Mastering Market Timing & Private Lending in Real Estate | Tim Baise Interview

Timothy Baise (00:00)
real estate investing is not for everybody. A lot of people would love to do it, but they either don’t have the time, they don’t have the resources, they don’t have the ability to deal with headaches or problems

Dylan Silver (00:02)
Yeah.

Timothy Baise (00:09)
And that’s what we have really transitioned over into.

Dylan Silver (00:09)
Yeah.

Timothy Baise (00:12)
we launched a fund that people can participate with us,

65 % LTV or less, high interest returns, and we don’t have to do anything. I’d rather do that and spend time

you on the beach with my grandkids or on the playground instead of chasing down a broken toilet

Dylan Silver (01:58)
Hey folks, welcome back to the show. Today’s guest has 30 plus years of experience in real estate and currently at the top of top flight home loans, top flight capital and top flight commercial offering residential construction, bridge loans, I-10 loans across 42 different states and splits his time between Michigan and Florida. Please welcome Tim Baise. Tim, welcome to the show.

Timothy Baise (02:28)
Thank you. Thank you Dylan.

Dylan Silver (02:31)
I always like to start off at the top 10 by asking folks how they got into the real estate space.

Timothy Baise (02:39)
Well, think mine was more of a lack of options. I grew up, I was born and raised downtown Detroit, and I think in a broken home and coming out of that, it didn’t seem like there was many options. And a lot of times you just hear, looking for ways to succeed. I always heard more millionaires are created from real estate than anything else. even at a very young age, it caught my attention. lack of options and lack of schooling, I kind of gravitated towards real estate.

Dylan Silver (03:09)
That’s an interesting way to get in, right? mean, I think a lot of people either come from one of two fields. You come from, my whole family is in real estate and everybody’s doing real estate. Let me go be a realtor or let me figure out how I get involved in real estate. Or it’s, I’m doing this other thing, which is how I got in. I was working for Nissan at the time. I’m doing this other thing. How do I generate wealth outside of this? And I kind of just did a Google search and I can’t tell you how many people have gotten in kind of a similar way or maybe it was

something on the radio where they heard about this. And so what were the first couple of years for you in the real estate space and what were your first deals like?

Timothy Baise (03:48)
Well, mean, for me getting started at such a young age, was real, you know, was brutal. It was pretty difficult. I got started as a real estate salesperson a month after I graduated high school. And when I say graduated, I barely graduated. I was a year late in graduate and they had to throw me out eventually. So again, I went to a real estate school here in Michigan, got my real estate salesperson license and I got thrown to the wolves, right? Because I didn’t know what I didn’t know at 19 years old.

And I was just out there trying to convince people that I knew what I knew and they knew otherwise. And so it was really, really tough start, but it still, it always hung with me that I had to do it.

Dylan Silver (04:24)
Yeah.

And so those first couple years, real estate salesperson license, is that different than a real estate agent? I’m not familiar with this term.

Timothy Baise (04:36)
No, it’s real estate agent, yeah.

Dylan Silver (04:38)
Okay, real estate agent. you’re out there and ⁓ getting basically trial by by fire, right? And at that point in time, did you know kind of grand scheme, like, hey, I’m going to be in this business forever. This is what I’m super passionate about. Or was it more of, hey, let me see how this goes, because I’m just fresh out of high school. And I got to see if this is it for me.

Timothy Baise (05:48)
Well, it was more of not knowing how to break into the real estate market again, because I didn’t have a father figure, I didn’t have a leadership role, I didn’t really have all that. So I just knew real estate was where it’s at. So the only thing I needed to do is try to get into it somehow, and that’s how I did it. And luckily, it didn’t work in the real estate agent arena, right? But it just kept me passionate to stay in the field, and that’s where I’ve been for 34 years.

Dylan Silver (06:16)
And so you mentioned kind of going through a transition. So it didn’t work as a real estate agent. Help us get to today, the pivot points, because we can see, you you’ve got top flight, residential, capital, the commercial, so many different verticals, right? But it started as a real estate agent. So what was the pivot points getting to where you are today?

Timothy Baise (06:39)
Yeah, so breaking away from that, know, kind of, know, muddling through, you know, life, trying to figure out how do I stay tied to real estate, even though it wasn’t working for me. So I would get part time jobs, I would do little things, you know, try to just figure out how to make it work. And it was really tough. So again, I bought my first house in 94, right? And that’s kind of what led to it. And then so what do I got to do to fix this thing up? And what do I got to do to

you know, turn a profit on it and how do I go from one to the next and it just kind of snowballed over time. But eventually it led to ⁓ the lending side of it, you know, getting involved. like, all right, so the real estate agent didn’t work for me because again, I was young and I didn’t know what I didn’t know. So then I got involved and somebody introduced me to becoming a loan originator, right? And to be able to help that side. So now I’m passionate about buying some houses, trying to figure that out.

Got my loan officer license, so I’m trying to figure that out. And eventually, the things just started clicking where I could help people with their finances while still tied to real estate.

Dylan Silver (07:44)
And so getting involved in the lending side, at this point you’re still young, right, and you had the experience as a realtor. Now you’re in the lending side. And as someone myself who’s worked a lot with investors and now have my real estate license, everything is in the lending. I mean, the whole deal will collapse if the lending isn’t lined up. And so you’re seeing this and you’re saying, I’m seeing kind of my niche here.

How did that business scale for you? What were your tactics? How did you gain more clients? What were the first couple years like in lending?

Timothy Baise (08:17)
Well, so what happened is I got started on the lending side with more of a high interest lending, lot more refinancing, trying to help people debt consolidate. And the crazy thing was, because I muddled through life up to that point, you I had just gone through bankruptcy, I had lost my two cars, my garbage can had just been repossessed. And now I’m thrown into this position of trying to convince other people that I knew what I was doing on consolidating or…

you know, sometimes their largest investment. Now, I’m the guy in the middle of this. So mentally it was, it was challenging, but it worked. So got started on that. And then I soon figured out that, you know, I’m offering high interest rates because you have the high interest rate lenders that are out there. It took me about six months to realize, cause people were telling me, and I’m selling 14 % rates years and years ago. And people were telling me, well, why would I do that when I could get 8 %? That’s what the going rate is right now. I’m like, I don’t know. Cause I didn’t know, right?

Dylan Silver (08:57)
Yeah.

Timothy Baise (09:13)
So I went and got my wife a job in the mortgage industry. She was a real estate agent’s assistant. And I just showed up one day, I’m like, honey, if we’re going to do this, I’m going to get you a job in a business. She’s like, no, you’re not. And I did. I went and I got her a job. So anything that I couldn’t do on the high interest rate side, I would send to her and she would do. And we were kind of tag teaming it and had a dual income originating loans. And that’s really what got us out of the gate working together.

Dylan Silver (10:14)
And so having a partner in the real estate space is just an incredible thing, right? A team that can do real estate together is gonna win together. so I tell this to folks, know, of course people would be blessed to have husband or a wife in real estate with them, but just that team around you, that nucleus around you is really what drives you to higher and higher and higher levels. So you’re involved in so many different verticals right now.

But how has the team building and the creating that organization around you been and has that been something that’s come naturally or was this ⁓ something that has had its ebbs and flows like many things?

Timothy Baise (10:55)
Well, I think like anything else, you have your ups and flows and ups and downs. But when we started Top Flight Financial, which is the parent company now segmented into a bunch of different things, 24 years ago, me and my wife started out of an 80 square foot room in our house, right? And it was from scratch. Back then, there was no loan officer licensing. There was really no compliance in Michigan. It was just kind of a free-for-all. There was no training.

We just kind of looked at what other companies were doing, grabbed hold of, hey, that looks good and this looks good, let’s marry this thing together. And it was problematic in the beginning, because again, we’re learning from nothing, no education and just trial by fire again. But one thing that we realized was, if we’re going to do it, we’ve got to treat people like we want to be treated, and we’ve got to do it compliantly. So we’ve got to put in the extra steps to make sure we’re doing things right.

Dylan Silver (11:36)
Right.

Timothy Baise (11:51)
And again, now 24 years later, we’ve been audited. We’re licensed 42 states, HUD approved, VA, USDA. I mean, we’ve got every accreditation endorsement available, but it’s still got to be done right. So after hundreds and hundreds of audits over 24 years, we’ve got that piece down. And we’re talking about that synergy. I’m in sales, my wife is in compliance. that’s a fine line to ride in a household with a husband and wife, right?

Dylan Silver (12:15)
That’s how it is, right?

Timothy Baise (12:18)
but she does her job and I do mine and we’ve done really, well over the years and it complements each other.

Dylan Silver (12:19)
Yeah.

think the compliance thing, I mean, it’s now bigger than ever. I I hear about it every day, every day, every day, I feel like in the real estate space. But it sounds like you were really spearheading it, an early adopter, if you will, of compliance. You would hope everybody would be, I think, specifically talking about the lending space, you know, pre-2007, 2008, it was like the wild, wild west. I’ve spoken with so many people. mean, people talking about making money hand over fist, and then all of sudden it’s just poof, gone.

And then kind of you have new spaces emerge. Like you have private money, which was there before, but then really got much larger and more significant. And you’re involved, you know, in the residential side, you’ve got, ⁓ correct me if I’m wrong, new construction as well, right?

Timothy Baise (13:10)
We do have new construction.

Dylan Silver (13:12)
Yeah, and the commercial. so blending all of these basically one stop shopping for folks who are looking for homes or new builds or any type of real estate lending, right?

Timothy Baise (13:27)
Yeah, yeah, any type of, you know, I just did 119 unit new construction kind of development up in Bay Harbor, Michigan. were, you know, doing a golf course. I’ve got a church, you know, in process, you know, and we’re going to do, you know, probably a billion or billion two in just residential volume. So yeah, I mean, it spans a spectrum at this point.

Dylan Silver (13:49)
You know, one of the interesting things that I take away from being in the real estate space and it just keeps me so enthused is you get to meet a bunch of new people. You get to have conversations that I don’t think people are having in other industries. Like I can go walk into a room and I can get that whole life story. I can get all of the steps that this person did to be successful. And in many cases, they’re happily willing to give away this information because they realize even if I gave this person the blueprint, they still have to go out.

and execute on it. And as someone yourself who’s been there, who’s had to make the strategic relationships, who’s had to pivot, now you find yourself involved in several different verticals, what would be your advice to folks who are maybe thinking like, hey, I want to get into the real estate space. I don’t know if I want to go realtor, if I want to go to the lending side, if I want to be in commercial, if I want to be in, you know, residential new construction, what would be your advice to folks who may be starting out?

Timothy Baise (15:26)
Well, again, a lot of times you hear, you know, whether it’s a market or anything else, you know, you can’t time to market, you know, more talking about the, you know, the stock market type of a thing. And I don’t necessarily buy that because even in real estate, you guys see there’s highs and there’s lows, right? I didn’t really get involved on the investing side of real estate until 2012, which was four years after the major collapse, right? Because it took four extra years for it to really hit the bottom.

But between 2012 and 2020, I acquired 430 properties around Michigan and built an Inc 500 company just on the investing side of that, right? But that comes with headaches. I mean, there’s a lot of problems that come with landlord tenant issues and capex issues and stuff like that. But I did it at a time where the mark was at the bottom and working its way up. You know, now, you know, I think we’re down to 30 properties because in 23 and 24.

doing even 22, 22, 23, 24, people are coming wanting to pay just ungodly amounts of money for properties that I don’t even know if they’re worth it today, but they were buying them. So we unloaded 85 % of our properties over the last couple of years just because of that. And we’re starting to see it now because we’re we’re licensed in 42 states. Markets are starting to even out. Some are even declining again. And it’s gonna, there’s gonna be a time to get back into that on my side of it. But.

Dylan Silver (16:30)
You

Timothy Baise (16:50)
To answer your question, I’ve been doing hard money lending or private equity lending for 20 years. And what I have found over that 20 year period of time,

real estate investing is not for everybody. A lot of people would love to do it, but they either don’t have the time, they don’t have the resources, they don’t have the ability to deal with headaches or problems and things like that. So with the hard money lending side of it, you can get involved in the real estate side of it, leave this speculate.

Dylan Silver (17:04)
Yeah.

Timothy Baise (17:18)
speculation to another investor, leave the headaches to another investor and still make an incredible return on the lending side. And that’s what we have really transitioned over into. And now we’ve, you know, we launched a fund that people can participate with us, myself included, all just, you know, equity based lending now to deals that really make sense. 65 % LTV or less, high interest returns, and we don’t have to do anything. I’d rather do that and spend time

Dylan Silver (17:27)
Yeah.

Timothy Baise (17:48)
you on the beach with my grandkids or on the playground instead of chasing down a broken toilet or plugged drain, you know what I mean? So it just depends on the avenue of real estate you want to go into. It’s so huge and so vast, you can make money in so many different areas. It’s just how much time do you want to spend doing it.

Dylan Silver (17:54)
That’s exactly right.

I want to ask you, and I often ask this to lenders because oftentimes people think, well, you got to go to a realtor to find out where the deals are. But the lenders are the piece of the puzzle where everyone has to go to them to get the thing across the finish line, right? You’re across the country, 42 different states. If someone is looking and maybe thinking, hey, I might be in California, I might be in New Jersey or New York or some of these maybe more regulated areas, and I’m thinking, where do I invest in?

And maybe let’s say, I’ll give you one scenario. They’re looking at, I want to go buy a couple single-family homes in an area and maybe turn them into a short-term rental, right? Where would you say for your money’s worth they should go take a look at if they’re looking at investing?

Timothy Baise (18:49)
man, I mean, honestly, I don’t know that I’m the best person for that question right now, just because timing for me, I’m out, you know? I mean, terms of investing in the actual real estate itself, I’ve kind of really backed out of that because the market went to an all time high and I’ll wait till it comes back around to get back into it. All of my short term rentals are gone, know, all the apartment buildings we had, all of it is gone because people are paying too much.

Dylan Silver (18:58)
Yeah. So wait, right?

Timothy Baise (19:17)
Now I’m not saying there’s no market that ⁓ is not at the top right now, but ⁓ for me it’s just easier to do the financing or the debt piece and let somebody else deal with the headache. So I don’t know the markets ⁓ to really answer your question like that.

Dylan Silver (19:35)
Well, let me ⁓ ask you, how, because we’re maybe not on the right time, and I think that that is a good thing for folks to know. Like, maybe, you know, from from this perspective, maybe pump the brakes on this. How would folks know when it is the right time, when things are in the right direction? Is it rates? Is that what it comes down to?

Timothy Baise (19:40)
Mm-hmm.

It really isn’t. I’ve, Southflate Financial, we’ve been doing this for 24 years. I’ve been through the ups and downs. You know, I’ve been through the real, you know, the crash 2006, seven and eight. We’ve been through COVID. We’ve been through high rates, low rates. The thing is people always need money. Rates affect cap rates, right? When you’re looking at projects like that, but people always need money and there’s always something going on. So I really don’t necessarily focus on rates too much.

Dylan Silver (20:23)
Mm-hmm.

Timothy Baise (20:23)
Unless

you’re looking at a project that, you know, the rates are $2.75 when you’re buying it and you’ve got a five-year balloon because it’s a commercial project, you know, can you afford it if the rates go to eight or nine five years from now? And a lot of people that bought over the last three or four years can’t. I mean, that’s why they’re saying there’s going to be, you know, $1.5 trillion in commercial debt that can’t get refinanced in the next couple years because the rates will go up. That’s scary.

Dylan Silver (20:37)
It’s more important.

Yeah. Tim, we

it is it’s a scary thing. It’s a scary thing. think your advice may be spot on. And I don’t often hear it, but sometimes, you know, patience and waiting may be the antidote to heartbreak. Right. But we are coming up on time here, Tim. Where can folks go if maybe they’d like to learn more about the top flight companies or reach out to you or maybe looking at lending for a deal themselves?

Timothy Baise (21:15)
Yeah, so again, I I highly advocate for people looking into lending money themselves, if at all possible, but there’s a lot of compliance that comes along with that. So again, if somebody wants to talk to me a little bit more about equity based lending, you can go to topflightcapital.com and it’s T-O-P-F-L-I-T-E like the golf ball topflightcapital.com and it will give you more information in terms of what we’re doing because I did start a fund. It was a $25 million fund.

I put five million of my own money in. I’m planning on raising that to 10 million by the end of the year because I believe so much in what we’re doing. And we’re going after deals that are out there that the banks just aren’t doing right now. In 2008, banks were 70 % of the market. They’re 15 now. I mean, that’s how wide the gap has become. And private equity has stormed the market. And there’s so much available. So again, if somebody’s looking at, I want it in real estate, but I don’t necessarily want to buy one house because if something goes wrong with that one house, I’m in trouble.

They can invest with me. We’re going to scale up to 100 million this year. And then all of our resources go together. We’ll do the debt financing and then we all win.

Dylan Silver (22:22)
It’s a lot ⁓ going on and impressive stuff. And Tim, congrats on your success and to your continued success. And thank you for coming on the show here today.

Timothy Baise (22:32)
You bet, thank you.