podcast right now, you're out there talking with people. And you're looking to continue to self-develop yourself so you can help others. That is a theme I've seen time and time again with successful people. They get to one level, but as they're getting to that level, they don't just stop there. They look at, okay, look, I may have used this coach or this mentor to get to me where I am, but now I want to level up to the next level, so I need to find another mentor that's going to take me there. And so that's huge.

Another thing that was cool was before we hit the record, I'm going to share this with the listeners. Before we hit record, he said, "Look, I had five years left in the service till my pension. And that's a big deal for a lot of service members. But when I was in the service, I built up my passive income. Such that I was able to leave five years early and it didn't matter. I had already built up that financial freedom."

When You Grow, You Add Value to the Table

Darin: I think that there's a lot of people, whether you're in the service trying to do your time to get your pension or whether you're in corporate America and you're thinking, all right, I just have to work my 30 or 40 years to build up this nest egg before I can really enjoy life. And here you are, an example that you don't have to wait until then. You can actually learn, network, and take action now so that you can better your life and at a much earlier stage.

Tim: I really hope that resonates with people. And if you haven't heard, if you didn't really catch that or even if you did, you should rewind and listen to that again. Because I think if you're listening to this, you're already in the realm of people who are able to succeed because they believe they can and they want to do big things. Maybe change the world in some way, whatever. But if you're listening, clearly you are part of that exclusive group who thinks that they can. Now, it's just a matter of whether it's real estate or something else or another kind of business, whatever industry you're in.

Just become an expert in a very specific niche inside that industry, network with people who have already achieved what you are setting out to achieve and grow every day as a person and take action. And then you'll be able to add more and more value.

The more you grow, you'll add more and more value to people. And that's really what it's all about. Exclusive example of getting in your first syndication as a general partner. The key to that is figuring out what it takes to close a deal.

Your Integrity Pays Off

Tim: All the roles of the GP, figure out what all the roles are that the GP plays and how could I fill as many of those roles as possible? How could I add as much value to a team? For instance, if you could be a person that finds deals, underwrites deals, let's just leave capital completely out of it. Let's just say you don't have any capital or know anybody that has any capital, which I doubt, which is not true. If you actually deep dive in your network.

Darin: But that's a big fear. And that could keep people away, is that they're afraid to ask for money.

Tim: I could talk about that all day. Raising capital, there's a secret to it and I'll tell you what it is here in a second. But let's just say, you find a deal and you underwrite the deal. Then maybe you could help with maybe due diligence and you help get the deal closed. And let's say you don't want to do any asset management. You don't have any capital. If you become a master at underwriting and become a master at finding deals.

So you could find the deal, underwrite it, and you have this amazing deal and you know how to identify this amazing deal. Do you know how many GP teams would be foaming at the mouth wanting you on their team? If you're a good person, you're ethical, you're moral, you show up when you say you're going to show up. Obviously, in the military, these are all the things that we have to do. So it's like even a tighter knit group that we have in our mastermind.

Be Interested With the People to Grow Your Network

Tim: All these people are not only investors in real estate, but they're focusing on multifamily and multifamily units. They're military, so they already have a bond. We already speak the same language, but find people who are like-hearted and like-minded. Going back to, how do you do that? Be interested in more people as you network in this industry. Once you know what you want to do, you just go tell as many people as possible. Look, I'm a really good guy, or I'm a really good girl. And I like multifamily units and I plan on closing multifamily deals this year. This is what I bring to the table. I am the best underwriter that you've ever seen, I have deal flow. And check it out, I might have a lead on raising capital through whatever, through a family office, or through a high net worth individual.

And I don't have that secured yet, but not only could I find and underwrite the deal. But I might have a lead on some capital and maybe I have 25 grand to invest as risk capital or EMD or something like that. If you go share that with enough people, I assure you, you will get involved in a deal within the next 12 months.

Darin: Yes. Huge. I love secrets. So go ahead and share the secret on the capital raise to everybody listening.

Tim: This secret might not be revealed as a secret to people. But for me, it was a secret because when I realized it and it clicked, for me, it was pivotal, completely pivotal. And I was able to then tap into a network of hundreds of millions of dollars.

The Secret in Raising Your Multifamily Units Capital

Tim: We've raised hundreds of millions, we have access to a family office that has access to hundreds of millions of dollars and they fund our deals for us. People think, raising capital, man, I'm never going to be able to ask someone for a 100K or even 50K or even 25K, which is usually a minimum investment inside of syndication as an LP. But when we're dealing with people now who issue a check for a million or five million or 10 million, there are so many people out there with so much cash, it's just stupid. Understand that.

Number one, there's so much cash in IRAs, 401k, self-directed accounts, brokerage accounts, CDs, savings, checking. So much cash, liquid cash. More now than ever, because people have been saving and saving and saving during COVID because they're fearful of some kind of correction. So a lot of people are sitting on the sidelines with so much cash. Let's just say there are billions of dollars of cash sitting on the sidelines.

And not only all that cash is available. All that cash is foaming at the mouth waiting for you to approach them with an opportunity. It's just a matter of learning how to structure a deal. Learning how to simplify that and convey that to the investors and offer them an opportunity. You are not asking for money. So you have the good thing. They have cash, but what you have is better. You have the deal. You're offering them this amazing opportunity to get double-digit returns, plus ownership, plus tax benefits.

Sometimes you have to educate them on that. The basics of that. What do you mean by tax benefits, cash flow, K1?

Offering Opportunity

Tim: What are you talking about? You're going to have to educate them. So once you have the knowledge, you have more confidence, then you'll have even more confidence to talk to investors in terminology that I'm using right now. And understand that by you offering them an opportunity, you have the gold. It's up to them whether they want to take advantage of it or not. If they say no, good, because you need rejection, move on to the next person.

No, no, no, no. Boom. Yes. I have 300K that I need to invest, it's a 1031 exchange, I have 45 days. Help me out. Cool, I have a deal. We have one more spot left. I only could offer you 50K. That's the thing I wanted to stress. The secret is, you're not asking for money, you're offering an opportunity. So you have the opportunity. You're just offering it.

Darin: Absolutely. I feel the same exact way. It's, you're not asking for money, you're presenting an opportunity. And some people are going to be closed off and some people are going to be so thankful. So, so, so thankful that you presented the opportunity.

Tim: And some people are going to be like, dude, I'm all in. Then a week later, this is the wiring instruction, go ahead and wire the funds. That's where 50% of people ghost you. And so, keep that in mind too when you're raising capital. Say if you have a 500,000 raise for your first raise, for your first syndication, or whatever and you're like, I just hit the mark. All these people said that they will invest. I got these commitments. You have to call that a very, very gentle, soft commitment.

Perfecting Your Pitch

Tim: Because then the next phase is, you issue wiring instructions and then only half of them are actually going to wire funds. Now you only have half of what you need. Meanwhile, now you have to raise another 300K or 250K or whatever it is. So again, it's good. And sometimes that person might be looking to invest 250, but you, for whatever reason, he didn't believe you. He didn't trust you. He or she doesn't believe you're credible.

That's where you got to continue working on yourself and go through the no’s and then perfect your pitch and have it very structured. The last thing I want to talk about is perfecting your elevator pitch. In 15 to 20 seconds, who are you? What do you do? What do you offer? And then what are you looking for? In 15 to 20 seconds. And I'll give you mine right now. So you could just pause it and make it your own.

This is the elevator pitch that I've literally had for the last four or five years. And it's changed a little bit based on who I'm talking to, but all it is, it's a hook to get someone so they actually understand who you are and what you do. To maybe sit down and learn more about your business model. And then you could talk about their goals and are they looking to invest or maybe they are a property manager. Maybe they are a broker, whatever it is. But my elevator pitch, whenever anybody says "well, who are you? What do you do? Whether I'm on stage in front of 2000 people or whether I'm talking to one person sitting at the bar".

The Elevator Pitch to Multifamily Units

Tim: I say,

My name is Tim, my partners and I focus on apartment communities and mobile home communities. And we syndicate these multifamily deals in workforce housing, cities, and workforce housing, and affordable housing in markets that show a predictable path of progress. So we're always looking for deals and we're always looking for partners and investors to offer double-digit returns plus tax benefits plus ownership. How could we collaborate?

I mean, word for word, that's pretty much it right there. "My name is Tim, my partners and I syndicated and invested in large multifamily deals. We're focusing on mobile home communities and apartment communities in markets that show a predictable path to progress." And we even list it. Like right now we're focusing on Indianapolis. Red hot. We love Indianapolis. We have our best asset managers there.

So I could talk a lot about Indy. And even I threw out that city. It shows, while he's actually investing, he knows what he's talking about. And maybe I could talk about why Indy. But it's a very high level 15 to 22 second, make it very, very, very clear and concise. Who are you? What do you do? What do you offer? And then what are you looking for? Because maybe the person that you're talking to doesn't have what you're looking for, but they know a guy or their partner has something that you're looking for.

And if you hit it off with them, if you build a bond and maybe went back and forth a little bit and you cared about each other and you're genuinely interested in each other, that's when even though they don't have what you need, they know somebody, because you guys spent that time building that relationship. So that's a key takeaway too.

Tim's Music Passion Outside Real Estate

Darin: That is a key takeaway right there. And I've seen that in action. People genuinely want to help you. If they like you, even if they're not interested, they genuinely want to help you in some way, shape, or form.

Tim: So true.

Darin: What do you do outside of work?

Tim: So super passionate about just traveling. My lovely wife and I love traveling the world. We've been traveling the world for the last couple of years.

Darin: Allyson. I got the pleasure of meeting Allyson. Fantastic.

Tim: Yes. We were in Jamaica. That was one of our stops. In 2020, we went all over the world. And we love doing that. Music is my passion. I've been playing drums all my life.

Darin: Oh, wow. I didn't know that.

Tim: We actually have a gig this weekend and we gig, we're actively gigging and playing here in the Pensacola Gulf Shores, Orange Beach area. And so yes, music is my life and traveling and the family and just buying property and helping other people.

Darin: Awesome. So what's the next big stretch goal?

Tim: This year, the goal is to get at least four more big deals, 100 plus multifamily units, apartment communities, mobile home communities, and then get from seven to eight-figure net worth. And then obviously hit at least three more new countries this year as far as just regular family and hobby. And then help at least 20 other multifamily academy students close their first or their next deal. Most of my goals are having to do with helping the guys and girls in our multifamily mastermind get their deals done.

Getting to Know Tim

Darin: Fantastic, man. Well, you got a lot going on my friend. If somebody wants to reach out to you, what's the best way for them to get a hold of you?

Tim: I'm going to tell you Instagram, @thetimothykelly. Facebook, Timothy Kelly, LinkedIn @thetimothyKelly, thetimothykelly.com. You could do all that. Just check me out. I post a lot of content, give as much value as possible. But just shoot me a text (847) 910-9161.

Darin: Hey, listeners, I hope you enjoy that one. This guy is the real deal and he's so genuine. When I met with him in Jamaica for three days, he's just out to help anybody that was there. Anybody that he can help, he wants to help. And that's just a great thing about life, is helping other people. And he's found the answer to that. So hope you enjoyed that one. Tim, appreciate you coming on. Until next week, signing off.

How to Reach Tim Kelly

• Tim Kelley's website
• ADPI website
• LinkedIn
• Facebook
• Instagram

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