From Multifamily to RE Tokens: Real Estate Innovation

Stephen Schmidt (00:02.932)
Welcome back to the show where we interview the nation’s leading real estate entrepreneurs. It’s your host back at it again, Stephen Schmidt. And if you’re joining us for the second, third or hundredth time, welcome back. We know you’re going to get a ton of value as you usually do. And if you’re finding us for the first time, where in the world have you been at? This is about to get added to your regularly listened to listened to podcast docket. I got to come up with a smoother way of saying that. I’ve been saying that the last few shows and.

Really got to figure that out at this point. Anyways, I got a really really big treat for you guys today I got Tyler Vinson in the house and Tyler is an absolute Titan in the real estate space with a long long long career in the acquisitions portion who also now is really deep into the Well, I’m gonna let him explain it but it’s re tokens essentially what he does is he helps people raise capital unlock their

liquidity and actually boost the efficiency and the automation of their investing and we’re gonna get into how he does that with RE tokens. But before we get started, just remember at Investor Fuel, we help real estate investors, service providers and real estate entrepreneurs, two to five X their businesses in order to build the businesses they’ve always wanted so they can live the lives they’ve always dreamed of. That being said, Tyler, welcome to the show.

Tyler Vinson (01:21.356)
Hey, thanks for having me, Stephen. Looking forward to it.

Stephen Schmidt (01:24.24)
You bet, man. So let’s just go ahead and give these fine folks a little bit of your background and how you got started in the real estate space. And then when did you pivot and start getting involved with RE tokens? How did that opportunity come about? How did you see the gap in the market? And what are you really focused on now? How did you get to where you’re at today?

Tyler Vinson (01:44.588)
Yeah, so I’ve been investing in real estate for just about 25 years now. Started out buying smaller multifamily properties, duplexes. In fact, had a buddy of mine who had come home from college at UW and he said, hey, a couple of my friends are buying apartment buildings. And I thought, well, that sounds really cool. And so I made the leap by, well, he took me to some

investment seminars if you will and back then there was I’m gonna date myself there was like, know, Russ Whitney Carlton sheets Robert Allen that was about it and The particular one that we went to actually was not a very good one Although I go to real estate conferences and events every year some fantastic ones, but but this particular one wasn’t very good and We got through it and on the other side He said let’s just

go buy some real estate and so we did and we went out and we immediately bought a couple of duplexes and that’s really when I fell in love with the sport of real estate investment. So I later quit my job and just did investment full-time and what that meant for me was getting a real estate license. So I worked with a larger brokerage firm in Spokane Valley, Washington for quite a while and I specialized in investment real

And so I would work with real estate investors helping them acquire mostly single-family homes at that point in time and When the great recession hit I Decided to leave that larger brokerage and I couldn’t think of better timing to start my own right at least I didn’t have the split anymore So anyway, I started my own brokerage with my sister really out of a side room of my house and grew

that. At the time the markets were suffering quite a bit so I needed to come up with a strategy of how I was going to you know be able to make a good amount of money when there was no buying selling or lending really going on in the marketplace and that’s where I came up with the acquisition strategy that I used for a lot of years where I was basically my own client. I had a lot of

Tyler Vinson (04:12.098)
people that knew me, liked me, and trusted me, a network I had built up. And so I would go out and at this time I was really training on seller financing. So I would go out and negotiate deals with seller financing and work with private investors for the down payment, for my acquisition fee or commission, for the rehab expenses and for reserves, mostly a hold guy. So that’s how I started and started in smaller multi-facility

family and single families. And then I just over the years worked my way up, started to get into apartment buildings. And today I own Class A storage facilities, larger apartment buildings, some retail office building, those types of things. And that led me into the syndication world, which is a larger level of capital raising. In my early days, I mostly did either private debt notes with investors.

or joint ventures where I brought them in as equity partners kind of including hybrids there and Later once you start raising millions of dollars you you typically need to get out of your normal

network. And so I started learning about like regulation D and other ways to raise capital for that. So that’s kind of my real estate history. When I pivoted is a few years back. There’s kind of two short stories I’ll tell. The one of the real short stories was the fact that I would have millions of dollars of equity locked up in real estate, but it was really illiquid. And so unless I sold the asset and

whole or went and worked with the bank for a cash out refi, which is a pretty painful process as a lot of us know, I really couldn’t access the equity. So, you know, as I grew my business and grew staff and then I live off of my real estate investments and so I need to be able to access that equity. as real estate professional real estate investors know that our equity is normally trapped and locked up there. So that was a problem.

Tyler Vinson (06:25.21)
really had been thinking about solving a lot. mean, yes, I would use private investors and do private debt and pull some equity out, but I wanted to play in a bigger way. The other side of that is a few years back, I was coaching my daughter’s soccer team and coming off the field and a good friend of mine from high school came up and, hey, Tyler, how you doing? Lots of hugs. He’s like, it’s been so great to see your success in real estate. And me and my husband, we’ve been working really hard.

and we’ve been saving up some money and you know we would love to invest with you.

And we kind of just looked at each other and then she answered herself and just said, but we don’t have enough money, do we? And that just broke my heart. That was just wrong. And she was right. At the time, I was doing deals where it was a $50,000 minimum. And most of my deals, you actually had to be accredited as well. But I certainly had a $50,000 minimum. And I know she wasn’t accredited. And I’m pretty confident she didn’t have the $50,000 to do that.

And so there was the other side of the problem and that’s where it really came together for tokenization for me. Because when we tokenize real estate, all we’re really doing is adding a digital ownership component. And what that allows us to do is take those fractions of it, you can call them LLC membership units, you can call them shares, when they’re digital we call them tokens, but that allows you to much more easily buy,

and trade and move these assets around. And it also has opened up the door to a secondary marketplace where we can actually sell those units to non-accredited investors in a secondary marketplace. All of that takes a lot of compliance, but it really showed me how we could solve the three major problems. One, make it easier to capital raise and get fresh eyeballs looking at these deals outside of our normal.

Stephen Schmidt (08:03.571)
Mm.

Tyler Vinson (08:30.456)
networks and and really make it a global affair if we wanted to because this is about scaling your brand at the end of the day. The second one was unlocking that equity so you can tap into the equity without having to sell the asset in whole or without having to wrestle through a cash out refi. And then there’s so much legwork and lifting and trying to raise capital a lot of the times and manage these deals and manage the investors. So that’s where the technology

really comes in and we’ve created a platform that really automates most all of that and adds an efficiency there that really is unprecedented and allows us as professional real estate investors to focus on our main job which is finding deals and finding investors.

Stephen Schmidt (09:20.872)
What a great answer. I think it’s appropriate to ask as a follow-up question to that, what’s something that you used to believe about real estate when you first started that you no longer believe now?

Tyler Vinson (09:36.686)
I think it is similar to what a lot of people struggle with and that’s the fact that

you have to know the people you’re going to raise capital from, that you have to have a particular network of high net worth people to be able to take down larger deals. That’s something that I believed and I think stunted my growth in the early days. I wouldn’t go after some of the larger deals because I just thought, well, you how am going to raise that capital? Where am I going to get that from? I can’t qualify for it on my own. You know, I need millions of dollars.

to do this and I later learned that that’s just not true.

Stephen Schmidt (10:22.074)
Have you had a deal fall apart last minute?

Tyler Vinson (10:25.806)
Oh, yeah, of course. Yeah, right at the closing table. I had a, you know, if I just go to the large end of the scale, what’s large for me is I had a 200 unit that I was buying in Tucson, Arizona, two separate apartment buildings, one package from the seller. I had a beautiful deal worked out. It was a $10 million deal. It was about five years ago, COVID time.

Seven million in seller finance, three million down. I raised all the capital, went through all the effort to do that. And then literally 48 hours before I was to fly down and sign at escrow, the seller wanted to change the terms and we had to back out of the deal because of it. So that’s just one example.

Stephen Schmidt (11:15.144)
No kidding. That’s insane. What changed for them, if that’s something you can talk about? What changes on a deal that big? Because ultimately, a single family house, there’s not that much that goes into it realistically compared to a $10 million project that you’re negotiating doing all that. It’s a much longer process too, I’m assuming.

Tyler Vinson (11:23.043)
Yeah.

Tyler Vinson (11:36.174)
Mm-hmm.

Stephen Schmidt (11:41.36)
With that, how does somebody just 48 hours before getting it done, how do they just change their mind all of a sudden?

Tyler Vinson (11:49.558)
Yeah, no, you’re right. I mean, I hear all the time people say, buying a single family is the same as buying a large apartment. I don’t believe that at all. I mean, in principle, yeah, yeah. So, but what happened there was I had this awesome seller financing note lined up, and I’ll geek out on this part a little bit if that’s okay. And what we had is she wanted me to

Stephen Schmidt (11:58.587)
I totally disagree.

Stephen Schmidt (12:14.963)
For

Tyler Vinson (12:19.472)
Personally guarantee it which was fine. I was I don’t normally actually do that how I structure it But I was willing to do it in this circumstance And we had a substitution of collateral built in there and a first right refusal and a whole bunch of great things in this note but later when She she went through final review She was not going to allow me to be able to resell the

Property in the future and keep the note in place. I didn’t have a balloon on it One thing about seller financing is the sellers can defer massive amounts of taxes Depreciation recaptures specifically and so I had taught her that so she was literally looking at she had 1031 to bunch she was looking at saving a couple million and in taxes actually a huge amount and so what she ultimately said is well, I

want this note will substitute the collateral meaning you can take the debt onto other properties but it can’t stay on this property. What that meant was if I wanted to sell the property in the future and do something like a wrap note and offer seller financing I would not be able to do that. Somebody would have to come in with new financing and the other problem with that

is there was a payoff clause. So I wouldn’t be able to allow that new financing to take out the debt. The debt would have to follow me and my portfolio for the next 30 years no matter what. So she wanted me to be able to, and I normally love this clause, but in this circumstance it was $7 million worth of debt. Well that’s a lot, in my world and my portfolio, that was a lot of debt to go spread around to my other property.

Should I desire to sell this particular building and with the investors that I had involved to your point there’s more working parts there and the risk I felt was associated with Being locked into that debt for such a long period of time with really no way to pass it off in a rap note or cash it out with a cash buyer that the risk was too much for us to be able to move forward on the deal I didn’t have the

Tyler Vinson (14:49.149)
exit options that I would normally have and that that’s what happened there.

Stephen Schmidt (14:55.06)
That’s wild. I love these types of stories too. Not that it’s a great story, I guess, for your intents and purposes, but it’s just, it’s always incredible to listen to how human nature takes over sometimes.

Tyler Vinson (15:06.434)
What?

Tyler Vinson (15:10.423)
Yeah.

Yeah, it turned out great though. In fact, it led to a wonderful storage facility, Class A storage facility that I still own today. I’d had to raise over three million dollars to do that deal. So it wasn’t about a month later. So I had this other opportunity of a Class A storage facility that the owner who was a custom home builder, really great person and a great home builder, but was not a

marketer really didn’t understand the real estate investment game they were struggling with the project and so he contacted me and I was able to take most of those investors I still had to probably round up another 1.3 million but move that into the storage facility project which in hindsight is much better than what these buildings in Arizona would have been because they needed a lot of deferred maintenance

into is going to be very management heavy and this Class A storage facility is like a dream compared to a C-Class apartment building, which I have a lot of those.

Stephen Schmidt (16:21.556)
So what types of deals with what you’re doing now, what types of deals are you avoiding now?

Tyler Vinson (16:29.55)
We really don’t work in the single-family home space unless it’s a portfolio. I don’t, you know, for RE tokens, it’s about servicing third party. We’re not involved in principles or acquisition. I still do that. I still run my real estate investment company and will purchase real estate, but RE tokens, where about 90 % of my focus is now, is about serving third party. It’s about helping people raise capital, give them the tools to do that.

Stephen Schmidt (16:35.283)
Mm-hmm.

Tyler Vinson (16:59.504)
Give them the liquidity component to their real estate and so normally you’re probably Going to be at a couple million dollar plus equity level for it to make sense to really get into the securities world of Capital raising and do that if you’re you know raising under a million dollars for example, you’re probably No legal or tax advice given by me, but my experience and what I see is you’re probably doing like a

Stephen Schmidt (17:25.524)
Sure.

Tyler Vinson (17:29.454)
joint venture, you know, with that level of capital where you’re bringing in one or two or three partners to do something like that. When you need to raise, you know, multi million to dollars, 234, 100, whatever it is, then you probably are going to create a security to be able to do that. And that’s normally what we do. So to answer your question directly on what we don’t normally serve as somebody that would want to tokenize just one or

to houses, we could do it, but it’s often not really viable for all the time effort that it takes to do that for them. For now, I think that’ll change in the near future,

Stephen Schmidt (18:12.34)
Sure. Right, as you continue expanding, scaling, et cetera, just to be able to serve more people overall at some point. But at the same time, you got to stay in the vertical that you’re in before it blows up and then you move on, right? It’s kind of like Amazon. I like to give Amazon as the best example. You know, they started selling books and now look what they sell. They sell everything. So same exact deal. So let me ask you this.

Tyler Vinson (18:21.613)
Yeah.

Tyler Vinson (18:35.83)
Yeah. Yeah.

Stephen Schmidt (18:42.132)
With what you’re doing, I had my question loaded up, I’m telling you, in my brain, and then I just lost my complete train of thought there. I don’t even know how that happened. That never happens to me. But I’ll get it back here in just a second. I think where I was going with it was like, what does the future look like in the next like 12 to 18 months for RE tokens with you guys?

Tyler Vinson (19:08.438)
Yeah, so here in June 2025, you know, time we’re recording this just a couple days away, so we will be launching the first real estate exclusive SEC regulated marketplace for real estate security tokens or private placement real estate. And we’ll be getting our broker, our digital broker dealers license and ATS license. So that is really a big

deal for us. And so what the future looks like is real estate and real ownership fractions of real estate, you could call them shares or LLC membership units, you’ll be able to buy, sell and trade those just like people do with stocks today. And for real estate, that’s a evolution that’s long overdue. Most asset classes, stocks and more recently crypto are able to trade and sell

you know in a very short time frame and electronically but real estate doesn’t have that there’s huge time frames massive amounts of middlemen if you will which causes a lot of expense you just can’t access your equity well that’s going to change with the secondary marketplace so you will see

Ownership in real estate private placement will call them fractions of real estate trading Like stocks or or crypto because when I think about real estate You know comparatively real estate’s like a big gold brick, right? And if you have a big gold brick It’s hard to you know get a lot of people in to that investment and certainly hard to get them out of that investment and the gold brick just moves as

one, you could sell the whole thing or bring debt against the whole thing, but everybody has to play ball, right? You’re really depending on that. That’s why it’s kind of illiquid, a really large gold brick. But imagine taking that gold brick and turning it into, you know, 10,000 gold coins or 10 million gold coins. And now each investor holds their own gold coins and can go do what they want with it. That’s what the future looks like.

Stephen Schmidt (21:32.359)
I rem-

Tyler Vinson (21:32.366)
And it really allows for those folks that couldn’t get into the gold brick, they can go buy a gold coin or two though and be able to have real real estate ownership, participate in the cash flow, the equity upside, and even the K-1 tax benefits.

Stephen Schmidt (21:48.533)
Sure, absolutely. My train of thought came back to the station. remember the question that I was gonna ask as fast as it flew out. One of the things that I recognize in you is obviously you’ve had a long, long track record of success and I’m sure every cliche could go into it. You just gotta take action, never…

you know, quit when it gets hard, like all of those things, but what do you think really separates you from somebody that got started at the same time as you did, that failed, gave up and quit versus you 25 years later of creating the success that you’ve been able to? What do you think your special, what is your special sauce? What’s your secret?

Tyler Vinson (22:33.248)
Yeah, so, you know, I think part of the cliche part is…

least we’re touching on that’s your mindset and and you know your your commitment and your belief in it there’s no doubt about that but if I was gonna you know distill some secret sauces two of them that come to mind is one of them is I relentlessly educate myself absolutely relentlessly and get myself around you know the right people I know you guys do a lot in that space and and bring people together for coaching and mentoring and that’s absolutely

Stephen Schmidt (22:57.532)
Mmm.

Tyler Vinson (23:07.952)
critical. Not only do you get some of the technical and strategic maneuvers that you need, the network that you build, the people that you meet, and then the energy that’s created with that. And if you do that year in and year out non-stop and then you’re putting it into practice, you become an expert in that space. So when it comes to like seller financing, for example, where I millions and millions of dollars in seller financing, I

Educated myself to the point where I could teach sellers why it was a fantastic idea in fact I wrote a book on this It why it’s a fantastic idea to sell on owner financing Because they can defer taxes keep an income You know it’s safe for their money all of those things and that really gave me an edge and same with you know the capital raising so I was able through just continuous consistent and relentless education to make

myself very valuable in my knowledge base. So when I was dealing with clients or prospects, sellers, investors, etc., I had that knowledge base, that value, and I had some networks and some reference points that were superior to those folks that weren’t putting in the same time and effort to developing themselves and their education in the space. Because you’ll want to do that too, you you want to select kind of a criteria

a space to dominate. think, don’t mean to take a full tangent here, but I think one mistake people make is they’re like, oh sure, I’ll look at the deal, right? Is it an industrial building? Is it a single family house? Is it an office? Is it an apartment building? I’ll look at it all. Well, you won’t be very good at any of it. So I do suggest, you know, narrowing that down to what your favorite flavor is right now, your asset type, et cetera.

and mastering that and getting good at that, you know, before you expand and dedicate your education surrounding that. So, you know, in my hometown, I’ve had many people, investors come into town, get into the space and they start asking around. And by the time they call me, they said, hey, I heard you’re the apartment guy in Spokane to talk to, right? And so that’s an example. So the education is one secret sauce. The other is

Tyler Vinson (25:37.44)
I have always pursued private investors and capital with virtually the same effort as I had finding deals and deal acquisition. And I think that’s another thing that set me apart is when sellers said yes, I could close every time. I had already had my investors prepared. I had investor program that I kept in touch with them with. And so I was,

I knew what my cost of capital was, which gave me a huge amount of confidence when I was negotiating the deal, what I could say yes or no to, and the strength to really walk away from a deal knowing that I had the investors on board with me to be able to close that. So those are the two secret sauces. One is the education and development constantly, consistently, relentlessly. And number two is putting a very similar effort into making

sure you have enough money to close deals as you do in actually finding the deals themselves.

Stephen Schmidt (26:43.326)
Great answer, man. There’s so many nuggets in there. You wrote a book called Freedom Through Cash Flow. And what would you say the premise of that book is for somebody that wants to pick that up? Because you talk about being a relentless student of the game and of things. I would like to say that I am myself, one of our family core values is improvement.

And I’m constantly learning myself, constantly looking for ways to level up even just my own knowledge base. But what would you say the premise of your book is and who’s that book perfect for in case somebody’s listening and wants to go check that out based on some of the knowledge you’ve put together over the years?

Tyler Vinson (27:23.2)
Yeah, so I think if the listening audience is mostly real estate investors, then they should know I wrote that book for the purpose of teaching sellers how to say how and why to sell their buildings or their portfolios to me. And so if I’m a real estate investor, I pick up that book and I reverse engineer it and say, okay, this is what this guy is talking to sellers about to be able to get some

of this amazing seller financing and it really dives into the benefits for the seller like depreciation recapture and the ability to defer that, how to minimize their tax obligation, how to present yourself as a quality buyer, teaching the sellers you know things to look out for so you know that if you’re competing against another buyer and you have some strengths maybe that they don’t have you’ll be able to

those out much easier. So that would be it. If somebody’s looking to buy properties and involve seller financing, which is perfect for the B and C class apartments that I was buying and typically larger assets, it’s more common. It really explains what those benefits to the seller are. You know, the flip side of that is when I first got in and started doing seller financing deals, it was for me. I, you know, it was like, okay, well, great.

I don’t have to use a bank and there was a period of time where I couldn’t finance an outhouse. So that was good that I didn’t need to use a bank. And I thought, well, this is just a great acquisition strategy if I can talk people into it. But once I educated myself much further, lots of hours with CPAs and attorneys and things like that, I realized that it was a huge benefit for the seller to find a high quality buyer like me to be able to

sell their building to. I’ve been walking through the patio of a restaurant and had a gal stand up and was like, Tyler, Tyler, big hug, it’s the guy who pays our bills, right? Because she’s getting this monthly income for decades and doesn’t have the liability of owning all the real estate. I was able to just do a nice setup that worked for them so they could retire.

Stephen Schmidt (29:51.956)
That’s awesome. Man, I got another question for you, but we’re so over time that I don’t know if I’ll be able to ask it. So I guess with that, Tyler, where can people learn more about you or go to find out what you’re working on?

Tyler Vinson (30:08.576)
Yeah, well our website are tokens.com There’s a quick start guide to tokenization on there and I highly recommend people go That’s a free download so they can go check that out and really learn about real estate Tokenization what it can do for their project. These are gonna be investors that want to scale and I’m also on LinkedIn RE tokens has a page on LinkedIn and I’m there but our YouTube channel is you know

where you’re really gonna get the cocktail party stories, you’re really gonna get all the expert insight on our YouTube channel, which is just at REtokens.

Stephen Schmidt (30:47.924)
you go, folks. Good dropping some love from the real estate pros and the investor fuel family. Thanks again for being here, Tyler, and sharing some of your insights with us. We appreciate it a ton. And we’ll see you all in the next episode.

Tyler Vinson (30:59.608)
Thanks, Stephen.