TJ Kosen has been in the market since 2006. He has owned and managed residential real estate from 1 to 112 units in addition to a residential Real Estate note portfolio and self storage facilities.
His Dallas based investment company TNT Property Solutions moves a high volume of distressed and retail grade residential properties in the Texas and Florida markets.
TNT is a tight knit DFW based company that sources directly to seller distressed properties, recapitalizes them, and either holds them in their portfolio or positions them for resale on either the retail, wholesale or seller finance markets.
reiAF is TJ’s community and education platform where we teach people the business; showing them how to leverage their time and build their business through optimizing exit strategies and strengthening their operational and organizational structures.
We don’t believe in a “one-size fits all” business model. We believe members and students should build the business they want – to suit their lifestyles and goals. To that end, we facilitate their success through a robust community whose guiding principle is “brutal honesty” when it comes to business development.
TJ enjoys spending his free time playing with his two beautiful children, reading with his wife, gardening, trail riding, wood working, golfing and working out.
Fun fact: TJ learned to walk when he was 33.
Episode Highlights Here:
TJ
wholesaling is a combination of wholesale and retail, kind of right in the middle. So we’ll close on the property, and then we’ll fix up the property to hit a specific price point. So not necessarily a full blown out flip where we’re trying to just, you know, compete with everything that’s at the top of the market. But we’re kind of scaling back from that, and scale back ideally, like, pretty far.
Brett
First of all, clarify what wholesaling is because some people might get confused with wholesaling and or not sure what it is. I know, I wasn’t sure until we start talking before the for the, for the conversations, or what is that? And what’s the number one secret to being successful in that in that field?
TJ
Yeah, so everyone knows that kind of a, it’s kind of a complicated structure, right? Everyone knows wholesaling relatively easy, whatever market you’re in, is, you know, you buy something for 75% Minus repairs, minus whatever. And that’s what they that’s what you’re able to make when you wholesale it to someone else, you know, maybe your markets 80%, at the peak of the market, maybe a year ago, you’re even at 2%, monetary, Paris, something like that. And then flipping I think is pretty easy. That’s where you put something on the retail and market kind of always kind of shooting for the top of the market. And we have six flips going right now. So we still do quite a big volume of those. But for like cash conversion cycle for turnover ratio for unknown unknowns, where you bump into stuff that you just don’t know what you’re going to be bumping into, it tends to be a fairly risky exit strategy for us. And it’s difficult to have a secondary exit strategy from an entire flip. So we like doing something right in the middle, which is wholesaling, which is kind of like it’s similar to innovations really, which is also kind of big in the marketplace, we do a handful of those. But wholesaling is a combination of wholesale and retail, kind of right in the middle. So we’ll close on the property, and then we’ll fix up the property to hit a specific price point. So not necessarily a full blown out flip, where we’re trying to just, you know, compete with everything that’s at the top of the market. But we’re kind of scaling back from that, and scale back ideally, like pretty far, the keys to success while we can go into like how to how to make that successful. But that’s like the that’s like the nutshell of how you do it is close on it. So the other transactional risk, but now you have control of the property, as opposed to wholesaling, there’s a lot of issues with that becomes more difficult to maximize your profit if you can’t close on the deal. And then we try to decrease our actual like, like, like product based risk by not doing massive blown out renovations on the property. But really trying to identify like a price point where this property if we do like these repairs will have this price point on the back end, and it’s a good strategy for the right property and for the right buyer profile.
Brett
Okay, so I think I’m getting it is basically not just putting every investment into a box, and it’s looking at it, you kind of mentioned it a little bit of the intro. Like what’s the highest and best, not just the highest and best use for the profit, but what’s the highest and best use as far as efficiency, right? So that doesn’t mean we’re going to do a full on renovation every single thing. It’s more like, okay, given where we’re at how quickly can we turn this property? You mentioned the cash conversion cycle. So perhaps that’s that ratio. Right? So understanding, you know, how much to put into each deal, and the time it’s going to take and maximizing the profit. Is that a fair summary TJ?
TJ
Yeah. And obviously, that’s always a moving target. There’s always a lot of kind of subjectivity to it, but it definitely summarizes it in a perfect world for sure.
Brett
Excellent. So what’s the number two secret to or I guess now, the number one secret to making that happen, since we just kind of define what it is? What besides I guess, maybe volume and just doing the sheer numbers that you guys are doing? What would be the number one secret to making to making this thing really work?
TJ
Yeah, you know, two years ago, I would have said that this was definitely the secret for wholesaling. I think it might even be in this market, the secret to actually like maximizing your money. And any kind of deal flow is identify at any point of the deal process at any point of whatever the deal is identify the target buyer avatar for the property based on the sub market, based on the condition of the property based on the condition that I can get to the property to with minimal effort, and then identify what is the likely buyer that’s going to buy that property. And again, for wholesaling, that makes a lot of sense. And we can break it down. We’ve kind of identified probably four to four and a half different buyer avatars for the wholesale model. And then we can extrapolate actually and apply that to other like exit strategies as well as strategies like flipping exit strategies like Novations exit strategies, like we do a ton of seller finance where we are the bank. I think we’ve done 35 or more deals this year where we’ve actually sold a property where we become the lender, but the best way to do that is by understanding the sub market and the buyer avatar that’s likely to buy the subject property on once it’s, you know, on the open market or on the well even close market. We don’t put everything on the open like MLS market
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About TJ Kosen
TJ Kosen has been in the market since 2006. He has owned and managed residential real estate from 1 to 112 units in addition to a residential Real Estate note portfolio and self storage facilities.
His Dallas based investment company TNT Property Solutions moves a high volume of distressed and retail grade residential properties in the Texas and Florida markets.
TNT is a tight knit DFW based company that sources directly to seller distressed properties, recapitalizes them, and either holds them in their portfolio or positions them for resale on either the retail, wholesale or seller finance markets.
reiAF is TJ’s community and education platform where we teach people the business; showing them how to leverage their time and build their business through optimizing exit strategies and strengthening their operational and organizational structures.
We don’t believe in a “one-size fits all” business model. We believe members and students should build the business they want – to suit their lifestyles and goals. To that end, we facilitate their success through a robust community whose guiding principle is “brutal honesty” when it comes to business development.
TJ enjoys spending his free time playing with his two beautiful children, reading with his wife, gardening, trail riding, wood working, golfing and working out.
Fun fact: TJ learned to walk when he was 33.
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