Latest / REL Freedom Podcast / Kevin "KAYR" Robinson - From Poverty & Loss To 160 Doors

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Kevin "KAYR" Robinson - From Poverty & Loss To 160 Doors · REL Freedom Podcast

• 0:00
  SPEAKER_00: So if I walk by a house, I see the whole back missing, that's not for me because I'm not a new construction guy.
• 0:05
  SPEAKER_00: So I want to be able to get in and get out and make sure that I add value, not just put a lipstick on a pig, but add value.
• 0:12
  SPEAKER_00: So we'll do the kitchen over, we'll do the bathroom over and refinish the floors and make sure that the lighting and stuff is up to code that people will say, Oh, this looks renovated.
• 0:20
  SPEAKER_00: I want to move in.
• 0:22
  Mike Swenson: Welcome to the Real Freedom Show.
• 0:24
  Mike Swenson: We inspire you to pursue your passion to gain time and financial freedom through opportunities in real estate.
• 0:29
  Mike Swenson: I'm your host, Mike Swenson.
• 0:31
  Mike Swenson: Let's get some real freedom together.com.
• 0:59
  Mike Swenson: It's where we put all of our articles, blogs, episodes, you name it, for you guys to be able to figure out.
• 1:04
  Mike Swenson: Really just to highlight a good story, something that you can get excited about, somebody that resonates with you, a story, a path, whatever that might be.
• 1:12
  Mike Swenson: There's a lot of cool things that you can do inside of real estate, and we want to inspire you guys to do that.
• 1:16
  Mike Swenson: So today we've got a really inspiring journey.
• 1:19
  Mike Swenson: Speaking of inspiration, we have Kevin KR Robinson, poverty growing up in West Philadelphia, moved 18 times before adulthood, and then had some great success kind of getting into schooling, and then you had to work for Goldman Sachs, among other things.
• 1:34
  Mike Swenson: Now you manage more than 160 rental units, two-time best-selling author of the book Can't Break Me, which really talks about your journey and your path and the way that you built what you're building.
• 1:44
  Mike Swenson: So KR excited to have you on the show.
• 1:46
  SPEAKER_00: Thank you so much for having me on your platform.
• 1:48
  SPEAKER_00: I look forward to having this conversation about real estate and also about my journey.
• 1:52
  Mike Swenson: Take us back, kind of get us started here.
• 1:54
  Mike Swenson: Talk about your journey, getting into real estate, why real estate, and we'll kind of take it from there.
• 1:59
  SPEAKER_00: Perfect.
• 2:00
  SPEAKER_00: So I grew up in Philadelphia.
• 2:02
  SPEAKER_00: My mother raised seven children on welfare.
• 2:05
  SPEAKER_00: We moved around about 18 times before I turned 18.
• 2:08
  SPEAKER_00: So I remember vividly uh living without a margin of safety, also without uncertain with uncertainty.
• 2:14
  SPEAKER_00: And I remember vividly when we lived in a studio apartment where we had a hot plate, no stove, we had a bathroom sheet, no bathroom door, we had a bathtub and no shower, and 15 people competing for space with rats, roaches, and flies.
• 2:29
  SPEAKER_00: And the reason it was so crowded is because multiple siblings of mine got pregnant as teenagers and had children back to back.
• 2:36
  SPEAKER_00: And so I remember living in that condition.
• 2:39
  SPEAKER_00: And that time my stepdad was there, and he said, Don't be an F up like me and everybody else in the family.
• 2:44
  SPEAKER_00: And so at that moment, I actually had three B's and three D's and one C because I'm cute.
• 2:49
  SPEAKER_00: But other than that, I was smoking weed and drinking from fourth grade to eighth grade, hated my life.
• 2:54
  SPEAKER_00: But from that moment, he said, Do as I say, not as I do.
• 2:58
  SPEAKER_00: And at that moment, I decided that I wanted to change my life.
• 3:01
  SPEAKER_00: And so I changed my mentality.
• 3:02
  SPEAKER_00: And I was able to shift.
• 3:04
  SPEAKER_00: I embraced what I call in my book, Can't Break Me, the three Ds, desire, discipline, determination.
• 3:10
  SPEAKER_00: And I was able to shift my life.
• 3:12
  SPEAKER_00: And so I went from that terrible student to volunteeran, school president, class president, debate captain, track captain, play football, and also cross-country captain, got a scholarship, went off to Wall Street, worked at Goldman Sachs and at a hedge fund.
• 3:24
  SPEAKER_00: And I got interested in real estate because when my stepdad, uh, when we were younger, he used to take us on walks and say, These neighborhoods are going to change.
• 3:32
  SPEAKER_00: Like Fifth and Seeds would be more as close to Temple.
• 3:34
  SPEAKER_00: He smoked a lot of weed, but he was a visionary.
• 3:37
  SPEAKER_00: He couldn't keep a job, but he he would inspire you.
• 3:39
  SPEAKER_00: And so he would say, This thing is close to university.
• 3:42
  SPEAKER_00: Somebody going by it this close to downtown.
• 3:44
  SPEAKER_00: And so he planted the seed.
• 3:46
  SPEAKER_00: He actually took us around houses that he would work on.
• 3:49
  SPEAKER_00: And so we got exposed to it, but he was broke as hell.
• 3:52
  SPEAKER_00: And so he planted the seed.
• 3:53
  SPEAKER_00: I watered it.
• 3:54
  SPEAKER_00: And then that's when I started investing in real estate at 26.
• 3:57
  SPEAKER_00: I bought my first rental unit, 2018, nine rental units, 2019, 35, and 2020, 105.
• 4:05
  SPEAKER_00: So I bought 70 during the pandemic.
• 4:06
  SPEAKER_00: Now I'm at 160 plus.
• 4:08
  SPEAKER_00: I stopped working on Wall Street and have my own property management business.
• 4:11
  SPEAKER_00: So that's the quick rundown.
• 4:13
  Mike Swenson: Awesome.
• 4:13
  Mike Swenson: You know, thinking about probably talking a little bit more psychology and that sort of thing.
• 4:18
  Mike Swenson: You know, there's so many people that are in a spot where they haven't invested in real estate, they don't know what to do, they don't know where to turn.
• 4:24
  Mike Swenson: And so maybe talk through probably like some of those mental hurdles that you had to walk through to go from, okay, I didn't have that, and now I'm going to be somebody that can have that.
• 4:34
  Mike Swenson: I'm I'm guessing kind of through college and Goldman Sachs, you were exposed to a lot of things that were different than what you, you know, originally had, which kind of changed your thinking around those things.
• 4:43
  Mike Swenson: But for a lot of people, it's like, well, my parents didn't have that, I didn't have that.
• 4:47
  Mike Swenson: So why am I worth you know doing more or getting more than what they had?
• 4:51
  SPEAKER_00: And so I think the first thing is that moment where I realized that I had to be vulnerable, that I don't know all the answers.
• 4:58
  SPEAKER_00: So therefore, I decided that I needed to open my mouth for closed mouth doesn't get fed.
• 5:03
  SPEAKER_00: So I started to I sought out mentors and sponsors.
• 5:07
  SPEAKER_00: I pretty much created my own personal board of directors, mentors and sponsors who will pour into me, support me, and encourage me and put their name on the line or what have you, or their money to help me.
• 5:18
  SPEAKER_00: And so that was part one.
• 5:19
  SPEAKER_00: But the second thing was getting a nurture environment, environments where people will encourage you and pour into you and believe in you.
• 5:25
  SPEAKER_00: But break embracing that idea of the three D's, desire, which is gonna get you motivated to want more for your life.
• 5:32
  SPEAKER_00: But I realized desire alone doesn't get you results.
• 5:35
  SPEAKER_00: And so therefore, you embrace discipline.
• 5:37
  SPEAKER_00: That's adopting routines and actually doing what you say you're gonna do, and also determination.
• 5:42
  SPEAKER_00: Determination will carry you through when you face setbacks.
• 5:46
  SPEAKER_00: So that was the principle.
• 5:47
  SPEAKER_00: So I said once I shifted my mindset, now I went about trying to do what I call the three C's.
• 5:53
  SPEAKER_00: I talk about my book and can't break me, intellectual capital.
• 5:56
  SPEAKER_00: How are you gonna learn in the classroom or outside the classroom?
• 5:59
  SPEAKER_00: But you have to learn or social capital.
• 6:01
  SPEAKER_00: How do I leverage relationships to affect change in my life or in my others?
• 6:06
  SPEAKER_00: And then financial capital.
• 6:08
  SPEAKER_00: We live in a capitalist society.
• 6:09
  SPEAKER_00: How do you get access to capital?
• 6:11
  SPEAKER_00: How do you apply for a loan?
• 6:12
  SPEAKER_00: How do you take advantage of programs?
• 6:14
  SPEAKER_00: So I started to shift my mindset.
• 6:17
  SPEAKER_00: And then once I did that, I put together the pieces saying, all right, let me figure out how do I get in a real estate business?
• 6:23
  SPEAKER_00: How do I apply for loans?
• 6:24
  SPEAKER_00: How do I become more marketable?
• 6:26
  SPEAKER_00: How do I build teams with contractors?
• 6:28
  SPEAKER_00: And that's how I went from owning no real estate to basically growing over time, running my own race at my own pace.
• 6:35
  Mike Swenson: Backing up just a step, then kind of that that formative years where you you turned things around, got into college and kind of your first years out of college.
• 6:44
  Mike Swenson: Talk about that because it seems like that's where the the momentum started to turn and started to pick up some of the experiences that you had or lessons, things that you learned that kind of prepped you.
• 6:53
  SPEAKER_00: I went from like a survival mode where I'm uncertain and I'm jumping out around and I'm not confident.
• 7:00
  SPEAKER_00: I'm just trying to survive.
• 7:01
  SPEAKER_00: And then I got structure.
• 7:03
  SPEAKER_00: So structure is when you have routines and you have mentors, you have teachers, you're trying to learn stuff in a systematic way.
• 7:11
  SPEAKER_00: And then the outcome is stability financially and mentally and emotionally.
• 7:17
  SPEAKER_00: And so what happened is I said, all right, let me start getting smart.
• 7:20
  SPEAKER_00: So intellectual capital, I start trying to join clubs, talk to mentors, talk to people that work in the banking and real estate space just to get educated.
• 7:30
  SPEAKER_00: And I learned that there were a lot of benefits to buying your personal name versus buying an LLC.
• 7:35
  SPEAKER_00: So I bought the first nine rental properties in my personal name because you get a lower interest rate relative to if you buy an LLC, you get down payment flexibility, whether you're putting 0% down, or you're putting 5% down, 10% down with the LLC, you got to put 20% down.
• 7:49
  SPEAKER_00: The closing cost is lower, the insurance premium is lower.
• 7:52
  SPEAKER_00: So I took advantage of all that basic stuff to say, all right, I'm gonna buy one property on average every year and master that before I jump to something else.
• 8:02
  SPEAKER_00: And so that's how it all started taking advantage of different programs and getting educated and taking the time to master one investment property at a time before I jumped in year 10.
• 8:12
  Mike Swenson: Curious to hear then, you know, friends, family, relatives, whoever that might be, when they see this change in you and this shift in you and and really you hitting the gas pedal, what were their thoughts or what were their feedback as you were uh going through that?
• 8:26
  SPEAKER_00: Well, in the beginning, because it took me nine years to go from one to nine rental units, actually, a lot of people were saying, Mmm, I thought you were smart.
• 8:35
  SPEAKER_00: Apparently, you're not that smart.
• 8:36
  SPEAKER_00: Why are you going so slow?
• 8:38
  SPEAKER_00: Oh my God, why would you go work for those companies and go to school and you only got like at 1.3 units or four units?
• 8:44
  SPEAKER_00: They said that.
• 8:45
  SPEAKER_00: But I said, Look, I gotta run my own race at my own pace.
• 8:48
  SPEAKER_00: So for me, the number one rule was return of investment.
• 8:51
  SPEAKER_00: If I put money down, I want all my money to come back to me and then later return on investment.
• 8:57
  SPEAKER_00: And so a lot of people initially thought I was first, some people thought I was crazy for even thinking I can become a real estate investor.
• 9:04
  SPEAKER_00: Then on the flip side, once I did buy something, people told me I was going too slow because I never use hard money lenders and things of that nature.
• 9:12
  SPEAKER_00: And I was, I didn't get partners until 2020.
• 9:15
  SPEAKER_00: So people said you're moving too slow.
• 9:17
  SPEAKER_00: But then when I stepped on the accelerator on the gas, everybody said, Oh my goodness, you're a genius.
• 9:22
  SPEAKER_00: Oh my, how did you do that?
• 9:24
  SPEAKER_00: You you lived off your job and you saved all your cash flows and paid down your debt.
• 9:29
  SPEAKER_00: So people's response was totally on both spectrums.
• 9:33
  SPEAKER_00: One, I you know you can't do it, no one in your family has ever done it.
• 9:36
  SPEAKER_00: The other one is you're going too slow.
• 9:37
  SPEAKER_00: I thought you were smart.
• 9:38
  SPEAKER_00: And then at the end, oh my goodness, you must be a genius.
• 9:41
  SPEAKER_00: And so it's interesting how that the dynamic works over time.
• 9:46
  Mike Swenson: It's interesting that you know, like how people talk about the overnight success story that takes eight years, you know, to build.
• 9:51
  Mike Swenson: So you see that fruit, they don't see all the work and all the hard stuff that happened to get to that point.
• 9:58
  SPEAKER_00: Exactly.
• 9:58
  SPEAKER_00: And people are like, So why you've never no one broke into your property, no one did this and that.
• 10:03
  SPEAKER_00: I said no, because I was going very, very slow.
• 10:05
  SPEAKER_00: I was very methodical in my approach.
• 10:08
  Mike Swenson: I know for a lot of people, what kind of hangs them up is you know, their their paralysis analysis, right?
• 10:13
  Mike Swenson: They're analyzing deals, figuring out what to do, locations and all that.
• 10:16
  Mike Swenson: And at some point you've got to move forward.
• 10:18
  Mike Swenson: So maybe talk about that first deal or two or three where you're like, okay, I'm I'm actually gonna put my my chips in the middle here.
• 10:25
  Mike Swenson: We're gonna go after this thing and do it.
• 10:27
  Mike Swenson: What were you looking for?
• 10:29
  Mike Swenson: What types of properties, or you know, what areas?
• 10:31
  Mike Swenson: I know a lot of your stuff's in Philadelphia, but certain areas, and then kind of what you were going for and how methodical was it?
• 10:37
  Mike Swenson: Or hey, I just happened to find a good deal and I'm good enough and I'm gonna take that and figure it out from there.
• 10:43
  SPEAKER_00: So for me, like you had mentioned earlier, I used the knowledge that I got from working in corporate America and also the knowledge that I got from moving around 18 times um before I turned 18.
• 10:54
  SPEAKER_00: So, on the one hand, I started to think like a tenant.
• 10:57
  SPEAKER_00: I was like, I know what tenants are going through with some of their stresses and how they're moving around.
• 11:03
  SPEAKER_00: I got to see different parts of the city.
• 11:05
  SPEAKER_00: And that taught me to say, oh, hell no, I don't want to live in that neighborhood.
• 11:09
  SPEAKER_00: And then the other neighborhoods said, Oh, look, we this might be a good place to move.
• 11:13
  SPEAKER_00: So seeing that and also seeing how landlords moved and treated us gave me a window into how to think like a landlord.
• 11:21
  SPEAKER_00: But then working on Wall Street, we used a lot of processes and systems so that you can stream streamline things, and you also paid a lot of attention to the fine print to figure out okay, this is the loophole or this is the way you have to approve things.
• 11:35
  SPEAKER_00: Uh, and so what I did is I came up with my own formula, which I have on my website, where what we do is a macro analysis.
• 11:41
  SPEAKER_00: The first thing I want to do is analyze on a macro level.
• 11:44
  SPEAKER_00: Is the state landlord friendly?
• 11:46
  SPEAKER_00: Is that city or county landlord friendly?
• 11:48
  SPEAKER_00: What I mean by that is it easy to evict people?
• 11:51
  SPEAKER_00: What is the process?
• 11:52
  SPEAKER_00: Are there any rent control?
• 11:54
  SPEAKER_00: So I'm asking all those questions.
• 11:56
  SPEAKER_00: How many core companies are in that city?
• 11:59
  SPEAKER_00: And then I narrow it down a micro level and say, let me find three zip codes that I want to analyze very carefully.
• 12:06
  SPEAKER_00: And these zip codes, do they have enough employers?
• 12:09
  SPEAKER_00: Do they have amenities?
• 12:10
  SPEAKER_00: Is it close to the airport?
• 12:12
  SPEAKER_00: Is it close to center city, restaurant, schools?
• 12:15
  SPEAKER_00: Also, and then I would go even deeper and say, okay, I want to find something in a neighborhood where there's a high ownership rate because owners tend to care more about the property.
• 12:25
  SPEAKER_00: So I'm looking at that.
• 12:26
  SPEAKER_00: Is it close to a local church?
• 12:28
  SPEAKER_00: How old are the tenants in that neighborhood that are there?
• 12:32
  SPEAKER_00: And so I'm look walking through the neighborhood at night and even on the weekend and during the day because I'm trying to get a sense of what my investment is going to be like.
• 12:40
  SPEAKER_00: Because I don't want to buy a house where somebody on the left side is selling drugs, and on the right side, they're doing prostitution.
• 12:46
  SPEAKER_00: And I'm really digging down deep when I do my analysis.
• 12:50
  SPEAKER_00: And that's how I ended up with particularly I invested in Cobbs Creek, which is close to the University of Penn and close to Drussard University, St.
• 12:58
  SPEAKER_00: Joseph University, and it's a bunch of churches and it's close to the airport in center city.
• 13:03
  SPEAKER_00: So I did all this analysis.
• 13:05
  SPEAKER_00: That's how I ended up investing in that community first.
• 13:08
  SPEAKER_00: And I said I want to buy a few properties there so I can leverage my team.
• 13:11
  SPEAKER_00: And I talk about this in my book.
• 13:13
  SPEAKER_00: I want to be able to leverage my team, leverage my relationships with the vendors.
• 13:17
  SPEAKER_00: When I talked about social capital, and uh I also want to be able to leverage my relationships with the local bankers.
• 13:24
  SPEAKER_00: So sometimes the banks will have relationships, uh, credit unions will focus on this part, our small bank, our state bank.
• 13:30
  SPEAKER_00: So that's how it all started.
• 13:31
  Mike Swenson: The local part is important because same thing for us, you know, we're looking for local banks because smaller banks they want to invest in the communities as well.
• 13:39
  Mike Swenson: They get that piece.
• 13:40
  Mike Swenson: And then, two, you're building a critical mass of you know, workers being able to work on multiple properties and and things like that.
• 13:48
  Mike Swenson: Were you looking more for kind of cash flow early on?
• 13:52
  Mike Swenson: Was it more value add type stuff?
• 13:55
  Mike Swenson: Or what were you looking at and kind of on that sliding screen?
• 13:58
  SPEAKER_00: That's a great, that's a great question because I tell people the riches are in the niches.
• 14:02
  SPEAKER_00: So I don't think you should jump around.
• 14:04
  SPEAKER_00: Monday, you should Monday.
• 14:05
  SPEAKER_00: I don't think this approach is best.
• 14:07
  SPEAKER_00: Monday, I'm a value add investor.
• 14:10
  SPEAKER_00: On Tuesday, I uh uh I'm a growth investor.
• 14:13
  SPEAKER_00: I'm building from the ground up.
• 14:14
  SPEAKER_00: Uh Wednesday, I'm doing Airbnb.
• 14:17
  SPEAKER_00: Uh Thursday, I'm flipping.
• 14:19
  SPEAKER_00: On uh Friday, I'm doing uh something brand new.
• 14:23
  SPEAKER_00: I'm just adding small houses in the backyard.
• 14:25
  SPEAKER_00: That you jump all around, you have no focus.
• 14:28
  SPEAKER_00: So therefore, I decided early on I'm gonna be a value ad guy.
• 14:31
  SPEAKER_00: So I've never done Airbnb, I've never done uh I've never sold anything, so I haven't flipped, I haven't used hard money lending.
• 14:38
  SPEAKER_00: I said I'm gonna do value ad.
• 14:39
  SPEAKER_00: I'm gonna buy an asset that can be occupied or not occupied, and I want to make sure that I am adding a certain amount of value to it.
• 14:47
  SPEAKER_00: So if it was a$100,000 house, my max is 50% that I would use for 50% of the purchase price for rehab.
• 14:54
  SPEAKER_00: So I will come up with my own parameters where I don't take on too much debt or too much risk.
• 14:59
  SPEAKER_00: So if I walk by a house, I see the whole back missing, that's not for me because I'm not a new construction guy.
• 15:04
  SPEAKER_00: So I want to be able to get in and get out and make sure that at value, not just put a lipstick on a pig, but add value.
• 15:11
  SPEAKER_00: So we'll do the kitchen over, we'll do the bathroom over and refinish the floors and make sure that the lighting and stuff is up to cold, that people will say, Oh, this looks renovated.
• 15:19
  SPEAKER_00: I want to move in.
• 15:20
  Mike Swenson: And then I assume cash out refi, take that money, pour into the first strategy.
• 15:25
  SPEAKER_00: Yeah, we do a cash out refi, and then you pour into something else so you don't have to pay uh taxes on it.
• 15:30
  SPEAKER_00: So that was my approach.
• 15:31
  Mike Swenson: Great, and that's that's a great way to go because when talking with other investors, it's like, you know, they don't necessarily want to leave money in a deal, right?
• 15:39
  Mike Swenson: They want to be able to put it in, add that value, get that back.
• 15:42
  Mike Swenson: And then it also helps from a scaling standpoint, too, because now you don't have to earn another 50 grand to put into it because you're getting that 50 grand back.
• 15:50
  Mike Swenson: So that is really important in terms of scaling.
• 15:52
  Mike Swenson: And and was that hard money lenders?
• 15:54
  Mike Swenson: You'd mentioned that earlier on that provided that capital early on.
• 15:57
  SPEAKER_00: I've never used hard money lenders.
• 15:58
  Mike Swenson: Okay.
• 15:59
  SPEAKER_00: So that's why I said it took so long to go from one to nine units, uh, because I would just buy one house on average per year.
• 16:07
  SPEAKER_00: And so I will buy something for 40,000 and the single families, you could put down 15% if it's your personal name and you don't live there.
• 16:14
  SPEAKER_00: So I come up with the$6,000, but I also will attend like one of the classes.
• 16:18
  SPEAKER_00: The credit union will let you attend like a home buyer class, even if you are an investor and you get like$1,500 or$1,000 towards your clothing costs.
• 16:26
  SPEAKER_00: So therefore, I found ways to cut down that cost.
• 16:29
  SPEAKER_00: Um, or I would take advantage of a loan that combine the rehab costs and also the purchase.
• 16:35
  SPEAKER_00: I think it's the homestead loan or what have you.
• 16:37
  SPEAKER_00: And you can get a 30-year uh fixed mortgage, but it has to be in your personal name.
• 16:41
  SPEAKER_00: You got to put down 25%.
• 16:42
  SPEAKER_00: So I would buy something for like 60,000 and I can use like a personal credit card.
• 16:47
  SPEAKER_00: So that's why I was pacing myself the first nine or 10 years because I said I'm gonna run my race at my own pace.
• 16:53
  SPEAKER_00: I don't have to overwhelm myself.
• 16:55
  SPEAKER_00: And so, and and what you do is you start with the three D's, then you get the three C's and the three R's, which is you build a track record, you're building those meaningful relationships.
• 17:05
  SPEAKER_00: And if you do the first two R's, your reputation will precede you and that will open doors.
• 17:09
  SPEAKER_00: So that was my strategy.
• 17:10
  Mike Swenson: Love it.
• 17:11
  Mike Swenson: So then you mentioned uh kind of 2019 into 2020 is when you you scaled quite a bit, picked up quite a few properties, multi-family apartment buildings and all that.
• 17:20
  Mike Swenson: Talk about the the the reason for that, the why and the how.
• 17:22
  SPEAKER_00: And and so for me, when I did it and when I was investing, when I bought that first piece of real estate, it was during the Great Recession in 2009.
• 17:30
  SPEAKER_00: And so I saw people, it was the opportunity that some people made a lot of money because it was as Warren Buffett would say, when there's blood in the streets, that's when you should be greedy, versus being greedy when everybody else is greedy.
• 17:42
  SPEAKER_00: And so I said, if the world ever appears to be coming to an end, I want to make sure I'm in a position to take advantage of the opportunities.
• 17:51
  SPEAKER_00: And so I lived off my nine to five job from 2005 to 2020, and that was for uh vacation, Medicare, everything, paid all the bills.
• 18:02
  SPEAKER_00: Then the rental properties throughout those years, I was able to save the cash flows after you pay everything.
• 18:10
  SPEAKER_00: And so with real estate for buy and hold, you benefit primarily four ways.
• 18:14
  SPEAKER_00: One is you get the cash flows, so I saved all the cash flows, two, you have debt pay down.
• 18:20
  SPEAKER_00: So the debt is getting paid down.
• 18:21
  SPEAKER_00: You also have the tax benefits, depreciation, all the other tax benefits, but you also have appreciation, which is forced and natural.
• 18:29
  SPEAKER_00: And so I was able to take advantage of those four levers.
• 18:33
  SPEAKER_00: So now in 2019, I can use my cash reserve and also borrow against my existing properties to go use that the funds from there with the down payments for the apartment buildings.
• 18:45
  SPEAKER_00: And so that's how I was able to go from single families to start owning apartment buildings.
• 18:50
  SPEAKER_00: I know it was slow and steady.
• 18:51
  SPEAKER_00: I believe that's how you win the race.
• 18:53
  Mike Swenson: And then the beauty with the apartment buildings, you know, you've got fewer roofs, fewer exteriors to worry about, and there's a better economies of scale that happens there as well.
• 19:03
  Mike Swenson: Um versus having to worry about, you know, 160 roofs on 160.
• 19:07
  Mike Swenson: Yes.
• 19:08
  SPEAKER_00: Yes, exactly.
• 19:10
  Mike Swenson: Talk about the management side of it, and then to the the workers that you're hiring to be able to do the work and do those value add maybe some of the the thought process or the strategy behind how things change and adapted over time as you added and scaled.
• 19:24
  SPEAKER_00: And so when I first started and I did the math, and I I would say, say for instance, I was writing something for 800, but let's use a thousand dollars per month.
• 19:32
  SPEAKER_00: And I had said the property managers went like 10%, and I only have like one property.
• 19:36
  SPEAKER_00: I said, We're only getting a thousand, and then I got to pay a hundred dollars every month.
• 19:39
  SPEAKER_00: I said, they eat into my profit.
• 19:41
  SPEAKER_00: So I said, maybe I should figure out how to manage this property myself so I can keep the money in-house.
• 19:46
  SPEAKER_00: And so because I took the first nine years doing everything primarily myself, I was able to master and understand the whole property management process from tenant selection to working with contractors to rehabbing to get money from lenders.
• 20:00
  SPEAKER_00: And so I decided to start what I call KR2 property management, which is my property management business, and say, I'm gonna hire family and friends.
• 20:09
  SPEAKER_00: And of course, you can make them 1099 employees or what have you, and also hire other companies.
• 20:14
  SPEAKER_00: Therefore, it was much more um beneficial for me, instead of having full-time employees, to find like my aunt.
• 20:20
  SPEAKER_00: She's in charge of cleaning.
• 20:21
  SPEAKER_00: So she or my niece can come and clean an apartment once in a while.
• 20:24
  SPEAKER_00: We don't need cleaning every day.
• 20:25
  SPEAKER_00: I can have other family members come and cut grass, or I can have uh day laborers come and do these basic jobs.
• 20:32
  SPEAKER_00: And so, therefore, I can keep track of how it happened just with one property, and I got two, and then I got three.
• 20:38
  SPEAKER_00: And so I think that knowledge helped me understand okay, there are benefits to having a crew that is really stable and they don't necessarily have to have college degrees.
• 20:49
  SPEAKER_00: I like to meet people where they are.
• 20:50
  SPEAKER_00: You may be gifted at just landscaping, you may be gifted at just cleaning something, you may be gifted at just doing some extermination, but people don't realize that the management business, the number one thing you need is you need people who are consistent.
• 21:05
  SPEAKER_00: They're gonna show up for work.
• 21:06
  SPEAKER_00: They may, even if they get on your nerves, they probably, if they're doing good work, that's all you want.
• 21:11
  SPEAKER_00: You need consistency that they don't go disappearing.
• 21:14
  SPEAKER_00: And so I will find people like that in the neighborhood, in these communities, and say, hey, look, you can keep your regular job.
• 21:20
  SPEAKER_00: If you like working night shifts, clean all the common areas at night.
• 21:23
  SPEAKER_00: Or if you like cutting grass in the dark and you can cut grass, just get you a light hat, whatever.
• 21:28
  SPEAKER_00: So my thing was trying to meet people where they are that actually share my core values and my principles, and that's how we're able to build the business.
• 21:37
  SPEAKER_00: But also you have to make sure that you have a team of skilled tradesmen who actually you have substitutes because you may use, I use like Goodman Plumbing sometimes, or I may actually use a general contractor, but I want to have backups because you plan for the worst, you hope for the best.
• 21:53
  SPEAKER_00: And so that has always been my approach about how to manage the whole process.
• 21:57
  Mike Swenson: Kind of what was your strategy for identifying?
• 22:00
  Mike Swenson: Finding these properties and finding these deals.
• 22:02
  Mike Swenson: Was it just relationship building with people?
• 22:04
  Mike Swenson: Was it just marketing, flyers, bandit signs?
• 22:07
  Mike Swenson: Kind of what was it?
• 22:07
  Mike Swenson: How did you find these deals?
• 22:09
  SPEAKER_00: So, in the beginning, when you're when you're really fresh out and you're learning, you're only buying one a year.
• 22:14
  SPEAKER_00: It's not like I can pay for any services or something like that.
• 22:16
  SPEAKER_00: It's not like I'm buying 50.
• 22:18
  SPEAKER_00: I only I'm only analyzing one.
• 22:20
  SPEAKER_00: So I may, I may, and I only decide to buy one.
• 22:23
  SPEAKER_00: So I may analyze using my framework, which I told you I do a macro analysis and a micro analysis, which I I described and I have in my bundle on my website.
• 22:31
  SPEAKER_00: But that I did that analysis and I could spend the whole year looking at 200 properties or 300 and say I'm only buying one.
• 22:38
  SPEAKER_00: It's not like I'm buying 50.
• 22:40
  SPEAKER_00: So I'll just say if this hits my parameter, where I want a 10% cash on cash return, or I wanted to be in this location with these amenities, or I wanted to have this type of crime and get the police report.
• 22:51
  SPEAKER_00: So because I'm only buying one, I get to spend all my time focused.
• 22:56
  SPEAKER_00: It's kind of like I tell people when you're a security guard, if I had to monitor two monitors, I'm gonna be pretty good.
• 23:01
  SPEAKER_00: No one's gonna steal anything.
• 23:02
  SPEAKER_00: But if I have to monitor 50 of them, people are gonna be running by me and everything, I'm gonna be overwhelmed.
• 23:08
  SPEAKER_00: And so for me, by myself, I found the deals off the MLS and also talking to people, telling them I'm interested in real estate, at churches, at community events, streets, clubs.
• 23:18
  SPEAKER_00: But as you get bigger, like I had said earlier, once you build uh uh establish a track record and build those meaningful relationships, you have the third R, which is reputation.
• 23:29
  SPEAKER_00: So now people call me nonstop with different deals because you have a reputation of being able to close, being able to take on big projects.
• 23:36
  SPEAKER_00: So therefore, deals start to flow your way.
• 23:39
  SPEAKER_00: But in the beginning, when you're a nobody, you got to go out there and try to figure out your way.
• 23:42
  SPEAKER_00: I tell people during that stage, I accept blessings from everybody, anybody.
• 23:46
  SPEAKER_00: It could be some addict on the sidewalk, it could be a doctor, a nurse, anybody.
• 23:51
  SPEAKER_00: So you you know real estate, then you know me.
• 23:53
  Mike Swenson: Are you looking to get started or scale in real estate investing but don't know your next step?
• 23:58
  Mike Swenson: Are you overwhelmed thinking about finding deals, analyzing deals, doing due diligence, and managing properties on top of it?
• 24:04
  Mike Swenson: Go ahead and push the easy button and invest with us.
• 24:08
  Mike Swenson: Real estate investing is what we do full time.
• 24:10
  Mike Swenson: We've done dozens of deals with hundreds of doors.
• 24:12
  Mike Swenson: We have the knowledge and experience to handpick the best deals that most investors can't find.
• 24:17
  Mike Swenson: We've at large off-market deals all the time where you can hopefully find returns and economies of scale that you just can't find on your own.
• 24:24
  Mike Swenson: The best thing is it's 100% passive to you for less capital than you put down trying to acquire a property on your own.
• 24:31
  Mike Swenson: Don't let this year go by where you don't make the leap, add to your portfolio, or you just sit in analysis by paralysis.
• 24:38
  Mike Swenson: To find out more, visit freedom throughrealestate.com and click on invest.
• 24:42
  Mike Swenson: You can book a call and learn more there.
• 24:44
  Mike Swenson: So get to scaling your portfolio now with us by your side.
• 24:48
  Mike Swenson: That's freedomthroughrealestate.com and click on invest.
• 24:51
  Mike Swenson: Talk about that 2020 year for you, which uh, you know, the world was changing, there's a lot happening outside.
• 24:58
  Mike Swenson: And for you and your business, it was a very significant difference.
• 25:01
  Mike Swenson: Now, you mentioned already about kind of when there's there's blood in the streets, like that's when you got to be ready.
• 25:06
  Mike Swenson: But for you, yeah, it was multifamily apartment buildings that you hadn't done much of before, buying many of them in one year and really scaling up all while everybody else is you know quarantined and who knows what's gonna happen.
• 25:21
  Mike Swenson: That must have been quite the test of your internal fortitude that year, moving moving forward and scaling the way that you did.
• 25:28
  SPEAKER_00: It was.
• 25:28
  SPEAKER_00: It was, and you had to you really had to have some deep belief in yourself and your guy given abilities and also trusting guy.
• 25:36
  SPEAKER_00: So, for instance, I had bought a 24 unit that year.
• 25:39
  SPEAKER_00: I also bought a 14 unit with a restaurant.
• 25:41
  SPEAKER_00: I also bought a 12-unit apartment building, a six-unit apartment building.
• 25:46
  SPEAKER_00: Uh, I also bought um uh six individual houses as well.
• 25:50
  SPEAKER_00: And so uh, no, five individual houses.
• 25:53
  SPEAKER_00: So, for instance, it was a uh a bunch of houses in Harrisburg, five houses on the same block, owned by a guy who owned them many years, but he was nervous that COVID was going to destroy everything.
• 26:03
  SPEAKER_00: He wanted 200 200k.
• 26:05
  SPEAKER_00: I found out on the MLS.
• 26:06
  SPEAKER_00: I emailed him and said, I put an offer in, say I'll give you the 200k, but after inspection, I got him down to$180,$85,000.
• 26:13
  SPEAKER_00: So it was$37,000 per house.
• 26:16
  SPEAKER_00: Over, and that was in 2020, by 2025, I put about like a total of$25,000 in those five houses, and they each one came back and appraised for$85,000 a piece.
• 26:27
  SPEAKER_00: And I didn't really do that much to them.
• 26:29
  SPEAKER_00: And I'm buying houses that's not they're like not Beverly Hills houses, they're just houses where you know you got workforce that need to pay the rent, and the rents used to be like$700 or$600.
• 26:40
  SPEAKER_00: Now they're all over a thousand.
• 26:42
  SPEAKER_00: Uh, and so I think during that moment when a lot of people were nervous, it created an opportunity for me to step in and lock in some of these houses at unbelievable rates.
• 26:52
  SPEAKER_00: But um, but also my portfolio that I had the name, the properties on my personal name, I was able to refinance and they're locked in at 30-year fixed mortgages at like 3% or 3.1% or 3.2%.
• 27:04
  SPEAKER_00: And so for me, I knew that it was going to be a once-in-a-lifetime opportunity that even if I don't do anything else for the rest of my life, if I just get this one year right, I'm good.
• 27:13
  SPEAKER_00: I'll be telling the same story for the rest of my life.
• 27:15
  SPEAKER_00: They're like, oh, but you only made that good deal once.
• 27:17
  SPEAKER_00: I said I know it happened 50 years ago, but I'm living off of that.
• 27:20
  SPEAKER_00: That that's how I got my best assets.
• 27:23
  Mike Swenson: Well, and you hear so many people say, like, oh, I wish I would have bought five years ago.
• 27:26
  Mike Swenson: You know, we always talk about, you know, on my real estate team, even you know, a long time ago, it's like, well, the the two best times to plant a tree 20 years ago and today, right?
• 27:35
  Mike Swenson: And so you've got to be able to take action when you can take action because yeah, everybody wish they would have bought properties X number of years ago or Y number of years ago.
• 27:44
  Mike Swenson: So you've got to figure out how do I make it work today.
• 27:47
  Mike Swenson: And then five or 10 years from now, I can look back and say, yeah, that was a great decision.
• 27:51
  SPEAKER_00: Yeah, you say, hey, look, I if you want to call me a one-trick pony that that just came up with that one trick, that's all I got.
• 27:58
  SPEAKER_00: That's all, folks.
• 27:59
  Mike Swenson: Now, real quick, you mentioned your book, Can't Break Me.
• 28:02
  Mike Swenson: I do like to ask people that author books on the podcast kind of how that came to you, that process of you know putting your thoughts together, putting it all down on paper and getting it out for the world to hear your story.
• 28:13
  SPEAKER_00: This book, Can't Break Me, is uh a reflection of my entire journey from going from a negative net worth to becoming a multimillionaire, but also about shifting my mindset is a blueprint and it it illustrates a life that is disciplined and that involves structure.
• 28:31
  SPEAKER_00: So I go from stability, from survival to structure to stability.
• 28:36
  SPEAKER_00: And so I talk about how I was able to build my own personal board of directors.
• 28:41
  SPEAKER_00: I was also able to become resourceful and leverage relationships to open doors for me, not only academically, but also professionally and also in a real estate space, and also come to this reality that we're all community made, not self-made.
• 28:57
  SPEAKER_00: Because once my community started to pour into me and open doors for me, whether that was financially and emotionally or even just feeding me, that started to really help the will spin.
• 29:07
  SPEAKER_00: Because I started saying, hey, look, I want to go into banking.
• 29:10
  SPEAKER_00: I'm talking to my lender.
• 29:11
  SPEAKER_00: Do you know someone that works with commercial real estate investors?
• 29:14
  SPEAKER_00: I want to get this and they open doors to introduce you to people.
• 29:17
  SPEAKER_00: Whether it was, hey, look, I'm going through a difficult time.
• 29:21
  SPEAKER_00: How do I get over this?
• 29:22
  SPEAKER_00: How do I understand grief or identity?
• 29:25
  SPEAKER_00: How do I do property management?
• 29:27
  SPEAKER_00: How do I become disciplined?
• 29:28
  SPEAKER_00: So the book is not necessarily just a promise to myself.
• 29:32
  SPEAKER_00: It's a promise to anyone that has felt as though they're their underdog, they felt as though they're stuck, or they feel as though they want to give up and just quit.
• 29:39
  SPEAKER_00: That I want people to know it's not where you start in life, it's where you finish.
• 29:43
  SPEAKER_00: And so that's pretty much why I want people to buy the book, Can't Break Me.
• 29:48
  SPEAKER_00: And I named it Can't Break Me, is because when I turned my life around in high school and got that scholarship, I went off the boat in college on a presidential scholarship.
• 29:57
  SPEAKER_00: And my brother, one year younger than me, he went to prison for attempted murder.
• 30:01
  SPEAKER_00: And he got sentenced 12 to 20 years.
• 30:03
  SPEAKER_00: And he served his time.
• 30:04
  SPEAKER_00: And as of writing this book, he's back in the system.
• 30:07
  SPEAKER_00: And so I talk about like how by the age of 29, I lost two siblings to the streets are health, and I lost both biological parents and both sets of grandparents.
• 30:17
  SPEAKER_00: But I tell people, you have to keep going.
• 30:20
  SPEAKER_00: Either moments are going to define you and break you, or you're going to build from there.
• 30:23
  SPEAKER_00: And so I talk about building a family business and everything.
• 30:26
  SPEAKER_00: So that's pretty much what the book is about.
• 30:29
  Mike Swenson: Awesome.
• 30:29
  Mike Swenson: Well, thank you so much, KR, for coming on the show and uh sharing your story.
• 30:33
  Mike Swenson: Obviously, a lot more to share.
• 30:34
  Mike Swenson: So uh, you know, folks can pick up your book.
• 30:36
  Mike Swenson: What's the best way for them to do that and to reach out to you to you and learn more?
• 30:41
  SPEAKER_00: So the best way to reach me is www.kayrmotivates.com.
• 30:49
  SPEAKER_00: My website, k a y r motivates.com.
• 30:52
  SPEAKER_00: I'm also K-A-Y-R-Motivates across social media, so you can reach me that way.
• 30:57
  SPEAKER_00: My book is available wherever you buy books.
• 31:00
  SPEAKER_00: If you go to my website, we're giving away my free prologue uh at KAYR Motivates.com.
• 31:07
  SPEAKER_00: So you can see how I think and also get to see how I write before you decide to purchase.
• 31:12
  Mike Swenson: Well, thank you so much for coming on and sharing your story, and uh best of luck to you in the future.
• 31:17
  SPEAKER_00: Thank you so much.