From Rock Bottom to Real Estate Royalty: Tarek El Moussa's Relentless Rise to Fame

"Hello and welcome back to another episode of the Collective Clicks Podcast. This is your host, Brandon Baitman, and today I'm joined by Tar Elusa. Tar has done a ton of stuff in the real estate investment space, everything from nearing a million dollars of revenue a month in his wholesale business to flipping real estate and having one of the most popular TV shows in the real estate investment space on HGTV. We're talking with Tar about all kinds of things like his mindset, how his real estate career has changed, his story, and how he got started. It's a super interesting episode, so I'll see you there."

"Tar, how are you doing today?"

"Good, what's up Brandon? How's it going?"

"Hey, doing fantastic. Good to see you again. It's been a minute. I'm super excited for today's episode."

"First, for anybody that doesn't know you or know you super well, tell me a little bit about your story. Like, where did you come from? When did you first start getting into real estate investing?"

"Yeah, sure. I'll give you the quick rundown. I grew up in Burbank, California, just a normal American family neighborhood. My parents immigrated—my mom was from Europe, my dad was from the Middle East. Fast forward to 19 years old, I got out of high school, I was going to college, kind of lost. I was selling kitchen knives for Cutco, and it turns out I could sell because I was actually making money. One day, I lost my sales book, so I essentially put myself out of business. I had what I like to call a defining moment. As a real estate investor, I've actually had many defining moments, but my very first defining moment, which is a moment in your life that changes the trajectory of your life, was at a Washington Mutual ATM in Sylmar, California, after losing that book. I'm looking at my ATM, and I swear, true story, I threw my head back and I'm like, 'Damn, what now?' Right? I looked over to the right, and there was this crooked sign that said, 'Say Y’s Old Owl Real Estate School.' I was like, 'Wait a minute, if I can sell knives, I gotta be able to sell houses.' So, that's how I actually got into real estate."

"At the time, the girl I was dating, her parents were in real estate like 20, 30 years before, so they used to talk about it, but I went in with nothing. Then I got my license and my book, 'Flipping Life,' just came out. It tells the very detailed story of exactly what happened, but long story short, I got a big deal early on, didn't know how to replicate it. I was totally broke six months into the business, ready to quit. I was trying to sell real estate at this time, as an agent, yeah, as a real estate agent, totally broke. At the time, I broke up with that girlfriend, my parents got divorced, my mom needed money, so she rented out my bedroom. So, I had to go move into her garage. It was a tough period of my life. I ended up going to this free event thrown by this guy named Mike Ferry, who's a real estate speaker and trainer. I had never heard a professional speaker. This guy, Mike, is a genius. He convinced me I could do anything. He convinced me that I would be a multimillionaire. So, at the end, I signed up for one-on-one coaching. It was a thousand bucks a month. Obviously, I did not have it, but I had a credit card. Here's what happened. I burned the booth. What I said was this: I'm giving myself 90 days. I'm going to do exactly what my coach says for 90 days, and at the end of 90 days, if I succeed, well, I made it in real estate. If I don't, I'm going back to school. I did not like school, and be very clear on that. So, I tell people, you want to change your life, you gotta block it into a 90-day block. For 90 days, you don't think about anything but that one thing that you want. So, the one thing I wanted was to make contacts. I know that sounds crazy. So, I'll tell you what we did. He said, 'How do you want to make your money?' There's for sale by owners, expired listings. An expired listing is a house that was for sale but never sold, so I would relist it. What happened was this: I would call from 7:45 a.m. to like 8:30 p.m., Monday through Saturday, three hours on a Sunday night. Ninety days later, I was at the bank, cashing about $120,000 in real estate commissions, right around my 21st birthday, which today, with inflation, is like $550,000. So, you know, I'm that old. But think about that. And here's the cool thing, and this is what I try to teach people, man. People just sell themselves out of their own success. Like, you don't. You just gotta go. And here's the truth: I made $120,000. I should have made $240,000. You wanna know why I only made $120,000? Well, I didn't know what a listing contract was. I didn't know how to run comps. Did I know how to sell? I knew how to sell. Could I get the appointment? I could get the appointment. So, that's how I kicked off my real estate career."

"Okay, interesting. So, that was still at that point as an agent, correct?"

"Yeah, that was as a real estate agent. Want me to tell you the kind of transition?"

"Yeah, I'm curious."

"Alright, so calling expired listings, I did really, I did really well fast. Everything I all the money I made, all the deals I got, I had zero marketing. I never marketed in my life. I was a cold caller. I was a cold calling machine. I was doing $500, $600 a day. People would call me crazy. Oh, but I never finished my story. Here's what, here's how I did it. How I made the $120,000. I had one goal every day. It wasn't to make money. It wasn't to get listings. It was to have 50 conversations with someone that owned a house. And the rule was, I couldn't go home until I had 50 conversations. So, because I focused on conversations, you know, on call number 50 of the night, I say, 'Hey, this is Tar with Credential Real Estate. Do you, Tar?' And they hang up on me. Do you think I'm mad or do you think I'm happy? I'm happy. That's my 50th contact. I get to go home. So, my job was just to have contacts, but it turns out if you have contacts, you get clients, and if you get clients, you get money."

"Yeah. Okay. So, you made it's a way for even the failures in the day to be contributing to your goal. That's how you, like, stay motivated for that. How long did you do that?"

"How long can a human do 500, 600 dials a day? Almost 10 years."

"You did that for 10 years?"

"Cold called. I cold called. I door knocked. I'll tell you my schedule. It was gnarly. This is when I got the show. I'll tell you in a second. You know, my gift is I'm willing to outwork everybody. Because, you know, when I want something, I just want it so bad. Nothing else matters. And that's really helped me get to where I am. But built a successful real estate business. I was young. Great Recession hit when I was 25 years old. I was living in a million-dollar house, had all these fancy cars, all this crap I didn't need, moved to this tiny little apartment, had to borrow my dad's truck with roll-up windows and broken AC, and I was back to rock bottom, right then started getting short sales for about a year and a half. I was hopping around apartments, man. My life was different. Like, I went from driving like a S500 Mercedes Brabus to, like, a truck that was breaking down. It was pretty rough. So, I started seeing opportunities in the market. And I did the short sale transaction. I had a first lien, a second lien, a third lien, an HOA lien, an IRS lien, and I negotiated it for 11 months. And in the end, I got a check for $7,000. And I remember the guy that I sold it to hired a gardener, cut the lawn, hired a painter, painted the house, and sold it two weeks later, made like $130,000. And that was the second defining moment in my life. And that was the exact moment I realized I was on the wrong side of the equation as a real estate investor, which, by the way, I now realize I've kind of been in some aspects on the wrong side of the equation as a house flipper, which I'll explain later. But in that moment, I said, 'I'm going to be an investor.' So, what did I do? I did what everybody does. I picked up my phone and I started calling everybody in my phone.

I said, 'I need your money.' They said, 'Why should I give it to you?' I said, 'Because I'm going to give you a 25% annualized return.' They said, 'Where is it?' I said, 'I don't know. But it's going to be worth a million bucks.' So, I did. I borrowed money from people I didn't really know. I don't know how to do this, but my best investment is for real estate. So, that's the way it started."

"Alright, so you started getting money from private investors, and that's kind of how you transitioned into more of the flipping and the wholesaling side of things?"

"Yeah, I mean, I'm talking to my whole sales floor, and the first thing that I want you to know, who get house flipping out there the old when I to get anything, it's just to learn in the house in the with bad.

"Have that same mindset going into our business, and if you are hyperfocused on finding that deal, you are going to find those deals. Okay, so for you, it's a mindset thing, and it's like being willing to do the volume. You know, same thing that brought you success—calling five to 600 calls a day. It's that you just gotta spend a lot of time connecting with these people. And if you keep on doing that, then you're gonna get the right deals. It just takes time."

"And my favorite is digital marketing lead—you know, when I was actually like a salesman for my company, I was converting one out of 14. I had a pretty darn high conversion rate. Um, yeah, that's... Yeah, so you know, my favorite digital market—no, actually, my number one favorite is the organic leads I get from being on TV. I love those. Number two is digital marketing lead, for sure. And then three, honestly, like, we're crushing it with outbound right now. We're doing a lot of deals with agents."

"Yeah, that's very cool. I'm curious to hear a little bit more about the story of how you got deeper into the wholesale business. Let's talk about, like, so obviously there's that beginning there where you had to get the 13 houses for your show, which is a wild story. I didn't realize that you were actually, like, doing the show as you were learning to do the business. I'm super curious to go back on, like, some of those initial flips that you were doing. I'm sure you look back at it, like, thinking that you were an idiot back then."

"Yeah, that's fair. Um, yeah, that's how I am—the me from six months ago is always an idiot. Like, I've always believed that. Um, it's a digressing but also really positive truth at the same time. Um, so moving past that, I mean, tell me about, like, this process from being, like, Tar the guy who cold calls, the guy who puts the deals together, the guy who manages the flips, to, like, a real estate investment business."

"Yeah, absolutely. So what happened was this: I've always been just a machine and hustled, right? Because honestly, started when I was a kid with sports. My dad made me play baseball seven days a week, like, five hours, you know? So I learned hard work as a kid. Um, but guess what TV did? Took me away from finding houses, it took me away from walking properties, it took me away from prospecting. So now I've got to find all these houses, and I'm short on time. So that's when I was forced to learn how to delegate, and I was forced to learn how to hire and staff and scale. Of course, at the beginning, I did everything wrong. I hired people I knew, a lot of headaches. And here's a reminder for everyone out there: You are going to get burned when you hire people. It doesn't mean you stop looking; it means you keep looking. So I always say, to find the right person, expect to be burned three times, and the fourth one, that's going to be the one. Um, so again, the mindset—expect to be burned. And sometimes we get lucky, but don't get upset when you get burned, because it should be expected. That's one, it's a volume game. So to scale, I started off with, you know, one acquisition guy, who is Adam Lindholm, who's the president of my company, Tar Vice Houses now. Um, but back then, his first day on the job, he showed up in his Mini Cooper. I took him out to the middle of the Inland Empire, we jumped out in a neighborhood that was in foreclosure, and we went door-to-door for five hours. And I said, 'This is your job.' Okay? And that's how we started. And then I got him on the phones, and then from there, we—I built this little team of four, and we were just humming. And then I think the first year, I did three, second year 18, third 46, fourth 88, and then it just kind of grew."

"Yeah, yeah. And then I think the most I had going at one time was in the 90s. But let's talk about some of the challenges because, no [bleep], it's been a rough couple of years for a lot of real estate investors, and guess what? I'm one of them. But, you know, I'm going to share with you what I did, so maybe someone can learn from this. It's just impossible to time the market. The biggest mistake I've made as an entrepreneur was trying to time the market—making the wrong decisions at the wrong times instead of just letting time be in the market, right? Letting it go. But when the interest rates doubled the year before, I had a big push to scale up everything. So I brought on staff, I expanded marketing, I expanded markets. So I had bought 91 houses first quarter. The rates were low, they were like, you know, 3%. Right after that, they jumped up to 7%, as you know. So then I was stuck with $700,000 a month in mortgages, all these houses, the doubling of interest rates. I mean, I'm remembering the Great Recession, I'm thinking to myself, 'Yeah, what am I going to do now?' So within minutes, I made a decision: I'm not going to buy any more houses because I already knew these 91 houses right here, I already knew. You don't have to tell me, I'm going to lose millions of dollars. I already know. Okay, by the time I fix them and, like, you know, I've got left, so because I knew that, I stopped buying and I said, 'Well, how do I offset losses? I gotta bring in revenue. What's the fastest way to bring revenue? Wholesale real estate.' So overnight, I changed my business model to wholesale real estate. A few bumps in the road at first because it was a new model for us, but they hard times, too, because other buyers started to get skittish at that time. It's kind of like the worst time for wholesale, yeah. No, I know, but, you know, today, things are going good. You know, I think we put like $800,000 up on the board this month or last month, sorry, we're in May. So it's pretty good. I expect us to be at seven figures a month consistently on the wholesale fees. We're still scaling up flipping, not as much, mostly just for the show, you know. But outside of that, you know, I run my company, Homes by Tar. I have my flagship company, Tem Capital. We're buying commercial real estate, we're syndicating. Just bought an awesome deal in Texas, 45 units, previous owner was into it at $100,000 a door, we're picking up for $66,000 a door. So, 34% discount. Yeah, yeah. So the deals are coming. The deals are coming. So if you ask me what I'm looking for today, I'm not looking for houses, I'm looking for monster deals where instead of making a hundred grand, I can make $10 million. And I want to flip them, I'm gonna flip them hard. Okay? Yeah, that's a... It's, uh, there's a lot of distress in that outside of the industry right now. Yeah, coming soon. Yeah, fair point. Okay, very cool. So if I'm understanding it right, you kind of scaled up the business, and then you started to really scale kind of at the worst time, and then, right then, just started re-upping, and then you changed your whole business model to wholesaling, and today, mostly wholesaling. Yeah, yeah. I mean, some of these houses were in California, like I was selling this one, lost $638,000, this one lost $690,000. But it's okay, you want to know why? I washed it all out. I didn't lose anything. My wholesale fees offset the losses from those flips, washed it clean. Now, down to my last two old ones, we're officially profitable again, getting ready to scale back up. Wow, that's, uh, talk about your back against the wall. Said it's the time you work the bestest. That's so... What is the fee like, then? Like, what do you... What do you want to do over the next few years? Man, so many different things, you know. I'm gonna continue, um, you know, continue being on TV, I enjoy that. I like, uh, I like entertaining people, I like creating good shows. I'm working on a few new ones right now that are a lot of fun. Um, when it comes to Tar Gets Buys Houses, I'm still looking to scale that. I want to continue scaling that across the country. I'm thinking about maybe offering, you know, licenses of the brand because, you know, here's the cool thing about, you know, my brand. If you put my brand against any other marketing, I'm gonna get more calls, I'm gonna have higher conversion because people have been watching me for 15 years, right? So I want to be able to scale that, and I want to get back to the communities. I want to teach people how to do this, I want to create free programs, I want to do things for underprivileged kids, like, just anything you could possibly think of. I, I really like to get involved with and just give, give back as much as I can and really go as far as I can. Yeah, that's super cool. Um, one thing I appreciate about you is this, like, it seems like you can take a beating, but it doesn't matter what happens, like, you have this, like, this, I don't know if positivity is the word, um, as much as like resilient. Bro, here's what it is. Here's the truth, man. I have ADHD, which means I'm actually an overly sensitive person. I'm like, you know, I get my feelings hurt sometimes, but I'm so used to it. Like, I've just gotten stronger and stronger and stronger, and the more [bleep] you can deal with, the stronger you get, like cars, right? And then they get bigger, bigger, and then I think, man, when something bad happens today, I think about my face plastered all over TMZ. I think about paparazzi chasing me on the freeway. I think about crying in the bathroom for a year. Like, my life's good today. So one of the big things that makes me so happy today is reflecting. I'm a two-time cancer survivor. That was a rough period in my life. Yeah, I, F season two of 'Flip or Flop,' I found out I had thyroid cancer at the beginning, and I also found out I had testicular cancer. The network called me, said, 'We understand the show's over.' I said, 'This show's not over. You're gonna film my ass wheeling into those surgeries.' And they did. And if you watch SE, yeah, they did. If you watch season two, you can actually watch me gain 60 pounds on TV, and then they did a surgery. They sliced my neck open, I had this tube hanging out, one week later I was back on camera working. I was talking like that, but, you know, nobody could say I didn't give it 100%. Yeah, yeah, that's wild. Well, it's been, um, it's been super cool to learn about your story and what brought you here.

Um, is there anything I should ask you that I haven't?

Why am I not working with you yet?
I don't know. Why aren't you working with us? Well, we could work, actually. I don't know. I was gonna say, it sounds like we have something to talk about. Yeah, fair enough.

Okay, after the show. Thank you, Tar. I appreciate your time, and um, for everybody else listening, I'll see you next week."

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