Why Smart Real Estate Investors Ignore Hype and Focus on Fundamentals | Timothy Shelton

Timothy (00:00)
And as I realized some of these facts, there was one major thing that happened in every single one of those groups. And that’s investors invest on hype. They invest on how great the pitch deck is. They invest how great the salesman is or the sponsors presenting it to them. And it’s not based on the fundamentals of the business that they’re purchasing or even the fundamentals of the operator that’s running it.

Quentin (01:58)
Hello, everyone. Welcome to the Real Estate Pros podcast. I am your host, Q Edmonds, and I am excited to be here today. I have another fantastic guest. And listen, I am going to let him tell you all the things that he’s involved in. But I’m excited for us. You know how I am. I love when we get a chance to peek through someone else’s lens. Stop me if you heard this before, because you know I say it all the time. That’s what brings me great pleasure, because we all can be doing the exact same thing.

but it’s still going to be different because we are unique individuals. And so the fact that you are involved makes your outlook different. And so we’re all at different parts of our journey and we are here to learn from each other. And so I am so excited to introduce you all to Mr. Timothy Shelton. Mr. Timothy, how you doing today,

Timothy (02:43)
I am great. Happy to be here, happy to be on your podcast to talk to other like-minded real estate people.

Quentin (02:50)
Absolutely, man. We’re so glad to have you here. And listen, man, I kind of just want to dive in. I would love for you to tell the people what your main focus is these days. We would love a little bit of an origin story, kind of how you got to the point where you are now. Like, we love the hero’s journey. And then, man, tell them where you are in the world. People seem to love to know where you are geographically, especially if they like, he right around the corner. Maybe I can get in contact with him. So.

Give us mainly what you’re working on, where you are, what you’re doing these days, your origin story and where you are. Mr. Timothy, sir, you have the floor.

Timothy (03:21)
Awesome. Awesome. Yeah. I’m Timothy Shelton, founder of Trust2Capital. Currently I live in Phoenix, Arizona, primarily to find a wife. That’s the primary reason I live here. No specific reason. As far as my origin story and how I started, it’s very, very unique as everyone’s is, but I started an investment consulting.

and a small firm in Atlanta. And that was a great experience for me because as an investment consultant, I was tasked with the work to go through each one of our portfolios to understand performance, to understand what would the common denominator was throughout every single one of our hedge funds, portfolio managers, endowments, and so forth.

And as you guys could guess, it was real estate. Okay. Diving even deeper into the analysis. wasn’t just if you bought real estate personally, it was investing in real estate. That was one of the major common denominators.

as I went through all these portfolios. And so just as anyone that’s young, that is very eager to learn and be in investments, and that was my core philosophy, was I wanted to help people get into good investments. Not to be a traditional financial advisor that points you into how to diversify, but how do I show someone that I understand these investments, not only from a, just an overview,

from the smallest details of Lion Works. And so from there, I jumped into real estate and found a group that was buying self-storage facilities and partnered with them. And within that journey, we bought 25 self-storage facilities, had about 30 employees.

We built an in-house management company to manage every single one of those facilities because again, we wanted to understand every part of the business. And so that was from investor relations to management of the facilities all the way to even the acquisitions. And within a span of three years, we closed 25 self-storage facilities.

And you can imagine how many flights I was on throughout that period of time. I think it was about four five times a month that I was flying. So yeah, great times there.

When 2024 hit 2023, 2024, the market got tough. All right. A great piece of advice that I still use today is Kiyosaki’s lesson of the 1 % rule. If you don’t know what the 1 % rule is, if you’re going to take anything from this call, whenever you look at a deal, check this, this right here is what I use to start any type of analysis. And that’s if the property makes $10,000 a month, you should be buying it at a million.

Okay, obviously there’s some nuances, other reasons for investments, but that’s a great starting point. So another example would be it makes $20,000 a month, $2 million, $50,000 a month, $5 million. All right. The market started to shift in 23. I would talk to owners and they would make $10,000 a month and they’d ask for $5 million. There’s not a world where that ever makes sense.

And so from there it was, okay, I’m going to reposition personally and stop buying for a second and just start consulting. Let’s start learning. And so I started my consulting business. And so I started consulting for other real estate private equity firms with their processes, with how they were buying, why they were buying, their analysis and so forth.

And so from there, I realized that there is one major thing that I didn’t know, and that is there are other great sponsors out there. I’m not the only good sponsor. There’s plenty of other ones. The other thing I didn’t know was there are other great assets.

self storage, multifamily, it’s not one is better than the other. I always believe that multifamily, since it was in the, you know, the necessities of need, right? It’s food, clothing and shelter that multifamily would always be a better investment in self storage. There are cases where that is not true. And so many times that’s why diversification is necessary.

Quentin (08:25)
Mmm.

Timothy (08:52)
And as I realized some of these facts, there was one major thing that happened in every single one of those groups. And that’s investors invest on hype. They invest on how great the pitch deck is. They invest how great the salesman is or the sponsors presenting it to them. And it’s not based on the fundamentals of the business that they’re purchasing or even the fundamentals of the operator that’s running it.

And so that’s why I started Trust2Capital and that’s where I am now is Trust2Capital is where we actually go through as consultants and we look at this from that perspective, not just from an investor perspective, because I do invest into these assets personally, but we look at it from a consulting perspective.

Quentin (09:38)
Man, I love it, Timothy. Thank you for walking me through it, man. Thank you for telling me kind of origin, the genesis of Trust2Capital. ⁓ I love how you decided to pause your own investing so that you can consult other firms and that led to you just knowing that there was great sponsors out there. There was…

great other ad sets out there and how you came to conclusion, one may not be better than the other. I absolutely love the journey. And I want to ask you this. ⁓ You know, I have a saying where I say destiny has no wasted moments. Meaning no matter what you go through in your life, your life’s journey, your career journey, you pull from moments that make you who you are today. it’s, it’s the compound of these moments and decisions to make you who the person you are today, right?

And so I would love to know throughout your journey, throughout your awakening and your awareness, what did destiny, what did these moments teach you about yourself? Did it teach you discipline? Does it teach you innovation? Did it teach you resilience? Like what did these moments teach you about yourself, Timothy?

Timothy (10:45)
I think the major thing for me to learn as a person was focus. I’m always all over the place. I always like to have my hand in every single thing, everywhere. And so what happens when you’re building a business and when you’re helping someone build a business, it’s you need to focus on your core aspects.

Quentin (10:52)
Mmm.

Timothy (11:05)
And so that was something I really had to force myself to learn is what is necessary in this business right now? What do we actually need to succeed and not what would be cool, what would be great, what would be helpful. It’s what do we need right now?

Quentin (12:01)
I love that man. Focus, clarity is everything. You know, I have another saying I say when you, well, it’s actually one of my mentors said this at a time when I was kind of an empath in my life. And he said, when you know who you are, you know what to do. And so that focus and that clarity on you, it helps you because you can be put in any situation and you will know how to respond because you know yourself.

And that means it could be asking somebody for help, right? It could be delegating, right? It could be moving yourself out the way because sometimes you are the bottleneck. You are the problem and not you, Timothy. I’m really talking about me, right? Like I could be the bottleneck and sometimes I got to move myself out the way. So I love how you brought in the word focus because that is everything. mean, that’s so, so important. And I would love to know as you was building Trust2Capital,

Have you ran into any adversity? How has adversity looked in your world? Because I’m going change that because we all run into adversity. So how has adversity looked in your world and how have you overcame it?

Timothy (13:07)
One of the major things that we’ve run into as far as adversity is just running multiple things at the same time and knowing when to get back into investing, when to start doing this, when to start doing that. Because as a consultant, you’re so focused on helping other people build their businesses. And there is a point where you have to step back and be like, listen, like my time is valuable.

Quentin (13:30)
Yeah

Timothy (13:35)
and you need to be focusing on building your own business. And that can be, you know, as people are jumping into real estate and they want to build their own syndication firm or their own fund, they need to understand that their time is valuable and you have to make time for yourself. And it’s not just following if you’re still on a nine to five or have another business, you have to make time to build out that syndication.

Quentin (13:36)
Yeah.

Timothy (14:04)
Fond.

Quentin (14:06)
Yeah. Nope. I love it, man. I think that is so good. So a very good strategic knowing when to pull back, knowing when to put, you know, it reminds me of the airplane, the, can’t get the word, the stewardess, you know, is another word I’m looking for, but how they always give you commands on before the plane take off. They always say,

Hey, if the oxygen mask drop, make sure you put it on first before you try to help somebody else. So it’s always just making sure your business is getting enough oxygen, making sure you are very coherent, make sure that you are razor sharp with what you’re doing. That way you can always help somebody else, but sometimes you got to pull back to make sure that you’re doing that. So I hear you, man. That’s very, very good. What is the next real goal for Trust2Capital? What are you looking to solve for scale next?

Timothy (14:59)
Well, Trustee Capo right now is working in just different industries. Like I said, there are…

other asset classes that are just as good as some of these core asset classes like multifamily or even self storage. And so right now what I’m working on is adding more of those because returns and risk make sense in these asset classes because there’s not as many investors and it’s really going through those, the due diligence and understanding those risks that you’re taking. But ultimately those can be great.

assets to add to the portfolio. so that’s where we are as far as jumping into our growth is adding more diversification for investors.

Quentin (16:27)
Yeah, yeah. I love it, man. I love the vision. I love what you guys are doing. Love what you guys are building. I think one of the questions I want to ask you and get your perspective is on the word relationships. Because it sounds like I keep hearing you say we, and you talk about working with investors. And so I would love to know from your perspective, relationships. Are they important? If they are, how do you build healthy relationships? What are some of your strategies? So talk to me a little bit, Timothy, about relationships, man.

Timothy (16:55)
Yeah, relationships are everything. Actually, that’s, if I was ever just to work on nine to five job or anything, I would go get into sales and I would just have relationships with people because that’s, that’s life is relationships. And I’m really active in my church. I’m active in my community. and I love to build things. In fact, that’s one of the best parts about, I move every about two years or so and I’ll

build another community somewhere else. And as difficult as that can be, one of the great things is I have relationships all over the country that I’ve created not only from church, but also from business. whenever I travel back, I’m always getting breakfast with somebody or lunch with somebody that I used to spend a lot of time with. And relationships are ultimately the only reason you would ever do anything like this.

Quentin (17:49)
Yeah, yeah. Nope, I love it. I agree. You you talked about, you know, church. So I always equate building relationships even in business is like building a community, you know, and community is common unity. It’s people who are of the same mindset doing things together, building an ecosystem where everybody can thrive. And so I am with you, man. Relationships are everything. Listen, Timothy, is there any subject that I did not bring up that you would like to talk about?

Or is there any other words of inspiration, motivation, education that you feel like the people may need to hear? I just kind of want to open up the floor for maybe something that’s on your heart or your mind that you feel like our viewers might need to hear.

Timothy (18:29)
Sure, when we started before this call.

We were talking about mentorship and that is such a major thing. Some of the decisions that I have made, even just being a, you know, I’m about 27 now. I started consulting when I was 24 years old and you know, that doesn’t really sound right. A 24 year old consultant. And I can still remember like people doubting that that was even possible. And I’ve had about 15 clients year to date at this

point and a lot of these companies are well over a hundred million dollars in assets. And so I said to say the only reason I even knew that I could do that was because of the mentors that I had in place. And I’m very strategic on how I pick mentors, religion being the first criteria. And then obviously the success that someone has had in the field that I’m looking for and whether that’s in business. Obviously, if you’re in a different type

of industry, like my dad for instance, he’s a nurse practitioner. That advice is not very helpful as far as what I do for a living. But mentors, as far as direction and what you can do is by far the best investment you can make.

Quentin (19:52)
⁓ man, I think that is such excellent advice. Again, that goes towards community aspect with mentorship is, you know, being around somebody that wants you to win, somebody who can see where you’re going and maybe even are where you’re trying to go and get in community, get in relationship with them, that common unity of.

ecosystem of where everybody can thrive and a mentor knowing, I see the potential, I see where you’re trying to go and I can talk to you and help you and help and be a support to you to where you’re trying to go. And so I hear it for sure, man. So Mr. Timothy, 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,

Timothy (20:38)
Yeah, absolutely. So you can go to trust2capital.com. So that’s trust number two capital.com

and you can fill out any of the forms there and reach out that way. That’s the best way to get in touch with me and I’m happy to sit down and talk about your investment strategy, what you’re trying to do and see we have anything that can help you. If not, that’s perfectly fine. There are many people that come through my pipelines that are business owners and they’re truthfully looking to buy more businesses. They’re not looking to be a passive investor and that is perfectly fine. So it just depends on what

you’re trying to do and I’m happy to help you figure that out.

Quentin (21:18)
love it, man. Well, listen, let me say three things to you, sir. First, thank you for your time. Could have been anywhere in the world, but you’re here with us. So thank you for your time. You are a consultant, so you know you can put a premium on your time. So thank you for your time. I appreciate you being here. Secondly, man, thank you for your story, for your narrative. I believe, I put a premium on stories. I believe stories have a way of planting seeds in people. You may never see the growth, but you planted the seed.

Timothy (21:29)
Thank

Quentin (21:45)
And that seed alone could cause somebody to course correct. It could cause an idea to spark. And so I thank you for your narrative and sharing your story. And lastly, Timothy, thank you for your perspective. Thank you for the way you think and bringing that perspective to this platform. I greatly appreciate you being here today, man.

Timothy (22:02)
Yeah, thank you so much for having me. It was great to be on this podcast.

Quentin (22:07)
Absolutely. Well, listen, y’all heard Mr. Timothy. Check in his show notes, get in contact with him. Let him help you. So please get in contact with him. But definitely make sure you are subscribed here because I promise you we’re going to continue to bring up amazing people just like Mr. Timothy. So sir, say thank you again. And everyone else, listen, y’all have a fantastic day.