- Matthew Tortoriello, Kevin Shippee and a third investor each invested $ 5,000 in a property.
- Matthew and Kevin then used their profits to continue buying and rehabilitating more properties.
- They believe that anyone can do the same with the right understanding.
Matthew Tortoriello and Kevin Shippee have made their names on multiple social media platforms. They are publicly known as Two Guys Take on Real Estate.
On TikTok alone, they have amassed over 800,000 subscribers. Their platform is full of short skits raising public awareness about real estate investing while sharing their successes and failures on the ground. Their primary business is Yellow Brick, a full-service property management company that operates in Massachusetts and Connecticut.
To date, they have owned more than 542 rental units, property documents viewed by Insider Show. They sold part of their holdings but kept 200 units. About 50% of their portfolio consists of single-family homes while 25% are two or three-family homes. The rest is a mix of commercial, residential and commercial properties. They told Insider that they are currently in the process of shutting down another 100 units.
“We’re just a few regular Joes. If we can do this stuff, you can do it too,” Shippee said. “And that’s what we’re trying to help people see.”
Shippee had no real estate investing experience when he started. It was Tortoriello who convinced him to join forces.
Tortoriello told Insider he bought his first investment property when he was just 16, after partnering with his grandmother. It was a two-family house in Pittsfield, Massachusetts. His second investment was out of state, in Saginaw, Michigan.
But being young and inexperienced, he made some big mistakes, including hiring a series of management companies that either stole money from his monthly rental income or failed to rent out his units, he said. he declares. At one point, his property was even broken into.
“They stole everything, the kitchen sink, the toilets, the heating systems. They stripped everything,” Tortoriello said. “And then the insurance company refused to pay because it was over 50% vacant for over three months or something.”
Tortoriello said before starting that he read a lot of books and listened to a lot of podcasts. But nothing prepared him for the real thing.
“Sure, educate yourself, but don’t [get] analysis paralysis, don’t let that hold you back because you learn a lot by starting out and then surrounding yourself with people smarter than you, ”Tortoriello said.
How they started
Things only really took off when Tortoriello and Shippee joined forces.
Tortoriello was good with numbers but was not a good negotiator and was not good at dealing with people. So he approached his college friend Shippee to ask if he would partner with him. They were both students at the University of Massachusetts at Amherst. Shippee was on sale, primarily for an electronics retailer.
“I was very, very successful at making other people prosperous and wealthy and everywhere I worked my performance was great. But I was getting crumbs,” said Shippee. “And I never really had anything to show for my success in jobs.”
The two decided to each put in $ 5,000. They were joined by a third friend at the time. Together they accumulated $ 15,000 for a down payment.
“One of the things that I love about partnerships, although it brings its own set of challenges, of course, is that you can partner with someone who might have a complementary skill set,” he said. Shippee said.
A hard money lender then provided the rest of the amount as a loan. The total purchase price for the property was $ 70,000. There was an additional $ 50,000 required for rehabilitation. By the time they were all-in, it cost $ 130,000.
Once the property was leased, a traditional bank refinanced it to $ 160,000. This allowed them to withdraw their initial investment, an additional $ 10,000 each, and repay the lender. Their profits were then transferred to the next investment property. They continued this same process to scale.
Tips for beginners
Even as partners, they have always encountered obstacles, including underestimating the costs of rehabilitating some of the properties they have purchased. This is especially the case when investing in an out-of-state property where you need to rely heavily on a remote team.
If you are investing in an area outside of your own, Shippee recommends considering a turnkey property. This way, you only hire a property management company, rather than contractors, and apply for a series of permits.
Shippee adds that you shouldn’t go for the cheapest management company. Once you’ve narrowed down some options, look for references from past clients and even city officials who oversee the property’s compliance.
Over time, you will have a better understanding of the region in which you are buying. And you’ll have a bigger network of people who can help you take the next step, and even point you to entrepreneurs.
“The key is to have a fantastic team that you can trust. Otherwise, you are doomed,” said Tortoriello.
Once you’ve chosen a neighborhood or area, you need to have a general understanding of local laws, especially eviction rules, Tortoriello said.
On education, Tortoriello said that if you’re looking for advice from someone with more experience, be sure to check that they’ve successfully invested in real estate themselves. There are many resources available, but not all of them come from real world experience.
Shippee’s final tip is to always analyze the deal from a numbers perspective. And don’t forget the little numbers, like maintenance expenses, landscaping and snow removal.