03 July 2023

In this week’s episode, Patrick Donley (@jpatrickdonley) sits down with Tyron McDaniel to discuss his background and career, his work in inner-city Houston, and his thoughts on making housing more affordable at scale. You’ll also learn about Tyron’s innovative approach to renovating and developing homes, his views on gentrification, and advice he gives to young people based on his many years of real world experience.

Tyron McDaniel is the Owner of Houston Vintage Homes and a leader on a mission to build affordable housing for all.



  • What it was like growing up in the 5th Ward of Houston.
  • How he was able to see a good part of the country at a young age.
  • What happened after he “quit-uated” from college.
  • Why driving a semi was formative for his life and career.
  • How a book on tape he listened to changed his life and perspective.
  • What some of the old school real estate infomercials were like.
  • How he got into the mortgage industry after being in trucking and focused on sales.
  • What it was like being a lender during the GFC of 2008.
  • How he got involved in buying real estate and netted $22,000 on his first deal.
  • Why a nightmare renovation made him move toward new construction.
  • How he learned about the power of partnerships.
  • What the benefits and challenges of buying “old raggedy houses” are.
  • What his strategy is after renovating an older home.
  • What his thoughts on gentrification and affordable housing are.
  • What his strategy is going forward for other asset classes.
  • How he views where we are in the current market cycle.
  • What are some other asset classes that are of interest to him?
  • Why RE Twitter is such a valuable resource.
  • Advice he gives to young people.
  • And much, much more!


Disclaimer: The transcript that follows has been generated using artificial intelligence. We strive to be as accurate as possible, but minor errors and slightly off timestamps may be present due to platform differences.

[00:00:02] Tyron McDaniel: Once you can figure out what you want real estate to do for you, then it’s about how do you want to accomplish those things? And so that’s one of the first things I tell people is, you know, you can learn from anyone, learn what to do, what not to do, how to do it better, faster, slower, more efficient, things of that nature.

[00:00:17] Tyron McDaniel: But you have to come to the table with something. You have to come with initiative. You have to come with a sense of direction, you have to come with a goal in mind that you want to get to. And then it’s just about figuring out how real estate as an asset class can help you get to whatever that end goal or destination you are looking to get to.

[00:00:36] Patrick Donley: Hey everybody. In this week’s episode, I got to sit down with Tyron McDaniel to discuss his background and career, his work in Inner City Houston, and his thoughts on making housing more affordable at scale. You also learned about Tyron’s innovative approach to renovating and developing homes. His views on gentrification and advice he gives to young people are based on his many years of real world experiences.

[00:00:57] Patrick Donley: Tyron is the owner of Houston Vintage Homes and a leader on a mission to build affordable housing for all. I had a blast talking with Tyron about his real estate journey, old school real estate infomercials that we both love, why he loves and encourages people to buy what he calls old raggedy houses.

[00:01:13] Patrick Donley: Make sure to check this one out. There’s a ton to learn from Tyron in this episode, and so without further delay, Let’s get into this week’s episode with Tyron McDaniel.

[00:01:27] Intro: You are listening to Real Estate 101 by The Investor’s Podcast Network, where your hosts Robert Leonard and Patrick Donley, interview successful investors from various real estate investing niches to help educate you on your real estate investing journey.

[00:01:50] Patrick Donley: Hey everybody. Welcome to the Real Estate 101 Show. I’m your host today, Patrick Donley, and with me today as a really special guest I’m excited to have on Tyron McDaniel. Tyron, welcome to the show. 

[00:01:59] Tyron McDaniel: Thanks for having me, Patrick. I’m looking forward to sharing with you for a little while here. 

[00:02:03] Patrick Donley: Yeah, I am too.

[00:02:04] Patrick Donley: I’ve been studying you, listening to several of your podcasts, really interested in hearing more of your story, but I wanted to jump in early days, like what it was like growing up for you in Houston in the Fifth Ward. Tell us a little bit about like what it was like in your family. I know your dad was somewhat entrepreneurial.

[00:02:19] Patrick Donley: Talk to us a little bit about your dad, your mom and dad, and growing up. 

[00:02:23] Tyron McDaniel: No, most certainly. Yeah. So great. And it’s always interesting when people have done their research there, so that’s pretty cool. But no, yeah, grew up in what we call the shadows of downtown Houston neighborhood called the Bloody Nickel Lake, a Fifth Ward Home of the Ghetto Boys.

[00:02:36] Tyron McDaniel: For those of you may be listening to old school rap in the eighties and nineties, world nineties actually, but grew up lower middle class is what I would call it. And I didn’t, it wasn’t into middle school. I realized that we were probably closer to the lower part of middle class than actually being middle class.

[00:02:52] Tyron McDaniel: But, you know, I had a pretty good childhood. I mean, I have fond memories of growing up where I grew up and how I grew up. My mom just, you know, took care of the kids and, you know, regular little jobs. My dad was an entrepreneur in the transportation industry, so he had owned a couple of trucks and had his own authority.

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[00:03:08] Tyron McDaniel: And one thing I loved about growing up in a trucking household is it afforded me the opportunity to see the country. I remember being in elementary school and middle school and you know, we’d be in US history or geography and we’d be talking about a state, oh, you know, this happened in Virginia, Colonial Williamsburg.

[00:03:24] Tyron McDaniel: Hey everybody, look around. Have you been there? I can say, yeah, I went to Virginia before, you know, talking about the Rocky Mountains or you know, California and everybody turn around. Okay, we surety. I’ve been there. And so as early in life, being able to travel and see the kind of the country, that exposure was critical to how I thought and how I saw the world.

[00:03:45] Tyron McDaniel: And so my child, nothing really spectacular or weird, really happened. Had a pretty stable household and I was the first of my family to go to college and I didn’t graduate. I graduated is what I generally say. Yeah, I love that. You know, I went for a semester or two, hung out party at a great time, but I always wanted to be like my dad.

[00:04:04] Tyron McDaniel: I wanted to go into the transportation industry. I wanted to drive trucks. I wanted to own a trucking company. And that was really the genesis of the concept of owning real estate started for me because my thing was I wanted to have a trucking company, but I wanted to own a warehouse. And in my mind I said, I’m going to have this warehouse on the first level and we’ll store freight and stuff like that.

[00:04:22] Tyron McDaniel: On the second level, I want to have me, what I called an apartment, but in essence a loft or something. So that’s like my first inclination of any attachment to real estate when I look back over my life. 

[00:04:34] Patrick Donley: Was your dad involved in any kinda real estate stuff or was he too busy with the transportation logistics stuff?

[00:04:40] Tyron McDaniel: Exactly. He had his head down traveling all over the country. And as I got older, I started to understand why when I was a kid and I’d say, I’m going to be a trucker like my dad. And he’d say, no, I don’t want you to be a trucker. Because as much as I love traveling, seeing the country, meeting new people every day and just really getting the experience what our country looks like, I also remember the times where stuff were happening at school and things of that nature.

[00:05:04] Tyron McDaniel: And he’s on the other side of the country, so he couldn’t be there. And so, no, he didn’t. I mean he owned, he had a couple of houses. Well, there’s a couple of different phases in our life I can remember where, you know, he had bought another house where we moved up from one house to another. We moved to the burbs and we had the other house and ultimately ended up selling.

[00:05:20] Tyron McDaniel: So he wasn’t really a real estate investor, he was just focused on the trucking business. 

[00:05:25] Patrick Donley: I love that line that you quit-uated from college. My dad did the same thing quit-uated and did great. You’ve done great. Walk us through, like after you ended up dropping out of college, what happened next?

[00:05:35] Patrick Donley: Did you have any, like, looking back on things, would you have changed anything or you, are you happy with how, like your decisions that you made? 

[00:05:43] Tyron McDaniel: It’s easy to say. I think sometimes we kinda romanticize whatever decisions we make, right? And so we’ll look back, say, ah, I wouldn’t have changed anything. You know, I love how, you know, the reality of the matter is there are things that transpired in my life that had I stayed in college, it would’ve made it easier.

[00:05:58] Tyron McDaniel: And I consider myself to be a nerd. I love reading and my learning and education didn’t stop when I left school, but it definitely could have benefited me and helped me be a better entrepreneur, truth be told. And it would’ve been appreciative to my life. So I definitely, looking back, wish that I would’ve made some different decisions as it relates to that for me personally.

[00:06:19] Tyron McDaniel: Part of my reasoning for leaving school is I wanted to go drive truck. And so, and you had to be 21 to drive trucks. I was like, you know, I need to spend, I’m going to for, you know, I’m going to do something until I turn 21 so I can go and be, hop in a truck and travel the country. And so ultimately me and some friends started, you know, we started a marketing company because we thought we could help rappers blow up.

[00:06:38] Tyron McDaniel: I started a cleaning business. We, there was a, there’s a famous Olympian track athlete named Carl Lewis. We won a contract from him, his properties. And so I started several little menial businesses and held a job and just kind of worked a nine to five job doing different little things, working in warehouses and stuff like that until I turned 21.

[00:06:56] Tyron McDaniel: Once I turned 21, I went out and started driving truck and then I started did that for, probably did that for a couple of years, just traveling all over the country, which was really formative for me. Going back to the educational process because when you’re driving a truck from, say, Houston to Detroit, then you take a load from Detroit to Atlanta, then you come back to Houston and you do that over 10 days.

[00:07:16] Tyron McDaniel: What happens is you spend a lot of time by yourself in the cab, this vehicle. And what it taught me is how to think. It taught me how to become self-aware. Cause this is pre-internet, you know what I mean? So it wasn’t any internet, it wasn’t any serious satellite or something to listen to, weren’t no such thing as podcasts.

[00:07:33] Patrick Donley: You, you had a cassette deck, right? A tape deck.

[00:07:35] Tyron McDaniel: Exactly. Exactly. And so when you ran out of tapes to listen to, then you just kind of looked around at the world and kind of got into your thoughts. And so that really started to help me become more of a little bit more cerebral in my thought process. And it helped me lean into the part of me that always longed to learn and educate myself.

[00:07:54] Tyron McDaniel: And I’ll never forget driving through Tennessee. One day I stopped in the truck stop and I picked up a book that changed my life. I don’t recall the name of it. It was like some rolling, there’s these church ministries and they’ll leave books for guys. And one of these books I read it talked about how the average person uses three to 4% of their brain power.

[00:08:13] Tyron McDaniel: And how someone like Einstein has noted to have used about seven to 8%. And it changed my life because I figured out I can’t hurt this by reading. I like literally the term I would tell my buddies, I said, dude, we’re all walking idiots. Cause we have all this potential that we’re not tapping into. And so that’s when I just, it took, I always loved reading as a kid, but that really took my desire to read to another level.

[00:08:37] Tyron McDaniel: And I always knew, well, you know, I didn’t go to college, but I understood that the world is my university. I just became a seeker of knowledge and just looking for opportunities and looking for ways to increase my understanding and knowledge of this world and how it works. 

[00:08:50] Patrick Donley: Yeah, that’s awesome. I’ve always thought like being a trucker would, it’s kinda like you could have a university on wheels just listening to stuff throughout the day, like you can learn so, so much. 

[00:09:00] Tyron McDaniel: Especially now, like now there’s all these really cool things to that, you know, take technology that we didn’t have back then.

[00:09:07] Patrick Donley: Yeah. It’s incredible. I heard you took your wife, but at the time it, like on your first date, I think it was your first date, you took her to a bookstore, is that right? 

[00:09:16] Tyron McDaniel: Yeah, 23 years later. Right. 

[00:09:19] Patrick Donley: That’s awesome. So it worked out great. First date idea. 

[00:09:23] Tyron McDaniel: Hey man, listen Patrick, when you’re broke, you don’t have a lot of money and you got your eyes set on something, you gotta get creative.

[00:09:29] Tyron McDaniel: And so she was an engineer, all kind of education, tremendous, you know, scenario she had going on for herself. I already had her real estate license and you know, I wanted to take her out. And I was thinking, okay, and at that time, at that stage of my life, you know, I spent a lot of time in the bookstores.

[00:09:45] Tyron McDaniel: You know, back then this was when you had Borders and Barnes and Noble and they had these big huge stores that had couches and lounge areas. And you know, here in Houston on Fridays and Saturdays, they have live bands playing. So like the bookstore was a happening place. And so I’m thinking it’s free. We got all the cool attributes, so let’s go hang out here.

[00:10:05] Tyron McDaniel: So literally that was our first date. We still tell that story to this day to friends and it’s always funny. But yeah, we had our first day at the bookstore and to this day we still go hang out in the bookstore like we did on our first date. 

[00:10:17] Patrick Donley: That’s awesome. I love it. It’s so cool. I wanted to talk a little bit about the trucking.

[00:10:21] Patrick Donley: Did you have some real estate stuff, like some tapes that you ended up listening to or anything at that time that like sparked your curiosity? 

[00:10:29] Tyron McDaniel: No, I didn’t really, I didn’t all back then I was, yes, singularly focused on trucking because it had been something that I’d wanted to do for so long. And so let me step back for a second.

[00:10:39] Tyron McDaniel: And part of my desire to really be fulfilled, what I call that my trucking Jones, was that my father passed when I was in eighth grade. And so there was a part of me enjoying trucking with him while at a later age that I never got to experience. And so it was important for me, like I knew there would be other stuff I do after trucking, but I had to go do this first.

[00:11:00] Tyron McDaniel: I had to go fulfill the part of me that, you know, that I never got to fulfill with him. I never got a chance to drive in the truck, him sitting in the passenger seat and we’re, you know, rolling around the country or whatever. So it was important to me that I do that. But no I, there was nothing real estate related on my radar at that time.

[00:11:18] Patrick Donley: And at that time, that was before like Rich Dad, poor Dad came out, I would imagine. Right? 

[00:11:23] Tyron McDaniel: Listen, I’m 49, so we’re talking about in 93, 94. Like Robert Kiyosaki was still broke at that time. 

[00:11:31] Patrick Donley: He was, yeah, he was. That’s so funny. I’m trying to think back then like who the guy would’ve been. I remember reading.. 

[00:11:38] Tyron McDaniel: Would’ve been Carlton Sheets.

[00:11:41] Patrick Donley: Carlton Sheets. There was another guy, Robert Allen that had some stuff that I remember reading 

[00:11:46] Tyron McDaniel: Well, Robert hadn’t jumped off the porch yet. No, back then it was just cause he remember this was in the nineties, it was Carlton Sheets and his infomercial programs that were on television. And those things probably didn’t really start hitting the airways.

[00:11:59] Tyron McDaniel: Yeah, it was in the nineties. Yeah, in the early nineties or so. 

[00:12:03] Patrick Donley: Do you remember Tommy Vu, the Tommy Vu infomercials? The Vietnamese guy? 

[00:12:08] Tyron McDaniel: Yeah, 100% Now. And Tommy came a little bit later, like Carlton was really the. The person to open up that whole world of infomercials, selling information and real estate.

[00:12:20] Tyron McDaniel: And there’s another, there was a guy named El Lowry. Like this is old school. Old school. 

[00:12:26] Patrick Donley: Tommy Vu is old school. He ended up becoming like a great poker player, like playing at the World Championship Poker series and stuff like.. 

[00:12:33] Tyron McDaniel: Wow. Who knew? 

[00:12:35] Patrick Donley: Yeah. Check out his Wikipedia. He’s he is led an interesting life.

[00:12:40] Patrick Donley: I will, I loved his infomercials. You know, he is surrounded, he’s on a yacht with, you know, ladies in bikinis selling the dream. Right? 

[00:12:47] Tyron McDaniel: You remember the two guys that were dwarfs? No Uhuh. Yeah, there used to be two guys that were, or little people I guess would be the proper now in this, you know, in this politically correct environment we live in now.

[00:12:59] Tyron McDaniel: But yeah, there were two guys that were little people that I remember. I want to say they probably did, I seemed like, I can remember an infomercial they did with Tommy Vu seemed like, I remember Tommy would have his, and then seemed like, I remember a time where there would be more than one person or something.

[00:13:14] Tyron McDaniel: But yeah, those, it’s funny thinking about this stuff, man. It’s crazy. I’m going to have to go and pull up some of that and post about, 

[00:13:21] Patrick Donley: I know, I love pulling up like, old school stuff like that. It’s so funny. It like takes you back to when you were a kid or a teenager or whatever. It’s so, so fun. So after the trucking, did you get into, I know you became like a mortgage broker at a certain point in your career.

[00:13:35] Patrick Donley: Is that what happened after the trucking? 

[00:13:37] Tyron McDaniel: Yeah, so what happened was after driving truck and then, you know, I went from traveling over the country to wanting to work locally now because I’m like, you know, making pretty good money. So now I can’t enjoy the money because I’m traveling the whole time. So I wanted to start working locally and then I started to want to, that’s when I really started to get into personal self-development and starting to read more.

[00:13:56] Tyron McDaniel: And so kind of creating my own quasi university, if you will, and started studying sales and marketing and things of that nature. And I was like, you know what? Now it’s time to start tapping into, I never forgot that average person uses four to 5% of their brain power. Let me start tap, you know, my thing.

[00:14:12] Tyron McDaniel: Hey, let me get to six. I figured out that you know what, the people who really make a lot of money are salespeople. You know, those are the people who can control their incomes. And so I started looking for opportunities to get into sales. And I tr and so at that time I was in, in transportation management.

[00:14:28] Tyron McDaniel: So I was working for a local company running a shift for what they call LTL freight. So when you basically, when you’re buying stuff from Amazon, that’s ltl, less than a truckload. And so I was working for a company as a shift supervisor, and I started looking for opportunities to segue from that into some kind of sales position.

[00:14:45] Tyron McDaniel: And during that timeframe, I met a friend of mine who was already working in the mortgage industry. And he was like, dude, I want to start a mortgage company. And I’m like a mortgage company? What is that? What do they do? And he’s like, well, they provide financing for people who want to buy a house to refinance a house.

[00:15:00] Tyron McDaniel: And in the back of my mind, one day I got an epiphany. I was like, if I understand finance, I could buy, build, or sell anything I want. I’d always had these aspirations of owning real estate. But I hadn’t had an entryway or a door to open to give me, you know, access to it. So when he said that, a light bulb went off in my head.

[00:15:19] Tyron McDaniel: And so I was like, dude, let’s do it, you know? And we were in the, in his efficiency apartment on the floor one day. We’re just trying to map it out and, you know, I came up with a name we called Dustin, let’s call it the mortgage outlet. 

[00:15:31] Patrick Donley: What year would that have been? Like the 90, early 90s?

[00:15:34] Patrick Donley: ’94 5?

[00:15:36] Tyron McDaniel: That point in time. This was probably around ’98, ’99. This was around ’99. 

[00:15:43] Patrick Donley: So the mortgage outlet. And so it was your own baby, right? This was like your first. 

[00:15:48] Tyron McDaniel: Me and my part, it was my, it was basically me and my partner. It was, his concept was the mor, I just came up with a name and we partnered together and got an office and, you know, he already had some connections and so we started the company, but now to get me some experience.

[00:16:03] Tyron McDaniel: So what he was he was an account rep for a company and, you know, so the account rep would go to different mortgage brokers and say, Hey, here’s our suite of loans. If you have a client that fits our borrower profile, you know, we’d love to be able to fund that deal. And so what he did was got me a job working in a office of a guy of one of his mortgage broker buddies so that I could learn and earn at the same time.

[00:16:25] Tyron McDaniel: So we had set up the mortgage outlet, but he was still working his job. So I was working there to, for another mortgage broker to kind of learn the business while we were, we could close a deal then get an office, computers and stuff like that for the mortgage outlet. So we kind of segued into the industry like that.

[00:16:40] Tyron McDaniel: The broker that I initially worked for, and this is again, this is early late nineties, so, you know, I was pretty much answering the phone doing faxes and stuff like that, but that’s what I was doing. 

[00:16:52] Patrick Donley: But Right. The rate sheet would come in right on the 

[00:16:53] Tyron McDaniel: fax sheet. Exactly. Yeah, exactly. There you go.

[00:16:55] Tyron McDaniel: Exactly. The rate sheet comes in, you know, this is the programs we offer and so on and so forth. So, but his niche was subprime lending and so that was the niche we went into. So we said, Hey, okay, great, let’s go here. And so we started putting out bandit signs, you know, this was way before they became popular, but we didn’t have a way to market and we needed to get business.

[00:17:13] Tyron McDaniel: And so we were like, you know, let’s just go pollute, let’s go create all this visual pollution by putting signs on street post, and in different intersections. And that’s how we started the drum of business. 

[00:17:24] Patrick Donley: Was it Delta Mortgage? Was that the big subprime company? Does that name ring a bell? 

[00:17:29] Tyron McDaniel: Well back then Delta, I probably saw Delta, but there were several lenders.

[00:17:34] Tyron McDaniel: There was option on News three loans shortly after Andrew Mozilla created Countrywide. Who were so yeah, let me see. Who else. Yeah, they were first community first credit, what was it? First Community credit. So yeah, that, those are the subprime days. There was a lot. We know how that turned out.

[00:17:51] Tyron McDaniel: Here’s the story I tell, and we may be getting ahead of ourselves, so, you know, sometimes, like right now, a lot of people are looking at our current real estate environment and they’re thinking, comparing it to the global financial crisis. We had no ai. And the story I tell people, I say, listen, you know, it’s one thing to read this, you know, to watch the Big short or one of these movies, or you’re online Googling or one of your teachers is telling you about it.

[00:18:14] Tyron McDaniel: I say, but I was there. I was a lender. I said, I remember when I first started in lending. There was a loan called a No Money Down loan, a hundred percent loan. That meant if you’re buying a house for, let’s just say 200,000, the lender will give you all 200,000. In fact, they would give you 200,000 plus up to 6% in concessions.

[00:18:31] Tyron McDaniel: So we literally had clients that would put a thousand, $2,000 earnest money and not have to bring any money to table to buy their homes. We literally had people that would get cash back at closing cause we wrapped all their closing costs into the loan and now they got back their refund of their earnest money at closing.

[00:18:49] Tyron McDaniel: So they bought a house for 200 grand and you leave closing with a check for 2,500, $3,000, but you needed to, at least when I first started, a six 20 credit score to do that. Ok. Then time keeps going. Now you need a 600. Then they lowered it to five 80, then they lowered it to five 60, then they lowered it to five 40, then they lowered to five 20.

[00:19:09] Tyron McDaniel: I’ll never forget the lender, they’re called Myla, M I L A, mortgage Investment Lenders of America is what name? They ride Minnesota or Oregon, somewhere up on in that corridor of the country. And I remember thinking to myself, Patrick, now I’m still fresh just a couple years into the industry, but I remembered cause me and my wife bought our house with a no money down loan.

[00:19:30] Tyron McDaniel: And I knew it took us having a six 20 for the lender. We went with it. We had to have a six 40 credit score. And because we did dealt with subprime, I was familiar with credit scores and people on the lower end of the spectrum. I saw those credit reports on a daily basis. So when I saw that they were now allowing you to get a no money down loan with 5 65 80, I’m like, dude, if you got a sub 600 credit score, you got some charge offs.

[00:19:54] Tyron McDaniel: You may even have a repossession that’s old or something like that. Who’s money, who’s lending their money to these people with no down payment. And even though I didn’t know what was going on, I knew that. I was like, man, this ain’t going to end right. Something weird is going to happen. And I just didn’t have experience to or point of reference to know.

[00:20:12] Tyron McDaniel: But I remember when I saw that five 20 facts come over from Milo, I was like, this ain’t going to be any good. And so I tell people now, I juxtapose that to today, the average borrower today had 6 8700 credit scores. So it’s never been more difficult than it is today to get a mortgage. So there’s a whole element to how easy it was to get money that we had oh eight and oh nine that we don’t have today that makes this market different.

[00:20:38] Tyron McDaniel: And I know they always say, oh, we this time is different. I fundamentally believe this time is different. Don’t mean we won’t have a crash. Don’t mean there won’t be things that happen to the economy. Cause those are cycles and cycles have to happen. But one thing I say is they never look the same. The things you’re looking for.

[00:20:54] Tyron McDaniel: That happened in ‘08, ‘09. We don’t have that same combination of factors. There’s some other converging things that are going on. 

[00:21:01] Patrick Donley: I had the same experience. I had a really close buddy who was in, who was a mortgage broker, right around the same time you were. And I remember him saying, he said, I can literally, it feels like I can print money for these people.

[00:21:12] Patrick Donley: It’s like, and when he said that, I was like, oh man, this is like not going to end well. I don’t know what year that would’ve been, but.

[00:21:20] Tyron McDaniel: Me and another one of our colleagues on Twitter, we call it, we call them the old fog mirror along, if you could put a mirror here and fog it up, you could get along. You know what I mean?

[00:21:30] Tyron McDaniel: Like literally, if you had a pole, you could get along. There was a long product out there for you. Whereas today, you could have, I mean, we have clients. Because my wife’s a real estate broker, so she runs that whole size. So we have clients that are, have six 80 credit scores, but there’s one little blip from 10 years ago or some god awful amount of time ago.

[00:21:50] Tyron McDaniel: And lenders are, you know, really scrutinizing these different things. So it’s just totally a different market from a perspective of being able to get capital to buy assets. Back then we had a hundred percent down loans for second homes, so you could buy a second home with no down payment. Like, it’s crazy.

[00:22:09] Patrick Donley: Well, it’s like that scene in the big short where I forget the guy’s name. Mark Baum or whoever, the main, the I forget the guy’s name, Steve Carell. His character he goes to the stripper, the strip joint, and she’s like, she’s got like five houses or something like that, you know? 

[00:22:23] Tyron McDaniel: Correct. Plus be taking her clothes off.

[00:22:25] Tyron McDaniel: Right, right. 

[00:22:26] Patrick Donley: I love that movie. Let’s jump into how you got into actual real estate stuff. So you’re doing the mortgage stuff, you’re obviously surrounded, you know, you’re learning the industry, you’re learning the financial side of it. Sounds like that was a bit of your plan to know that first, how did you get into buying homes, fixing them up, buying them, like you say, old raggedy houses.

[00:22:45] Patrick Donley: I love that phrase too. 

[00:22:47] Tyron McDaniel: Again, it was a step, being, becoming a mortgage broker was a stepping stone. It was a serendipitous step. I wanted to understand finance, and so what began to happen by virtue of dealing with, in certain cases, subprime, we would get people that would call us that were in situations where they were behind 3, 4, 5 months and stuff like that, and facing foreclosure or something like that.

[00:23:06] Tyron McDaniel: And so the first house I bought was from, it was a referral from a colleague of mine who was an investor and they was coming around Christmas time and he was just so bombarded with some stuff. He’s like, man, here, call these people. They want a, you know, a loan. If they can’t get a loan they want to sell.

[00:23:22] Tyron McDaniel: Long story short, it was a family, it was an older couple that they had just really, they weren’t in a financial bind as much as they had just gotten tired of being homeowners. You know, they’re up in age and they just wanted to get basically a, what I call a hassle-free lifestyle. And so they were like, Hey, listen, refinancing will be cool, but we still would have a mortgage.

[00:23:41] Tyron McDaniel: We don’t want that. We just want to be done with all this. And so I was like, man, I’ll buy this house from you. Let me buy it from you and I’ll give you some capital so that you can move on. And so I bought a house. We put $9,000 in it. We paid one hour painters to this day, I la we paid him $6,000 to paint this house, which was a lot.

[00:24:00] Tyron McDaniel: He was the expensive painter. So we went and put him in this house. Today I get that same job done for 2,500 bucks. But anyway, paint the house for $6,000 and then I did thousand dollars in landscape and $2,000 and something else. But we spent nine grand. And we turned around and listed the house and sold it, and I think we made about 22, 20 4,000.

[00:24:20] Tyron McDaniel: 22,000 I think net. That feels good. Yeah. I looked at my life and had my wife like, wait a minute. As I was a broker, we would do buy a house or two here. There I bought a duplex of 42,000 and I learned a valuable landlord lesson that I’ll get into in a second year if that comes up. So we started buying a house or two here or there, you know.

[00:24:41] Patrick Donley: And this was before The 2008 crisis, right? Like 2005 or so? 

[00:24:46] Tyron McDaniel: Exactly, yeah. This is ’03, ’04, ’05, ’06 and stuff like that. So we’re buying a house or two here or there. You know, we keep one, we’d sell one. 

[00:24:56] Patrick Donley: At this point, this was a side hustle, right? You were doing this on the side, you still 

[00:25:00] Tyron McDaniel: Yeah, the transition out of lending was one day, you know, I’m talking to someone like yourself, you want a six and a half percent interest rate?

[00:25:07] Tyron McDaniel: And I’m like, man, Patrick, listen to best so we can get right now, six and three quarters. And I looked up, I guess a, and I’m like, dude, I didn’t get into the game to be heckling over a quarter or eighth of a basis. Points on a rate. This is only a stepping stone. And so it was like, that was that moment where I said, you know what?

[00:25:23] Tyron McDaniel: Let me go ahead and transition into the next phase of this. And so, so I told my wife, Hey, listen, we’re going to start doing more investing. And so that’s what we did. I went out and bought a old ragley house over in a part of Houston. We call Sunnyside and I’ll ne 51 46 Higgins is the address and the reason why I remember, because that house gave me pure hell, everything from there was a homeless guy that was stealing the aluminum siding off the house.

[00:25:49] Tyron McDaniel: So I come and we had this amount of siding. I come back two days later, one and half of my whole wall is gone. I see him parked down the street, taken by the side, go sell it. We were doing the roof. I didn’t know that there was a fire that had happened in the house. So we uncover all this fire damage.

[00:26:06] Tyron McDaniel: My contractor was taking advantage of me. It just, every mistake that could possibly happen happened on that house. And the nail and the coffin on that deal was, I knew it had termites, right? Because we saw a little dirt. So I’m thinking, okay, we got a couple of boards are going to replace around this window.

[00:26:20] Tyron McDaniel: And we pulled the sheet rock back and I see this two by four stud. And I literally I grabbed the stud some made me grab the stud. Let me find a piece of paper here. As it gave you a visual. 

[00:26:31] Patrick Donley: I can imagine it just went like, poof. Yeah. 

[00:26:34] Tyron McDaniel: Here’s, so I, there’s this stud, right? And I grab it, and Patrick, literally, this paper is giving me more resistance than the stud.

[00:26:41] Tyron McDaniel: The termites had eaten up the entire interior of this two by four. And the only thing left was the shell. And come to find out, the whole front wall of the house had just been decimated by termites. And I said, dude, I could actually build a house with less headache and hassle than this piece of crap.

[00:26:58] Tyron McDaniel: Like, this is crazy. And so that house made me start to look at wanting to do new construction because I was like, new construction is easier. Then I went out and found a new construction project where there were 12 houses to be built on a lot. They had already built it they had already built the streets and subdivided.

[00:27:14] Tyron McDaniel: All you had to do was basically get your plans approved and then go out and build the houses. At that stage, I still was a mortgage broker. We had a real estate team and I started to now say, okay, let me set up a home building company and start to go in the direction of home building because I’d done investing, had some rentals, had flipped some houses.

[00:27:32] Tyron McDaniel: The next iteration was becoming a builder. 

[00:27:35] Patrick Donley: So how did that end up? You bought 12 lot, you bought 12 lots. Is that what you said? 

[00:27:39] Tyron McDaniel: Yeah. Well, so one of the advantages of becoming a lender was it taught me a concept about, I call deal structure, understanding how to structure a deal, how to finance, and so on and so forth.

[00:27:50] Tyron McDaniel: So I put $5,000 earnest down. It was $750,000 to purchase. It was 14 lots. Yeah, it was 14 lots. And so the way I negotiated the contract was I had a take down schedule. So I take down these lots at these different timelines and so I took down, the first one, got started, took down the second one, and that’s as far as I got.

[00:28:08] Tyron McDaniel: I got two houses constructed and ultimately had to sell off the other remaining lots and cut my losses on that project. And I, my valuable lesson in that particular scenario was at that stage of the game, what I’ve ultimately figured out about myself is I love design, I love the minor nuances, you know, designing the cabinets, what kind of crown molding and tram is going to go here.

[00:28:30] Tyron McDaniel: You know, all the little minutia stuff that you have to do as a builder. But see, that wasn’t a builder project. That was a developer. I needed to be in a developer mindset. So having conversations with capital partners, having conversations about what I hire R is going to be, and making sure that the builder project manager was taken care of all at minutia, I needed to be focused on the big picture.

[00:28:53] Tyron McDaniel: So the lesson I learned there is the desk the differentiation in the roles. There’s a builder, there’s a developer, there’s even a project manager. A lot of times, or at that stage of the game, I got the, I got all of those confused because I just didn’t know what I didn’t know. That was one of many lessons I learned.

[00:29:09] Tyron McDaniel: Then I also learned the power of partnership because I did that whole undertaking by myself. However, the guys I bought it from, one of the guys that was a partner in that project, that hook who sold me the land, was worth 23 million. Here I am by myself. I definitely wouldn’t work 23 million. But the point is, if this guy’s worth 23 million and he has three other partners, what makes me think I can play in that same arena by myself as he man.

[00:29:32] Tyron McDaniel: So I learned the value of partnership, I learned the value of understanding what my strengths are, becoming self-aware. I wanted to be on site with the guys on the daily braces, bring back, bring them tacos, and I wanted to be there to see the magic happen. 

[00:29:48] Patrick Donley: Did you take a hit financially then on that, or was it more just like you, you got in a little over your head and you were able to get away from the project without too much damage?

[00:29:57] Tyron McDaniel: No, definitely took a financial hit. Definitely took a financial hit, lost a lot of money and time because one of the concepts is you gotta fail fast if you’re going to fail fast. And so, you know, I prolonged it. I should have sought out partners earlier on. I should have did several things that would allow me to be able to recover from that quicker, but I didn’t.

[00:30:17] Tyron McDaniel: So it took a while to get through that and really it hurt my emotions, you know, it hurt my ego had to go back and kind of reevaluate. So when you, what I always tell people is when you get it wrong, You actually go back and start second guessing yourself. And that’s really when you get introspective and it causes you to be a little bit more humble.

[00:30:37] Tyron McDaniel: And then you start to recognize your mistakes. When you get it right, you know, you think I’m the smartest guy in the world, then everything is going to go the way that went. So what began to happen is after that, dusting myself off. And then in the process of doing that, here’s the other thing that was transpiring is I had my mortgage business that now began to suffer and our real estate team, because I was so focused on the building side.

[00:30:58] Tyron McDaniel: So it really put me in a compromising position and like I said, had to spend some time regroup and come back and get ready to go at it again. 

[00:31:06] Patrick Donley: So did you regroup after 2008? Like at what stage of the game did you start getting kind of get back into feeling good about what you were doing and on more firm fou, you know, a foundation that’s firm?

[00:31:19] Patrick Donley: When did that happen? 

[00:31:21] Tyron McDaniel: After that project had to do some more loans and keep the lights on, if you will. But you know, I knew that, you know, hey, I’ll get this right, you know, that one didn’t turn out right, but I just gotta dust myself off and keep going. And so then I’d done, you know, the new construction I’d done old houses and so I figured, well, let me go back and start buying some old houses again.

[00:31:41] Tyron McDaniel: And so, you know, I bought an old house, we renovated, fixed it up and sold it. And at that stage, when I did that particular house, I was able, because I didn’t have all these projects going on, so I could just focus on this one house and really give it the attention it needed. And it became amazing little house and just had some really cool features.

[00:32:00] Tyron McDaniel: And that house was the house that really opened the can of worms from a design perspective for me to help me figure out, you know, you’re really gifted in this space. If you dedicate the time and attention to doing what you’re good at, figure out what your genius is and zoning in on that. And so that house is when I started to develop a formula.

[00:32:19] Tyron McDaniel: For how we like to buy. It helped me develop what my buy box is. It helped me figure out where I wanted to play, what kind of communities I wanted to start to impact, and so I started to formulate this vision of something that I had when I was a kid. One thing we didn’t talk about early on in my life, I remember there was a period when my mom was trying to buy a house and it was very difficult for her.

[00:32:38] Tyron McDaniel: We had some land, she wanted to build a house, and so ultimately ended up buying a house in fifth Ward. But long story short, I remembered looking at some of the houses was like, man, if I were selling this house, I would’ve done this, or I would’ve done this, and there’s these different little design things I would’ve done just to make it nicer.

[00:32:54] Tyron McDaniel: You know, it’s one thing to be affordable, but it doesn’t have to look like it’s affordable housing. So that’s when I started to develop this design sentiment. And so from there I started to say, okay, let me go find another house. That’s old house that has this character, you know, old craftsman houses. Let me go find another one of those.

[00:33:11] Tyron McDaniel: And I did another one. And I started to get good at taking really old houses, keeping the things, some of the old aesthetics about them that made them houses that people love, but also bringing them up to date so that the people who want, you know, the creature conference that we offer now with the modern amenities and things of that nature.

[00:33:28] Tyron McDaniel: So it’s more, so it’s like a design fusion, if you will. 

[00:33:32] Patrick Donley: What were you paying for these homes back when at this stage? 

[00:33:35] Tyron McDaniel: We paid so like, when I first started buying, we were buying from say, 40 to 60, and we were putting somewhere between 40 to 60 in these houses and we were selling them, you know, anywhere from 140 to about 180 or so.

[00:33:50] Tyron McDaniel: Because one of my things is I wanted to redevelop communities like the, my neighborhood I grew up in which Fifth Ward, third Ward, second Ward Center side, and communities like that. The hood, if you will. I wanted to make the hood nicer. And then I came up with what became the mission statement for my company, Houston Bennett Homes was reshaping the face of inner city Houston, one home at a time.

[00:34:11] Patrick Donley: Yeah, I love that. I’ve done something similar just buying old raggedy houses. because it’s like, I mean, you can go wrong, but you can’t go too wrong. You know? It’s a great way to get started and just to learn, you know, for anybody that’s getting started, buy an old raggedy house and maybe it’ll work out, maybe it won’t, but you’ll learn a ton is kind of my feeling.

[00:34:29] Tyron McDaniel: I’ve heard it termed as baptism by fire, right? That’s true. It’s true. But what I tell people that, you know, I talk to people all the time now and it’s, oh hey listen, I want to become a developer. I want to get started building. I said, okay, great. Go buy the rag this house you can and renovate it. And to your point, you’re going to learn so much.

[00:34:46] Tyron McDaniel: See, doing an old house is way more, is more difficult than building a new house. But see, here’s the thing. But if you go build a house first, you’re going to think that’s the most hardest thing you’ve ever done. Versus if you do that old house first, building new is going to be easy because you got a point of reference.

[00:35:04] Tyron McDaniel: You got something to compare it to. Then there’s certain things you’re going to do different from a management perspective, how you handle your trades. And then one thing I love about old houses or by having an existing home versus new construction is very difficult to pivot when you’re doing new construction.

[00:35:20] Tyron McDaniel: Having lived through the global financial crisis, I saw so many builders go out of business. Because you got a new development, you got all this money sunk in the ground, you can’t pivot. This was before build to rent, so you can’t pivot. Whereas if you have a house and it’s existing, like right now we have a house where our budget was $90,000.

[00:35:36] Tyron McDaniel: We saw the market start to shift a little bit. So we said, okay, rather just spend all 90 on this house. We’re only going to do about 60, which means we got an extra $30,000 while we refinance out. And since we’re not selling it at this dollar amount, we’ll sell it at lower amount or we’ll just refinance, keep it as a rental and wait till the market to transition.

[00:35:54] Tyron McDaniel: So when you have an existing structure versus a going from the ground up, new construction, it gives you a little bit of opportunity to pivot if you need to. But I think it’s a great way to start. Now here’s the thing. As you’re going through that process, you’re going to hate it. You’re going to get frustrated.

[00:36:08] Tyron McDaniel: You’re going to get ticked off with all the stuff that’s going to happen, but it’s literally giving you a bachelor’s degree in real estate investing, construction management, budgeting, and things of that nature. And so there’s so much that you’ll learn from doing that initial old house. And then if you hate it, never do it again.

[00:36:24] Tyron McDaniel: You have that experience. If you love it and you’re reared like me, you’re pain freak. You’re crazy like you. You’ll do it again. 

[00:36:31] Patrick Donley: I wanted to hear what your strategy a little bit, once these are fixed up, are you holding them in a portfolio? Are you selling them off? Is it a mix of both? Talk to me about how you think about that.

[00:36:42] Tyron McDaniel: So part of our mission in reshaping these communities is helping people from these communities who’ve now left like, so when I was in Fifth Ward, my first poll of thing was, we gotta get out of here right? Then. Now Fifth Ward is the hottest area in city of Houston right now. So my mission is we have to sell S one to create liquidation events.

[00:37:00] Tyron McDaniel: The other reason why we gotta sell is cause we want to help more people get into these areas, people that are from these areas, and then in reality of the matter, they’re branded city that’s growing. So everyone in these areas aren’t going to be from the community. So there are other people that deserve living in a nice neighborhood as well.

[00:37:13] Tyron McDaniel: So we want to be able to service them a product. We keep some, we sell some. And what dictates whether we keep it or sell it at this stage of the game is what? How do, where’s that deal placed? Where are we at in the market? What’s going on around us that will dictate if we’re going to sell it or not. Our buy box, what dictates what we buy is this.

[00:37:32] Tyron McDaniel: So my buy, my strategy is simple. I’ll buy any house in any condition if you sell it to me for land value. Cause my premise is now I have a structure, I’ve gotten that structure for free. Now here’s a little bit more thought into that. And now a lot of houses up buy, people say, that’s a tear down. Why would you buy that house?

[00:37:48] Tyron McDaniel: I said, well, here’s the thing. If I tear it down and then now I gotta get plans designed, engineered, permitted and approved, that’s anywhere from four to six months. In a city like Houston. On the low side, that same house that you think is a tear down in four months, it’s a brand new house. We’ve renovated, ran through it front backwards, and now it’s ready to be sold or rented out.

[00:38:09] Tyron McDaniel: If you’re, if I tore it down, I haven’t even started construction yet. I don’t even have a permit yet. Not only is it faster in certain respects, it’s also, it can also be financially more advantageous because if I’m buying a vacant lot and I’m building, or if I tear it down and I build, I, I’m pretty much gotta pay cash for it.

[00:38:27] Tyron McDaniel: Cause the lender’s not going to give me the money to tear down, then wait six months for me to start building it for another four to six months. So I’m have to pay cash with that, which, that’s more capital intensive if I’m going to renovate it. It’s easy to get hard money or private capital or whatever to buy, renovate it and service it to the market.

[00:38:45] Patrick Donley: Yeah, and at minimum you probably have the foundation, you probably have, you might have to do a little framing, you know, like it sounded like one of the projects you had a fire, you might have to do a little reframing, but it definitely expedites things and you’re buying it at a great price. So it sounded like you got in early to these areas when nobody else really wanted to be there.

[00:39:03] Patrick Donley: They weren’t maybe a handful of people, but are you seeing more and more people as the Fifth Ward becomes the place to be? What’s it like now? What’s the market like now? Is it harder to buy homes and. 

[00:39:15] Tyron McDaniel: Yeah, so I put these, like this, now they call Fifth Ward, east River. So, you know when the phraseology changes, that’s a marketing thing.

[00:39:22] Tyron McDaniel: And so you can already understand what’s happening. You know, now if you were to ride, if you know, if you came to Houston, we rode around, you’ll see people walking their dog and stuff like that. When I was growing up, it was the bloody nickel. The bloody nickel for a reason. I tend to be a trailblazer. I tell people I want to be a reason, I want to be a part of the reason why in the future people feel comfortable in these areas.

[00:39:41] Tyron McDaniel: When I first bought my, but the first lot I bought in fifth Ward was $7,000. Fast forward to today, I have a lot that I’m selling in that area and we’re going to sell it for 150,000. Just a lot. Yeah. Saying when I bought that lot, I bought that lot pre gfc, I think I bought that lot in around 2007, 2006, 2006, 2007.

[00:40:05] Tyron McDaniel: I paid seven grand. Today they’re 150,000. So no. Fifth Ward and all of the inner city Houston has just taken off because back in the mid nineties, Houston started growing at 10, 15% a year annually. And no. And so our inner city corridor took off, but also our perimeter, our slippers took off as well. And so these close end areas though, have really thrived.

[00:40:27] Tyron McDaniel: And my biggest regret, as most investors have is I didn’t buy more, didn’t buy more when I had the opportunity to. 

[00:40:34] Patrick Donley: Yeah, I’ve got the same feeling. I was in a similar area that is now since gentrified, but 10 years ago, nobody wanted to be in this area in my part of Columbus. And now it’s the cool place to be.

[00:40:44] Patrick Donley: And there’s whatever art galleries and breweries and restaurants and it’s totally changed. And so I interviewed a guy. I wanted to hear your thoughts on this. When people maybe critique you for gentrification, so you know that those neighborhoods change, it forces out people that have lived there. They say you’re a gentrifier.

[00:41:04] Patrick Donley: I interviewed a guy who, I don’t know if you’ve heard of John Marsh, is his name. Chris Powers interviewed him. He lives in a town called Opa Leica, Alabama. And I highly recommend you check this guy out because you would love him. He basically rebuilt his like depressed old town in Alabama and I think he’s done like 300 buildings.

[00:41:24] Patrick Donley: He’s helped start 60 businesses in the town, like be a part of that. But he calls it, you know, when he started it was a depressed area that nobody wanted to be in. And you know, now people come from hours away to check this town out. And so he calls it deification. He says, I didn’t gentrify this place, I deified it.

[00:41:43] Patrick Donley: And I love that. I love that phrase. How do you, I, how do you respond to people that are like, ah, you’re just a gentrifier. 

[00:41:51] Tyron McDaniel: Well, my first question is how much land do you own in the area where you’re from? You know what I mean? My thing is everybody has an opinion and who am I to say it’s valid or invalid?

[00:42:01] Tyron McDaniel: It’s okay to own an opinion, but I want you to own something else. See, I don’t have to tell you my opinion because you can drive to the communities where I’m from and see my opinion in the real world. So I’m less interested in hearing your opinion. I’m more interested in seeing it. Point number one. Point number two, the na.

[00:42:17] Tyron McDaniel: Remember I said this was the bloody nickel. Where were you at when I, when the lenders wouldn’t land to me in Fifth Ward and I had to figure out how to buy the property. Where were you calling it then? And then there’s an education. There’s two things. There’s an educational component that’s lacking as it comes, as it relates to this topic.

[00:42:34] Tyron McDaniel: And gentrification as a word, has a bad pr. They need a better PR team. Most people really want gentrification. They really do. Cause like, you know, I’m buying houses that have been vacant for 10, 15, 20 years that are derelict properties. Most people want more money for the schools. They want cops, they want sidewalks, they want lights on the street.

[00:42:55] Tyron McDaniel: Well, in my neighborhood, which is Fifth Ward, it had the highest concentration of tax delinquent locks in all of Houston. So when we’re seeing bad crime and things of that nature, what we’re not connecting that is there’s no tax base. Cause most of the BA land is vacant or dele. So how can you have all these services that you’re mad aren’t being provided when the city can’t provide them?

[00:43:14] Tyron McDaniel: Cause the funds aren’t there. So you really want gentrification. What you’re mad about and what you don’t want is displacement. Most people conflate or confuse the two. Gentrification and displacement are two totally separate things. Displacement is creating an environment where the people from those areas or you push those people out of those areas.

[00:43:33] Tyron McDaniel: We are bringing people from those areas back into those areas. Or people like me who one day I recognize that when I was growing up, the guys that were on the block that I looked up to were drug dealers. And I recognize that I, as much as I love my neighborhood, my community, I can’t raise my son here because I don’t want him having to endure the same things I did.

[00:43:53] Tyron McDaniel: So that became a part of my reasoning for wanting to change the area. So it’s important for us to understand what we’re really talking about, what we’re calling gentrification. Gentrification has a negative connotation. What you’re really mad about is displacement. And the bigger issue of displacement and gentrification is affordable housing.

[00:44:10] Tyron McDaniel: America’s short six to 8 million houses, depending on whose math you want to subscribe to. That’s the bigger issue, is that we don’t have enough affordable housing. If we have more affordable housing, then displacement wouldn’t be an issue and people wouldn’t be upset that the neighborhood’s looking nicer.

[00:44:25] Tyron McDaniel: But because we don’t have enough affordable housing, any progress you see in an area, you automatically have a negative connotation. And you call it gentrification. You call people like us that make neighborhoods better, gentrifiers. But if you really understood the reason why your sidewalks are jacked up, the streets are torn up and things of that nature, then you would see it a little bit differently.

[00:44:45] Tyron McDaniel: So to me, I love having these conversations because, you know, I ask people, well, you know, when these areas were de land, I have a property that we per did not long ago where the property had been vacant over 15 years. Let’s think about this. If you’re the city, they’re probably getting $500 a year in taxes on that house.

[00:45:03] Tyron McDaniel: Boom, fast forward, we fixed up and make it nice. Now they’re getting $2,000 a year from that one property. Now let’s extrapolate that and do that over 10, 15, 20, 30 house in a concentrated area. You’ve now just changed what that area looks like from a civic perspective, which means now you have school, you have money to enhance the schools, get a park built, and things of that nature.

[00:45:24] Tyron McDaniel: It’s a multi-pronged conversation with several different layers to it’s an onion. There are all these different layers, and we gotta peel them back and deal with each one. 

[00:45:33] Patrick Donley: Yeah, and I mean the thing is you’re taking something that’s just like a blight on the neighborhood and if you’re fixing a house up, that alone is like making a huge difference to the people that, that are around that house psychologically, spiritually, like everything.

[00:45:46] Patrick Donley: This John Marsh guy had an interesting saying that he, talking about his town, he said he didn’t feel like he’d be a success until the person that’s lowest on the socioeconomic ladder is like enjoying the kind of life that the person at the top is. You know that there’s like some equity and that the guy at the bottom is like enjoying his town and is having a great time living there.

[00:46:07] Tyron McDaniel: Most certainly, you know, patch, one thing I tell people is like, y’all post a picture of a house or something like that online and you know, people say, Hey, it’s great and this, that and the other, and I appreciate that. What I always tell people what’s most impactful to me, Isn’t those great comments from people who are distant and just see it from afar?

[00:46:23] Tyron McDaniel: It’s when the guy walks up to me and say, man, let me tell you who used to live here. Man. Thank you for doing what you’re doing at this house. Let me tell, you know, I remember there used to be people in here doing drugs, and there was this happening. And that happens over and over again.

[00:46:35] Tyron McDaniel: We have a project right now where when the neighbors saw what we were doing to the two houses next to him, the son called me one, or he left the number, his number with one of my guys, I called him, he said, Hey, listen, when we saw what you were doing to that house, we wanted you to have our house. Our mom is, we’re fixing to move her into a facility.

[00:46:53] Tyron McDaniel: We would want you to have our house. And they only did that because they saw how nice we made the house look to them. And so again, going back to the people who generally have. And this isn’t everyone, but my thing is the people that are in the community, what do they say? And the people in the communities where we operate and how we operate, they bring us other houses.

[00:47:12] Tyron McDaniel: I can show you example at the example of, we go and renovate this one house, then somebody down the street says, Hey, listen, won’t you come by this house? 

[00:47:21] Patrick Donley: Yeah. I’ve had the same experience and it is a great feeling. I do want to get into like the affordability issue. What do you feel like are some concrete steps that could be taken to Sol?

[00:47:30] Patrick Donley: You know, I don’t know if it’s going to solvable, but start moving in the direction of fixing it. 

[00:47:35] Tyron McDaniel: So the first thing, and this is what I always tell so I’m a fortunate enough to be in Houston. We have a community called Livable Places, and they’re the people who are responsible for creating our development guidelines and things of that nature here in the city.

[00:47:45] Tyron McDaniel: And so by virtue of that, I end up talking to a lot of people who are in politics and things of that nature. I wanted tell, say they asked me that same question. I said, well, the first thing you can do is get, for affordable housing, we should be able to get a house permitted in 30, maybe 60 days max. If we could cut down the time it takes for me to have a set of plans like this to have them permitted and approved, if we can cut that time down, that’s going to help guys like me who provide this housing because for me to go buy a lot and then have my capital tied up in this lot, four or five, six months going through permitting, I mean, all I’m doing is having to off forward those costs over to the buyer, which increases the price.

[00:48:23] Tyron McDaniel: So the first thing is allow us to get houses permitted and approved quicker is the first thing. There are obviously different. Tax incentives that, that they can offer down payment assistance for the buyers subsidized financing where you can get maybe lower rates for first time home buyers and people who are buying and, you know, at certain price points with certain income levels and things of that nature.

[00:48:46] Tyron McDaniel: So there’s many different things that we can do. There’s no shortage of land bank programs and things of that nature that are already around. But to me, I think one of the hinge that swings this really big door is if we could get plans approved quicker, like it would change. And I, and this why I always tell city officials, not even just for affordable, but for all of your housing, like that’s the biggest bottleneck is, Hey, I want to build x.

[00:49:09] Tyron McDaniel: Well, the amount of time that it takes for us to go from here’s what can be built there to actually having a permit to build is so long, so cost prohibitive that it forces the cost of housing to go up because we as developers, have to take all these risks where you buy land. I have a scenario right now where one of my mentees bought some land and unfortunately, because the city didn’t do in Houston our drainage guidelines have changed cause of flooding and rightfully so, but because basically the city doesn’t have a water connection to this property, which is on city, you know, it’s on city water.

[00:49:44] Tyron McDaniel: They have to spend what would take about 170 to $180,000 just so that they could have city water and drain. And I’m like, that piece of land will never get built and developed. And from the city, like the city like you guys, that’s a part of your responsibility as a city to provide these things. And so, there’s different levels, but I think helping us be able to get properties permitted quicker is going to be something that would really open a door to a lot more affordable housing being provided in the marketplace.

[00:50:13] Patrick Donley: Yeah, it’s a good point. I experienced the same thing here and it’s super frustrating. I wanted to get your thoughts on, are you still sticking with old raggedy houses or are you doing more ground up. 

[00:50:24] Tyron McDaniel: Right now as the business evolves? You know, you start getting older. I have a son who’s a junior in high school right now and things of that nature.

[00:50:31] Tyron McDaniel: I love that there’s a part of me that operates in a comfort zone, and so that’s me buying old ragley houses and we do build as well, so we do new construction builds, plexes and single family, stuff like that. And so I always keep a mix. But over the last year or so, I’ve started to wean off of my buying as many old ragley houses as much, you know, we’ve been buying some apartment complexes and some bigger projects.

[00:50:54] Tyron McDaniel: I also have a design firm, so we do a lot of design work of different areas for other people. And so I’ve kind of been growing that. I really want to grow that to be a little bit bigger. It’ll it affords me the opportunity. Early on, you asked, or before we got on got live, you asked about doing work like in Cleveland, other markets.

[00:51:10] Tyron McDaniel: So my design firm allows me an opportunity to impact other markets without it having to be my project or dollars. So that’s what I love. I’ve been ramping that up, but going back to asset classes and so we started to looking at little bit bigger projects. Right now we have a pretty extensive pipeline of new construction development projects that are coming down that, you know, we have a, a courtyard development project that we’re working on.

[00:51:31] Tyron McDaniel: That’s going to be really cool. Cause there hadn’t been any courtyard developments in Houston in. Since like the sixties or seventies. We have some, just some really cool patio home projects that we’re developing right now. And so we do new construction. I just love old raggly houses, so I talk about it more.

[00:51:46] Tyron McDaniel: I don’t really talk about new construction cause it’s just not as exciting to me cause the part of me that is not very patient, you know, see when you’re doing new construction you gotta do a whole bunch of planning work so that you can then do a whole bunch of permitting work so that you can then get ready to actually do the work of building it.

[00:52:03] Tyron McDaniel: So you gotta work 3, 4, 5 times before you actually get to an end result. Whereas if I find a house today, we closed it three weeks, the day I close, we actually got activity and stuff going on. So that’s why I like all houses because I can get to activity faster. And then the other thing is for us, I like to have a mix.

[00:52:22] Tyron McDaniel: I don’t always want to only have all houses going. I don’t always want to have all new bills going. Because for me, in my, how I like to operate, I think you need a comfortable mix if you want to be able to coexist. And last through these ebbs and flows of the market. 

[00:52:35] Patrick Donley: We talked about Donovan, Adesoro, who’s doing duplexes and I think he’s moving on to like some bigger projects.

[00:52:42] Patrick Donley: How are you seeing like things in Houston, like with rates going up home, prices going up, just like where we are in the market cycle. I wanted to hear your thoughts on that. How you’re, what strategically, how you’re thinking about it. 

[00:52:54] Tyron McDaniel: Which goes back to, so to me, I think you have to have a evergreen business strategy.

[00:52:58] Tyron McDaniel: And so what I mean by that is you’ll always have minor pivots and adjustments you’ll make within your business model. But ultimately, fundamentally, I don’t want to have to change whole wholeheartedly everything we do. And so that’s why we keep a certain amount of these type of, that’s why we keep a certain amount of old houses, if you will, a certain amount of new bills.

[00:53:16] Tyron McDaniel: The market as a whole in general, and Houston, like Houston is a very thriving market, is continuing to grow, you know, between Houston, Dallas, San Antonio, and Austin. They project, you know, somewhere between 2020 5% of all Americans who live there over the next zero to 10 years. So we by default are very blessed to be in this market.

[00:53:35] Tyron McDaniel: I think Houston’s one of the best markets in the country, and the biggest thing is we’re kinda losing our affordability reputation because, you know, we’re still relatively affordable compared to the other major metropolitan cities. But for those of us that been here, We’ve watched, you know, there’s, in 2015 in some of the same areas Donovan and I both work in, and I can recall you can buy three bedroom, two bath, a brand new home, 1500 square feet for 159,000 in 2015.

[00:54:04] Tyron McDaniel: Today that house, exact same house is now 330, 300 $40,000. You know, those of us that have a long member, we remember when it was 159,000. Well, we’re never going back there. And so Houston’s growing. It’s thriving. It’s a wonderful market, it’s very dynamic and there’s so much that you could do. Like there’s so many niches here that you could, you know, build a tremendous business in.

[00:54:25] Tyron McDaniel: So it’s a great market and yeah, it’s just going to continue to go up. 

[00:54:30] Patrick Donley: Yeah, I wanted to hear your, take. You, I saw a tweet that you put out within the past week or so. I was talking about what asset class would you choose to have, like passive income, like truly passive income. Do you know what I’m talking about, the tweet you sent out and it got a ton of responses.

[00:54:44] Patrick Donley: I wanted to hear your thoughts on it, like what some of the thoughts that people shared that you liked. 

[00:54:50] Tyron McDaniel: I mean, man, it was some, it was so many great ideas there and one, so there’s one of the things I wanted to do and Houston’s a big metro transportation hub and obviously I have a transportation background.

[00:54:59] Tyron McDaniel: One things I’ve always wanted to own, and even more so now as I get older is like basically truck storage, parking lots. So, you know, guys who drive a 18 wheeler, you know, they want to be able to park their truck somewhere close to where they live. And that, and so I had several people that mentioned parking lots.

[00:55:16] Tyron McDaniel: And so that’s a niche that kinda, cause once you put your asphalt out, you got a mechanic shop, a little restaurant there, light, you know, the mechanic shop’s ran by a mechanic, the restaurant, some guy with a taco truck or lady with a taco truck and that’s it. And so it’s not anything to manage, I mean it’s just dirt.

[00:55:33] Tyron McDaniel: I mean, you’re just collecting rent. So that’s one of the really passive ideas that’s been juggling around in my mind. I’ve been watching some guys do that here locally. But there were several asset classes, you know, everything from a single tenant, net leases TNLs of people talked about those triple net opportunities.

[00:55:48] Tyron McDaniel: And then there were the people that said, there’s no such thing as passive. I said, okay, great. I got you. The tweets, it as close to passive, right? Y’all know you’re going to have to do something, but there are asset classes and there are different structures that allow you to be more passive than others.

[00:56:03] Tyron McDaniel: Another one is lending. You know, we’ve done some lending before and we’ll probably do a little bit more here in the future, but being able to land to quality operators who you understand their business, they don’t take too much risk and, you know, they’re able to get in and out of projects is a fairly profitable and quasi passives opportunity.

[00:56:21] Tyron McDaniel: And yeah. And so those are some of the opportunities that were highlighted. And yeah, it was a great tweet though. It was very informational and I like to sometimes tweet stuff or put information out there that will cause smart people to think and share their ideas. And that was the really goal that I wanted to have there.

[00:56:37] Tyron McDaniel: And I had so many people reach out to me and say, Hey, thank you for tweet net. I got so many great ideas and that was really what I wanted to do there. 

[00:56:45] Patrick Donley: Well, you’ve got a ton of followers. I’m not sure how many now, like 20 or 30,000 at least, I think. What’s your take on Twitter? How’s it affected your business, your personal life?

[00:56:54] Tyron McDaniel: Twitter I jokingly, I tell people, I say Twitter’s like revenge of the nerds. Like all the nerds get to hang out and vibe and be cool on Twitter. Twitter’s been amazing, man, from connecting with people like yourself from various parts of the country, and to me it’s like a entrepreneur college is what I call it.

[00:57:10] Tyron McDaniel: It’s like entrepreneur. It’s like entrepreneur college slash country club slash business fraternity slash the high net worth social media platform amalgamation, if you will like it. It’s just a lot of different things all in the one. Now, obviously you can go into these little silos of politics and all this other stuff and you know, you can curate your feed however you want, but for me, Twitter’s just been a great place to network with some of the greatest minds in the world.

[00:57:41] Tyron McDaniel: And freely, like people are so freely given. Like I tell, like there’s a, you know, it’s literally a million dollars worth of information on your timeline on any given day. And if you just read a tweet or two or three or four or five and then go offline and take action, right on some of that. So go study it deeper, get some more information.

[00:57:59] Tyron McDaniel: Like it’s amazing what you can learn there. And so Twitter’s been very instrumental. I always tell people, Hey man, you should get on Twitter. And they’re like, what? Twitter? Trust me. You have no idea. And some don’t. But hey, listen, I’m glad I’m glad I’m there and active and engaged in the market.

[00:58:14] Patrick Donley: They’re missing out if they’re not on, they really are. 

[00:58:18] Tyron McDaniel: 100%. And I mean, I think, and it’s continuing to grow. Like I remember when Retwit wasn’t really a thing. Now it’s a big thing, you know, it’s getting written about and so on and so forth. And yeah, it’s a really cool place to network and meet really cool people to learn, grow, and then create value for others.

[00:58:35] Patrick Donley: You had mentioned some mentees. I wanted to talk about that a little bit. What are some of the things, aside from getting on real estate Twitter, that you tell some of the younger people that are coming to you asking for advice? 

[00:58:45] Tyron McDaniel: What are some of the things I tell them, one get started a lot of times. So what happens?

[00:58:50] Tyron McDaniel: A lot of times you’ll come on a place like Twitter and you get all these different ideas and stuff like that. So you know, you gotta be self, like there’s guys out there that do big industrial stuff like that. Hey, there’s plenty of money there. It’s cool, it’s awesome, exciting, but you gotta be self-aware.

[00:59:04] Tyron McDaniel: It doesn’t really interest me. You know what I mean? So I’m more, you know, so I find the things that interest me. Now I can learn from them, right? But that’s not what interests me. So I always tell people one, what do you want to accomplish? Be self-aware. Real estate’s a dynamic industry. So you see me, I’m over here doing these rag houses.

[00:59:21] Tyron McDaniel: It looks fun, cute, sexy, but you may hate that. You may not even, you maybe should never buy a old Ragley house. You may need to go buy 10 or 20 or 30, a hundred young apartment because that suits you on what you’re trying to accomplish. So the thing about real estate isn’t mimicking what I do, what Patrick does, what Chris or whomever else does, it’s figuring out, this is the way I ask it in a statement.

[00:59:41] Tyron McDaniel: I say, Patrick, what do you want real estate to do for you? Once you can figure out what you want real estate to do for you, then it’s about how do you want to accomplish those things? And so that’s one of the first things I tell people is, you know, you can learn from anyone, learn what to do, what not to do, how to do it better, faster, slower, more efficient, things of that nature.

[01:00:00] Tyron McDaniel: But you have to come to the table with something. You have to come with initiative, you have to come with a sense of direction, you have to come with a goal in mind that you want to get to. And then it’s just about figuring out how real estate as an asset class can help you get to whatever that end goal or destination you are looking to get to.

[01:00:16] Patrick Donley: It doesn’t seem like you’re super money motivated by the whole real estate game. What is it that is like your mission, your drive? What is it that gets you up in the morning? 

[01:00:25] Tyron McDaniel: I don’t have money goals. None of my goals are attached to a dollar. Oh, I gotta make this amount or that amount. To me, it’s about living a fulfilled life for me.

[01:00:36] Tyron McDaniel: And so my thing is I want to impact my community, my city, my country, in a positive manner. And one of my main ways of doing that is through real estate design, development and renovations. And so that’s what excites me is knowing that I’m doing something that long after I’m gone, will still be here.

[01:00:53] Tyron McDaniel: There’ll be buildings that we built that will be here, you know, a hundred years from now, houses that are already a hundred, 200 years old that we now just added another a hundred years to their life. And there will be someone they’ll get to live in and my son, my grandkids, my nieces, nephews and whatnot will base, Hey, my uncle did this, or my dad did this.

[01:01:10] Tyron McDaniel: And so those things tend to mean a lot to me. And it’s not necessarily what we do as much as it’s how we do it and the people that we impact. And so part of why I do what I do and why I share is because I want to help more minorities get into real estate development. I want to help more women get into real estate development.

[01:01:26] Tyron McDaniel: I want more of our communities to, going back to the gentrification topic, gentrification isn’t bad, but what’s bad about gentrification inherently is none of the historical stakeholders or people in these areas are able to guide that gentrification. So I want to create processes and pathways for people to have a little bit more control over what happens in their built in the built environment.

[01:01:49] Tyron McDaniel: And so those are some of the things that excite me about what I’m able to do or what I get to do. I’m fortunate enough to be able to wake up and do the things that we do, and I don’t take it for granted at all. 

[01:02:00] Patrick Donley: Yeah. You’re doing good work in the world and I love it. I love sharing like this. Today I want to do a quick fire round if I could with you.

[01:02:07] Tyron McDaniel: Let’s rock and roll. 

[01:02:09] Patrick Donley: You said you’re a book nerd. Talk to me about a book that I should be reading right now. 

[01:02:13] Tyron McDaniel: There’s a book I read called Risk Game. It’s a phenomenal book. 

[01:02:18] Patrick Donley: Oh, Risk Game. Yeah, I think I’ve heard of this. 

[01:02:21] Tyron McDaniel: Yeah. Yeah. They were talking about it on Twitter, but a while back. Yeah. Risk Game is a phenomenal book.

[01:02:26] Patrick Donley: It’s a real estate book. It’s a like a real estate entrepreneur or? 

[01:02:29] Tyron McDaniel: No. It’s a guy who’s venture capitalist wrote, it’s a kind of more of an autobiographical autobiography, but it’s just written. He was very candid in how he wrote the book and it’s just some wonderful stories in, there are a lot of different lessons that one can extrapolate from that book and apply it to their life.

[01:02:46] Patrick Donley: Yeah, I think like Moses or Levi Benkert or somebody mentioned that, so it’s on my list, so. 

[01:02:52] Tyron McDaniel: Yeah, both. It’s one. Yeah. Move it up to the top of the list, trust me. 

[01:02:57] Patrick Donley: Okay, I will do that. I will do that. Risk game. I’ll put it in the show notes too. Who’s your entrepreneurial or real estate hero? 

[01:03:04] Tyron McDaniel: Man. I’m an entrepreneurial real estate hero.

[01:03:09] Tyron McDaniel: Now. That’s one I hadn’t been asked before. You kind of stumped me on that one. Let’s come back to that one, gimme a second, and to marinade on that one, Patrick. 

[01:03:16] Patrick Donley: Okay. Okay. What about your worst job? 

[01:03:19] Tyron McDaniel: Oh, gotcha. You know what I’m going to tell you who? My real estate entrepreneurial hero. So when I was a mortgage broker, there are these two clients, this lady, I was, she was refinancing one of her properties because there were some past due taxes.

[01:03:32] Tyron McDaniel: And I’ll never forget asking her. I was like, what is your income? And she said, well, 25 baby. I was like, 25? What? A month? A year. What are you saying? She said, no, baby. $25,000 a buck. And long story short, there was this lady uhs dad as gave her and her brother. She, he didn’t give, her dad didn’t give them gifts, regular gifts.

[01:03:52] Tyron McDaniel: They, she gave them houses. And by the time she was in her mid forties, she had retired and her income was $300,000 a year from the assets that they owned. I never forgot that lady. Then there was a gentleman, another person we were refinancing and he drove a old Chevy Silverado trucker hat, Western t-shirt with a marble buttons on pearl buttons.

[01:04:13] Tyron McDaniel: And you know, I say, what do you do for a lease? He says, son, I’m retired where you retired from. He said, all I do is cut the grass in my yards and pick up my rents. And you know, just a regular old guy in a Dr. Old Ragley truck was rich as all get out. Earned us, owned several million dollars, probably about two, $3 million worth of real estate, free and clear throughout something that Houston neighborhoods and just lived a really nice, cool, basic life.

[01:04:34] Tyron McDaniel: Volunteered at his church, you know, was a pillar in his community. And so those were my real estate heroes because they were people that looked like me. That served as an example of what I could become if I had enough discipline, I added enough time, hard work into what it is I want to do. So those are my real estate heroes.

[01:04:52] Tyron McDaniel: I love stories like that. Yeah. And so you said what was my worst job? 

[01:04:57] Patrick Donley: Worst job. Yeah. Anything come to mind real quick? 

[01:05:01] Tyron McDaniel: My worst job was working in this plant for Texas Instruments making like computer chips or something like that. Like it was, yeah, it was horrible. 

[01:05:09] Patrick Donley: I can’t, were you like in a, those like white gowns and all that?

[01:05:12] Tyron McDaniel: Yeah, like you had to wear these suits, these masks and, you know, it was just a sterile environment. You couldn’t really talk to people. Like, I’m a people person, I like to be out and about, you know, it was very regimented, you know, they timed how fast you got from here to there, so on and so forth.

[01:05:28] Tyron McDaniel: And ultimately I got fired from that job. So that’s the other part about it that made it. 

[01:05:33] Patrick Donley: That’s awesome. I’ve got an uncle who says like, the best job you can have is actually the worst one because it teaches you exactly what you don’t want to be doing in life. And that’s some good information to know about yourself.

[01:05:43] Patrick Donley: Cyron. This has been a lot of fun. I’ve really enjoyed meeting you, talking with you, hearing about your stories and the Houston Vintage Challenge. You are up to some good stuff in the world and really appreciate it. For our listeners that want to learn more about you, find out about what you’re up to, what’s the best way for them to 

[01:05:56] Patrick Donley: do that?

[01:05:57] Tyron McDaniel: I highly recommend following technic us out on Twitter and Tyron McDaniel, TheUrbanCEO on Twitter and on Instagram. It’s Houston Vintage Homes. 

[01:06:06] Patrick Donley: Okay. Thank you, man. I really appreciate your time today. 

[01:06:09] Tyron McDaniel: Thank you, sir. I appreciate it. 

[01:06:11] Patrick Donley: Okay, folks, that’s all I had for today’s episode. I hope you enjoyed the show, and I’ll see you back here real soon.

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