House Hacking a Fourplex: How Tyler Cobb Built 57 Rental Units

Tyler Cobb (00:00)
Yeah. So I heard this this one quote and I really love this. ⁓ fear is a mile wide and an inch deep. And those things that you’re seeing before you go and do something are real things. But as soon as you start, you’re never gonna regret it. There’s not a lot of people I know that bought their first piece of real estate and regretted it. It may be one out of a hundred people that are like, hey, this actually didn’t go too far for me.

And most of the time it’s because it’s not a li it’s a lifestyle they just don’t love. They still usually end up doing well if we’re all looking at monetary ⁓ perspectives. But they never regret it. So if you’re out there listening, you’re like, Okay, maybe the like what is it if you just do it. You gotta you just have to jump into the water.

Cody Crabb (02:16)
Welcome back to the Real Estate Pros podcast by Investor Fuel. I’m your host, Cody Crabb, and today I’ve got Tyler Cobb with me. Tyler is a multifamily investor based in Anchorage, Alaska, where he’s built a 57-door rental portfolio before turning 30. We’re going to dig into how he got started young.

Why Anchorage is a different kind of market and what newer investors should know if they are waiting for the perfect time to start. Thanks so much for joining us, Tyler. Appreciate it.

Tyler Cobb (02:40)
No, I appreciate you guys having me. This is gonna be a lot of fun.

Cody Crabb (02:42)
⁓ now I I find it really interesting that ⁓ you ⁓ your story just kind of subvert subverts expectations in multiple ways. Like ⁓ first you’re and you’re a real estate investor in Anchorage, Alaska. That’s already a that’s already thrown me off. you are under thirty with a with a double digit portfolio. That’s already that’s already thrown me off. So I’d love to hear a little bit about your story. How did you well, first of all, you’re not even from Alaska, which also threw me off because I like, he obviously is from Alaska.

So how did you end up in Alaska and what ⁓ what started you on your real estate journey?

Tyler Cobb (03:15)
Yeah, so ⁓ born and raised in ⁓ Pennsylvania. and what I was I joined the military at eighteen years old, two weeks after I graduated high school, I was shipped off, ⁓ joined the Air Force. So I was in San Antonio for basic training, went down to Mississippi for continued follow on training and then first duty station, they sent me up to J Bear, Joint Base Elmador Ferguson, and I was there, joined, did my four and a half years and then just fell in love with the state.

So got out and then that’s where it kind of began. That’s how I got here. How I started investing in real estate is actually really funny. So during COVID, I always say this like COVID is like the best thing to ever happen to me. ⁓ and and during COVID, during the in the military, some jobs were just like, Hey, we don’t want everybody to get contaminated. So half on, half off schedule. So I was basically at home sedentary, this whole time and I was like, Well, I might as well be doing something.

I was always interested in like my money working for me. So I did a bunch of research. And the first thing I did was I actually did like mutual fund stocks. And my uncle was really, really good at this stuff. I mean, he was super and he showed me how to do it. And I think like I invested like a hundred bucks and like what the next day I made like eight cents and I was so excited. Like I I was like ecstatic. Yeah. It like literally eight cents and I did nothing that day. I just literally like I just sat

Cody Crabb (04:34)
You have to do

Tyler Cobb (04:40)
And did more like watching YouTube videos, right? So I was like, wow, this is cool. This is great. So then I did more research. I’m like, there must be other things I can do instead of mutual funds because I have like no tangible control over that, right? it’s just like sit around and wait. And then I f I actually fell up ⁓ upon bigger pockets and I was like, what is this?

Cody Crabb (05:00)
It’s either that or rich dad, poor dad. It’s one or the other for every guest. Yeah. Exactly.

Tyler Cobb (05:05)
So I was like, what is real estate investing? And I kind of just like went down this rabbit hole. I almost became obsessed. ⁓ and then I got in contact with an agent who’s now like a business partner, ⁓ mentor of mine, and he helped me buy my first fourplex, ⁓ using like these owner occupied loans. ⁓ first one with like an FHA. even though I was VA, I try to use the FHA first because there is like a an order of operations if you can do it. ⁓

And yeah, I just keep became more obsessed and then just kept going. ⁓ and like over the lifetime of investing so far, I’ve owned like probably like 70 doors and ⁓ I’ve obviously sold some off ’cause now I’m at the fifty seven and we just keep rolling them to try to in rolling them into bigger places if we can. ⁓ but yeah, it’s kind of like the thirty thousand foot view.

Cody Crabb (05:58)
Hmm. Well, so I’d love to hear a little more about this first fourplex because when I think of real estate investing, th what the place that does not come to mind is Anchorage, Alaska. ⁓ and so I’d be curious to know, like what what did the numbers actually look like on that? Is that like a ⁓ I mean maybe that’s why it worked, ’cause it’s not somewhere you would normally think of. I’d be I’d be curious what that actually looked like.

Tyler Cobb (06:21)
Yeah, so ⁓ first four bucks and these numbers are gonna sound amazing compared to ⁓ what things look like now.

Cody Crabb (06:28)
thinking like I was thinking like COVID rates in like rural US. I yeah, I can’t imagine.

Tyler Cobb (07:21)
Yeah. So ⁓ so I bought my first fourplex. It was like five minutes from J Bear. I was still in the military at the time, and ⁓ my agent connected me with a loan officer. Loan officer’s like, Hey, if you can swing this, I would try to use an FHA loan. ⁓ the reason being is there’s a lot of rules with FHA that don’t apply to VA rules, so it’s easier to go buy another fourplex using a VA if you’ve already bought an FHA. Vice versa is really difficult.

because of the rules FHA has. So use FHA loan. ⁓ the purchase price of the property was three hundred and sixty thousand. And these were one bed, one bath units, ⁓ little place. It’s like twenty four hundred.

Cody Crabb (08:00)
It was a fourplex. I was a little bit like that’s more than I thought, but this is literally like four four doors in one. Yeah.

Tyler Cobb (08:06)
Four

doors. ⁓ so each one was a one bed, one bath, and they’re all like ranch style, so easy for like ⁓ handicap or elderly people to step into it. Obviously at the time I’m not thinking about these things, but I’m like, hey, this is what I need. This is cost effective, the n numbers made sense. At the time, the rents were around a thousand dollars each, ⁓ each unit. So which is good, you know, it’s not like fantastic. ⁓ but that’s

Cody Crabb (08:33)
Certainly

not bad though. That’s I mean I can imagine that they

Tyler Cobb (08:36)
it’s

not yeah, it’s no bad. It’s like we salivate over those numbers today because it was like under a one percent rule, and it was like, there even is a little bit of value at here. But the really funny part about this, and why I got really, really scared about real estate investing, is I put it under contract and we’re doing due diligence, and in the middle of due diligence, the boiler room caught fire. So and like I’m a young dude. I’m like

Cody Crabb (08:59)
He’s

Tyler Cobb (09:02)
Probably like twenty one, twenty two at the time. And I was like, What am I doing? Like maybe

Cody Crabb (09:08)
Your head like, this so this is that story I’ll tell w about my first big real estate mistake someday.

Tyler Cobb (09:13)
No,

I like, dude, I just made a horrible mistake. Fortunately I it was like during due diligence, so the last owner still owned it and they got the insurance to pay for it and stuff. But also one of the tenants was like a hoarder and he was smoking in the unit, so I have like went in that one. I’m like, okay, this is this is the value add, whatever. And then the boiler room caught fire and I said, Dude, there’s n I can’t like I’m so like I was a little s a little scared to be frank with you. But the my business partner, ⁓ Jamie Rose and

He was my agent at the time, he said, Trust me, you’re gonna want to stay in this contract. So the contract phase actually extended like another month because they had to rebuild the entire boiler room. ⁓ but what came out of that was a huge blessing now that like we look back retrospectively. The got a brand new boiler, grand new washer dryer. ⁓ everything in that whole entire section got rebuilt. They remodeled two of the four units because smoke got in there. ⁓

Cody Crabb (10:07)
So that and insurance paid for the whole thing.

Tyler Cobb (10:10)
Insurance paid for everything and I was like well when I got done when I signed the papers like shook his hand I was like thank you so much because where I was ready to terminate ⁓ terminate the contract ’cause I was so scared he was like n he was able to be in that thirty thousand foot view he like, No, this is gonna be huge for you. This is gonna be a huge come up. And I was like, Okay, I’ll trust you. And good thing I did because ⁓ I mean years later I so I bought it for three sixty, I got all my closing costs paid for, so it was like net three forty five, I think.

of what I paid. ⁓ two years later, obviously this was before COVID, and then two years later, obvious COVID kind of like boomed the real estate market. ⁓ rates were so low, you could buy anything, it would make sense. And I sold that building for $475. So which doesn’t seem like huge crazy numbers ⁓ when we’re when you you you look at like people who are buying these multi-million dollar apartment complexes. But for someone who used

three and a half percent down, which was like twelve grand, to then live for free because I was living in one of the units, save up all the money the military was giving me, ⁓ have my tenants pay for everything, all the maintenance, all the mortgage, the utilities, ⁓ and to then walk away with like a hundred and what, fifty thousand dollars, hundred and twenty, hundred and fifty thousand dollars.

Cody Crabb (11:25)
At this point you’re like, All right, I have dis I have discovered the the trick, the hack to life. Yeah.

Tyler Cobb (12:05)
And I felt like a genius, right? ⁓ obviously there’s stuff like that you couldn’t predict. We couldn’t predict that the COVID market would absolutely explode values or that rates would go as low as they did. ⁓ but that’s like a a lesson. It’s like it’s all about being in the game, being a part of the market ⁓ through those ups and down swings, because then you could capitalize on those things. So now like that same piece of real estate, ⁓ I think that same forplex

a l comparables are trading around five fifty, five seventy five. So even the guy after me who bought it is still sitting in a good equity percentage. You know, like it’s not like he tapped out lo and then he bought it at full market and then lost money after. No, things have actually still been good, stabilized, ⁓ and he’s still sitting on a good equity position. So it’s it’s still like a win win win for everybody.

Cody Crabb (12:54)
Yeah. So yes, you see you said something that caught my attention. You said being in the game is the real lesson here. ⁓ so for for someone that’s kind of stuck researching forever or they feel like I just need to I need to strike at the right moment, what would you say to those people? Because it feels like you’ve had really good luck and really bad luck kind of at the same time, like they’re the same through the same events. So like I I’d be curious to know your thoughts on that.

Tyler Cobb (13:22)
⁓ so anybody that I t one of the things whenever I’m coaching, so I do agency work too. ⁓ and I love helping people buy their first fourplex. It’s like my like I love doing it. It’s my favorite thing. ⁓ I always tell people things can and will go wrong. You’re gonna own this asset for hopefully years on end. prob hopefully you never sell it. Over the course of that time, you’re gonna run into some difficulty. Like

There is no and like I feel I feel like people when they hear that, they’re like, okay. Like they’re always in their mind worried about can things go wrong? And it’s like, yeah, you’re you’re gonna have if you’re in the game long enough, you’re probably gonna have someone you have to evict. You’re probably gonna have someone who wrecks your unit, you know? And that doesn’t mean that you shouldn’t just not consider those things. Just because you got the permission of, hey, there is risk. Okay, la di la di da, I’m just gonna go enter it.

You should know those risks and plan accordingly. Like that’s why it’s super important to have reserves and stuff. ⁓ have cash set aside for those bad events. But I I think when people hear that of like, okay, like you’ve made it through and it’s been a huge blessing for you. And I’m not gonna guarantee, I don’t guarantee that you’ll have those results, but it’s like, well, history tells us like real estate is one of the greatest asset classes to have. So

And if you plan accordingly and take that risk and make sure you apply it c correctly and make sure you have your r risk kind of diversified if you’re building a big portfolio, like you can overcome that. And ⁓ unlike stocks, real estate is a active kind of business model. So as long as you’re you’re not burying your head in the sand, you can also get ahead of a lot of these things. So ⁓ yeah, I’d say like

Being in is better than being out. ⁓ so just buy it. Like, obviously do your due diligence, do your numbers, make sure it makes sense for you and your family situation. But you’re not gonna in 10 years, you’re probably not gonna regret owning it. ⁓ even if it doesn’t go up a dollar, if you buy that fourplex, the numbers make sense, it pays for itself, and it doesn’t appreciate a dollar. In ten years, your tenants will have paid down a sizable percentage.

Hold on for thirty years. Your tenants will pay off the entire amount. So bank getting rid of one of those one of those money maker generator money making generators in real estate, you’ll still have a tremendous like asset in thirty years. Yeah.

Cody Crabb (15:48)
Well when you put it that way, it seems like a no-brainer. Yeah. It’s it’s how could you not do it? ⁓ so I’d love to for you to give us the practical version of that because ⁓ the my first thought is of course you think that because you’re in Anchorage, Alaska. Like like of course there’s availability, of course there’s like who else is gonna buy it? Like there’s like probably I in my head, I’m like, there’s like just like polar bears and nine people in the Anchorage. I’m sure that’s not true. But my point is the I I think a lot of people hearing this.

⁓ that live in anywhere else are like, Okay, but that doesn’t work where I am. So I’d love to hear what you would say to that and what people if people want to do this fourplex system, what do they need to do?

Tyler Cobb (16:29)
Yeah, so two prong there. So the first thing I’d try to address if someone says, Hey, it doesn’t work, obviously I would want to look closer ’cause there are certain parts of the United States where they don’t build fourplexes, right? Like or they’re very small percentage of the actual housing inventory there. That could be true.

Cody Crabb (16:48)
For like legal reasons or is it is it just like they just don’t have

Tyler Cobb (17:32)
Zoning, like if you so I grew up in Pennsylvania. we don’t have fourplexes there. It’s a lot of like you get a lot of duplexes, ⁓ but I I don’t see very many fourplexes that are built kind of to the average age of inventory you have. So in Pennsylvania, the average age of inventory, especially in like Erie County and Crawford County, are around the nineteen to nineteen thirties. So back then, they weren’t really

building too many four unit housing buildings. Right. There are some, don’t get me wrong. ⁓ but they’re not being built as much as usually today where people where builders and ⁓ these developers get a better bang for their buck by building up and building out. ⁓ with like, okay, I can get a twenty unit plot of right here, right? So and it’s a better bang for the buck if they’re getting all the materials that they’ll save on wholesale costs.

But back then they just weren’t so they weren’t thinking about these things. They’re just putting up structures because ⁓ they needed the housing. Like everybody gets yeah, everybody gets a single family house. Sweet. ⁓ so unless that is the problem, there are probably fourplexes in your area ⁓ that are probably either being sold or about to be sold. ⁓ and if you’re ex just expecting those things to come to you at the very beginning

Probably not gonna happen. You know, ⁓ I think a lot of people wait for the perfect deal to pop up and sometimes by the time it hits Zillow, the MLS, Redfin, whatever app you use to look at these ⁓ look at the housing stock, ⁓ it might be too late because now there’s especially these days I’ve noticed, at least in Anchorage, as soon as that hits the market, there’s such an inventory desire, there’s such a demand for like

multifamily inventory that you’re probably unless it’s way overpriced, you’re probably competing against at least bare minimum five people. So I would say if you can try to get those network connections early, finding a good ⁓ agent, even calling and working with property managers, I found is really, really nice. ⁓ if you can get ahead like, hey, like tell them your story, be as authentic as possible. ⁓ I’m I’m looking to buy my first rental property.

use looking to use my FHA VAA VA loan and get into one of these assets to start my journey, people are usually willing to help you. Like I’ve noticed, like usually I mean there are some of those bad actors out there. People are want to help others win most of the time. Yeah.

Cody Crabb (20:07)
Totally. And also like if you’re in the industry, like it’s like shop talk. People want to talk about this and help people and yeah, they do.

Tyler Cobb (20:14)
Exactly. Like, I don’t know how many times like I’ve been to a conversation about real estate and like I just go on for like thirty minutes and like especially people like are you’re interacting with them and they can see you’re excited about it, they want to help you out. Like I mean I have clients that come to me that are like, Hey, I want to do this and usually I have a lead or two on this guy’s thinking about selling. I never tell them like, Hey, you can buy this. but I’ll like, Hey, I got a guy who’s talked about it. Let me call him. And I’ve been able to connect those dots without either

ever even coming to market, which is a great I mean, I mean that’s that’s cool for cool for me off some obviously everybody’s making money in the transaction. But also it’s like connecting that dot for like getting someone from where they are to somewhere where they want to be. That’s all like sales really is. ⁓ so if you can like find those people in your specific area, ⁓ get connected with them, talk with them, bring them out to coffee.

and try to add value. Obviously, just don’t try to extract all the time. Because those people are kind of like, Okay, this is like a heavy conversation. All you want is want, want, want. Bring if you can, bring something to table. Like

Cody Crabb (21:21)
Exactly.

Yeah. If you know about something, then yeah, teach them. Help them. Like if if they have if you have something to offer, then it’s literally like a a win win for them because they’re like, okay, I’ll help you out because you can help me out. Yay, win. ⁓ so just as a j I don’t know if you really gave us a ton of information on this. Why fourplexes? Like in my mind, it’s it’s because it’s like it’s a duplex that’s not quite an apartment building, it’s an apartment building that’s not quite a house. It’s kind of the

maximum best of both worlds. Is that it or is there more to it?

Tyler Cobb (21:54)
⁓ so why fourplexes? That’s a question. ⁓ so at the very beginning, ⁓ when I was deciding like, okay, I want to do multifamily, there obviously are a ton of strategies out there. You why a lot of people I think get ⁓ so scared to jump in is because they’ll go online or watch a YouTube video and then people be like, you could flip houses, buy a duplex, rent by the room, single family homes. Why this is the best asset class.

And it’s like they’re more of afraid of making the wrong decision versus making the right one. So at the very beginning, I was like, okay, if I’m gonna do something, I just gotta pick a niche and do it really, really well. So when I went to fourplexes, obviously you can with your FHA VA loans, residential real estate is described as one to four units. So I’m like, okay, the best bang for my buck is to try to get as much property as possible using these high leverage loans.

Cody Crabb (22:48)
Yeah, that makes total sense.

Tyler Cobb (22:49)
Fourplex. That’s super easy. ⁓ yeah.

Cody Crabb (22:52)
And it’s usually the ma like you said, it’s like the the maximum that is technically allowed. So it’s like, yeah, it makes total sense. ⁓ I think this is really interesting because I feel like it this is one of those strategies where I hear people say it and I’m just like, duh. Like yeah, I go like, you want to buy a fourplex? Well, here’s what you could do. Go find a fourplex and call the owner and say, Hey, do you wanna sell me your fourplex? Like I hear stuff like that and I’m just like, it’s it’s funny that people don’t really think of that being an option, but it is, and you can do it. And I think

I think that’s really interesting.

If you were to ⁓ go back and kind of look at your initial transactions, what’s changed now? Is there a difference in what you’re looking for or how you’re looking for it, or is it relatively similar?

Tyler Cobb (23:34)
Yeah, so it’s changed a little bit. ⁓ I think at first, when you become like the first, your first investment, you’re kinda at least me, how I always think about it, is like I gotta get in the game. Like I was picky about like certain parts of town I didn’t want to be in versus the ones I do. ⁓ so that has definitely changed. ⁓ where I’m like I’m a I’m r more selective about where I buy just because

The more you have, right? Like at 57 Doors, and I I have a ⁓ a property manager that manages a lot of this. ⁓ I don’t love dealing with things that are preventable at the front end. What I mean by that is yes, I can go buy in a lot of area in a lot of probably parts of the United States, everybody can probably imagine this part of town where it’s like, yeah, I can go buy a ton of real estate in that area and I could scale really, really fast.

But the problem is holding it, you know? and at the beginning of my journey, I was like, hey, like I’m since I’m gonna be on site, I can prevent these things. just because I’ll be more active. I’ll be on site. And if something happens, I’m right there. Now, from that same property, I live across town and I don’t like dealing with easy preventable issues that let are preventable when you buy the property. Like

Hey, like I don’t want to be right on a main street because I’m gonna have so much foot traffic that, you know, sometimes people do dumb stuff, kids do dumb stuff, and they’ll throw things in the backyard and then your tenants complain. And it’s like, I just want to prevent those things. So buying off the street now, ⁓ or ⁓ buying things that have a bit more amenities to set myself apart, right? So if buying places with washers and dryers in units instead of shared.

Because people, at least in my market, would pay at least a hundred and a hundred and fifty dollars more a month to have those things in the unit because there’s not a lot up here. ⁓ so I I would say that’s how it’s changed over time. The same stuff is I want to buy real estate. Like I it’s gone great for me so far. It doesn’t mean I’ll always have the same number of returns that I that I was getting like two, three, even four years ago. But I’m still a huge believer in.

the next 10, 15 years of real estate. So that stuff hasn’t changed. ⁓ maybe me being a bit more selective on the stuff I do buy because I’m probably not going to be on site all the time. And it helps your manager. Like honestly, like having a good relationship with your project manager is huge. If you keep buying things that are not great and you expect your manager to just do it.

It could sour the relationship because now he’s putting so much more energy into you than he is to like growing his business, right? So I’m not saying buy th don’t buy things based on a someone else’s opinion, but if you’re really looking to scale over the long term and have these relationships, you should be mindful of those things. Like yeah, it’s not it’s you’re probably not gonna get far in real estate just by yourself. So

Cody Crabb (26:36)
Yeah, definitely. It what’s that what’s that expression? If you wanna go far if you wanna go fast go

Tyler Cobb (26:41)
Go

alone. If you want to go far, go together.

Cody Crabb (26:44)
Right,

yeah. And I think that’s a great way to that’s a that’s a great wrap up here. we’re running out of time here. So for somebody that’s listening ⁓ that’s earlier in the journey, maybe they’re stuck overthinking or they’re stuck, you know, they’re trying to make decisions, they’re trying to they’re worried about the future. What advice would you have for them? ⁓ other than the stuff you just barely said, which was pretty good actually. But

Tyler Cobb (27:04)
Yeah. So I heard this this one quote and I really love this. ⁓ fear is a mile wide and an inch deep. And those things that you’re seeing before you go and do something are real things. But as soon as you start, you’re never gonna regret it. There’s not a lot of people I know that bought their first piece of real estate and regretted it. It may be one out of a hundred people that are like, hey, this actually didn’t go too far for me.

And most of the time it’s because it’s not a li it’s a lifestyle they just don’t love. They still usually end up doing well if we’re all looking at monetary ⁓ perspectives. But they never regret it. So if you’re out there listening, you’re like, Okay, maybe the like what is it if you just do it. You gotta you just have to jump into the water.

Cody Crabb (27:49)
Hmm. Well, I think that’s a great way to tick us off, ⁓ offline. Thank you so much, Tyler, for hopping in today. This has been really, really good, inspiring. I love it. ⁓ I’ve learned a little more about Anchorage, which I did not expect today, but you never know what you’re gonna get into. ⁓ thanks so much for everything you’ve shared. If someone wants to get in touch with you, ⁓ you know, who would you like to get in touch with you? And ⁓ how can they do that? Just go to Anchorage and just yell, Tyler, because in my head that would work.

Tyler Cobb (28:12)
Yeah, so

probably. That would probably work. ⁓ no, so if you want to get in touch with me on Instagram, Redheaded Investor. obviously like I said, I do agency work. So if you look at the buy sell ⁓ in the Anchorage or Alaska in general, ⁓ get in contact with me there. Or if you just want to talk real estate, I’m always open to having conversations. So Redheaded Investor on this one. Awesome.

Cody Crabb (28:36)
Well, thank you so much once again ⁓ for your time today for all this great advice and and insight. And listeners, thank you for listening as well. Thanks for your time. Make sure you don’t miss our next episode. Once again, Tyler, thank you so much and have a good one.