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Show Summary
In this episode of the Real Estate Pros podcast, host Q Edmonds interviews Zach Zimmer, a successful real estate investor from Northeast Ohio. Zach shares his journey from a traditional job to becoming a real estate investor, discussing the strategies he used to build his portfolio, the lessons learned from various business ventures, and his current goals for the future. He emphasizes the importance of mindset, the value of controlling real estate, and the need for continuous learning in the investment space.
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Zach Zimmer (00:00)
The table didn’t even notice that leg got disappeared in one minute again. And so that’s, that’s something I like to talk to folks about is you got to understand, that I’ve had it happen to be twice in one minute. My income was all gone. And so by taking control and finding, you know, maybe it’s not rental properties for everybody. Maybe it’s selling on Amazon or ATM machines or car washes or Etsy. It’s something to take control and not let that happen to you.Quentin (00:00)
Yeah.Yeah.
Yeah.
everyone. Welcome to the Real Estate Pros podcast. I am your host Q Edmonds. And man, listen, I am very excited to be with you today. I am excited about my guest. I’m gonna tell you right now. I’m not gonna be able to get this guy to emotional worrying about nothing. This guy is laid back. This guy has it figured out. He has learned how to get his time back and he’s gonna tell you all about it, but I’m excited because he has a wealth.
within his perspective of why he does things, how he does things, the time that he spends with his family, like what motivates him now. I think it’s something a lot of us kind of really aspire to get to, and he has reached that level. And so I’m excited and maybe he’ll give us some tricks to the trade, but listen, I’m just excited just to bring to this platform to you guys, Mr. Zach Zimmer. How you doing today, sir?
Zach Zimmer (02:49)
Hey, great man. Thanks for having me and I should have took a five hour energy like you right before we got on. Man, your energy and excitement, how can you not have energy listening to you?Quentin (03:01)
So listen, man, I appreciate that because I feel like I’m feeding off your energy, brother. So listen, I appreciate that, man. And man, you’ve just been dropping down. We’ve been talking, getting to know each other. And I’m just ready for you just to give the audience just a sliver or really how much ever you want, a peek into your lens, into your perspective, the way you do things, what fires you up, what makes you, you know, what gets you passionate about what you do. So.I want to step back, I want to give you the floor. Take us into your world. Tell us what you do. Tell us why you do what you do. And also maybe what markets you’re operating in as well.
Zach Zimmer (03:37)
Yep. yeah, again, Zach Zimmer in Northeast Ohio in the Akron Canton markets, which are an hour south of Cleveland. Most folks, if they’ve been reading about real estate for any amount of time, know that this is a ⁓ desired market in terms of rental returns. Probably some of the actual economics behind that is just lots of workforce.call it like a just a blue collar median income workforce that for some reason just don’t have the credit to buy homes. We also have a lot of universities that suck up housing, right? I don’t invest in student rentals, but we have a lot of universities. So that sucks up housing. So yeah, we have great rental returns that when I found out about them in 2012, yeah, single families,
you could be all in whether you were buying them turnkey from the bank like my first two were, the foreclosures back in 2012 were getting paint, carpet, any work that needed done so that they could be turnkey ready because you did not have probably one 50th of the investors that you do today back in 2012. You had so few investors and
Yeah, I mean so banks couldn’t get rid of these properties that needed people to come in and do a whole bunch of work, you know, but they could you know, if they put carpet and paint maybe they get an occupant owner to come in and and so yeah back then you were getting properties all done in the 30s or finding something in the 20s that you put some work into but you know here that was probably that market of middle 30s to 40,000 you were all done in a rental that was gonna rent for 850
So, you know, you do the math, you take out a mortgage, you know, your property taxes back then were maybe a hundred dollars a month. Your insurance was maybe 250 a year. So yeah, you should cash flow for something a month after, I mean, after property taxes and insurance. And, and yeah, so great return today. Those numbers are far, far, far different. Mostly, uh, I mean, yes, everything’s improved in real estate, but just so many more eyes.
in this area. And so my area now has multiples more out of state buyers than we even had in state buyers back then. yeah, I was very fortunate to uncover real estate in 2012, long before bigger pockets, before there was forums, before real estate investing was really a common thing.
Um, you know, back then it was, yeah, maybe your uncle had a duplex or two or, you know, but there weren’t like tons of people living on passive income and, know, running real estate businesses or wholesale businesses, flipping businesses, rental businesses. And so that’s a nice benefit that people have today is the strategies and the plans are all out there. It’s, you know, even AI aside, you can
read up on, you can watch YouTube videos, you can get free courses everywhere to understand how to build a rental portfolio, to how to build a wholesale company, a flipping company. that’s a big perk that we didn’t have back then. We had to figure it out ourself what this looks like. And that’s what it started with. I ended up buying two single families with Huntington Fixed 30 year mortgages with my engineering manager bonus. So I got like a…
$18,000, $20,000 bonus and that was enough to buy two houses with 30 year fixed loans and maybe 10 % down. And that was it. I was like, okay, spend all my money. And that was the biggest first step. You know, I’ve been asked on, you either when I’ve been coaching or on podcasts, like, you know, tell us about, you know, the biggest decision or tell us about that. And it was like, that was it.
Quentin (08:19)
youZach Zimmer (08:22)
getting my wife and changing my mindset where we were dinks, double income, no kids, W-2s. And when we got a little extra money, we did what dinks do. let’s get new furniture. let’s put on a patio. Let’s get a new TV. Let’s take a vacation, right? More money comes in, more money goes out. but we’re funding our 401k and our IRA. So we’re good, right? We’re going to have these jobs for 30 years. We’re going to work the healthiest 30 years of our life. Our most vibrant.Quentin (08:34)
ThankHmm.
Hmm.
Mm.
Thanks.
Zach Zimmer (08:50)
healthy 30 years, we’re gonna spendit working for someone else, and we’re gonna have this 401k and this IRA, and hopefully we’re gonna be in good health and we will have fun those last 20 years. And that was what we thought. That was what my parents did and I didn’t know any different. And so I bought those two and I thought it was done and I was like, hey, we’re having a kid.
And look at this in 18 years, I’ll sell those two houses and that’s going to pay for half a college. So guess what? We don’t have to save for college now. And we’re getting five, $600 cashflow a month. Our weekends, Oh, we’re going to ball out. Like we’re going to blow this on the weekend and go up to Cleveland overnighters. We’re going to, you know, our weekends are covered and now college, you know, at least half of college is covered. And that’s what I thought rental to rental properties would be. So.
Quentin (09:16)
ThankZach Zimmer (09:38)
You go on another year and you know, I’m kind of hearing about these self-directed IRAs, right? I’m like, well, I just left that company and I have 300,000 in my 401k. Huh? Yeah. Let’s self-direct IRA and buy some houses, which let’s get to the end. Not a good place to hold rentals everybody. don’t do, you know, lend in a self-directed IRA, buy promissory notes, but do not buy real estate because you lose the main benefits.Quentin (09:57)
Thank you.Zach Zimmer (10:40)
of holding real estate when you hold it in a self-directed IRA. So I have since fixed all that. But yeah, so I went and bought four more houses in that self-directed IRA. And I’m like, okay, I’m collecting rent. It’s going in there. It’s doing, it’s growing much more than my 401k. And I was like, okay, I’m done again. Have no money. And then I heard about a community bank that people were using that was funding the rehab. And I was like,And you know, somebody’s like, yeah, just, just inflate the numbers, like inflate the rehab numbers. And as long as the home appraises, they’re going to, know, and so I got this house under contract and yep. Okay. We, had my contractor put together a rehab number on it. And I was like, yeah, let’s, we’re just going to add 8,000 to that. And then like a week before closing all the copper gets stolen out of this house. And I’m like, okay. I’m like, what do think that’s going to be? He’s like,
Quentin (11:22)
.Zach Zimmer (11:31)
Well, to run it in pecs, it’s going to be 400 bucks. like, Oh no, what would it be if we were going to do copper? Oh, copper, you’re going to be 2,500 bucks. I’m like, yep, say put 2,500 bucks on there. And so, you know, we put all this stuff in there and the home appraised, you know, for, I don’t know, 80 or $90,000. And I’m like, and so at closing, I didn’t bring any money to the table. They gave me a check for like $8,000. And I’m like, Oh my goodness. And I think the total rehab was going to cost me like 10.Quentin (11:47)
Hmm.Hmm.
Zach Zimmer (12:00)
So,you know, I got a check at closing, I had to cover 10. And so yeah, from there, like I just started doing these rehab loans. And then eventually, and at that point, I still don’t think, I still just think this is a nice little side hustle. And I start getting a little more cash. Wife and I, you know, I was good in financial management. We lived.
below our means, not greatly below our means, but a little bit. And so we didn’t need to touch any of the real estate income. We didn’t touch it, kept snowballing. And then so eventually, you know, I flipped some and I’ve got enough cash to where I’m buying these rentals in cash, rehabbing in cash, and then take them to the lender, getting a new appraised value, getting all my money back, plus some tax-free profit, right? So.
I buy it for 40, I put 10 into it, it appraises it 85. So I’m putting 5,000 in my pocket. I get all my money back. So my return on investment is infinity, right? No money in the deal, make 400 a month after PTPITI. And I just kept doing it. And I still, you know, let’s call it 2014, right? So now I’ve read 10X by Grant Cardone and
I mean, that just really helped me, even though I didn’t really know where this was going. I knew it was profitable. And okay, I’ve got all these engineers around the country. I’m flying around the country. got two, you know, I got a toddler and an infant or two toddlers in 2015. We’ve moved houses. I’ve gotten eviction. I just bought this house. I’m trying to deal with this turnover and 10X really told me and taught me who cares.
buy that house that you see that’s a good deal. Don’t just be like, ⁓ I’ll look at it next week. No, go look at it today and buy that house today. And those two books, 10X and Boba, mean, Cardone is very controversial, right? But he doesn’t care. Whether you like him or hate him, you’re thinking about him, right? And that’s what an influencer wants. But if you want motivation, if you want salesmanship, I don’t know that there’s much better.
Quentin (13:52)
Yeah, yeah, Yeah, right. Yeah.Zach Zimmer (14:05)
I mean, his two books, 10X and Boba for motivation just hit me at the right time when the market was so great. I had the right contractors, the right agents. And I was just like, but I’ve got, I’ve got this problem. got this problem. And it was like, who cares? Buy another house, buy another house. And had I not, I mean, there’s a lot of things in life that go that way. Like, ⁓ now’s not the right time. Maybe next month. Well, it’ll never happen.You’re like, oh, I’ll go look at that house next week. Well, next week this happens, the kid’s sick, there’s another problem at work. I’ll buy a house next month. Oh, next month, then this house is having an eviction or a turnover and oh, this one needs a water line. But if you just don’t care and I just took down every deal. so for 2015 and 2016, I bought like 27 or 30 houses. So more than one a month for two years. And then…
I don’t know when I kind of thought like, I can quit my job. I think I was just like, my goodness, like, yes, like this is amazing. It’s now double what I make. And it was just something I just kept doing. Like we talked about OCD, right? Obsessive compulsive disorder. And I have OCD tendencies around things that I believe are beneficial. And fortunately,
Quentin (15:45)
Yeah.Yeah.
Zach Zimmer (16:03)
It is applied to business. is applied to exercise and nutrition. You know, versus like we talked about, like locking windows or doors, like some people do, but yeah, it’s applied to things that I think benefit me and like the Boba book, right? Be obsessed or be average. I just kind of kept going and, and we missed, well, we missed one thing in 2013 after I bought those two properties.Quentin (16:11)
Yeah, yeah, yeah.Zach Zimmer (16:28)
We had left that company. That’s where I had the 401k took a job relocation. We built a new house, just a little bit further north. I was working in Cleveland and after six, seven months of being there, it was private equity company. They eliminated my position and I, it’s just, it’s crazy how, how knee jerk private equity is. I was leading a bootcamp for them in Indiana when theytold me I was laid off and didn’t know the bootcamp was going on, forgot that they had all these supervisors travel to that hotel where I’m leading a bootcamp. And on Monday is when they laid off all these people and they were like, ⁓ shit, know, we’ve number one, like, we can’t end your credit card today. Like you’ve got to get home and what are we going to do with all these supervisors and this, this camp you’re leading that all these people drove to. But the point of that was, right. I’m in a hotel room.
Basically in tears, we just built a new house. I am 70 % of our income. This has never happened to me before. I’m talking to my wife who’s in her parents’ basement because we just finished building a house that we’re about to move into and I just lost my job. And as Tim Shiner in 50 Things They Didn’t Teach You in School tells you, I only had one leg under my table, right? And what happened to that one leg in one minute, that leg was gone.
And it was just such a, mean, stress and emotion. mean, we’ve got, we have a, at that point we had a seven, eight month old baby. built a new house that was, you know, definitely more than we can afford with her income. And I don’t know. I was just, I hadn’t been through that. So I didn’t know how quickly I would land. And fortunately I landed well, you know, within two, three weeks.
Quentin (17:52)
Yeah.Zach Zimmer (18:12)
But that point there is that was another data point to say, I’m just going to keep buying rentals because I’m never going to let my employer sweep out my leg again. And so when that happened again, only six years later, right? So six years later, that happens again in 2019. And it was comical because I didn’t even notice my pay hitting my account when I would get my direct deposit from my job.I remember talking to my buddy one time and I’m like, what is this? What is this deposit here? don’t. Oh, that’s my pay. And I was a director of engineering. So I made good money. when you have so, you know, I had 50 some houses that rented it, call it thousand, $1,100 a month. So you got 50 houses there. I had hard money lending and notes with interest income coming in. I had flips coming in. So, you know, any day in that Chase account, right, there’s lots of stuff. So,
⁓ a little, a three or $4,000 deposit, you know? So it was funny when that happened and I came home that day to this pretty ridiculous house that we built, you know, the last house that we’re building. we’d had new, we got new, you know, we had new, new cars and this new house. And I came home at like noon that day and my wife’s like, what’s going on? Why are you home so early? And I’m like, that’s it. My job’s eliminated. She’s like,
Quentin (19:28)
Yeah.Zach Zimmer (19:30)
And my wife is phenomenal that, you you could say it’s the best scenario or you could say it’s the second best scenario. She is not involved at all, but doesn’t prevent anything, right? Gives me all the time needed to run these businesses. You know, has never, you know, questioned why she has to sign something as she has to sign something. And yeah, so.Quentin (19:42)
Yeah.Zach Zimmer (19:50)
But she didn’t really fully understand. Like she was there the first time when it happened and she knew things were better, but are we going to be okay? And I was like, yeah, I got to get us health insurance and I got to get a laptop and I got to get a cell phone because all these things were company, right? ⁓ but yeah, it was totally different because now instead of that, that one leg from 2013 now was a tiny leg that the table didn’t even move.Quentin (20:03)
Yeah, yeah, yeah, yeah, yeah.Zach Zimmer (20:15)
The table didn’t even notice that leg got disappeared in one minute again. And so that’s, that’s something I like to talk to folks about is you got to understand, that I’ve had it happen to be twice in one minute. My income was all gone. And so by taking control and finding, you know, maybe it’s not rental properties for everybody. Maybe it’s selling on Amazon or ATM machines or car washes or Etsy. It’s something to take control and not let that happen to you.Quentin (20:16)
Yeah.Yeah.
Yeah.
Absolutely. Absolutely.
Zach Zimmer (20:43)
Um, so yeah, eventuallyin 2019 also is when I kind of stopped buying single families. felt I had enough. I had 50 some and you know, it was like, Oh, let me look at some other things. And I was on biz by cell. And that’s when I found a trampoline park, you know, one of these kids trampoline parks, 26,000 feet with all this stuff. And, and I thought that would be fun for young kids and a good cash flowing business.
Quentin (21:02)
Yeah.Zach Zimmer (21:08)
and had so many issues with that place and then COVID and that’s where I came up with this original thought of never buy a job. If you’re putting your money to work, if you’re putting your money into something, you want it to be passive or semi-passive or some amount. Like if you want a job, go get a job. so buying that trampoline park essentially bought me a job.Quentin (21:18)
Mmm, yeah man.Yeah.
Yeah.
Zach Zimmer (21:33)
Saturday with 500 people in the park and the toilets are backed up and you got feces on the floor. And then you got drunks at 1130 on a weekend. it’s just so many issues we dealt with there until we finally got out of it. the good story about how we got out of it is because we controlled the real estate. And people have said this, youQuentin (21:56)
Yeah.Zach Zimmer (21:59)
You make money controlling the real estate, not necessarily owning it or having equity in it. And this was a prime commercial space right off the highway by the airport with 30 foot tall ceilings. And we had a 10 year lease on it. And, you know, it was very desirable for high bay storage, high bay manufacturing. And so when our landlord knew that we were struggling, you know, he came to us and was like, you know, I could let you out of the lease.like, okay, well, we still owe 250,000 on our SBA loan. Oh, okay. Well, you know, so would you guys be interested in a buyout? And we’re like, yeah. so eventually, you know, he started with like 100,000 him and the company that wanted our space. But eventually, yeah, they came up to quarter million dollars for us just to walk away from the park and leave it there. And then a company came in and you know, trashed it all and
Quentin (22:31)
Right.Zach Zimmer (22:54)
Basically, put in it’s now like some construction company, but yeah, I mean, just controlling the space. And that’s how I treat my real estate business. know, home equity, same thing. Home equity is not a good investment. If you are a Dave Ramsey disciple, yes, equity is good. But if you are a driven, an entrepreneur, a real estate investor,If you call yourself or claim you are one of those, you better be able to go make more than 6 % on your money. And so when you, when you have home equity, when you leave money in real estate, you’re admitting that you don’t know how to go make more than 6 % on your money. And so, yeah, that’s why I follow the burr process. And that’s, basically my whole MO is buy them in cash, rehab them in cash, take them to a lender.
I take out a low 60, 65 % LTV, but that gets me all of my cash back because my deals are normally pretty good to where I’m in at a low basis. And yeah, so I take my money out. I have no money left in that house and I lend it to somebody else. So maybe I’m making an infinite return on investment in the house because there’s no money there. And now I’m lending it to someone at 15%.
Or I go put it in another house and I burn another house. so it’s just, it’s kind of crazy how it all came together of the real estate then mixed with lending. Lending is a very passive activity. So those are my two bread and butter. And then the loser, right? The biggest loser, the biggest pain point has been the somewhat or very sexy looking private equity syndications.
Quentin (24:11)
Yeah.Yeah.
Yeah, yeah, yeah, yeah.
Zach Zimmer (24:35)
Now, that hasbeen a seven figure mess across two dozen syndications. And we can get as deep into that or just stay on the cursory surface. ⁓ But yeah, those have not gone well.
Quentin (24:40)
Yeah.No, we can say
that because I know, syndicators, you said that welcome on your podcast anytime. I remember you saying that. No, I’m joking. I ain’t trying to make you spit out the water. But no, man, I want to ask you this because time is wrapping up, but I have to ask because you have bought your time back. Things are successful. You are loving where you are right now. So what’s the next real goal for you, Mr. Z?
Zach Zimmer (24:56)
No. ⁓ Yeah, almost. Nope.So yeah, mean, our net passive income coming in is about three times what we spend. I like that healthy number because yeah, I mean, you have a year like this year when my wife comes to me and our kids don’t want to play soccer anymore. They want to do competitive cheer. Oh, well, competitive cheer is about $8,000 per kid per year.
So now I have to go insert a line item on our monthly spend and it doesn’t start at the bottom here. It starts two thirds of the way up that, oh, we’re going to spend $1,000 a month on competitive cheer. you know, people, hear people say like, oh, hey, I’m making $5,000 a month wholesaling. I’m going to quit my job. Horrible decision. Don’t do that. You know, keep your job as long as you can. Snowball this money.
But so, you know, I guess my point there is, I don’t really have financial business objectives. You know, my objectives are more around lifestyle. You know, my top two podcasts are The Dad’s Edge and Front Row Dads that are, you know, kind of, they talk about business, but they’re not, they’re about living your life. ⁓ And since I’ve achieved the passive income now, so.
Quentin (26:21)
Yeah.Zach Zimmer (26:25)
I do want to continue buying at least three more like five plus, you know, five to seven houses a year. So I would say I’m going at that kind of semi passively. You know, I don’t try to source deals. I’m not sending out mailers or making phone calls or texts. I’m just keeping my ears and eyes out. And when a deal is out there, I jump on it and close it. Cause yeah, our expenses are going to go up every year.Quentin (26:37)
Yeah.Zach Zimmer (26:50)
And I want to make sure we’re still at like three times what we spend, and income coming in to keep that snowballing. And yeah, I mean, I, I’ve dipped into different things and I’ve constantly gotten burned Amazon, e-comm stores, ATM machines, different, syndicators. So, houses don’t go to zero even when they burn up. had a house burn up and I got my big check from insurance. so.You what I would tell folks is, yeah, there’s so many Facebook reels and Instagram shorts if they’re called like trying to show you the next hottest thing from Ryan Panetta or any of these social sales guys. And yeah, you got to take everything with a grain of salt and really just try to find the concrete fundamental cash flowing ideas and stick with them and.
Quentin (27:25)
Yeah.Zach Zimmer (27:42)
And hopefully it’s in your local market because that makes it even harder when you’re doing something out of your market.No syndications, that’s the thing for me is just, no, no, will keep, no, no. But for anybody, if you have people that are, there are two really good websites that are private forums for investors in syndications. And that’s Private Investor Club and 506B Group.
Quentin (27:48)
No syndication. I’m going to make sure I get on the phone where all my syndicators are sending you away. We’re going to flood.Yeah, Yeah, yeah, yeah.
Zach Zimmer (28:14)
Unfortunately, I didn’t find those until I was already pregnant in syndications. Yeah. Yeah. So, but if I was looking for passive income in syndications, I would really start spending my time in either of those two groups because they drill them. They bring them on there. They drill them. These are all well, well seasoned syndication investors. They know what to look for.Quentin (28:17)
Yeah, you already had your trauma. Yeah, yeah.Zach Zimmer (28:39)
And they, yeah, so I would follow the lessons that are in those two forums if I was going to get back into syndications.Quentin (28:46)
Absolutely. Now, man, I love this, man. This has been so great. Man, you have given us a wealth of information and knowledge. Thank you for taking us down your road, telling your story. I’m sure there is so much that people can just take away from this. But I want to ask you this before we wrap. Listen, if someone wanted to reach out to you, connect with you, maybe collaborate with you or learn more about what you’re doing, what’s the best way for them to reach out to you,Zach Zimmer (29:09)
So you can find me on Facebook, it’s Zach Zimmer, Z-A-C-H-Z-I-M-M-E-R. And then I also have a website, zachzimmer.com. And yeah, I do some small selective coaching. It’s not something I market or advertise or try to sell. But yeah, there’s some things on there on the website and also a link to one of my best friends, Turnkeys in Northeast Ohio. So if people are looking,⁓ For rental properties in Northeast Ohio, we have my best friend who’s ex-Amish. So you have all Amish crews working on your house, which their quality is about as good as it gets. So yeah, I do help move some turnkeys here because I found that I can’t compete with this out-of-state investor demand. So I might as well see how it can supplement. And these are properties in the same areas where I’m still buying. So it’s right there with me. But yeah, check out the website, zacksimmer.com.
Quentin (30:02)
Yeah.I love it. he is. This is Zack Zimmer. Thank you so much, man. Thank you for your time, your story, for your perspective. Thank you for the nuggets that you dropped on this episode today. I really appreciate you being here today.
Zach Zimmer (30:16)
Hey, thanks for having me. It good chat.Quentin (30:18)
Absolutely. And so there he is. Y’all got the value. Y’all heard the conversation. You do not want to miss out on future conversations. So make sure you go ahead and subscribe. One click of the button, people. Subscribe and therefore you will get the alert when we have these amazing conversations. So again, thank you, Mr. Zach. And to everyone else, we will see you on the next time.
