How to Build Passive Income with Real Estate (Hard Money Lending Tips)

Jared Prevost (00:00)
Dude, I will say, as somebody who’s made of long-term and mid-term rentals, I’m convinced mid-term is so much easier. Dude, you don’t have to show apartments. People book it without ever seeing it. Amazing. Evictions, not a thing. Like, payments already guaranteed through the platform. Tenant quality, you are literally renting to people where it is their job to take care of things in people. Amazing.I love every part of it. ⁓ Yeah, like I’m a huge midterm rentalDylan Silver (00:25)
⁓ Salt.

folks, welcome back to the show. Today’s guest is based in beautiful Spokane, Washington. He owns a software company called Tandem that blends rev share real estate coaching with lead generation tools, runs a hard money lending business for fix and flips and new construction, and is actively investing in single family homes in midterm housing potentially right in Tampa, Florida. Please welcome Jared Prevost. Jared.

Welcome to the show.

Jared Prevost (02:31)
Thanks so much for having me. It’s a pleasure my man.

Dylan Silver (02:34)
I always like to start off at the top of the show by asking folks how they got into the real estate space.

Jared Prevost (02:39)
Yeah, I a very distinct moment. So I don’t I don’t have any entrepreneurs in my family, really. Like I have a cousin who runs a floral business. outside of that, I didn’t even know that really existed. And so I remember very specifically, I lived in a duplex in college and one night I just couldn’t sleep. And I remember being on my bed and like just watching random YouTube videos, trying to like, you know, make myself bored enough to fall asleep. And I saw a Brandon Turner video.

on the four wealth generators of real estate. And I always thought to myself, why would anybody ever own this house? I went to school in this tiny dinky town called Big Rapids, Michigan. Why would anybody ever own this? And I just remember listening to that and looking around and I was like, ⁓ dude, he basically owns this house for free and then doesn’t have to pay taxes. was like, well, and this was, we were just starting, I graduated in 2021.

Dylan Silver (03:28)
You

Jared Prevost (03:33)
So like I was in college hearing about how people were making crazy amounts of money and appreciation and stuff. And so that was what I caught the bug on. Then I literally listened to like a hundred episodes of the BiggerPockets podcast over the course of a few months. From there, went and interned for a boutique developer building financial models. And yeah, I mean, I can continue on with my journey, but that’s really how I got started.

Dylan Silver (03:57)
So it sounds like you knew actually pretty early on. mean, you mentioned BiggerPockets, but also you mentioned starting out kind of saying like, who would want to own this? You know, what’s the reason for this? And did I hear you right? were in Michigan initially, born and raised.

Jared Prevost (04:10)
⁓ Born in Cody, Wyoming, but raised in a very rural part of Michigan on Lake Superior. So like an eight hour drive from Lake Yeah, yeah, I’ve done a lot of traveling. I’ve lived in a lot of weird places.

Dylan Silver (04:16)
Okay, you’ve traveled.

So tell it me through getting down because you were in the greater Tampa, right? Were you in St. Petersburg or Tampa? Which one were you in?

Jared Prevost (04:29)
I was right in Tampa. Yeah.

Dylan Silver (04:31)
Okay, I’m

thinking about moving out there. I really am. I’ve had some guests on this show, which is funny because you went from

Tampa to Spokane and I’m in Dallas, Texas right now and I’m looking and I had a couple realtors on the show who are from the west coast. I had no idea that I mean, maybe there’s some people who might disagree, but there’s like a friendly competition between the parts of Florida. You’ve got like the west coast, you’ve got, you know, southern Florida, Miami area.

and then you’ve got other parts. I had no idea that there were so many Florida’s.

Jared Prevost (05:48)
Yeah.

Here’s the thing, I’ll give you two perspectives on it. Everybody knows Miami’s number one in Florida. It’s gonna be the most globally recognized. is quite literally considered the capital of the Latin American world. We get it, it’s Miami. But you wanna talk about number two spot between Tampa and Orlando? There is some beef, dude. If you’re from Tampa, you would never wanna live in Orlando, ever. And if you’re from Orlando, they’re like.

You guys whatever like we have the space coast nearby like we have Disney and you know, it’s honestly Yeah, it’s kind of a big beef. But then generally speaking in Florida West Coast people from the Midwest go to the West Coast people from the East Coast go to the East Coast so It’s over generalization. But if you go to the east side of Florida, it feels a lot more like New Jersey you go to the west side. It feels a lot more like Ohio, Wisconsin, Michigan

Dylan Silver (06:39)
Yeah.

That is funny.

Jared Prevost (06:44)
So it’s

culturally a little bit split.

Dylan Silver (06:47)
That is funny. I’m in Dallas, right? If you’ve been over here, we’ve got DFW Metro, which is Dallas and Fort Worth Metroplex. Literally neighboring cities. They basically touch each other. And if you tell someone from Fort Worth that they’re from Dallas, that’s like fighting. They’ll correct you on the spot. They’ll be like, yeah, it’s so great to be in Dallas. They’ll be like, no, we’re in Fort Worth. And you’ll be like, yeah, but I mean, you know, we’re so close. Like, it’s, you know, literally right over there. Like, it’s called the… No, no, no, different thing.

And I’m like, man, this is like some serious thing. I’ve seen maybe a little bit of that, a little bit of that with some areas in Florida, which you pointed out. But I want to pivot a bit here, Jared. You’re in a number of verticals, which I have some experience with, less than others. You’re very active in the lending space, but you also got started initially, if I’m understanding the journey correctly, involved with a couple wholesale deals, right? Or maybe more than a couple. And I’ve seen this

progression from kind of wholesale to then working your way up, maybe getting a few flips to then people going into the lending space. I’m curious what you make of that and if you think that’s kind of a natural progression for a lot of folks as well.

Jared Prevost (07:53)
Yeah, I will say that I think a lot of people in their mind, they think of real estate in the single family space as levels. And it’s like wholesaler, agent, flipper, developer, lender or something like that. I don’t think that’s true. I don’t think there’s anything special about being a lender versus a wholesaler versus a developer. I will say I’m pretty big on like thinking about how business models work, et cetera.

I want to be in a business that I can develop a moat and I can develop recurring business. Wholesaling is extremely difficult to build a moat through like brand recognition, et cetera. Like it’s very difficult. Anyone can call this in clients in the eyes of a seller. Usually like it’s a little bit of like, ⁓ like how much should I buy with you? But everyone’s so good at sales that everyone is best friends with the seller. It really comes down to the offer price a lot.

Dylan Silver (08:33)
Yeah.

Jared Prevost (08:46)
Reputation is like not that important when you’re direct to seller. Reputation for buyers is super important, but I mean I see shady people all the time just scumbags locking up sellers because it’s kind of hard to tell like they only deal with you one time.

Dylan Silver (08:56)
Yeah.

Yeah, you don’t know this person,

right? You’re only in this situation once, who are you? You know what I mean?

Jared Prevost (09:41)
Exactly. in wholesaling, on the Dispo side, you can build up some recurring revenue, right? But generally speaking, it’s really tough business to do that. Fix and Flip, it’s kind of similar. It’s hard to develop recurring business that you’re not working really hard at. It’s hard to build them out. One thing I really like about lending, like, yeah, I’m always going to compete with other people on pricing. Like, don’t get me wrong. But my ability to build a brand,

which is one of the strongest ways to build a moat in your business, to protect your profit, is really strong. And my ability to create recurring business is also very strong. Because once I have docs from somebody and have them approved, it’s like a pretty big hassle to go somewhere else, even for hard money. And my good clients will buy a deal every one to two months. So for that reason, that’s part of the reason I progressed into it. But a lot of it was pain.

I struggled in wholesaling for a year and a half. was quite good at sales, but I didn’t enjoy it at all. I didn’t really feel all the time like I was helping the sellers as much as I could be. Like you just don’t really have fully aligned incentives. I win when somebody else loses to some degree. Like you need the transaction to close, but the more I can make and the less you make is a win for me, which I just struggled with that a lot.

Dylan Silver (10:43)
Right

Jared Prevost (10:58)
In fiction flip I lost 20 grand on my first flip, but that’s how I got used to the world of part money. Yeah, dude, I was so frustrated with wholesaling. I was like, I’m just gonna buy a flip. And I didn’t even ask any, one of my really good friends that I was working for, I didn’t even run the deal by him. I was like, whatever, dude. I’m just gonna buy this flip. I’ll make like 20 grand in own wholesaling business in Spokane from Florida. Didn’t go well at all. But that…

Dylan Silver (11:01)
You like it?

Yeah.

Easy, yeah.

I got it.

Yeah.

Jared Prevost (11:23)
like led me into lending, which was a much better fit for me, my skill sets, like I’m a very good marketer and ⁓ I particularly like, I really like social media. So that’s been really good for me. And I also really like, like I only win if my borrowers win any other way I lose. So for me, that’s like fires me up.

Dylan Silver (11:42)
Yeah, it’s, it’s a great way

to have that kind of synergy in that unified front. Everybody wins, right? Everyone, everyone’s happy. I want to ask you about, you know, having multiple businesses because you’re really involved in a couple different spaces, right? You mentioned before hopping on here, you’ve got the platform, is it tandem that does the rev share? Or is that the lending?

Jared Prevost (12:01)
Yeah,

yeah, yeah, it’s tandem. So it’s completely different. And it’s actually like a really good question because I struggled with shiny object syndrome for a long time. And initially, like origin story on tandem, the first business I ever got into in college was like financial coaching. And so we built our own online site because it’s really difficult to give advice when you couldn’t give feedback on some of these financials and like doing that over Excel did not work. ⁓

Dylan Silver (12:27)
Yeah.

Jared Prevost (12:27)
And then from there, I just like, got born for real estate and I’m like, do want to do financial coaching? But we already built this whole site. Like this would be sweet to sell this to money coaches. Like imagine you could just get your whole like own budgeting platform, lead management, lead magnets, all this stuff for free. And you could get it set up overnight. I was like, this is such an easy sale, dude. Like, I don’t know who wouldn’t sign up for this. Turns out nobody signed up for it, but the problem.

Dylan Silver (12:54)
Yeah.

Jared Prevost (12:55)
The problem wasn’t the actual business. That had nothing to do with it. The problem was that 90 % of my time and focus and contacts were in real estate and 10 % were in this other world. So it’s like, dude, when I got extra time, I tried to the relationship, et cetera. And so what I found and kind of learned through, I mean, we’ve been working on this business for five years, is that your business doesn’t need to fall into the same vertical. And that’s why we took this

software and we were like, actually, I kind of made it for myself and I’m an entrepreneur who has like multiple different business income sources and expenses. I like, this would be sweet if like, I’m just going to use this for my real estate stuff. And then I’m already in the same space and know about a bunch of people running these groups. Like this is extremely valuable for entrepreneurs. So we just shifted it and we’re like, this is for real estate coaches now. Like, I mean, it still works the same.

any coach wanted to use it, but I was just saying, no.

Dylan Silver (14:31)
There’s a lot of real estate coaches, right? And a lot of people who want that type of coaching, it’s going to be even getting bigger now that more people I think have, and I’m a fan, by the way, I’m a real estate agent. So sometimes people might think, well, what’s your take on it? I’m a big fan of real estate coaching and platforms like yours that facilitate that because there’s so many people, especially younger people who are looking at the price of homes thinking, how am I going to do that? Where I’m from in Northern New Jersey, it’s like $220,000 to qualify for.

you know, a very middle class home, right? And so it’s like if you’re college graduate and you’re looking at, know, what your outlooks are, how are you going to get involved? I think it’s almost like if you’re not a real estate investor, you’re now losing access to a lot of the things that you might potentially have access to. So I want as many people to be involved as possible, you know, which which brings me to the the verticals that we haven’t talked about, which is you’re looking at potentially

properties in Spokane, but also maybe midterm housing in the Tampa area. So you’ve kind of got an eye on on both coasts, right?

Jared Prevost (15:33)
Well, so kind of for Tampa, I am not a big like buying whole Florida person. The people that I’ve seen that bought rentals a few years ago, they don’t cash flow anymore. They were literally making three to 400 bucks a month long-term rents, like on a solid deal. Even without rates changing, they don’t cash flow. Rents have gone down 100 to $200 a month.

Property taxes have gone up that much and then insurance has gone up at least $100 a month, if not $200. And they’re not stopping. So everything is kind of trending in the wrong direction. So for me right now, in Florida, because I have so many project management connections, so many clients that I can partner on deals with, my last flip, didn’t ever go into it. I didn’t look at it.

I used an inspection company I trusted, had one of my repeat clients go and like he’s handling everything. I will never see the house and I love it that way. It’s just the math. I’m a math guy. I just love the math. I’ll negotiate the deal. Yeah, I’m not stepping into a flip. Ain’t no way and I want light cosmetic jobs. Like I’m not doing this for vanity. I just like the business. So for Steph and Tampa, it’s like I get, I see literally a hundred plus deals a month.

Dylan Silver (16:25)
Yeah, I trust the map, right?

Jared Prevost (16:42)
by the nature of my business. And I get first eyes on a lot of it. And I have like kind of VIP status with a lot of agents and wholesalers where I could get into something early on. So I really like that. Like I can plug and play into a fix and flip and spend hardly any time on it and know that it’s gonna get done right. In Spokane, like dude, I don’t have that. I just moved here, but I’ll tell you what, like I don’t wanna keep renting a place here. ⁓ And…

Dylan Silver (17:07)
Yeah.

Jared Prevost (17:09)
I think that there’s a lot, like long term, I feel lot more bullish on property taxes staying lower, insurance staying lower and consistent rent growth here. And like this is a fairly affordable market. Like median home price is actually similar to Tampa, but it’s cheaper to actually own because lower property taxes and insurance. So here I really like, I used to do manage and midterm rentals.

And so this city is getting a lot more friendly on ADUs. So I think what I want to find is like a beat up single family with a basement. Turn that into two units within an ADU close to hospital, which is like the best area of town in Spokane proper. And turn that into a midterm rental, both units. And then I’m kind of just like a guest until I whatever do something else.

Dylan Silver (17:59)
Sign me up. That

sounds like a great strategy right there. Especially if it’s near the hospital. You get some midterm, right, some medical staff. That sounds like a great thing. And then when they move on or whatever the situation, there’s another one right behind them.

Jared Prevost (18:12)
Dude, I will say, as somebody who’s made of long-term and mid-term rentals, I’m convinced mid-term is so much easier. Dude, you don’t have to show apartments. People book it without ever seeing it. Amazing. Evictions, not a thing. Like, payments already guaranteed through the platform. Tenant quality, you are literally renting to people where it is their job to take care of things in people. Amazing.

I love every part of it. ⁓ Yeah, like I’m a huge midterm rental

Dylan Silver (18:37)
⁓ Salt.

Jared Prevost (18:44)
Obviously nobody else invested it except for me. We don’t need more of them. But I really like the strategy or a really cool one too is like doing insurance rentals. We messed around with that a little bit. That is a sweet business if you can get into it. Displaced homeowners. Great.

Dylan Silver (19:01)
Big deal.

Jared Prevost (19:03)
Amazing.

Dylan Silver (19:03)
I’ve spoken with someone in Hawaii who actually did that. And they lived, it was so tremendous. They got, guess, it was from FEMA or some organization that ended up doing the displace, because what you’re talking about, during the wild, I guess there was fires, if I’m not mistaken. I’m probably butchering the story, but they ended up living like abroad. They went to a completely other country and they said, wow, that’s something more people got to look into. But

Jared Prevost (19:24)
Wow.

Dylan Silver (19:28)
⁓ Jared, we are coming up on time here. Where can folks go if maybe they’d to learn a little bit more about Tandem or the lending business or reach out to you maybe if they’re in the Spokane area or have a deal maybe in the Tampa area?

Jared Prevost (19:40)
Yeah, the best place to reach me is on Instagram. It’s JaredDoesHardMoney. I have a hard time forgetting what I do, but I’m posting content literally every day. I’m on there all the time. I’ve got my own podcast, Lever Up Your Life. So that’s where I hang out the most if you want to get ahold of me.

Dylan Silver (19:57)
Jared, thank you so much for coming on the show here today.

Jared Prevost (20:00)
Yeah, thanks for having me Dylan, it was a pleasure.