The Sluggish, Regular Approach to Make $50K Per MONTH with Rental Properties

Andrew:
That is the BiggerPockets Podcast present, 8:45 each week. It’s our aim to deliver you the tales, the how-tos, the knowledge to be able to make good choices in right this moment’s present actual property market. We hope that by listening to BiggerPockets, you possibly can develop your data base sooner than Taylor Swift’s checking account. Now, should you’re questioning, the place are David and the place is Rob? Nicely, right this moment is substitute trainer day. If you happen to grew up and went to highschool or center faculty or elementary faculty within the eighties and nineties, right this moment is the day the place the bell rings, your trainer’s not at school, the door swings open and that huge boxy TV rolls by means of on the cart with a VCR. So we’ve bought myself, Andrew Cushman, as your host right here, and naturally, Matt Faircloth. The way you doing, Matt?

Matt:
I’m nice, Andrew. It’s nice to be with you right this moment. And also you completely dated your self six occasions in that intro, by the way in which, as a result of there are folks on the market listening proper now questioning what a VCR is.

Andrew:
I’m simply going to personal it. I can’t cover the grey anymore, so I’m simply going with it.

Matt:
You most likely nonetheless do personal A VCR, don’t you? I wager there’s one in your basement someplace. No?

Andrew:
I don’t.

Matt:
No. Okay.

Andrew:
No, I don’t, fortunately. No. And I don’t even know what VCR stands for anymore.

Matt:
Video cassette recorder, however shifting on. Andrew, it’s nice to be with you right this moment. I’m so grateful that David and Rob left the microphones on for us right this moment so that you and I may bounce in and be co-hosts right here to ask you, Andrew, how are you right this moment?

Andrew:
The surf has been good currently, the snow is beginning to fall within the mountains, and I’m beginning to see some fairly thrilling offers come throughout my desk, so if I need to really feel significantly better, I may need to take one thing not too long ago legalized.

Matt:
There you go. I’m totes jelly throughout the board. Jealous of the waves, jealous of the snow, jealous of all that, the offers and every thing, man, that sounds superior.

Andrew:
Wow. Nicely, nobody’s right here to hearken to us right this moment. We’ve bought an incredible visitor, KC Massie from Lexington, Kentucky. Matt, what are we going to listen to from KC right this moment?

Matt:
I’m tremendous excited for right this moment’s dialog, Andrew, since you and I’ve debated for a lot of, a few years on which is healthier to get in a multifamily, to do the natural development methodology, as I did, which is to purchase a two unit than to purchase a 4 unit, to purchase an eight unit, air quote, double your portfolio each time you do a deal. You are able to do it that method or you possibly can simply hop immediately into the deep finish the place the sharks are as nicely, which is what Andrew did as a result of Andrew’s extraordinarily good. Not everyone’s as good as Andrew and never everyone’s daring as Andrew is, and Andrew’s been capable of construct an exceptional profession for himself by getting immediately into the deep finish of multifamily first bounce.
Our visitor right this moment did what I did, which is to slowly scale, be taught landlording, be taught the sport as you develop, and take a number of strategic moments in his profession that we talked about and we’ve all had these strategic moments. He’s been capable of actually, actually double down and triple down and quadruple down in his portfolio by means of a number of strategic moments he’s had in his previous, and I’m tremendous excited to listen to about that and to listen to about rising and scaling and I feel lots of people are going to have the ability to relate to right this moment’s story.

Andrew:
All proper, thanks Matt. So KC, welcome to the present, my good friend. How are you?

KC:
Doing nice. Thanks for having me on the present, guys.

Andrew:
All proper, glad to have you ever right here. So some background for listeners. KC, you’ve been investing in actual property, I consider, for 11 years. You reside and spend money on Lexington, Kentucky, so that you’re one of many ones who has the benefit of investing in your individual yard. At present personal 121 models throughout 20 properties. We’re going to dive into that a bit of bit extra. Principally multifamily. You bought the 4 models, the eight plexes, the ten plexes, 28 plex, 33 plex. I’m undecided whenever you stopped utilizing the phrase plex, however they simply preserve getting larger. You even have some lengthy and short-term leases, single household properties. Your portfolio at the moment valued at 12 million, and a very powerful piece of that’s it’s a few $6 million fairness place. It’s not simply concerning the worth of the belongings, it’s how a lot fairness you might have in them. And you’re a proud father of three children and also you handle the actual property portfolio along with your spouse, who’s additionally named Kaisey, however spelled otherwise. In order that’s fairly the background and plenty of good information to extract from that.

KC:
Yeah. We must always have her. She’s the one which ought to be on right here. She’s the brains. She’s the brains. I’m the phony.

Matt:
Yeah, for the subsequent episode. I feel most profitable males can say that they’ve bought a really, superb, phenomenal lady standing behind them that’s the wind of their sails, I can say that too of myself, so tremendous huge shout out to the opposite KC Massie. Give her a howdy from us from the viewers at BiggerPockets. Fast, simply, word, you’ve chosen an exceptional market. Lexington, Kentucky, is one in every of my favourite markets within the US as nicely. DeRosa, my firm, is closely invested in Lexington as nicely. Can’t wait to delve into why you picked Lexington, Kentucky, as your goal. So KC, all of us have these main turning factors in our careers and also you had a serious turning level again in 2016 the place you’d already been actual property investing for a bit, however you had a second and it’s an exceptional story. I’d like so that you can inform it right here for the viewers of that first turning level you had in your actual property investing profession.

KC:
So I began again in 2012, however was simply doing the onesies and twosies and nearly limiting beliefs had been sort of controlling what I believed was doable. Any of the larger offers, I sort of simply wrote myself off, however my spouse and I made a decision to do one thing daring and went loopy and determined to plan a visit world wide, which has all the time been a aim of mine, I simply all the time talked myself out of it. Simply not financially good, you need to make investments your cash, not blow it on one huge journey, however we ended up… I used to be doing summer time gross sales on the time and it was actually draining on me, so each night time I’d come residence, I’d simply plan one other portion of this journey and sort of seeing all of it come collectively. After which ending our journey… We went all world wide.
We went to London, Dubai, Maldives, Singapore, Bali, Fiji, Australia, after which resulted in Hawaii, and it’s a kind of moments the place on the very finish of the journey, my spouse and I had been sitting on the sting of the massive island of Hawaii, we had been trying over the volcanic rock and it hit me that limiting beliefs management a lot of what we do and we all the time speak ourselves out of some huge stuff that we’re capable of do. And as I used to be sitting there trying over the ocean, I simply was dropped at tears, having that feeling of undertaking one thing that almost all don’t get to do, however then sitting there and seeing it come to fruition simply modified my complete outlook on how I strategy enterprise, how I strategy actual property, even my circle of relatives life, however sitting there with my associate in life and checking off this bucket listing that I believed may not ever be doable, simply actually set the tone for the subsequent few years of my investing profession.

Andrew:
Yeah, it appears like we should always do a separate podcast episode in your travels since you named off about 18 locations I nonetheless need to get to. So to recap that, you took the leap and truly went and did the epic bucket listing journey that many individuals both can’t do, and even once they can, they nonetheless don’t do it, so kudos to you for doing that. And it appears like taking that journey truly led to an enormous turning level in your life and in your actual property investing profession, so we’re going to get again to that in only a second. First, we’re going to take a fast break for our sponsors.
All proper, so we’re right here with KC Massie and he simply instructed us a few life-changing journey that not solely modified his life but additionally was an enormous turning level in his profession. Nevertheless, we’re going to take a while to journey again a number of years to the start of his 12 million greenback portfolio as a result of it didn’t begin proper at 12 million. So KC, inform us concerning the first deal. How did you discover it? How did you purchase it? What bought you began on this now 12 million greenback investing journey?

KC:
Nicely, it was again in 2012 and I used to be truly attempting to determine how one can present my girlfriend on the time that I used to be critical and I used to be like, what a greater solution to present her I’m critical apart from purchase a rental proper down the road from her dad and mom’ home? I figured if issues didn’t work out along with her, then it was nonetheless going to be a superb funding. So I did the 20% down simply because that’s what someone had instructed me, mentioned, “Hey, whenever you purchase a home, you bought to place 20% down, it’ll prevent cash.” So I did that. It was truly a financial institution owned property on the time and happily, it did work out with my spouse and I feel it was an excellent choice to purchase that rental, only a city residence.

Matt:
Now, was that the home hack, you rented out a few bedrooms, huge shout out to Craig Curelop’s ebook on home hacking, on dwelling in a property and having tenants allow you to pay your individual overhead, your dwelling bills, in order that was nice. The 20% that you just needed to lay down on the property as a result of someone else instructed you you need to, proper? The place’d you get that from?

KC:
So I used to be in a commission-based job. It was one hundred percent fee and the pay construction was truly lucky for investing as a result of we’d get half of our pay all through the summer time after which half of the pay would come on the finish of the 12 months. So that you get this test, substantial test should you do nicely, and also you don’t need to simply blow it on dumb stuff, so I mentioned, nicely, let’s get a number of this again out of my checking account so I don’t spend it within the fallacious locations and put it right into a home. And so it was a $200,000 rental. I put 45% or 45,000 down.

Andrew:
And KC, I’m sorry should you talked about this and I missed it, how did you discover that deal? Was it simply sitting on the MLS?

KC:
Yeah, it was simply on the MLS. Yeah.

Andrew:
So you can begin a big and profitable actual property investing profession by shopping for one thing off the MLS.

Matt:
There are offers on the MLS typically, Andrew, to seek out. Yeah.

Andrew:
Yeah. Nicely, and that’s additionally a superb level is a number of us, I do know I noticed it this fashion once I was getting began, is we really feel like, oh, I’ve to get essentially the most superb deal ever simply to get began in actual property. And when you do need to watch out and never simply go purchase something, it doesn’t should be a house run to get began, it simply needs to be one thing that works. And KC, you probably did an excellent job of simply doing one thing and shopping for one thing. I’m guessing you most likely didn’t have a imaginative and prescient of, I’m going to purchase this rental after which be speaking to Matt and Andrew years later about my 12 million greenback portfolio, however you took step one after which the subsequent step confirmed up and all that.
So from there, you went on to purchase principally small multifamily, proper? Like one or two a 12 months, you proceed to fund them by means of gross sales earnings out of your job, after which, I assume, appears like shopping for in direction of the top of the 12 months whenever you bought your bonus. So let’s return to the 2016 turning level. We perceive Kaisey performed an enormous function in that change. May you elaborate a bit of extra on that?

Matt:
Simply to elaborate, Kaisey’s your spouse, so that you married somebody along with your identical identify for goodness, I can’t consider what that should be like in your world when folks say, “Hey, can I speak to KC?” “Which KC?”

KC:
Proper.

Matt:
There’s two KCs in your family pronounced precisely the identical, I do know spelled otherwise, right?

KC:
Yeah. I imply, initials are KC after which the opposite one’s Kaisey so you possibly can pronounce it otherwise, however it’s laborious. It takes a skilled ear.

Matt:
I get it. You guys should have a number of enjoyable with that. So take us again to the cliffs of Hawaii trying on the volcanic rock and the ocean and the massive epiphany that you just had about… I simply need to inform you how shifting that was, by the way in which, about you realizing that you just needed to tour the world, so you probably did it. And so now it’s like, nicely, I need to scale up and construct an actual property portfolio, and so, aha, epiphany. So what was the choice that you just made in your subsequent motion there on the cliffs of Hawaii, 2016?

KC:
So sitting on the cliffs of Hawaii, it hit me deep the place… As a result of I feel I solely had 10, 15 models on the time, I didn’t have a complete lot. All my development actually got here from that time on 2016 by means of 2021 is the place I made an enormous push. It’s a kind of emotions you possibly can’t actually put into phrases, however it was the sense of accomplishment on, it wasn’t like a difficult factor, it was simply overcoming the worry, I assume, is one of the simplest ways to place it. Like overcoming the worry of doing one thing that I may simply speak myself out of. You are able to do it with investing, you are able to do it with taking a brand new job, you possibly can take it with an enormous journey that you just most likely ought to save the cash on as a substitute. I can’t put a quantitative worth on that have.
It was shifting for me on the time, and oftentimes once I inform a narrative, I can’t even get by means of it as a result of it’s a sense that I’ll always remember. And simply my spouse and being like, “Wow, we did this.” One, I used to be exhausted. 31 days on the go, each three to 4 days we’re getting on one other flight and what number of totally different points we bumped into, and my spouse, we’d simply came upon she was pregnant proper earlier than we left and so it was a complete lot of emotions, a complete lot of feelings, however it actually helps you discover a new gear, and in order that gear kicked in after that.

Matt:
What’s your subsequent transfer? So that you’re again from Hawaii, you’ve bought an enormous context shift, you’re pondering larger, you’ve conquered the world, conquered the mountains of Hawaii, you get again, what’s subsequent?

KC:
I bought to get higher at promoting. I bought to get higher at gross sales. So I actually began finding out and focusing. It wasn’t like, “Hey, I need to purchase extra homes.” It was like, “I need to get higher at no matter I’m doing and something that scares me, I need to work out how one can do it.”

Andrew:
That is sensible. Earlier than we get an excessive amount of additional down the trail, I need to circle again and wrap up the story of sitting in Hawaii. After that second in Hawaii, on that journey, how did Kaisey affect your actual property development after that when you bought again? You talked about limiting beliefs many occasions, and I’m glad you’re doing that as a result of that’s one thing all of us battle with in several levels. What, perhaps, limiting perception did she allow you to get previous in order that it made that such a turning level in your investing profession?

KC:
She took the reins and simply ran with it. She learn a ebook, the ebook on property administration, I feel Brandon Turner’s ebook on…

Andrew:
Brandon and Heather.

KC:
Property administration. So she learn that. Yeah, yeah. Yeah, that one. I’ve by no means learn it however she learn it as a result of she noticed how dangerous I used to be doing. That’s truthfully what occurred. I used to be working my job and I simply would get calls about folks not with the ability to pay or, “Hey, I need to pay late,” Or this upkeep downside, and so I began simply sending them to her. I used to be like, “Hey, I can’t name this individual again proper now. I’m in the course of work, are you able to name them?” And so she began doing it and he or she was like, “Wait, this individual hasn’t paid for 45 days?” And I’m like, “Yeah, I assume not. They’ll get to it. They’re all the time good for it. I’m simply attempting to assist them.” And he or she’s like, “You’re handicapping them. You’re setting them up for failure. They’re going to suppose that’s regular and also you’re allowed to try this.”
She had the mother mentality the place you need to sort of have some self-discipline. And so I mentioned, “Nicely, if you are able to do higher, I’m all ears. I’m not doing superb.” I feel I had 12 or 15 models. And so she learn the entire ebook and simply took over and it made it to the place I used to be like, wow, if we all know what we’re doing and we now have programs in place, you possibly can actually generate income from being a landlord. I’d all the time heard you possibly can, however I used to be simply hoping it was working. I used to be like, so long as I will pay my mortgages and have some leftover, it’s hopefully working. So earlier than she bought concerned, earlier than Kaisey bought concerned, I used to be simply hoping that it was working. So long as I had more cash in my account getting in than going out, I figured I used to be doing okay. And so, as soon as she took over, we actually bought the programs in place that confirmed precisely how worthwhile a home was or worthwhile a deal was. Earlier than that, I used to be simply sort of winging it.
And I’m actually huge on faux it until you make it, and I used to be simply doing what the professionals instructed me to do and hoping I didn’t mess up an excessive amount of alongside the way in which. And if I tousled, then it might be a studying expertise. Somebody instructed me as soon as, you win and also you be taught. So that you don’t win and lose, you win and also you be taught. So actually, I took that to coronary heart and I mentioned if I’m messing up, hopefully I’m falling ahead as a substitute of failing and falling backwards. Hopefully I’m failing ahead.

Matt:
Nicely, to start with, it’s very robust to faux property administration. You both do it otherwise you don’t. It’s like a Yoda, do or don’t. There isn’t a strive. You don’t attempt to be a superb property supervisor, that’s it, it’s only one or the opposite. I additionally need to [inaudible 00:17:11] on simply the idea of investing along with your partner. It’s one thing Liz and I did within the very starting once we first bought began in actual property and I commend Kaisey, your spouse, for seeing there was a spot in your small business and her being prepared to step into it as a partner to say, “Okay, that is perhaps one in every of our weaker factors on this enterprise, so I’m going to step in and actually discover ways to do that by studying Brandon and Heather’s ebook and discover ways to grow to be an exceptional property supervisor and maybe take that off your plate in order that you possibly can give attention to scaling,” Which I actually commend her for being prepared to try this.
And I additionally simply need each husband and spouse combo listening proper now to be aware of the way in which an efficient husband and spouse can work as a group and having one another’s again.

KC:
I can’t inform you what number of occasions different buyers or people who need to spend money on actual property are like, “I might do it if my spouse was on board,” Or, “It will be a lot simpler if my spouse would assist. She fights me on it.” And it’s like, my spouse, simply truthfully, she trusted me at first and he or she noticed that there was a necessity. And most profitable enterprise or entrepreneurs, they see an issue and so they have an answer, and so she was that resolution in our personal environment, in our personal world, and he or she mentioned, “Hey, I see an issue and I is usually a resolution.”

Andrew:
It’s humorous, folks all the time ask me, “What was your most vital rent?” And what I like to inform them is I employed an extremely good, hardworking, and supportive spouse that I might not be right here speaking to you if I didn’t do, and it sort of looks like all three of us did that so I don’t know if there’s a theme there. Perhaps there ought to be a BiggerPockets relationship app developing quickly to assist buyers trying to get into the enterprise, discover like-minded companions.
All proper, so Kaisey helped you notice that you possibly can deal with extra and it appears like helped get you previous some limiting beliefs, helped you see some issues that perhaps you weren’t doing as nicely, which, that’s only a word, it doesn’t should be a partner. It’s actually laborious for any of us to see our personal weaknesses and simply to have someone else to have a look at you and who’s prepared to candidly inform you like, “Hey, you possibly can be doing this higher,” Is extremely useful. However I need to ask, you had been dwelling in Utah on the time, right? All proper, so that you had been doing a little lengthy distance investing in Lexington and then you definately determined, hey, let’s simply go forward and uproot ourselves and transfer to Lexington, Kentucky. What initiated that? What led to that?

KC:
By the point we’re executed with this, you’ll work out how one can say Lexington, Kentucky. It’s a tongue tornado.

Andrew:
Am I going to get a bunch of DMs?

KC:
We’ll should observe that one, however no. No, Lexington is the place I’m from, I used to be born and raised and I like it, however we had been truly dwelling in Utah. My spouse’s from there, and so she truly introduced it as much as me to maneuver again as a result of she was doing the property administration factor from Utah and he or she mentioned… I feel that one of many final straws was, we needed to ship an HVAC firm over to an condo that was complaining of no warmth. So the final straw with dwelling in Utah and attempting to property handle, we had a tenant complain that they didn’t have warmth and so we despatched an HVAC firm by and so they referred to as us out and mentioned, “Yeah, it’s working nice. That they had it switched to the cool mode and that’s why the warmth didn’t come on.” And so we paid 150 bucks for somebody to exit and swap it to warmth, and I used to be like, okay, it might make much more sense to be nearer, little stuff like that. However yeah, in order that was what sort of kicked us this fashion.

Matt:
There you go. And so that you’re again to Kentucky now, which is a market that I’m very accustomed to. My firm owns fairly a bit in Lexington as nicely. See, Andrew, I can say Lexington. Yeah, there it’s. Perhaps you need to personal there to have the ability to say it. Perhaps that’s what the time period is as a result of as soon as you purchase in Lexington, you’ll be capable of say the identify, proper? You’ve moved your spouse and now household out to Lexington, Kentucky, you achieved some consistency, proper? Now she’s working the property administration aspect of the enterprise. How did the gross sales aspect of your small business go so you possibly can generate some revenue to proceed to develop your actual property enterprise?

KC:
So the strategy I took was immediately into my gross sales. It wasn’t essentially, “Hey, I need to do that however at actual property.” My spouse was actually taking up that, I used to be simply looking for offers. Most of what we discovered, I consider the 20 we personal now, I feel 17 or 16 we’re on the MLS. So it wasn’t like they had been hidden offers or wholesale offers, it was all MLS stuff. However to return to the gross sales factor, I simply tried to remove any variables. Something that I may management, I needed to regulate it, mindset being a kind of. However with gross sales, it’s very inconsistent, proper? It’s a rollercoaster. You get some actually huge days or actually huge weeks, months and then you definately normally go feast or famine.,However my thought was, let’s do away with all of the inconsistencies so we will be as constant as doable.
So I might sometimes promote one to 3 a day the place over the course of an entire summer time is a extremely huge summer time, however you may need one other man promoting 5 – 6 or seven in a day, however that’s as a result of they had been actually using the waves the place I used to be simply attempting to maintain it flat line as doable, simply not get too excessive with the highs, too low with the lows. We actually utilized that to actual property as a result of when it rains, it pours. You will get a number of issues all of sudden. All of the air conditionings exit on the identical time, all of the plumbing issues on the identical time, and so you possibly can actually speak your self out of doing extra stuff should you go off emotion. I simply tried to remove as a lot emotion as doable.

Matt:
So actual fast, only for relatability to the viewers, what had been you promoting?

KC:
Residence safety. So door to door. So it wasn’t essentially the most glamorous job, however it was door to door for 5 months out of the 12 months.

Matt:
There’s an outdated adage, should you serve the plenty, you’ll eat with the courses. Residence safety is one thing everyone wants, it’s not lots of of 1000’s of {dollars} to cost it, so that you’re promoting one thing that lots of people want and are prepared to make use of, so I feel that’s nice, and it sounds such as you had been doing very nicely at it.

KC:
Yeah. It was a house automation too, so you possibly can sort of do it in some very nice neighborhoods. It’s not simply safety, however it was actually neat. You might do every thing out of your smartphone.

Andrew:
And KC, it appears like, not surprisingly, you might have one of many traits that we often see in profitable actual property buyers and that’s simply the relentless persistence, constant execution. May you give some particular examples of how did you optimize your actual property enterprise or actual property investing for consistency, it may very well be software program, I imply it may very well be lease [inaudible 00:24:10], what are some specifics that you just enforce that made issues higher for you?

KC:
So tenant communication is an enormous one simply so your cellphone’s not going off on a regular basis. So we use Buildium. Buildium is a software program. There’s AppFolio, Buildium. We’ve used Lease Prepared for some time once we had a number of smaller models. As soon as we bought larger, we converted to Buildium and it actually helped sort of preserve issues organized so that you don’t, one, overlook upkeep requests, two, you might have documentation of every thing so you possibly can truly present you’re doing all your job, lease assortment, folks will pay on-line, you are able to do your leases on-line. I don’t understand how landlords did it again earlier than smartphones and all this know-how as a result of my cellphone is my workplace. I can actually do every thing from posting an condo for lease to accepting, doing background checks, every thing proper there in your smartphone. The mother and pop landlords again within the eighties, nineties, I don’t understand how they did it. I might’ve gone loopy.

Andrew:
So KC, going again to the relentless persistence and consistency as being the factor that actually delivers outcomes. Your organization, you instructed us the technique of how relatively than going out and having an enormous day like everybody else and promoting 5 or seven programs after which they take a number of days off, you targeted on perhaps one or two a day, and what did that result in in 2019?

KC:
Yeah, 2019 was an superior 12 months. So I actually was specializing in gross sales and I used to be actually simply getting higher every day at eliminating all of the distraction as a result of there’s a lot distraction from simply social media to, “What does this individual have? I don’t have that.” Folks get caught up in maintaining with the Joneses. And even with gross sales that occurs as a result of I need to have a 3 or 4 day each single day, however I sort of simply put my head within the sand and simply went to work. And so I used to be truly capable of promote an account each single day, which doesn’t sound like a lot, however whenever you do two each single day for 150 days, you promote over 300 and also you’re the highest of the corporate after which you might have the perfect RMR and you’ve got the bottom cancellation charge since you simply excellent your programs down.
It’s bizarre for me to say, however they really had an award, which I didn’t learn about, however they created an award referred to as the Kevin Massie Award simply because I led each single class that 12 months and it was actually a cool expertise, however it wasn’t one thing I anticipated, I simply needed to do the perfect I may at every.

Andrew:
So then now, that’s an actual stage up. You didn’t simply win the award, you had been to this point above that they created an award in your behalf. That’s fairly spectacular there.

KC:
It was bizarre for me. It was a really uncomfortable factor, however on the identical time, it’s rewarding to see. It’s a kind of moments the place it’s like, wow, truly, I may focus and obtain, proper? Focus and obtain. Too many occasions we get distracted by all of the issues that would go fallacious as a substitute of simply doing it.

Andrew:
So do you communicate with the folks at that firm and whoever wins the award, you’re like, “Hey, you bought the KC? I’m that man. I’ll signal it for you.”?

Matt:
That’s nice. That’s nice. We must always all goal in life to have an award or a avenue named after us, Andrew. So KC, that’s superior. I see a end result taking place right here, proper? Going all the way in which again to you sitting cliff aspect with the opposite Kaisey, then to her entering into actually proudly owning the property administration aspect of the enterprise, you actually mastering the gross sales course of a lot that they identify an award after you. Unimaginable. Going ahead right here, you’ve then determined, by means of all these iterations, to essentially double down your actual property portfolio and begin taking down bigger offers. So speak us by means of that. Speak us by means of that, what that regarded like, felt like as you determined to essentially scale up into bigger and bigger condo buildings.

KC:
So yeah, so I’d all the time get notifications of every thing, and I didn’t actually have a realtor that was sending me stuff, I simply bought notified on LoopNet, it’s a industrial property web site that simply posts normally larger issues. I don’t even know why, at one level I subscribed to get notifications there and I noticed two small condo buildings, 30 models, principally 30 models every, bought posted. And so I used to be like, heck, let’s simply name the itemizing agent and experiment a bit of bit as a result of I knew at $4 million, I wasn’t going to come back with $800,000 to the desk, 20% down on this, and actually… I didn’t suppose I had an opportunity to even have a look at this, however one thing like a voice or one thing in my very own head mentioned, “Hey, should you don’t go have a look at this now, when are you ever going to have a look at… You’re by no means going to go have a look at a deal of that measurement should you don’t begin someplace.” And so I went only for kicks and giggles to go see it.

Andrew:
In order that’s one other technique, kicks and giggles, simply do it. KC, it sounds such as you simply up and referred to as the itemizing dealer for this stuff with no… You didn’t have a 12 months of preparation, you had been identical to, “Hey, let’s simply see what occurs.” One of many, I feel, the largest and most typical challenges folks have once they’re attempting to make that leap to, “Hey, I’ve been speaking with actual property brokers about single household and two plexes and 4 plexes,” To, “Oh my gosh, now I bought to name a industrial dealer. What do I say? What if I say the fallacious factor?” How did you overcome that? Simply briefly, what was that dialog like and the way did you get previous the… As a result of it doesn’t sound such as you employed a mentor and went to 3 bootcamps, you simply did it. So how did you get previous that hurdle and what did you say? What did that sort dialog sound like? How did you get that dealer to take you significantly as a beginner?

KC:
So I’m an enormous believer in, if we search in the proper locations, issues will work themselves out. If we’re truly doing our greatest and being a real individual, sincere, all these issues, I really feel like karma’s an actual factor. I’d actually been looking, looking for one thing to stage up and to get extra critical about actual property, and so once I referred to as him, I simply was straight with him. I used to be sincere with him. I used to be like, “Hey, it’s simply me. I don’t even know if I’ve an opportunity at shopping for one thing like this, however I need to come see it, and I feel it’s a superb trying property.” He was the dealer, the actual property agent and the proprietor. I didn’t know that, however when he took my name, he was like, “Okay, yeah, come, I’m doing a displaying right now. You may tag alongside.”
And so I went, confirmed up with my janitorial key belt on my denims, and I’m strolling round with attorneys and medical doctors and there’s one man there in scrubs and he’s a physician on the town. And they also’re like, “Who’re you?” They’re like, “Are you upkeep?” And I’m like, “No, I’m simply tagging alongside for the tour.” And so I find yourself a number of models, taking some footage and movies and I went residence and I used to be like, “Oh, that’d be superior to purchase that. I’d should promote a number of issues to have $800,000.” And I instructed him that, and he was like, “Nicely, you understand, name the financial institution, name the lender. They really did one thing distinctive for me once I purchased it the place they took much less down.” And I used to be like, “Okay, I’ll name them. It’s all the time good to make new contacts in the actual property world.”
And so I referred to as the lender and he was like, “Nicely, we’d take into account 10%.” However I don’t suppose they’d’ve thought of that had I not began with these duplexes, fourplexes, triplexes, and proven some success there. And so as soon as they noticed like, hey, he can do it, they supplied 10% after which I used to be capable of do a number of issues to make that occur.

Andrew:
So two issues I need to spotlight there for everyone. Primary is, that’s one other impediment is, “Ah, how do I do that and not using a monitor file?” Nicely, KC, you didn’t have a monitor file for a 30 unit property, however you had a monitor file in actual property, you had a monitor file in one thing. And so monitor file will be good efficiency in your job, however simply exhibits that you just’ve been doing one thing. In order that’s primary. And kudos to you for not limiting to your self to, “Nicely, I can solely purchase eight models as a result of that’s what I’ve executed to this point.” Second is, you’ve talked about faux it until you make it, and that’s a extremely frequent factor that you just hear these days, however it’s vital that you just… What you’re doing is just not faking it, proper? What you simply instructed us is that you just had been clear with that dealer. You instructed them, “Hey, it’s me and I most likely can’t purchase this, however I nonetheless need to have a look at it anyway.” And so that’s the proper solution to do faux it until you make it.
It’s not mendacity to folks, it’s not presenting your self as somebody totally different than you might be, it’s simply taking the motion as should you had already made it and being clear about it. I don’t know if that is true, you possibly can debunk me proper now, KC, if you would like, however I’m prepared to wager that one of many causes that man needed to promote to you and work with you is as a result of he most likely felt like he may belief you. Most individuals need to work with someone who comes throughout as real, clear, and relatable. After which additionally, once more, most people who find themselves larger up on the ladder and so they see somebody who’s actually making an effort to climb as much as go from an eight unit to a 30 unit, they’re joyful to say, “You recognize what? This man’s working laborious and he’s doing a superb job. I need to assist him.” So I’m prepared to wager that a part of the rationale you bought that deal is as a result of who you might be and the way you approached that dialog.
You weren’t faking it, you had been simply placing your self on the market and saying, “I’m going to do that though I haven’t made it but,” And so kudos to you for making that occur.

KC:
So yeah, it was truly actually neat once I sat down on the closing desk with him. I requested him, I used to be like, “Why did you are taking my supply?” He mentioned, “I simply believed you.” As a result of there was a pair different gives on it and he mentioned, “I believed you whenever you mentioned you’ll be capable of shut.” And the loopy factor is, we truly needed to do a triple shut. I needed to promote one property, then we closed on this one, after which he needed to shut on one thing he was shopping for. He was 10 31 exchanging into it so we needed to shut three days in a row, and there was a number of issues that would have occurred, however we ended up making it occur, so it was wild.

Matt:
Yeah. That’s superior, KC. I need to simply give my perspective on faking it until you make it. And in some methods, you’re truly convincing your self you could get it executed, proper? And by you convincing like, “Pay attention, I can do that. I can determine it out.” And that is perhaps you from the cliffs of Hawaii speaking to your self years later and realizing that with sufficient willpower, identical to you determined to tour the world, you mentioned, “That is what I need to do and I’m going to determine this out,” So this deal, this 37 unit in Lexington, Kentucky, is nearly like a tour of the world, however you mentioned, “You recognize what? I’m going to go in and determine this out.” And I do consider that a number of occasions the universe tends to conspire round confidence, and also you walked into that deal, “Nicely, I’m going to determine this out. It’s what I need to do.”
And swiftly, earlier than you understand it, the financial institution’s saying, “Nicely, we’d take 10% down,” And also you do produce other offers with fairness, and the dealer believed in you and it’s all as a result of by means of that confidence you had by telling your self that I can determine this out, you probably did. And I feel a number of occasions folks suppose that actions over time result in confidence, however it’s the opposite method round. They only resolve to be assured about one thing and the actions it’s good to take will robotically grow to be extra logical and observe behind it. So kudos to you, man. So now what? You’ve bought this 30 one thing unit below possession, inform us a bit of bit concerning the deal now that you just personal it, even with a bit of bit larger debt on it at 90% mortgage, it looks like it’s nonetheless money flowing. Inform us about that deal after which inform us about what’s subsequent for you and your spouse on the market on Lexington.

KC:
Yeah, so we purchased it in 2021, so it was throughout Covid and rents had been, I felt like, low, and so I felt like we may elevate them fairly good with out doing a ton of labor. That they had managed it fairly nicely, however I did see some holes the place we may enhance on administration, and so we simply ran with that. I instructed my spouse and he or she was simply sort of like, “You probably did what?” We solely had 50 models on the time and we doubled that in a single day. It was uncomfortable. Most issues which might be price… I heard a narrative as soon as the place it mentioned no person will get embarrassed once they do a bench press and so they fail on quantity 10 or 11 or 12. Often you go to a failure and also you be ok with it, you understand your limits, you understand the place you possibly can go to, however I really feel like in life, a number of occasions the place we go to a failure, we get embarrassed and we sort of shut down and we shut up store as a result of we discovered our failure. Many of the development occurs at that failing level.
And so there was a number of issues we did fallacious once we first took over, however we discovered our restrict and located the place our holes had been and the place our weaknesses had been and what we wanted to give attention to, and so it was the perfect factor that would have occurred to us. We truly ended up, from that very same lender, ended up refinancing nearly $2 million price of different property that had been on arms with one other native financial institution that had been… They had been snug, they had been 5 and a half p.c, however they had been on the brink of expire in three years and I used to be like, “Nicely, let’s go forward and refinance and take every thing to this financial institution.” We took every thing over there and we ended up getting 3% on all of our present property, plus this new one we simply purchased was at three and 1 / 4 or one thing, and so it was these issues that sort of domino into place as a result of we discovered our weaknesses, we discovered the place we have to enhance and we discovered options for these weaknesses.
However you’re asking what’s subsequent? It’s simply to attempt to be the perfect landlord we will, to supply a superb, clear, protected place for folks to dwell and deal with our… We prefer to have a communication with our tenants, we prefer to have, not finest buddies with all of them, however we prefer to respect them. We get all of them Christmas presents, little issues like that. Not Christmas presents which might be actually ornate, however we make a take care of an area restaurant or one thing the place they get a free one thing and we’ll give all of them Christmas playing cards after which go money in for that, go redeem it, however simply letting folks know you consider them and that they’re not only a quantity. It goes a great distance should you do resolve to handle your individual property.

Matt:
And I need you to present your self a fast celebration right here as a result of after you got this constructing, you had been capable of create sufficient revenue out of your portfolio that you just did what a number of of us which might be listening to this present need to have the ability to do, which is…

KC:
Yeah, simply spend extra time with my household. I walked away from my different job.

Matt:
However you stop… Yeah.
You might be so humble, brother, and I really like that about you, however you stop your job. I used to be teeing you up that you just had been capable of stop your day job that allowed you to spend time with household, actually personal your calendar, personal your time and every thing like that, and that’s one thing that lots of people are aiming to have the ability to do by means of actual property investing. However not like a number of of us that simply discuss doing it, you’ll be able to suppose a bit of bit larger, take some motion, take a number of motion, and make it occur, so kudos to you, man.

KC:
I respect that. I feel lots of people attempt to do it too early. I feel we’ve talked about it rather a lot for the previous couple of years the place everybody must dash to the place you possibly can retire. And I’ve seen a number of buddies strive to try this and so they’ve executed it too early, and so I caught on the place I stayed… As a result of I favored the corporate I labored for, I felt like I did fairly good at my job and offered a superb service, and so I caught on so long as I may, most likely longer than I wanted to, till it was uncomfortable the place I didn’t need to be missing at the actual property. I slowly phased out. It wasn’t like, “Oh, I hit it, I’m executed, peace.” I stayed on most likely two years longer than I actually wanted to, however as a result of I needed to be… You bought to construct your basis on a rock and never sandy basis so I actually let it solidify, ensure we’re in a great spot. I couldn’t clone myself, and so I needed to choose one or the opposite.

Andrew:
So financially talking, the place does that portfolio put you guys right this moment? So body of reference for someone who’s like, “Okay, if I get to 120 models…” What does that appear to be financially?

KC:
So we usher in about 105,000 a month in gross rents, simply over $900 a unit. A few of these are one bed room models and a few of them are three bed room models. We’ve got some on Airbnb, which that fluctuates, however about half of that, just a bit below half, is definitely revenue that we get to maintain as soon as we plan for CapEx. Brandon Turner’s books on investing in actual property does a extremely good job of estimating for CapEx. So we plan for roughly about 5 grand a month in simply bills, simply upkeep stuff or repairs, after which we now have our scheduled upkeep, which is pest management, garden, snow removing, all that fundamental stuff, however yeah. When you handle it your self, we may rent full-time administration, however we prefer it. I really feel like we do a greater job by managing it simply because we care greater than a property supervisor’s going to care. And we’d not try this ceaselessly. There could be a time the place it’s like, hey, we’re tapped out, we will’t do anymore, however proper now we love to do it, so we simply need to do what we love to do.

Andrew:
And I feel that’s a continuing debate, third get together versus self-management, and I feel your scenario is likely one of the conditions the place self-management completely makes essentially the most sense, the place you might have all of your properties in a market that you just dwell in and that you understand and you’ve got quick access to, and it’s actually laborious to seek out good property administration for stuff below 100 models. So it sounds such as you’re establishing very well. So final essential query earlier than we wrap up. We’ve bought the KC and Kaisey dynamic duo, what’s your actual property profession trying like for the subsequent 5 years? Are you guys executed shopping for? Are you simply aiming to hit a specific amount? Are you going to maintain funding it your self? Are you going to syndicate? What are KC and Kaisey, once we interview you once more in a few years, what are you going to be telling us?

KC:
Man. Nicely, once more, I’m to the purpose the place, with my spouse and I, and we now have three children, we need to have extra children, in order that was sort of a aim, to get to the place we may spend extra time with them. However in relation to actual property, with rents going up, we hope to maintain rising that. We did lock in all of our industrial lending for 10 years, so we’re good for about 9 extra years there, so we’re lucky to time that fairly good. However I might love to purchase extra. We truly went and checked out a 4 million greenback property… No, sorry, it was 8 million, the opposite day as a result of I’ve some buddies of mine that they’ve been eager to get into actual property now, so it’s extra of a aim now to get as many individuals concerned as I can. I’ve by no means executed a associate take care of anybody. And to not say I received’t, however I sort of need to assist extra people who I do know take pleasure in among the identical advantages that actual property’s introduced me.

Matt:
There’s a ebook on the BiggerPockets library referred to as Elevating Non-public Capital you might need to take a look at KC. A number of folks have learn it as nicely. A brand new launch simply got here out with a foreword by Tempo Morby, KC, so you possibly can test that out. It’ll educate you how one can construction these offers with your pals for win-win conditions. Simply to say, you may need to test it out.

KC:
No, I really like that. Yeah. Really, your podcast was one which sort of impressed me to suppose larger as a result of had been within the Pacific North, or sorry, not Pacific, the Northeast, proper? That’s the place you guys… Yeah. I listened to that podcast and I used to be like, man, I’m pondering too small. He’s sitting right here simply exploding. So I needed to speak myself out of issues the place I used to be like, it’s not about what number of numbers, it’s not about what number of models. Nevertheless it was very spectacular. I beloved your podcast. It actually helped me suppose larger.

Matt:
I had these epiphany conversations with myself as nicely. I used to be not in as cool of locations as on the cliffs of a volcano in Hawaii. I’m most likely sitting in my lounge. However yeah, it’s actually a matter. And I attribute a number of your success right here simply to you pondering larger, however then additionally having the braveness to take motion on the interior pool that you just needed to dwell an even bigger life and also you selected to dwell, you needed to dwell larger, you needed to have an even bigger factor, and also you determined to observe that need and take motion on it and have a look at you now. I’m tremendous excited to listen to what occurs to KC and Kaisey of Lexington over the subsequent couple of years. Man, this has been nice.

Andrew:
It’s been nice speaking with you, and I hopefully will make it out to Lexington, Kentucky, one in every of nowadays.

Matt:
Was that good? I believed that was excellent.

Andrew:
Was that acceptable? Was that acceptable? Okay, I don’t need to get canceled.

Matt:
Spoken like a Kentucky landlord. Nicely executed.

Andrew:
Mispronouncing. So a number of issues that, simply to recap, KC, primary, once we have a look at what’s led to your success, it’s surrounding your self with folks, on this case, the right partner that can assist you get previous your limiting beliefs, consistency, simply not swinging for the fences, not truly leaping off the rock in Hawaii, however simply displaying up day after day, placing within the work, doing the issues that produce outcomes. And by doing that, not solely in your gross sales job, however in your actual property profession, you’ve exceeded nearly everyone else and I feel there’s rather a lot to be taught from that.
One other one is, you didn’t do a primary deal and stop your job instantly and put your self into a tricky spot, and that’s one thing that everyone has to really feel out on their actual property journey, however you constructed a sustainable actual property enterprise, used your W2 to try this, after which whenever you made the massive leap to 30 models, you mentioned, you understand what? Now the W2 is holding me again, and now I’m going to drop that. I’m going to verify there’s an award named after me so nobody forgets that I used to be right here and now I’m simply going to exit and I’m going to construct my actual property enterprise. After which, additionally, there’s this perception on the market that in an effort to construct an actual property portfolio, you need to go elevate cash. You haven’t executed that. You’ve taken the, I don’t need to say gradual, as a result of $12 million in 10 or 11 years is just not gradual, however you took the gradual and regular strategy and constructed it in-house. Whenever you say you might have 121 doorways, you actually have 121 doorways, and that’s a formidable feat. So nice speaking with you. Matt, the rest you need to add earlier than we log off right here?

Matt:
Yeah, I simply need to underscore one factor there, and that’s the energy of leveraging your relationship along with your partner. It’s not for the faint of coronary heart to deliver your partner into the enterprise, however if you’re aligned along with your partner on the place you need to go and the advantages you see actual property investing are going to deliver you ala KC and Kaisey now with the ability to spend extra time along with your children and their household, maybe journey a bit of bit extra, all these sorts of issues. If you happen to’re capable of be aligned along with your partner and convey them into the folds of your small business, there’s a lot leverage that they’ll deliver to you. So I commend you, KC, on with the ability to try this, and I simply problem the listeners right here to contemplate doing that yourselves as nicely as a result of its made all of the distinction for myself and my marriage and my enterprise as nicely too.

KC:
So, yeah, no, I agree with you one hundred percent, Matt. It’s an enormous profit to have somebody in your group that has the identical objectives aligned. One factor that I might most likely advocate and a few recommendation that I like to present is constructing quietly. I feel a number of our limiting beliefs come from different people who don’t know or haven’t executed the analysis, don’t have the identical objectives, they hear your objectives and so they shoot them down. And so, truthfully, I didn’t actually voice… Folks knew I used to be in actual property, however they didn’t know to what extent, and I don’t even suppose my dad and mom know to what extent I’m concerned in actual property. I instructed them I used to be doing a podcast there right this moment and so they had been like, “Oh, what’s that? That’s neat.” So constructing quietly as a result of should you’re good at one thing, you’ll inform everyone, however should you’re nice at one thing, they’ll inform you. That’s a Walter Peyton quote I heard a very long time in the past.
And so I didn’t really feel like the necessity to inform anybody what I used to be doing. One, I didn’t need them to speak me out of it, and two, I didn’t need to, I don’t know, come off the fallacious method. And so now once I speak to folks about actual property, it’s extra to assist encourage them and attempt to get them away from the evaluation paralysis kind mindset. However yeah, so my spouse has actually been an enormous supporter of that. She’s the one one that actually is aware of our objectives and it’s good to have somebody that’s pushed, desires to realize some huge stuff.

Andrew:
I actually like what you mentioned about constructing quietly. That resonates rather a lot with me, particularly once I examine it to what you are inclined to see on social media nowadays. Kudos to you, KC. So, for these listeners who resonate along with your story and perhaps wish to get to know you a bit of bit extra or discover out extra about you, even should you’re doing it quietly, how can they attain out to attach with you?

KC:
I’m on Instagram, however I normally simply publish journeys that my household and I prefer to go on. So we attempt to journey someplace as soon as each month or two, in order that’s most of what I publish about. On Instagram, I’m simply KC, M-A-S-S-I-E, KC Massie, after which after all, folks can textual content me or e mail me, however it’s KC, M-A-S-S-I [email protected].

Andrew:
All proper. Sounds good. Matt, how do folks get in contact with you?

Matt:
Of us can observe me on Instagram on the Matt Faircloth, and most significantly, they’ll go to my firm’s web site, simply DeRosa group.com, D-E-R-O-S-A, DeRosa group.com to listen to all about our firm.

Andrew:
All proper. And I’m solely on LinkedIn for social media, however should you join with me there, that’s truly me posting and commenting, so it’s not a digital assistant or an AI bot, so please do join with me there. After which for BiggerPockets, please tune into future episodes. Hopefully you bought a number of worth from our dialog with KC. Fairly quickly you’re additionally going to be listening to about how to save cash on taxes with Amanda Han, after which unconventional choices that can assist you finance offers. Debt and financing is a difficult topic nowadays, so we bought an episode popping out with Zach LeMaster. Be sure to keep tuned for these. And Matt, any parting feedback?

Matt:
God, this has been an excellent episode, Andrew. I all the time take pleasure in co-hosting with you. This has been a number of enjoyable. And if I may have the honour of taking it residence right this moment, Andrew. Do you thoughts?

Andrew:
Please do. Please do.

Matt:
Okay. That is Matt Faircloth with Andrew Cushman, the brand new awardee of the perfect substitute podcast host ever, the Cushman Award, signing off.