How I Started A $500K/Month Real Estate Investment Business
Hello! Who are you and what business did you start?
My name is Cory Lewis, and my company is called T. C. Lewis & Co. We are a real estate investment and management firm operating mainly in the Appalachian mountain region of the Southeastern United States. We are a licensed real estate brokerage in multiple states, and that allows us to identify, project, negotiate, and broker deals for our clients for commercial and investment properties. Following the acquisition, we manage the performance of the investment and/or the improvements to the investment through our Property Management and Construction Divisions. We now represent clients from all over the world investing in the Appalachians.
We started very small with just my (now) wife and myself holding meetings in bookstores and coffee shops in Johnson City, Tennessee – not necessarily because we wanted to buy the potential client a coffee, but because we didn’t have an office where we could hold a meeting. But, we moved into a small office that originally had a couple of lawn chairs in it until some desks arrived that we had to assemble – my buddy Hans has never let me forget what a pain in the ass that was because he was recruited to help. So, we eventually worked the business into a multi-faceted firm that has seemingly taken on a life of its own.
We now have a small corporate office in downtown Asheville, North Carolina supporting regional offices around the Appalachians. The firm has been named to Inc. magazine’s list of the Fastest Growing Privately Held Companies in America (no. 128), seventh fastest growing real estate company in America, named to the Financial Times inaugural 1000 Fastest Growing Businesses in the Americas list, named Best of Property Management for eight years running, named Community Supporter of the Year, been given the Tennessee Small Business Excellence Award, named Builder of the Year, named One of the 10 Best Brokers in Tennessee, and various other recognitions.
What’s your backstory and how did you come up with the idea?
I’m from a very small town in the Appalachians called Sylva, North Carolina. If you’re not familiar with that region, it’s a very diverse area. Sylva is in the north end of Jackson County, and Cashiers (and neighboring Highlands) are in the south end. Sylva is blue-collar, and a factory-type (now tourist) town and Cashiers/Highlands is a spot where some of the wealthiest people in the world have vacation homes and are all members of one of the ultra-exclusive private clubs.
Growing up, I worked at my family’s convenience store. I saw a lot of the folks headed through to Cashiers and Highlands up from Atlanta for the weekend, and a big portion of them seemed to be making their money in real estate. Some were making money buying the mountain land around my town at a low price from local farmers who had no use for the steep mountains, developing a portion of the top, and then selling it off for astronomical amounts of money to other rich people. I was amazed by that. And I couldn’t understand why no one locally had tried this himself.
I come from a fairly long line of entrepreneurs on both sides of my parent’s families. My great-grandfather on my dad’s side quit school after the fifth grade, and then he went on and started a convenience store business that I still help operate 85 years later as it has passed down to my grandfather, my dad, and now myself and my brother. And my grandfather on my mom’s side owned a heavy civil construction company building large-scale projects like interstates throughout the mid-1900s. My uncles and cousins still operate a part of that business, too.
Grit and persistence can take you a long way – a lot further than good grades or an expensive suit.
In high school, I was interested in marine biology and, as part of a school project, participated in a published study with Dr. West from Western Carolina University about the health and diet of native speckled trout populations. But, when I met with my guidance counselor/assistant football coach, Mr. Greene, he asked me what I was interested in, and I told him. He marked out marine biology and said that he was going to put me down for business. He said, “Business is the only thing both sides of your family have done for generations, so I’m going to put you down for that. You can’t make a good living in marine biology.”
I went to college to play football in Tennessee and majored in mainly friends, women, and booze, and I really can’t say that I regret any of it. Overcoming the (albeit self-imposed) adversity of being hungover at an early class where you have no idea what has really been discussed and figuring out a way to make a ‘B’ on the test taught me a lot and is a worthwhile life lesson. But I also worked retail in the mall (mainly for beer money) and worked at a marina during the Summers of undergrad (mainly for the view). And I eventually went to grad school in Florida and started working for Major League Baseball.
I had always had a great appreciation for architecture and thought that may be a possible career path at some point, but I also thought that I may not have the math skills to make it. I saw a lot of the large homes of the baseball players, and I loved some of the high-rise buildings in Tampa and the historic architecture in Ybor City. I always thought it was so cool how an old building could be reinvented with a new life that almost seemed as though that should have been the life it led all along.
I moved back to Tennessee mainly because I was in love with my now wife. And she had opened a bar in downtown Johnson City. She was tired of the late nights and wanted out of that business, and I wanted to do something besides work for somebody else, so we started talking about real estate. We started discussing how it seemed like everybody that we knew that had made any real money had been in real estate in some capacity – if even as a side-hustle. And we signed up for real estate school.
Take us through the process of designing, prototyping, and manufacturing your first product.
After we got our licenses, and after my wife sold the bar, we both went to work for a typical sales firm in Johnson City. But we had a plan to open our own firm as quickly as possible, and we worked on it relentlessly while we worked at The Real Estate Source.
The name for our business we knew would be important, and we landed on T. C. Lewis & Co. mainly for two reasons: (1) The name goes back four generations in my family, and we have passed it along to our kids now; and (2) it sounded and looked like a well-established, old firm. I liked the ampersand from having worked at Abercrombie & Fitch (before it got weird and clothes got tiny for some reason) and it seemed to help make it look established – and expensive. And the lion is from my family crest. I knew that we needed that because as I was learning, most of the people that were seeing success in real estate were old, didn’t really seem to need the money, and the investors that they represented had even older money. And if we planned on targeting the investor side of real estate, they weren’t just going to blindly hire a couple of ~25-year-old people to handle their real estate for them.
We sold quite a bit of real estate for the firm where we worked, splitting it all along the way with the company owner, which reiterated that it was basically a pyramid scheme, and we weren’t where we wanted to be on the pyramid. We developed a great plan that encompassed focusing on our contractor clients and moving into the investor and development world of real estate. We were seeing 80-year-old realtors still trying to sell real estate because they had no retirement plan or ability to live without continuing to make sales. And we knew that there had to be a way to make money in real estate without chasing around first-time homebuyers and looky-loos (that’s a technical term) who would never be approved for a home loan. When we did the math on time, gas, etc. on that, it just didn’t make sense long-term. We knew it had to be a diversified approach, including sales, development, remodeling, and construction. We just didn’t know how all those pieces were going to fit together.
Describe the process of launching the business.
We eventually pulled the trigger on our own office space, hired some key folks away from the firm where we had worked, and hit the ground running representing new development projects and perfecting the sale of spec homes. That was all in 2006, and then by 2008, we all know what happened to the market. And we didn’t really know what we were going to do. I think that looking back, we are thankful that we hadn’t had years of ‘easy money’ success in real estate so that when things turned south, it wasn’t great, but we weren’t that far in over our heads. We hadn’t really made any money yet anyway.
Then we had a client from North Carolina that came to Tennessee to buy a small apartment building in Kingsport – it was either distressed or in foreclosure. And he asked that if he bought it, could we manage it. He wanted to know if we offered that, or if we could recommend somebody that did because he lived out of state and would need somebody. I confidently said yes, of course, we can handle it. So, we made the offer, he left, and I went to tell Haize (my wife) that I was working on this deal, I thought it was going to be accepted, and she had to figure out what property management was and does before we had a closing. And that’s what we did. We quietly went to work figuring out what was expected of property management, and if there was any way that we could make money from it.
That closing happened, and our thirty-day old property management program was implemented. We developed some rudimentary documents mostly based on places where we had lived previously. And that property led to another from another past client, and we realized that we had enough revenue coming in from management to pay the utility bills at the office. And we knew that we were onto something. And with no real estate purchases or sales really happening during the real estate crash at the time, we had also stumbled upon what people were doing – they were renting.
This process led to us realizing the connection between the things that we had outlined in our original plan that we wanted to be involved in – the diversification into real estate sales, development, remodeling, and construction – and it was just missing the property management component that put it all together. It also built-in monthly revenue that could be budgeted around for growth and stability. It became our key to the investor doors that we had wanted. They hired us for management, we would clean up a big mess at a complex with maintenance and vacancies, and we would talk them into hiring us for more services. TCLewis Facebook photos.
Since launch, what has worked to attract and retain customers?
It’s hard to advertise for what we do in any real estate sales magazine with listings or even on social media. We had to do a lot of advertising and marketing during our startup phase. We wanted to make a big splash, almost as though we were established already in other areas and had just moved into the region where we were operating. So, that took some dollars to make happen and we mainly used all the funds generated from the business to get the word out about who we were. But at this point, it’s more word of mouth, and we do some direct mailings to people that we know we can help. I’ve also been big on just calling somebody or showing up at their office and introducing myself. It’s much harder for them not to consider your pitch to your face because they can all delete an email or avoid returning a phone call. Then the pitch just has to be interesting enough to get them asking questions.
I think we’ve seen things become a kind of two steps forward and one step back type of thing along the way. That freaked us out a lot at first, but we grew kind of accustomed to it. Growth will lead to some balls being dropped, but you have to do your best to not allow that to happen – at least not to your most important clients – or the growth will just put you out of business.
We’ve grown organically for the most part, and we’ve helped clients who were ready to throw in the towel in real estate investing to start to realize a return and then decide to let us help them grow their portfolio. That type of client story speaks volumes to other potential clients. And we have a few bank clients that refer struggling investors to us to help get their properties turned around and profitable – or at least making the mortgage payment. It’s definitely in the bank’s best interest, but it also can help a struggling investor does not have to be the bad guy, and we can take the reins on things.
I’ve never really had an issue being the “bad guy,” but some people hate it. Those people need property management for their investments. I’ve always looked at it as I’m fair, not necessarily nice. I’ve been pretty brutally honest with clients, or tenants, city officials – whoever we’re dealing with. That has worked great, and it also led to our biggest public relations nightmare.
We had a medical resident, I think he was, renting a property that received less of a security deposit refund than he thought he should have after moving out. And he called relentlessly discussing it. We followed the letter of the law, and the smell of the place was the big issue emanating from the carpets if memory serves. The damage warranted exactly what we had done. But, one of his calls interrupted an important conversation that I was having with another staff member, and I just picked up the phone and the guy started crying – apparently, he had cried on a couple of other calls with the office about this deposit. I told him that I’d send him an additional couple hundred bucks or whatever it was and to stop calling. So, when it came time for me to sign the check, on the ‘For’ line, I wrote beside it, “Being a crybaby.” In my mind that’s why he was getting the couple hundred dollars was because he had been a cry baby, and we were busy. It made the local news in Tennessee. And I think he tried to post about it extensively online. If you google something generally about us, you’ll still see it. And there have been others – reviews don’t really bother me. I know that we’re fair and we simply follow the rules and expect tenants to do the same. Managing these tenants is such a small part of our business, but it’s what shows up all over the internet.
How are you doing today and what does the future look like?
We’ve developed a great network at this point in clients and banking relationships, and we’ve been investing in us a lot lately. We’ve been fairly aggressively acquiring properties over the last three or so years, and I enjoy that. It’s nice not to have to make the same pitch and give the same explanations or updates or solve the same problems over and over to clients. These properties are just my company running my own investments, and that’s what I’d really like to see for our future.
I have been able to centralize a lot of things into our small corporate office. We aren’t structured like any other investment and management company that I’ve seen – we’re more lean and efficient. I think that has a lot to do with the fact that we weren’t tainted by having worked for some large firm prior to starting the company, and we didn’t have a big pocketbook when we got started, so we just moved through the process logically and without bias and did each job along the way ourselves to see how it should be done and how one job related to another.
Systems and processes are the greatest friends of any entrepreneur. If you spend substantial time on them, it will pay dividends in the long run.
Our margins on revenue are much better than average, and the returns for our clients are, too. Nationally, I think the average return on real estate investment is around 10%, and we’ve got that pushed to +14% for our clients. And we’ve achieved that over time by incorporating more into our company, and these two have been the most important: (1) Maintenance was inconsistent and so were the labor costs, so we started putting our own maintenance staff in place a little less than five years ago. That has led to consistency in quality and cost. And we have trucks driving around with our logo on them, so it has also helped a little in the marketing department I guess. And (2), I opened a hardware store (for other reasons) that is now starting to give us the ability to buy materials wholesale. So we’re looking at warehousing some items so that we shop our own warehouse as opposed to Lowe’s. It’s the next step in the evolution for us.
Personally, I’ve had some significant job offers recently, which is pretty cool after working for myself for a substantial amount of time. It’s a little shocking and can take you off guard, but I enjoy seeing the opportunities and how other, much larger folks operate. And it’s flattering. I’ve explored one, in particular, that was lucrative and would have been a lot of fun. Who knows, maybe one day I’ll just take a good opportunity that comes along. Here are some Facebook photos.
Through starting the business, have you learned anything particularly helpful or advantageous?
I’ve made so many mistakes that I don’t even know where to begin.
I’ve learned that grit and persistence can take you a long way – a lot further than good grades or an expensive suit. I’ve also learned that being an entrepreneur is hard and it will take a toll on you. And you need to be prepared to deal with that before your mental and/or physical health is compromised.
People are also going to disappoint you or try and take advantage, and you have to realize it, deal with it, and somehow not let it harden you. Or you just become an asshole. I went through that phase.
And imposter syndrome is a real thing that I still struggle with regularly. I didn’t even know it had a name until a couple of years ago.
I also think that you have to learn to adapt and pivot. You need a good plan, but pivoting properly is a big deal to seize opportunities. Everything happens for a reason, and you can only control what you can control, but if you learn to see the angles, you can pivot and be successful no matter the business and no matter the outside forces that you can’t control – the state of the economy, competitors, etc.
And you may have to fake it until you make it at some point. I did. But some people just fake it, and they forget the part about making it. If you find yourself having to fake it, you have to go home or back to the office and stay up as long as it takes to learn everything you can about what you’ve just faked. Or else you’re just a liar.
I’ve always thought that it’s immensely important to know who you are and where you’ve come from – understanding those that have come before you and the sacrifices that have been made. I’ve already referenced my family in this interview a few times, and that’s because it’s very important to me. It’s motivating to look back at their struggles that have gotten me to this point. It makes tough times easier to deal with.
I’ve also embraced that I’m captain casual, and if you want to hire someone in an expensive suit to handle your investments that don’t cuss a little, call somebody else. I know how to make money in real estate.
What platform/tools do you use for your business?
We use a few tools in our company.
PropertyBoss is our property management software that handles application processing, lease management, rent payments, work order requests, and assignment, etc. When we outgrew it and moved from a basic Excel spreadsheet for our property management, they were the company that we selected. And they seem to be evolving well over time as we have. They’re responsive to our requests and have been proactive about asking us what can make it better.
And we use an app called Raken for our construction projects that easily track and share reports daily on the projects where we’re working. It’s simple to use, has a photo component, and a daily series of questions that are answered from each job. And that info for each project is shared with whoever in the company is appropriate automatically.
And RPR is a great app and tool for real estate folks to use. It has great info instantaneously, and if you’re working across an area encompassing a few different multiple listing systems, it cuts to most of the information that you want.
What have been the most influential books, podcasts, or other resources?
I think that you can’t learn enough about what other people have done in business. Someone’s failures are probably more important than any successes that you hear about. And books and podcasts have been very helpful to me. But, I don’t think that they even have to be on-topic with your business. I listen to The Daily from the NY Times every morning, and I listen to anything from Sarah Koenig or Malcolm Gladwell.
There’s something to be said for knowing what’s going on in the world outside of your bubble or your business. It will help your business to know what’s happening out there in the rest of the world, too. And you can be a better conversationalist and communicator for having listened. Nobody wants to hear you regurgitate business philosophy that you learned from Tony Robbins.
I think that it’s equally important that you surround yourself with some other entrepreneurs. I look at it like an addiction where only other addicts (entrepreneurs) can really understand the problems that you’re facing everyday. Can I insert a shameless plug here? I’ve just started a podcast called Entrepreneurs Anonymous. And the preview will be out around Christmas with the episodes to start releasing at the end of February. So that’s one you should check out at ea-podcast.com
Advice for other entrepreneurs who want to get started or are just starting out?
I know now that I’m an incrementalist. And in today’s business world, there are a ton of new startups that are doing more business than I am. But I’ve been building this for the long haul and perfecting it as I go. I bootstrapped it, built the firm foundation, and I’ve been working my way into some substantial growth at this point. From the outside looking in, it may seem like it happened overnight, but I know that it didn’t. So I think that you have to decide what type of business you want – one that you grow fast and make an exit, or one that you want to grow incrementally and in perpetuity. That will be important as you’re developing your business and strategy. I’m hopeful for more incrementalists who want to grow a business without looking for an exit to some conglomerate. We just don’t need any more of that.
Systems and processes are the greatest friends of any entrepreneur. If you spend substantial time on them, it will pay dividends in the long run.
You’re going to run into people who are often wrong and never in doubt. Don’t be one of those people. And you shouldn’t take criticism from people that you wouldn’t take advice from.
The other thing that I try to remind myself of is that the early bird gets the worm, but the second mouse gets the cheese. And if you’re going to be a successful entrepreneur, you have to know the difference.
But I also have a Banksy print hanging in my conference room that has a Diogenes quote on it that says “One original thought is worth a thousand mindless quoting.”
Where can we go to learn more?
If you have any questions or comments, drop a comment below!