How Tim Herriage Built Ternus in a Tough Real Estate Market and Scaled to $100M

Tim Herriage (00:00)
If you’re not actively pursuing AI and in learning and being flexible, you are getting left behind. ⁓ we now have robots that answer our phones. ⁓ I was at a gas station on my way back in West Texas this weekend, ⁓ where, it’s called quick quick trip QT.

And they now have a robot that goes around and cleans the floor all day long. ⁓ and that thing doesn’t need a living wage, right?

Quentin (02:04)
Hello everyone. Welcome to the Real Estate Pros podcast. I am your host Q Edmonds and I am excited to be here today. You know my tagline, you know what I say and I absolutely mean it. I have another fantastic guest. I have someone here who has a ton of experience. Some of y’all probably looking at him and like, when do we know this? But listen, this gentleman has been in the game 25 years, sat in every chair.

that you want to sit in when it comes to real estate and done it all. And so this is going to be a great part, a great time for us to just learn and glean from this experience. And so I am so delighted to present to some, introduce to others, Mr. Tim Herriage Mr. Tim, how did I do, Herriage, I did that the last time. Herriage, Mr. Herriage, I apologize, sir. How are you doing today, Mr. Tim?

Tim Herriage (02:52)
You got close. It’s Herriage like the word hairage.

I’m fantastic, how are you?

Quentin (03:03)
man, doing great, doing great. So glad that you’re here. And listen, sir, I’m the type I like to dive in. So I would love for you to tell the people what’s your main focus these days. If you don’t mind, give us a little bit of an origin story, kind of how you got to the space that you’re in and then tell them what part of the world you’re in. People love to know what people are geographically. So Mr. Tim, sir, you have the floor.

Tim Herriage (03:27)
Yeah, Tim Herriage. I live in the Dallas Fort Worth area. I’m the founder and CEO of company called Ternus. ⁓ We loan money to real estate investors nationwide. ⁓ I’ve bought a couple thousand houses. I’ve done an IPO with Blackstone. ⁓ Billions in lending transactions.

securitizations and things that I don’t even understand, but I started out as a former U S Marine that took a job as a general contractor for a house flipper in Dallas. So, ⁓ the last 25 years has led me ⁓ to and from a lot of great places and, ⁓ I’m excited to be here.

Quentin (04:05)
Absolutely. Stephanie, thank you for telling us what you do, walking us through the journey to how you got to where you are. And so Mr. Tim, I always make a statement probably every podcast. Destiny has no wasted moments. I it no matter what we go through in life, momentum is building. And there are moments that make us the people that we are today. And when we look back, we can actually see the breadcrumbs to how we got to where we are now. So Mr. Tim, you know.

bought a couple thousand houses, former Marine, definitely been through a journey. What has the moment, what has the journey taught you about yourself? Has it taught you discipline, resilience, innovation? What has the journey taught you about you, Mr. Tim?

Tim Herriage (04:50)
Never questioned God. you, you know, it’s a journey. Life’s a journey. Business is a journey. Relationships are a journey.

Quentin (04:52)
Hoo!

Tim Herriage (05:49)
And, ⁓ I think we all think that we’re in control of certain things and we have this plan. ⁓ and, ⁓ I’m, I’m, I used to coach little league football. got some kids I coached in the, that are now in the NFL and they all still call me coach, but I taught.

Coach my kids too. And I tell them all the time, the biggest lesson is you’ve got to pick a destination and you’ve got to get started. just, tell them this, trust me when I say, when I say to you, the destination will change. There will be detours. You may even get halfway to California from Texas and decide you’re going to Illinois. ⁓ but the key is be grateful every day.

Get up and put one foot in front of the other and life has a way of figuring things out if you follow what you believe in.

Quentin (06:42)
Absolutely. Now you mentioned trusting God. One of my favorite Bible scriptures to quote is that we make our plans, but God determines the outcome. so thank God he let us make our plan. we, we determined the destination. We think we’re going to arrive at. So we make the plan, but sometimes God comes along and he just changes things up and you just got to go along for the ride.

Tim Herriage (07:04)
Well, you know, we’re all such horrible children that that we, say, you know, God didn’t answer our prayers or whatever. And, ⁓ we don’t, ⁓ accept that no is an answer. And, and we tell our children, no, ⁓

Quentin (07:21)
Leet answers sometimes.

Tim Herriage (07:27)
And we just don’t like it when God tells us no. So I think, you know, part of my growth has been learning that.

that I won’t get what I want, but if I just keep trying, it’ll probably work out better. Here’s the crazy thing. If you would have told me when I got out of the Marine Corps, that there would literally be times of my career that I would be sitting in on the 43rd floor on park Avenue in a board meeting, talking about billions. I would have laughed. I would have thought you were nuts.

When I got out of the Marine Corps, I wanted to be a cop. was going to be a Texas state trooper, right? then, but you got to get a job before you go to college. And then I fell into this and then I was going to be a general contractor. And then I was going to be a flipper, then a landlord. And then I start hosting conferences and then I ended up meeting Blackstone. Like, it’s like, that’s the thing is like, we, we pretend that we have a plan, but we actually don’t have plans. We actually just have hopes and dreams.

Quentin (08:36)
Yeah, yeah,

yeah.

Tim Herriage (08:38)
And, you know, just I just go with the flow.

Quentin (08:41)
Yeah, yeah. What is it? I think it’s a Golf Brooks song that says sometimes the best things in life is unanswered prayers. Is that it? Is that a Golf Brooks song?

Tim Herriage (08:48)
Yeah, yeah, it’s sometimes

I thank God for unanswered prayers, right? ⁓ Yeah, because I could just be a state trooper, but instead, you know, I’m not.

Quentin (08:53)
Yeah, yeah, yeah.

Mm.

Mm-mm. So 25 years, you just explained a lot. So I’m sure you faced some adversity. So how has adversity looked in your journey, and what did you do to overcome it?

Tim Herriage (09:14)
So I’ve got a great perspective that I don’t think a lot of people have. ⁓ I’ve been in environments where, where it wasn’t safe to be. ⁓ We’ve, I’ve been spent entire months on edge thinking that that call was coming. And even once walked down a street where it said danger sniper area. ⁓

So my reflection on adversity is just completely different. ⁓ I, I say it to my team all the time. No one’s going to die. And a lot of times in business, it just seems bad. It seems awful. seems stressful. And in this, you just have to have perspective, right? Like

There, I’d say to my team, there’s not an IED underneath your chair at the office. Right? mean, there’s no one’s going to shoot you when you walk out of your building. mean, and, and I think if we can apply that perspective to any adversity we run into in business, it, it, it helps. It helps you just, okay. In the Marine Corps, we always said improvise, adapt and overcome. Um,

And that’s just the way I run my business. Like, okay, there’s a problem. Great. We knew there’d be problems. What, how do we fix it? Let’s focus on the solution, not the problem. So I guess that’s the real advice because not everyone can frame it through the lens I have from, ⁓ my time, but you can focus on the problem or focus on the solution. tend to focus on the solution.

Quentin (11:26)
Yes, sir. Yes, sir. Thank you for your perspective. And I was so elated to ask you that question because I wanted to hear your unique perspective. Because like you said, that’s the name of the game is perspective, the mindset. And I tell people all the time, like that’s that’s the name of the game, your mindset and being able to shift your mindset in adverse situations. And so I appreciate your reflective answer, your thoughtful answer. Mr. Tim, what is next for you, sir? What are you looking to solve a scale next, man?

Tim Herriage (11:56)
So I started Ternus two years ago. We’ve gone from no employees to 50. We’ve gone from no business to a hundred million. ⁓ and we’ll probably do a hundred million this year. ⁓ I’ll probably sell the company in the next couple of years or take it public. ⁓ you know, I have a very, I have a plan. after all the business I’ve done.

Uh, it is my intention. Uh, I’m 48. No, I’ll be 48 next month. Sorry. Uh, and, um, my oldest son, my youngest son will graduate high school basically the week I turned 50. Uh, and the intention is to move into a much more simple life at that time. Um, and travel and.

If he’s playing college sports, I’ll show up at college. ⁓ we want to spend a lot of time in Europe. want to spend a lot of time in, ⁓ New York. yeah, I mean, it’s, it’s, it’s, I’m working very intentionally over the next two years. ⁓ I need to get my EBITDA earnings before interest taxes and amortization at Ternus up above.

a hundred million so that we can exit at the number that I would like to exit at. And, ⁓ it’s not just about me though. I have shareholders. We did a crowdfunding raise and sold stock in the company. ⁓ we, ⁓ I, I carved 20 % of the company out for my employees. So they’re in the boat with me. I have partners, right? So

I’m a person that really likes to win with others. and so the idea is to, ⁓ the idea was to start a company, build it in hard times and then get to a declining rate environment and exit. So starting a company in the real estate investment space two years ago was not the greatest timing, but I intentionally did it when I did it because

They say good habits are formed in bad or bad habits are formed in good times and good habits are formed in bad times. So ⁓ I think we’ve got a great team and I think we work really hard with headwinds. And the beautiful thing about the round trip when you sail is if you go into the headwind first, you’ve got a tailwind when you’re on your way back to the dock.

Quentin (14:16)
Hoo!

Yes, Man, you mentioned the word habits. That’s one of my favorite words because that’s one of my favorite books, Atomic Habits. Not sure if you heard of it, but that’s I read that book about three times. And I would absolutely love asking you this question. You did a crowdfunding raise. You got employees. You got partners. You have a son. You have a great team. So I want to hear your perspective on this one word, relationship. When you hear relationship, Mr. Tim, what comes to mind?

Tim Herriage (15:41)
You can’t be a sponge. ⁓ a lot of people say, I want to be a sponge. want to, ⁓ ride your coattails. I want to pick your brain, all these kinds of things. The thing I don’t like about sponges is sponges take, right? They don’t give. And, and I always say in a relationship lead with value. I’m very well known, ⁓ throughout the industry as the person that can help you. It can introduce you to the person that you need to talk to.

And when I used to buy houses, I said it all the time. I tell people, look, if I can’t buy your house, I’ll point you in the right direction. Uh, at, at, at Ternus, if we don’t offer a, uh, if we don’t offer a product, we’ll point you to the right lender. Um, you know, so it’s relationship is about.

being of service and being of values to someone else and then aligning with people that are willing to take that same approach. That’s the way I look at

Quentin (16:42)
I always say, I always equate relationship to community. And I always say community is common unity. It’s people that’s doing something, moving a vision together. And they do different things, but they move a vision together. And so I think relationship and building community is a great way to proceed with just building something that’s very efficient. All right, last question. Let me get you out of here on this, Mr. A ton of experience,

So I would love for you to tell our listeners something you feel like they need to know. What is something that you feel like the people that’s listening in, something that they need to know?

Tim Herriage (17:19)
If you’re not actively pursuing AI and in learning and being flexible, you are getting left behind. ⁓ we now have robots that answer our phones. ⁓ I was at a gas station on my way back in West Texas this weekend, ⁓ where, it’s called quick quick trip QT.

And they now have a robot that goes around and cleans the floor all day long. ⁓ and that thing doesn’t need a living wage, right?

I was in Austin two weeks ago and I was crossing the street and I stopped and looked and I just couldn’t get it out of my eyes. there were three vehicles parked across the lane had the road had three lanes and there were three vehicles stopped at the red light and they were all three Waymo driverless taxis. ⁓

I, the kiosk, the AI, if you’re not building a skill around artificial intelligence and these tools and learning how to manipulate it, you are being left behind and you will, you will not be able to ⁓ keep up and you’re probably going to find yourself unemployed. ⁓

It’s just insane. People, well AI can’t do that. Yeah, it can. It may not be able to today, but the speed that I’m watching this technology evolve. ⁓ Literally, I am not a computer science guy, but earlier this week,

I was using AI to go through my QuickBooks for one of my sister companies and pull consolidated reporting. And it started finding gaps in my finances that everyone else had missed. And it doesn’t just find it. It tells me how to correct it. It gives me advice and it’s rational advice. So it’s like, I just, I just caution anyone that has their head buried in the sand thinking this isn’t going to impact them to look hard. ⁓

You want to know how to use AI, get a free chat GPT account and ask, how do I use AI? And it’ll start telling you and then go from there. You can argue with it. You can ask it to educate yourself. I’ve actually now programmed Claude cowork to double check with chat GPT pro whenever designing code. It’s, it’s changing everything every day. And if you’re not going, if you don’t get in front of it, it will run you over.

Quentin (19:57)
There he is. Mr. Tim, sir, if someone wanted to reach out to you, connect with you, collaborate with you, learn more about what you’re doing, how can they get in contact with you,

Tim Herriage (20:07)
I am at Tim Herriage no spaces on every platform. I think I’m the only Tim Herriage in the world, so it’s pretty easy to find me. ⁓ And Ternus is T-E-R-N-U-S. It’s Latin for threefold. And that’s our company, ternus.com. We’d love to help you if you need, if you need financing and we’re hiring. If you’re looking for a good job in real estate, do want to join a good team? ⁓ Check out our careers page.

Quentin (20:32)
Listen, Mr. Tim, let me say three things to you, sincerely. One, thank you for your time. I think you of all people can put a premium on your time. So don’t send us no invoice, but thank you for your time. I appreciate you being here. Secondly, sir, thank you for your story. Thank you for your authenticity. Thank you for coming and planting seeds and people. And we don’t know when those seeds will grow, but the seed is there and it may grow two months, five months from now, but you planted seeds. lastly, sir, thank you for your mindset, for the way you think.

and bringing your mindset to this platform. I greatly appreciate you being here today, Mr. Absolutely. Well, listen, y’all heard Mr. Tim. You got the information. Get into the show notes. Check him out. He’s the only one out there, y’all. So connect with him. But also make sure you’re subscribed here, because we are going to continue to bring up amazing people just like Mr. Tim. So sir, thank you again. And everyone else, have a fantastic day.

Tim Herriage (21:07)
Thank you for having me, Quentin.