The Slow, Steady Way to Make $50K Per MONTH with Rental Properties

Andrew:That is the BiggerPockets Podcast present, 8:45 each week. It’s our aim to carry you the tales, the how-tos, the data so that you could make good choices in at present’s present actual property market. We hope that by listening to BiggerPockets, you possibly can develop your information base sooner than Taylor Swift’s checking account. Now, should you’re questioning, the place are David and the place is Rob? Effectively, at present is substitute trainer day. In case you grew up and went to highschool or center college or elementary college within the eighties and nineties, at present is the day the place the bell rings, your trainer’s not in school, the door swings open and that huge boxy TV rolls by way 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 at present. And also you completely dated your self six instances 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 conceal the grey anymore, so I’m simply going with it.

Matt:You in all probability nonetheless do personal A VCR, don’t you? I guess 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 at present. I’m so grateful that David and Rob left the microphones on for us at present so that you and I may leap in and be co-hosts right here to ask you, Andrew, how are you at present?

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 wish to really feel significantly better, I may need to take one thing lately 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 little thing, man, that sounds superior.

Andrew:Wow. Effectively, nobody’s right here to take heed to us at present. We’ve bought an incredible visitor, KC Massie from Lexington, Kentucky. Matt, what are we going to listen to from KC at present?

Matt:I’m tremendous excited for at present’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 progress technique, 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 manner or you possibly can simply hop instantly 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 all people’s as good as Andrew and never all people’s daring as Andrew is, and Andrew’s been in a position to construct an exceptional profession for himself by getting instantly into the deep finish of multifamily first leap.Our visitor at present did what I did, which is to slowly scale, study landlording, study the sport as you develop, and take just a few strategic moments in his profession that we talked about and we’ve all had these strategic moments. He’s been in a position to actually, actually double down and triple down and quadruple down in his portfolio by way of just a few 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 believe lots of people are going to have the ability to relate to at present’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 put money into 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 only hold getting greater. You even have some lengthy and short-term leases, single household houses. Your portfolio at present valued at 12 million, and crucial piece of that’s it’s a few $6 million fairness place. It’s not simply in regards to the worth of the belongings, it’s how a lot fairness you have got in them. And you’re a proud father of three children and also you handle the true property portfolio together with your spouse, who’s additionally named Kaisey, however spelled in a different way. In order that’s fairly the background and many good data 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 believe most profitable males can say that they’ve bought a really, excellent, 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 hiya from us from the viewers at BiggerPockets. Fast, simply, be aware, 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 virtually limiting beliefs have been form of controlling what I assumed was attainable. Any of the larger offers, I form 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 all over the world, 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 wish to make investments your cash, not blow it on one huge journey, however we ended up… I used to be doing summer season gross sales on the time and it was actually draining on me, so each evening I’d come dwelling, I’d simply plan one other portion of this journey and form of seeing all of it come collectively. After which ending our journey… We went all all over the world.We went to London, Dubai, Maldives, Singapore, Bali, Fiji, Australia, after which led to Hawaii, and it’s a type of moments the place on the very finish of the journey, my spouse and I have been sitting on the sting of the large island of Hawaii, we have 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 discuss ourselves out of some huge stuff that we’re in a position to do. And as I used to be sitting there trying over the ocean, I simply was delivered to tears, having that feeling of engaging in one thing that the majority don’t get to do, however then sitting there and seeing it come to fruition simply modified my entire outlook on how I method enterprise, how I method actual property, even my family life, however sitting there with my accomplice in life and checking off this bucket listing that I assumed may not ever be attainable, simply actually set the tone for the subsequent few years of my investing profession.

Andrew:Yeah, it feels like we must always do a separate podcast episode in your travels since you named off about 18 locations I nonetheless wish to get to. So to recap that, you took the leap and really 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 feels like taking that journey really 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 informed 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 just a few 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 in regards to 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:Effectively, it was again in 2012 and I used to be really making an attempt to determine find out how to present my girlfriend on the time that I used to be severe and I used to be like, what a greater solution to present her I’m severe apart from purchase a condominium proper down the road from her mother and father’ 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 any individual had informed me, mentioned, “Hey, whenever you purchase a home, you bought to place 20% down, it’ll prevent cash.” So I did that. It was really a financial institution owned property on the time and thankfully, it did work out with my spouse and I believe it was an excellent resolution to purchase that condominium, only a city dwelling.

Matt:Now, was that the home hack, you rented out a few bedrooms, huge shout out to Craig Curelop’s e-book on home hacking, on residing in a property and having tenants allow you to pay your individual overhead, your residing bills, in order that was nice. The 20% that you simply needed to lay down on the property as a result of any individual else informed you it’s best 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 really lucky for investing as a result of we’d get half of our pay all through the summer season 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 wish to simply blow it on dumb stuff, so I mentioned, nicely, let’s get a variety of this again out of my checking account so I don’t spend it within the improper locations and put it right into a home. And so it was a $200,000 condominium. 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 search out. Yeah.

Andrew:Yeah. Effectively, and that’s additionally a superb level is a variety of us, I do know I noticed it this manner once I was getting began, is we really feel like, oh, I’ve to get probably the most wonderful deal ever simply to get began in actual property. And whilst you do wish to watch out and never simply go purchase something, it doesn’t need to be a house run to get began, it simply must be one thing that works. And KC, you probably did an important job of simply doing one thing and shopping for one thing. I’m guessing you in all probability didn’t have a imaginative and prescient of, I’m going to purchase this condominium 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 way of gross sales earnings out of your job, after which, I assume, feels like shopping for in direction of the tip of the 12 months whenever you bought your bonus. So let’s return to the 2016 turning level. We perceive Kaisey performed a giant function in that change. Might you elaborate a bit of extra on that?

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

KC:Proper.

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

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

Matt:I get it. You guys should have a variety of enjoyable with that. So take us again to the cliffs of Hawaii trying on the volcanic rock and the ocean and the large epiphany that you simply had about… I simply wish to inform you how shifting that was, by the way in which, about you realizing that you simply wished to tour the world, so you probably did it. And so now it’s like, nicely, I wish to scale up and construct an actual property portfolio, and so, aha, epiphany. So what was the choice that you simply 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 believe I solely had 10, 15 models on the time, I didn’t have a complete lot. All my progress actually got here from that time on 2016 by way of 2021 is the place I made a giant push. It’s a type of emotions you possibly can’t actually put into phrases, nevertheless it was the sense of accomplishment on, it wasn’t like a difficult factor, it was simply overcoming the concern, I assume, is the easiest way to place it. Like overcoming the concern of doing one thing that I may simply discuss 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 a giant journey that you simply in all probability 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 way 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 completely 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, nevertheless 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 a giant context shift, you’re pondering greater, 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 learning and focusing. It wasn’t like, “Hey, I wish to purchase extra homes.” It was like, “I wish to get higher at no matter I’m doing and something that scares me, I wish to determine find out how to do it.”

Andrew:That is smart. Earlier than we get an excessive amount of additional down the trail, I wish 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 progress after that after you bought again? You talked about limiting beliefs many instances, and I’m glad you’re doing that as a result of that’s one thing all of us wrestle with in numerous 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 e-book, the e-book on property administration, I believe Brandon Turner’s e-book 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 unhealthy I used to be doing. That’s actually 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 wish 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 particular person again proper now. I’m in the course of work, are you able to name them?” And so she began doing it and she or he was like, “Wait, this particular person 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 making an attempt to assist them.” And he or she’s like, “You’re handicapping them. You’re setting them up for failure. They’re going to assume that’s regular and also you’re allowed to do this.”She had the mother mentality the place it’s important to form of have some self-discipline. And so I mentioned, “Effectively, if you are able to do higher, I’m all ears. I’m not doing excellent.” I believe I had 12 or 15 models. And so she learn the entire e-book 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 methods in place, you possibly can actually make cash from being a landlord. I’d all the time heard you would, however I used to be simply hoping it was working. I used to be like, so long as I pays 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 stepping into than going out, I figured I used to be doing okay. And so, as soon as she took over, we actually bought the methods in place that confirmed precisely how worthwhile a home was or worthwhile a deal was. Earlier than that, I used to be simply form of winging it.And I’m actually huge on pretend it until you make it, and I used to be simply doing what the professionals informed 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 could be a studying expertise. Somebody informed me as soon as, you win and also you study. So that you don’t win and lose, you win and also you study. 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:Effectively, to begin with, it’s very powerful to pretend property administration. You both do it otherwise you don’t. It’s like a Yoda, do or don’t. There isn’t any strive. You don’t attempt to be a superb property supervisor, that’s it, it’s only one or the opposite. I additionally wish to [inaudible 00:17:11] on simply the idea of investing together 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 niche in what you are promoting and her being keen 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 learn to do that by studying Brandon and Heather’s e-book and learn to turn out to be an exceptional property supervisor and maybe take that off your plate in order that you would deal with scaling,” Which I actually commend her for being keen to do 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 workforce and having one another’s again.

KC:I can’t inform you what number of instances different traders or those that wish to put money into actual property are like, “I might do it if my spouse was on board,” Or, “It might be a lot simpler if my spouse would help. She fights me on it.” And it’s like, my spouse, simply actually, she trusted me at first and she or he noticed that there was a necessity. And most profitable enterprise or entrepreneurs, they see an issue they usually have an answer, and so she was that answer in our personal ambiance, in our personal world, and she or he mentioned, “Hey, I see an issue and I is usually a answer.”

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 form 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 arising quickly to assist traders seeking to get into the enterprise, discover like-minded companions.All proper, so Kaisey helped you notice that you would deal with extra and it feels 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 be aware, it doesn’t need to be a partner. It’s actually exhausting for any of us to see our personal weaknesses and simply to have any individual else to take a look at you and who’s keen to candidly inform you like, “Hey, you would be doing this higher,” Is extremely useful. However I wish to ask, you have been residing in Utah on the time, right? All proper, so that you have 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 determine find out how to say Lexington, Kentucky. It’s a tongue tornado.

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

KC:We’ll need to follow that one, however no. No, Lexington is the place I’m from, I used to be born and raised and I find it irresistible, however we have been really residing in Utah. My spouse’s from there, and so she really introduced it as much as me to maneuver again as a result of she was doing the property administration factor from Utah and she or he mentioned… I believe that one of many final straws was, we needed to ship an HVAC firm over to an residence that was complaining of no warmth. So the final straw with residing in Utah and making an attempt to property handle, we had a tenant complain that they didn’t have warmth and so we despatched an HVAC firm by they usually known as us out and mentioned, “Yeah, it’s working nice. They’d 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 change it to warmth, and I used to be like, okay, it could make much more sense to be nearer, little stuff like that. However yeah, in order that was what sort of kicked us this manner.

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 it’s important 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 to 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 facet of the enterprise. How did the gross sales facet of what you are promoting go so you possibly can generate some earnings to proceed to develop your actual property enterprise?

KC:So the method I took was instantly into my gross sales. It wasn’t essentially, “Hey, I wish 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 believe 17 or 16 we’re on the MLS. So it wasn’t like they have been hidden offers or wholesale offers, it was all MLS stuff. However to return to the gross sales factor, I simply tried to eradicate any variables. Something that I may management, I wished to manage it, mindset being a type 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 often go feast or famine.,However my thought was, let’s do away with all of the inconsistencies so we could be as constant as attainable.So I might sometimes promote one to 3 a day the place over the course of a complete summer season is a extremely huge summer season, however you may need one other man promoting 5 or 6 or seven in a day, however that’s as a result of they have been actually driving the waves the place I used to be simply making an attempt to maintain it flat line as attainable, 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 variety 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 discuss your self out of doing extra stuff should you go off emotion. I simply tried to eradicate as a lot emotion as attainable.

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

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

Matt:There’s an previous adage, should you serve the lots, you’ll eat with the lessons. Residence safety is one thing all people wants, it’s not a whole lot of hundreds of {dollars} to cost it, so that you’re promoting one thing that lots of people want and are keen to make use of, so I believe that’s nice, and it sounds such as you have been doing very nicely at it.

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

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

KC:So tenant communication is a giant one simply so your telephone’s not going off on a regular basis. So we use Buildium. Buildium is a software program. There’s AppFolio, Buildium. We’ve used Hire Prepared for some time once we had just a few smaller models. As soon as we bought greater, we converted to Buildium and it actually helped form of hold issues organized so that you don’t, one, neglect upkeep requests, two, you have got documentation of every little thing so you possibly can really present you’re doing all of your job, lease assortment, folks pays on-line, you are able to do your leases on-line. I don’t know the way landlords did it again earlier than smartphones and all this expertise as a result of my telephone is my workplace. I can actually do every little thing from posting an residence for lease to accepting, doing background checks, every little thing proper there in your smartphone. The mother and pop landlords again within the eighties, nineties, I don’t know the way they did it. I might’ve gone loopy.

Andrew:So KC, going again to the relentless persistence and consistency as being the factor that basically delivers outcomes. Your organization, you informed us the technique of how reasonably than going out and having a giant day like everybody else and promoting 5 or seven methods after which they take just a few days off, you centered 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 particular person 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 wish to have a 3 or 4 day each single day, however I form of simply put my head within the sand and simply went to work. And so I used to be really in a position to 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 have got the most effective RMR and you’ve got the bottom cancellation price since you simply good your methods 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 known as the Kevin Massie Award simply because I led each single class that 12 months and it was actually a cool expertise, nevertheless it wasn’t one thing I anticipated, I simply wished to do the most effective I may at every.

Andrew:So then now, that’s an actual stage up. You didn’t simply win the award, you have been up to now 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 type of moments the place it’s like, wow, really, I may focus and obtain, proper? Focus and obtain. Too many instances we get distracted by all of the issues that would go improper 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 facet with the opposite Kaisey, then to her moving into actually proudly owning the property administration facet 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 way of all these iterations, to essentially double down your actual property portfolio and begin taking down bigger offers. So discuss us by way of that. Discuss us by way of that, what that regarded like, felt like as you determined to essentially scale up into bigger and bigger residence buildings.

KC:So yeah, so I’d all the time get notifications of every little 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 often greater issues. I don’t even know why, at one level I subscribed to get notifications there and I noticed two small residence buildings, 30 models, mainly 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 return with $800,000 to the desk, 20% down on this, and actually… I didn’t assume 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 take a look at… You’re by no means going to go have a look at a deal of that dimension 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 known as the itemizing dealer for these items with no… You didn’t have a 12 months of preparation, you have been similar to, “Hey, let’s simply see what occurs.” One of many, I believe, the most important and most typical challenges folks have once they’re making an attempt 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 improper 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 a giant believer in, if we search in the proper locations, issues will work themselves out. If we’re really doing our greatest and being a real particular person, sincere, all these issues, I really feel like karma’s an actual factor. I’d actually been looking out, looking for one thing to stage up and to get extra severe about actual property, and so once I known 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 wish to come see it, and I believe it’s a superb trying property.” He was the dealer, the true 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 exhibiting at the moment. You’ll be able to 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 health care provider 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 just a few models, taking some photos and movies and I went dwelling and I used to be like, “Oh, that’d be superior to purchase that. I’d need to promote just a few issues to have $800,000.” And I informed him that, and he was like, “Effectively, , 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 true property world.”And so I known as the lender and he was like, “Effectively, we might contemplate 10%.” However I don’t assume 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 in a position to do just a few issues to make that occur.

Andrew:So two issues I wish to spotlight there for everyone. Primary is, that’s one other impediment is, “Ah, how do I do that with no observe report?” Effectively, KC, you didn’t have a observe report for a 30 unit property, however you had a observe report in actual property, you had a observe report in one thing. And so observe report could be good efficiency in your job, however simply exhibits that you simply’ve been doing one thing. In order that’s primary. And kudos to you for not limiting to your self to, “Effectively, I can solely purchase eight models as a result of that’s what I’ve executed up to now.” Second is, you’ve talked about pretend it until you make it, and that’s a extremely widespread factor that you simply hear these days, nevertheless it’s vital that you simply… What you’re doing will not be faking it, proper? What you simply informed us is that you simply have been clear with that dealer. You informed them, “Hey, it’s me and I in all probability can’t purchase this, however I nonetheless wish to have a look at it anyway.” And so that’s the proper solution to do pretend it until you make it.It’s not mendacity to folks, it’s not presenting your self as somebody completely 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’d like, however I’m keen to guess that one of many causes that man wished to promote to you and work with you is as a result of he in all probability felt like he may belief you. Most individuals wish to work with any individual who comes throughout as real, clear, and relatable. After which additionally, once more, most people who find themselves greater up on the ladder they usually see somebody who’s actually making an effort to climb as much as go from an eight unit to a 30 unit, they’re completely satisfied to say, “You realize what? This man’s working exhausting and he’s doing a superb job. I wish to assist him.” So I’m keen to guess 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 have 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 really actually neat once I sat down on the closing desk with him. I requested him, I used to be like, “Why did you’re 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 to shut.” And the loopy factor is, we really 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 variety of issues that would have occurred, however we ended up making it occur, so it was wild.

Matt:Yeah. That’s superior, KC. I wish to simply give my perspective on faking it until you make it. And in some methods, you’re really convincing your self that you would be able to get it executed, proper? And by you convincing like, “Hear, 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, similar to you determined to tour the world, you mentioned, “That is what I wish 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 realize what? I’m going to go in and determine this out.” And I do consider that a variety of instances the universe tends to conspire round confidence, and also you walked into that deal, “Effectively, I’m going to determine this out. It’s what I wish to do.”And hastily, earlier than it, the financial institution’s saying, “Effectively, we might 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 way of that confidence you had by telling your self that I can determine this out, you probably did. And I believe a variety of instances folks assume that actions over time result in confidence, nevertheless it’s the opposite manner round. They only determine to be assured about one thing and the actions you have to take will mechanically turn out to be extra logical and comply with behind it. So kudos to you, man. So now what? You’ve bought this 30 one thing unit underneath possession, inform us a bit of bit in regards to the deal now that you simply personal it, even with a bit of bit greater 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 have been, I felt like, low, and so I felt like we may elevate them fairly good with out doing a ton of labor. They’d 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 informed my spouse and she or he was simply form 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 value… I heard a narrative as soon as the place it mentioned no person will get embarrassed once they do a bench press they usually fail on quantity 10 or 11 or 12. Normally you go to a failure and also you be ok with it, your limits, the place you would go to, however I really feel like in life, a variety of instances the place we go to a failure, we get embarrassed and we form of shut down and we shut up store as a result of we discovered our failure. Many of the progress occurs at that failing level.And so there was a variety of issues we did improper once we first took over, however we discovered our restrict and located the place our holes have been and the place our weaknesses have been and what we would have liked to deal with, and so it was the most effective factor that would have occurred to us. We really ended up, from that very same lender, ended up refinancing nearly $2 million value of different property that have been on arms with one other native financial institution that have been… They have been comfy, they have been 5 and a half p.c, however they have been on the point of expire in three years and I used to be like, “Effectively, let’s go forward and refinance and take every little thing to this financial institution.” We took every little thing over there and we ended up getting 3% on all of our current property, plus this new one we simply purchased was at three and 1 / 4 or one thing, and so it was these issues that form 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 most effective landlord we will, to supply a superb, clear, secure place for folks to reside and care for our… We prefer to have a communication with our tenants, we prefer to have, not finest associates with all of them, however we prefer to respect them. We get all of them Christmas items, little issues like that. Not Christmas items which might be actually ornate, however we make a cope with a neighborhood 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 concentrate on them and that they’re not only a quantity. It goes a good distance should you do determine to handle your individual property.

Matt:And I would like you to offer your self a fast celebration right here as a result of after you acquire this constructing, you have been in a position to create sufficient earnings out of your portfolio that you simply did what a variety of people 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 like that about you, however you stop your job. I used to be teeing you up that you simply have been in a position to stop your day job that allowed you to spend time with household, actually personal your calendar, personal your time and every little thing like that, and that’s one thing that lots of people are aiming to have the ability to do by way of actual property investing. However in contrast to a variety of people that simply speak about doing it, you’ll be able to assume a bit of bit greater, take some motion, take a variety of motion, and make it occur, so kudos to you, man.

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

Andrew:So financially talking, the place does that portfolio put you guys at present? So body of reference for any individual who’s like, “Okay, if I get to 120 models…” What does that seem like financially?

KC:So we herald 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 now have some on Airbnb, which that fluctuates, however about half of that, just a bit underneath 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 primary 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 would not try this without end. There is perhaps 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 wish to do what we love to do.

Andrew:And I believe that’s a continuing debate, third get together versus self-management, and I believe your state of affairs is likely one of the conditions the place self-management completely makes probably the most sense, the place you have got all of your properties in a market that you simply reside in and that and you’ve got quick access to, and it’s actually exhausting to search out good property administration for stuff underneath 100 models. So it sounds such as you’re organising very well. So final principal 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. Effectively, once more, I’m to the purpose the place, with my spouse and I, and we now have three children, we wish to have extra children, in order that was form of a aim, to get to the place we may spend extra time with them. However relating 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 really 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 associates of mine that they’ve been desirous 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 accomplice cope with anybody. And to not say I received’t, however I form of wish to assist extra those that I do know get pleasure from a few of the identical advantages that actual property’s introduced me.

Matt:There’s a e-book on the BiggerPockets library known as Elevating Personal Capital it’s possible you’ll wish 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 would test that out. It’ll train you find out how to construction these offers with your pals for win-win conditions. Simply to say, you may wish to test it out.

KC:No, I like that. Yeah. Truly, your podcast was one which form of impressed me to assume greater as a result of have 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 discuss 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 cherished your podcast. It actually helped me assume greater.

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 in all probability sitting in my front room. However yeah, it’s actually a matter. And I attribute a variety of your success right here simply to you pondering greater, however then additionally having the braveness to take motion on the internal pool that you simply needed to reside a much bigger life and also you selected to reside, you wished to reside greater, you wished to have a much bigger factor, and also you determined to comply with 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 assumed that was good.

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

Matt:Spoken like a Kentucky landlord. Effectively executed.

Andrew:Mispronouncing. So just a few 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 will help you get previous your limiting beliefs, consistency, simply not swinging for the fences, not really leaping off the rock in Hawaii, however simply exhibiting 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 virtually all people else and I believe there’s quite a bit to study 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 do this, after which whenever you made the large leap to 30 models, you mentioned, what? Now the W2 is holding me again, and now I’m going to drop that. I’m going to ensure 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, it’s important to go elevate cash. You haven’t executed that. You’ve taken the, I don’t wish to say gradual, as a result of $12 million in 10 or 11 years will not be gradual, however you took the gradual and regular method and constructed it in-house. If you say you have got 121 doorways, you really have 121 doorways, and that’s a formidable feat. So nice speaking with you. Matt, anything you wish to add earlier than we log off right here?

Matt:Yeah, I simply wish to underscore one factor there, and that’s the energy of leveraging your relationship together with your partner. It isn’t for the faint of coronary heart to carry your partner into the enterprise, however in case you are aligned together with your partner on the place you wish to go and the advantages you see actual property investing are going to carry you ala KC and Kaisey now with the ability to spend extra time together with your children and their household, maybe journey a bit of bit extra, all these sorts of issues. In case you’re in a position to be aligned together with your partner and produce them into the folds of what you are promoting, there’s a lot leverage that they’ll carry 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 workforce that has the identical objectives aligned. One factor that I might in all probability suggest and a few recommendation that I like to offer is constructing quietly. I believe a variety of our limiting beliefs come from different those that don’t know or haven’t executed the analysis, don’t have the identical objectives, they hear your objectives they usually shoot them down. And so, actually, 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 assume my mother and father know to what extent I’m concerned in actual property. I informed them I used to be doing a podcast there at present they usually have 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 all people, 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 wish to, I don’t know, come off the improper manner. And so now once I discuss to folks about actual property, it’s extra to assist encourage them and attempt to get them away from the evaluation paralysis sort mindset. However yeah, so my spouse has actually been an enormous supporter of that. She’s the one one that basically 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 quite a bit with me, particularly once I evaluate it to what you are inclined to see on social media nowadays. Kudos to you, KC. So, for these listeners who resonate together with your story and perhaps want 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 often simply put up 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 put up 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 electronic mail me, nevertheless 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:People can comply with 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 really 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 variety of worth from our dialog with KC. Fairly quickly you’re additionally going to be listening to about how to economize on taxes with Amanda Han, after which unconventional choices that will help you finance offers. Debt and financing is a difficult topic nowadays, so we bought an episode popping out with Zach LeMaster. Be sure you keep tuned for these. And Matt, any parting feedback?

Matt:God, this has been an important episode, Andrew. I all the time get pleasure from co-hosting with you. This has been a variety of enjoyable. And if I may have the distinction of taking it dwelling at present, Andrew. Do you thoughts?

Andrew:Please do. Please do.

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