How Real Estate Transformed Gary, Indiana | Tom Olson’s Story

Tom Olson (00:00)
I was telling all of my investors, I was saying, hey, I can sell you turnkeys right now for $45,000 and $50,000 and $60,000.

And I’m like, it might be time to start taking chips off the table in those markets that you bought four or five years ago and start buying here. A couple of them were very smart. A couple of them heeded the advice. Most of them didn’t, because they were like, OK, why am I making good money with the rentals that you sold me in Hammond and Mayerville and those other areas? And the ones that did, that got in early, have been absolutely

honestly. If you just think about it, if you’re a passive investor and you buy a property from a turnkey provider and in five years the property doubles or triples in value, mean, I’ve had so many of them.

Erika (02:19)
Hey everyone, welcome to the Real Estate Pro Show. I’m your host, Erika, and today I’m thrilled to be joined by Tom Olson, a true powerhouse in the real estate game. He’s doing it all. Tom, it’s so great to have you on the show.

Tom Olson (02:34)
Thanks for having me, Erika. I’m glad to be here. I’m in sunny Florida right now looking out at the beach, at our condo, and it’s amazing.

Erika (02:42)
I’m sure it is. And I think our listeners are going to be in for a treat with your story and how you’re juggling so many different moving parts in the real estate industry while keeping your vision front and center. So I just want to cut right to the chase. Tom, how did you get started? How did you learn how to manage all these companies?

Tom Olson (03:03)
Well, that’s a long, long story. definitely don’t have time for all of that. I will tell you that. I have read at least eight or 900 books. I have been through the whole EOS entrepreneur system of how to build businesses and I do consult for that. so it’s just, it’s been building blocks. I’ll tell you that. But I think my story really all gets started. was 12 years old.

Erika (03:05)
Cliff Notes if we can.

Tom Olson (03:30)
⁓ And I started working in construction all through high school. I worked through construction got married super young

Still married to my beautiful wife here of 28 years. And we, I started a side business right out of school. I went to a year college and literally said, you know what? This is not for me. Not because I thought I was something special. It was just, I saw all the people in college and I said, I don’t want to be like any of these people that are around me. And I don’t want to be like any of these professors. So what in the world am I doing here in college?

⁓ And and really like in hindsight that was probably one of the smartest things I could have ever done and I didn’t know it You know, there’s been times of my life where I kind of felt like maybe I should have done You know finish college or I should have done that but today I’m like absolutely not Some people I think should go to college for certain things, but it was not for me, but started working in the trades Learned construction read the book rich dad poor dad and said hey, can I can own a rental I like to have these little cash machines as he calls it

And you know, that’s how you can have financial freedom. I don’t need financial freedom by you know, becoming a billionaire I just can as long as I just have enough of these little cash machines sitting around that are paying me every month You know, I I can have financial freedom. I can do that. I can help a lot of people By doing that so that started in you know, I bought my first rental when I was 20 years old right after I bought my first house

and Kind of getting off to the races, right?

Well, that first rental didn’t go so good, which it never does, right? That’s kind of the story you always hear. The first deal I did was horrible. I told my wife I would never do the deal. I’d never buy a rental again. That didn’t happen for me, but that’s what I always hear, at least. And we sold it. We actually made like $15,000, which for me in my 20s, that was a lot of money in my mid 20s. But didn’t really get back into the real estate game.

heavily until about 2006 and then in 2006 I was in doing a lot of new construction work at the time I had a side business going making six figures and in your late 20s that’s a lot that was a lot of money for me at least back then and we thought things were going great and then wouldn’t you know it within two months all the new construction starts stopped I mean our

Our county went from 500 permits being pulled for building new construction to 50 in one month. And then it never went back. And I still don’t even think it still has gotten back to 500 new building permits for new houses in our county. So it was kind of like, know, God was saying, I’m taking you in a whole different direction and you just better come along for the ride and you better enjoy it because I got some good things for you.

That’s kind of my life. at that point in time, between 2006 and 2009 was a whirlwind. I will tell you, we sold our house in Crown Point, Indiana, which if you’re from Northwest Indiana, you know that’s the place to live. Like that’s the A neighborhood. I moved to Gary, Indiana. I bought a house, paid cash, $19,000. I paid for this house, put $15,000 into it. I had borders living in my basement to help me pay for my…

for my my my housing at the time and You know when you go from making a hundred and twenty hundred thirty thousand dollars a year to twenty You know you you changed what you do my house in Crown Point I kept as a rental through through the whole through the whole crash and everything and I’m like hey I’m gonna I’m gonna rent the nice house. I’m gonna go to Gary, Indiana And during that whole time it was definitely a humbling experience, but it was definitely experience where I can say

I didn’t just pout. I didn’t just blame everybody else. I didn’t blame the government. I didn’t blame the people down the street. I said, you know what, what can I do? I woke up every morning. I prayed and asked God, what can I do today? I still remember walking around a track of an old abandoned school that actually has been torn down now. And I just remember thinking, man, the people here in Gary, Indiana, they need help. You know, like you think you’re going through a tough time.

right now, but this whole city has been dilapidated. It was the murder capital of year, of the world in the 80s. And he’s like, this city needs help. However bad you think you have it, somebody else has it way, way worse. And I just remember that like, kind of just hitting in my heart. And I was going to this mastermind back then called Collective Genius. And I remember a guy getting up and I don’t remember who the guy was, but he’s like, if you have a dream in your heart,

and you never speak it, you never say what it is that you want to do. Number one, you’ll probably never do it because nobody else will know about it and you need to let other people know about what your dreams are. You need to speak that into life and you need to just every day, you need to just get up and say, hey, I’m going to do this. So my dream was to flip the city of Gary, Indiana. I was like, crap, I can’t believe I actually said that out loud. So the next Collective Genius, I actually got out there and it was interesting how the people came and

and ask questions about it. I was still younger, obviously, at that point in time. So that kind of all led me through a lot of different circumstances. When my job decided to kind of dry up, I started making phone calls. I had never made phone calls before, never really marketed my side business, but I’m like, hey, if my boss doesn’t have full-time work for me, I gotta get out there and work.

I made three phone calls. did jobs for two of those people. And then one of those guys I did a job for and I went out there and gave him a scope of work, did the job. And at the end of the job, he said, you know what, Tom, you are the only contractor. He’s like, I’ve been doing construction business for 30 years. He’s like, you are the only contractor in 30 years that has ever come out

where you were on time, number one.

I mean, it is so hard to get contractors to actually show up on time when they say that they’re going to come out look at your project, right? He’s like, you’re the first person to come out on time to give me a scope of work the day of. Most contractors now are taking like a week to give you like numbers and tell you what things are going to be. And I understand that too, because we have a pretty large construction company now, but you’re the first person to do that. Give me the scope of work, start on time, end on time and then on budget. He’s like, I’ve never had anybody do that.

And so I want you to be my project manager for all my projects. So I was like, okay, great. I just literally went from having a job, not having a job, and now I have a job again already. It wasn’t really a job. He paid me as 1099. And we were kind of partnering on the deal because his payment to me was 50 % of the profit he was gonna make. Like that was my pay. My pay wasn’t, you know, this much per hour. It was just, hey, we’re gonna do these projects.

you’re going to do the scopes of work to begin with, you’re going to work with the contractors, you’re going to work with the investors. Basically, he was telling me, hey, you’re going to do my job and we’re going to split the profits. OK? And that’s what I did. Honestly, I happily did it for six months. We worked a lot. It was 60, 70, 80 hour week work weeks.

Then six months later happens and he comes to me and has another conversation because we would meet weekly to write out bills and pay contractors and to make sure everything was kosher and pay me when I needed to be paid and such. And he came to me and he said, you know what, Tom, I’m moving to Mississippi. And I’m like, what, really? I’m like, well, what are we going to do with all these investors that we’ve been serving? And he’s like, well, you can do whatever you want with them. And I’m like, OK, cool. Basically like.

Forget non-competes, forget anything. Like you just gave me your three customers and you said I could take them basically. So I went to these three customers and I said, hey, if I could help you find a house, if I could give you a scope of work before you bought the house, and if I could bring you the best realtor, would you hire me to do your construction work? I had no idea that I was offering two other pieces of the puzzle that was actually more valuable than even just the contracting work.

But that one instance, I flipped 100 homes for these three investors over the next three years. We were basically doing about two or three rehabs a month. And the average profit on those investments were $26,000. And I was like, man, and the more and more I did it, the more and more I realized, actually, this is real value. This is a real deal.

So then towards the end of that whole conversation and that whole experience in my life, I started going to the investors and I was like, you know, if I’m gonna do this for you, I think I should get a finder’s fee. I think I should get a couple thousand dollars when I find you a house at the beginning. And then I think I should get 15 % of your profit at the end of the deal. So I was actually getting a $2,000 finder’s fee and a 15 % …

Of the profit of the deal at the end, but by the time that that whole thing subsided in about 2011 or ish or so 2009 I partnered with a man and we we wholesaled between 2009 and 2016 ish about 1500 homes

I learned the acquisition game. I learned the acquisition game about how to acquire I learned about ARV

which I had kind of already done. I had already known this. I just didn’t know exactly how to acquire. I remember a lot of the houses that we purchased were HUD homes where you could literally put a house under contract and we sold 500 homes without a buyer’s list. And I’ll tell you how we did it, Erika. We put out bandit signs to sell. A lot of times these people think, you use bandit signs to acquire houses and a lot of the wholesalers put those out.

But we were putting bandit signs out to actually sell homes before we had any idea what a buyer’s list was. In fact, I still remember conversations about a buyer’s list and we were just completely lost. Like, how do you build a buyer’s list? What do you do to have a buyer’s list? Until somebody finally stood up and said, a buyer’s list is just a list of people’s names, emails, and phone numbers, and you just send them when you have deals. Like, that’s it. That’s all it is. It’s not very complicated.

But it took us about three or four months to figure that it wasn’t very complicated. So from there, quit that partnership in 2017 and started the, we started One Property Solution, One Group Network, One Construction Management Company. We are licensed contractors. We are licensed property managers. We have about 600 doors under management. We do build and manage rental portfolios for investors. Then we started our own portfolio as well.

under a company called Sarah Joe LLC, which is actually my late mother-in-law’s name. So we named it after my late mother-in-law and my wife runs that company. And we’ve got a lot of midterm rentals in that business. We also have a listing leaders affiliated brokerage, which my wife owns and runs that. It’s really a very small brokerage. It’s mostly just her and two or three other people. Most of the deals that go through there are her deals that

we acquire from or sell from our companies or our investors as well. We do work with a lot of our investors to try to help them find properties or sell properties as needed. And then we also started Good Success, which is a education company. Today we are running a dealmaker meetup group through that. We do a three day event once a year called the Gary Dealmaker, where people can come to Gary and see how we are flipping the city of Gary, Indiana, but also connect with other.

investors, have national speakers. mean, the speakers at the event are amazing. Over a billion dollars worth of assets under management are just into speakers. that’s it’s a pretty crazy thing that I feel like just kind of happened over the last couple of years. That’s been crazy. And then we started Conduit Capital about two and a half, three years ago. Actually, the whole idea started four or five years ago. I had I had been borrowing money

from people to do our deals, which I still do a little bit of that. So whenever we started doing deals ourself in 2017 with our own companies, I have a list now about 200 and I think 230, 240 names right in my Podio private lenders app. And whenever we have a deal, send that deal out to our private lenders. We don’t send it out to all of them at once, we just send it out to one or two at a time.

And so we’ve borrowed all this money, we had this list, and I started talking to one of my mentors, he’s like, that’s a really valuable list. You probably really should do more with that. And I’m like, you know what, you’re right, because there was a time where we were flipping 150, 200 homes a year, and I’m like, I’m not gonna do that for the rest of my life. I’m not gonna flip 200 houses a year for the rest of my life. Right now we’re down to about 40, and then we’re building about five to 10 new builds a year right now as well. On top of that.

in that company because we’re doing so many other things with our other companies. We’re building our property management company. We’re building our own portfolio. We’re building the education company. We are building the construction company and we are building the fund, which again, I kind of believe, this is kind of beliefs here, but I don’t really believe that the flipping business is a great business. It’s not a great business model. It’s a great hobby.

It’s a great way for somebody to make money that’s gonna do it by themself, that’s gonna work hard for five or six years and make a good amount of money to be able to go do something else with it. But as far as a business model that sits, where it sits back and you sit in the owner’s box and everything is done for you, in my opinion, there’s a reason why you never see Fortune 500 companies that are flipping companies. You have Fortune 500 companies that are new construction builders, but you never see…

flipping companies that are Fortune 500 companies. It’s not scalable. You get to a certain point and the expenses just cost more than it’s honestly worth. So you got to find that sweet spot that you can do with the right amount of overhead. So I’ve kind of been not transitioning out, but just changing that whole business model over the last couple of years. One of the pivots that we made in 2021, 2022 was kind of focusing more on construction.

I started seeing what my contractors were charging me and I was like if they can charge that much money What the heck am I doing flipping houses because they’re gonna make more money on these things than I am And so we’ve kind of really ramped up the construction ramp down the flipping and also gotten into new construction Which I think will kind of be you know steady for the next year or so in my market But I think it will have another ramp up at some point, especially though in Gary, Indiana so

So that kind of brings me all back to kind of a capital. I know we have a lot going on and I know that’s a lot of rabbit trails there for everybody to follow. so about five years ago, I started just private lending my own money and then I started learning how to wrap lend and I’m like, okay, well can kind of wrap lending is almost like a brokerage. You’re kind of brokering deals or just making the points on the top and I can do it with my self-directed IRA and that’s a great way to.

to build your wealth. And I was like, this is fun, this is good. But then I started getting more more interest from that. And more more investors have said, hey, I wanna be a part of this. I love to do lending, but I don’t wanna do all the work myself. I don’t wanna go out and find all the deals. I don’t wanna have to underwrite the deals. I don’t wanna do the paperwork. If there’s a foreclosure, I don’t wanna have to mess with that. So we created Conduit Capital Lending Fund. And that’s kind of where we’re at today. We still have all these businesses. We’re still doing all of this today.

We just closed our initial offering with our legacy fund with a condo capital and we just opened up our new debt fund. We’ll probably be opening up an equity fund here in next two or three years with that.

Erika (20:43)
Yes, Tom, I want to go back to what you were talking about specifically with Gary, Indiana. And I know you’ve been working hard to transform the community. How has the response been with with your efforts with that?

Tom Olson (21:00)
I will say, Erika, it’s been very, very mixed. So in the investor community, it’s been mostly thumbs up. The investor community, except for when I first started. So when I first started 2016, 2017,

was telling all of my investors, I was saying, hey, I can sell you turnkeys right now for $45,000 and $50,000 and $60,000.

And I’m like, it might be time to start taking chips off the table in those markets that you bought four or five years ago and start buying here. A couple of them were very smart. A couple of them heeded the advice. Most of them didn’t, because they were like, OK, why am I making good money with the rentals that you sold me in Hammond and Mayerville and those other areas? And the ones that did, that got in early, have been absolutely

honestly. If you just think about it, if you’re a passive investor and you buy a property from a turnkey provider and in five years the property doubles or triples in value, mean, I’ve had so many of them.

I actually just got a message two days ago from one of my Israeli investors and he just said, I just got the check from Huntington. I just want to let you know I’m super thankful for you and your team.

You are a rare person. It’s been, very hard, people like you are very hard to find. And I was like, that to me is like the best thing I could possibly hear is when my investor’s happy, when my investor gets a $100,000 check from closing and they’ve owned a property for five years, what’s the ROI on that? You know what I mean? It’s like, everybody wants to talk about cash flow. I’m like, guys, listen, cash flow is great. I love cash flow, don’t get me wrong. But for cash flow for rentals, it’s really more about keeping the deal together so you can eventually get the

the depreciation, the appreciation, and you can get the equity pay down that your tenants are actually paying for you. That’s where the big money’s at when it comes to rentals. But it’s been a mixed bag. Investor community, said, mostly have been positive, except for the local people that originally said, no, it’s never gonna work. You you’re wrong. Gary’s never coming back. You’re just gonna…

It’s a horrible idea literally like still remember the Facebook post. I actually took screenshots of them Was local investors like lambasting me saying I was stupid saying that I had no idea what I was talking about And it’s funny because those same investors are now flipping and Gary those same investors are now also Trying to come along for the ride, but they weren’t willing to be first in I will say it’s been on the on the

The city has been very welcoming for the most part, but the community itself has been very, very mixed. There are some people that love what we’re doing and it’s very heartbreaking, honestly, at times where when you send something out and people are like, don’t give this guy anything, don’t sell him anything. It’s really strange. I pray about it, I kind of think about it, I try to…

talk to other people about it in the community and say, hey, what can we do to better? And they were just like, you know what, naysayers are always gonna be naysayers. like, somebody that have people, people that have something to complain about always have something to complain about. So I will say it’s been a mixed bag, but hey, I still think it’s my purpose. I still think it’s part of the reason why I’ve been created and put on this earth. we put our office in Gary on purpose in 2017. And then in 2020,

I still remember my, I had COVID, right? Everybody had COVID in 2020. I had COVID, I’m laying in my bed sicker than I’ve ever been. And my wife’s like, I found my house. This is my house. This is my home alone house. And it’s for sale. Cause I guess she had been, cause she has had helped us in acquisitions and she, she, she found this house that, that, we now live in. And she’s like, we’re going to buy this house. I’m like, okay, whatever. You know, like I have COVID. I don’t even have an opinion. Right. And so that’s where we live today. We live right in the heart of Gary.

⁓ Right by the hospital right in downtown And we do that on purpose Not not because we’re trying to you know Be goody-to-choose or not because we want to do anything But I kind of look at it like like a missionary if you’re a missionary in Guatemala You can’t live here in the United States and if I’m gonna really flip the city of Gary, Indiana And if my heart’s really gonna be in Gary, Indiana, we’re also gonna move to Gary, Indiana So we did that about three and half years ago. And So we are rooted there in the community

And again, I don’t really believe politics is my mission, but I have been working with government officials and we’ve been trying to do whatever we could possibly do to entice other business to come to Gary, Indiana. I feel like the housing stock has already changed. I mean, it’s already changed. If you think you’re gonna get in now on the ground floor, Gary, sorry. Like I still think it’s gonna double in price again, but it’s not gonna triple again, you know, in seven years. But the housing stock has already

flipped, it’s already changed. But now the next step, in my opinion, is business and bringing more business to Gary. And we’re starting to see this a little bit, but I’d love to see it in a lot larger grand scale.

Erika (25:47)
Yeah, that’s, that’s very exciting, Tom. I love everything that you’ve shared today. Before we go, one thing that I want to ask is what piece of advice would you give to someone just starting off in real estate? You’ve learned to juggle so many plates. If someone is just getting started, whether they want to focus on one thing or they might want to build something more brick by brick, what would you say?

Tom Olson (26:14)
So I’d give people two pieces of advice. I think, and it doesn’t really matter, I think introvert or extrovert, I think people look at things a little bit differently, but I think these really apply to both. And normally it’s the extroverts that are not gonna like the first piece of advice I say, it’s the introverts that are gonna love it, but it’s read. I promise you, like you get up and you read.

I don’t care if it’s 10 pages a day, whatever it is. I don’t even care if you listen to books. Whatever it is, fill your mind with positive stuff. Like what you put in your mind is just like what we put in our computer. It’s kind of like AI, right? Like whatever you put in, whatever prompt you put into AI determines what AI is gonna spit out. And whatever we put inside of us is what’s gonna get out. So if you wanna have the knowledge, if you wanna be able to be at a point somewhere in the future,

You know it is a read And then I think the second thing and again extroverts love to tell me I don’t read I’m like I don’t care then like put the headphones in and put audible in when you’re on the treadmill I don’t really care what it is, but you’ve got to get that stuff inside of you And then the second one is what the extroverts like and the introverts don’t like and that is show up I mean I cannot tell you how much value I have gotten from masterminds through the years from going to three-day events

Now I’m not talking about these events that try to sell you into $50,000 program. Just stay away from those. Always say no. They’re a waste of time. You’ll never get your money out of them, in my opinion. Now there are some $25,000, $30,000 masterminds that I’ve been a part of, I’ve had tremendous value from. The mastermind community is completely different than these $50,000 Rich Dad Poor Dad programs. And I’m just not a big fan of those education platforms.

The three day events that are $5.99, that are $8.99, that are $9.99, I promise you, there is more money, there’s more network, there’s more smart people in those rooms. And it was interesting to me, I just had another really smart guy, and it was weird, because he was even at an event, he was at an event, I guess he was speaking at that event, but he asked me, he’s like, Tom, why do you come to these events? Because I wasn’t speaking at this particular event, although the…

The host actually had me come up and speak and do some panels and I wasn’t scheduled to speak there. But the guy’s like, why did he even come to this? He’s like, you don’t need, I’m like, every time I come to one of these meetings, I meet somebody, I learn something, and I promise you, like, you have to show up. And what gets me, what rubs me really the wrong way is these guys that think they know it all, they won’t show up to local meetup groups, they won’t show up to the local Rias, and they’re like, ⁓ it’s just a waste of time, and I’m like.

No, it’s not. Like, even if it’s just a reminder of something that you already know, I met my biggest private lender at a RIA club about 10 years ago. This little Chinese lady named Helen, and at the end of the day, she looked up at me and she’s like, Tom, I want to loan you money. And I was like, I didn’t ask her, I didn’t even tell her what I did. She just came up to me.

And it’s interesting, I’ve never sent her a deal that she said no to. I have no idea how much money this lady has. And I try to not even send stuff to her. I never sent stuff to her at the beginning. It’s always kind of like, okay, let’s send it to this person, this person, this person. Let’s see if they’ve got money sitting. And then it’s kind of like, okay, if we need to get the deal funded, send it to Helen. But I met her at a meetup group. So I really think that those two things are super, super important. And lastly, you know,

is have goals. You have to have goals and then you don’t just have to have goals, but you have to go back. You know, we do this in all of our companies. We’ve got nine different companies that we have P &Ls that we actually are focused on and every company, every quarter, we are reviewing last quarter, we’re setting goals for next quarter or ROCs, whatever you want to call them there, and we’re solving issues. You know, so, but set goals. Don’t just set goals, but like review them.

Like set a time frame for those goals, review the goals, and what you’ll find out is at the beginning of setting goals and reviewing goals, you’ll really suck at it. It’s kind of like riding a bike. It’s like you’re running your business. But you will get so much better by setting goals and then reviewing goals. So you’ll get better at setting the goals. You’ll get better at reaching the goals. And so those are the three pieces of advice I think are more powerful than anything else. So read, show up, and…

make sure you’re focused on, like dream big, but set goals, set measureables, set your rocks, set your scorecard every week and make it happen. That’s really how, and that’s, it’s interesting, because us in this real estate world, we look at corporate world kind of like, oh, we don’t wanna be like them, but hey, there’s a reason why the Fortune 500 companies got to where they are. It’s because that’s the program. That’s the steps that you have to take in order to be a real business.

Erika (30:58)
Yeah, yeah. Wow, Tom, you’ve touched on so many awesome things today. I really appreciate all the advice and insight that you’ve shared with our listeners today. Before we wrap up, if someone wants to get in touch with you, collaborate, learn more about what you’re doing. What’s the best way for them to get in touch?

Tom Olson (31:21)
Sure, so we’ve got many different avenues. I’m gonna try to touch on just a few if you don’t mind. First of all, we do have an Active Turnkey podcast that we talk about building and managing rental portfolios for investors. You can find that in all the podcast platforms, Active Turnkey podcast. We also have You Conduit Capital, so the word youconduitcapital.com. If you’re interested in our fund and what we’re doing there.

You can hop on a call with us and make that happen as well. And then also, if you want to come see us and see what we got going on, we also have a three-day event in September called the Gary Dealmaker. You can go to dealmakergary.com or goodsuccess.com, and you can find out more information about that as well. Those are probably the best ways to get a hold of us. so, yeah, so with those three different ways…

There’s also ways to get in touch with us and get on our calendars to have a conversation with either myself or somebody on my team as well. But we’d love to have you. We’d love to see you at the September event.

Erika (32:19)
Thanks again for being on. It’s awesome. Everything that you’re building and I love what you’re doing in the industry. Everything you do, you’re doing with purpose and impact.

Tom Olson (32:30)
Well, also thank you for having me. I appreciate you guys and everything you guys are doing. there’s anything else I can do for you, please let me know. I’d love to help.

Erika (32:36)
Awesome. For those of you tuning in, if you got value from this episode, make sure that you’re subscribed to the Real Estate Pro Show. We’ve got more conversations coming up with operators like Tom who are out there making big moves in real estate. We’ll see you on the next episode.